Bring on those Tesla numbers: From Wall Street research notes to various auto blogs, it looks like Tesla (TSLA) will badly whiff on its Model 3 delivery goals for 2017 when numbers are released on Thursday evening. The Tesla fanboys have ignored the warning signs, bidding up shares of the money-losing electric car company by 2% over the last five sessions. Maybe they should start paring back the position, if this latest nugget from top auto site Electrek is worth anything. Based on its tracking of VIN numbers, Electrek believes that Tesla only produced 2,000 Model 3s in 2017. Wall Street is still hovering around Model 3 production numbers of 4,000 to 5,000. Even considering that the market is a forward-looking indicator, if Tesla drops those type of production numbers on Thursday the stock will probably fall off a cliff. On another note, new data out of IHS Market estimated there will be 1 million driverless cars on the road by 2025. The research outfit expects 33 million autonomous cars on the road by 2040. Start collecting those Model 3s, someday they may be classics.
- REWIND: The above was posted before Tesla's terrible Model 3 delivery numbers revealed on Wednesday evening. Tesla said after the close that it delivered a mere 1,550 Model 3s. The number badly whiffed Wall Street estimates, sending shares down as much as 2% in after-hours trading. Not getting the "Morning Jolt" daily newsletter? Join here for free, and stop missing out on actionable investing news like this one.
Gold prices are melting up, baby: Luxury jeweler Tiffany & Co. (TIF) may be sitting on a much higher valued asset base real soon. Gold prices have spiked more than 6% to $1,315 an ounce since a nearly five-month bottom on Dec. 12. For technical traders, the move has been pretty bullish as gold prices have been above their 50-day, 100-day and 200-day moving averages since Dec. 18. Palladium and silver prices are up about 9% and 5%, respectively, over the last month. To be sure, metals investors have several things to latch onto at the moment. The tax law could send deficits ballooning by $1.7 trillion over the next 10 years, according to a projection from the Congressional Budget Office. U.S. debt would rocket to 97.1% of GDP in 2027, up from 91.2% using the CBO's prior projections. The deficit spike could slowly undermine confidence in the U.S. dollar, sending investors into gold as a safe-haven. Another consideration is a potential surge in U.S. inflation as corporate and middle-class tax cuts ripple through the economy. Gold is often seen as a hedge on inflation.
A good play on numbers: Nomura issued a fun read on Amazon's (AMZN) Prime service that is a pure play on hypotheticals. Assuming all Prime fees are allocated to products shipped (they aren't), Nomura estimated that Amazon collected $1.65 in Prime-related revenue per package in the fourth quarter. The problem: shipping via FedEx (FDX) Express in the U.S. costs $17.60 per package, noted Nomura. UPS's (UPS) average revenue per package is $10.30. In other words, Amazon Prime is wildly unprofitable and it may get even worse as Amazon tries to ship even faster. It's unlikely Amazon bulls will care about this numbers play ... until the market forces them to care in 2020.
Deals Cost a Lot
New data from Dealogic on the 2017 deal environment should remind everyone that in this hot market, doing deals will cost a pretty penny. Hence, there is rising risk that companies overpay for targets and returns end up below plan.
TheStreet's sister publication The Deal has just released its new league tables. Check them out here.
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