Tesla gets another holiday gift: Even some special gifts from governments to the electric car industry hasn't been enough to ignite a sustained rally in Tesla's (TSLA) once sizzling stock price (it's down 7% in the last three months vs. an 8% gain for the Nasdaq Composite). Wonder how the fourth quarter has gone for Tesla as to be sure, the gifts have been extra special. First, the $7,500 tax credit for buyers of electric cars in the U.S. was maintained in the new tax law. Looks like Trump chose not to penalize Elon Musk for leaving his advisory council earlier this year. The next present came Wednesday, as China chose to maintain a tax exemption on so-called new energy vehicles (NEV) that was set to expire at year end. In a decision widely expected by the market, the tax exemption will run from Jan. 1, 2018 until Dec. 31, 2020 for plug-in, hybrid and fuel-cell powered autos. Tesla has found success in China despite its already pricey cars not being privy to all EV tax credits and being exposed to a 25% import duty. Sales for Tesla China topped $1 billion in 2016. If Tesla's stock can't accelerate on this news, as well as more big-names ordering a new electric semi from Musk, one has to wonder what's up with the company entering 2018.
Forget Apple for a second: In case you were still opening presents on Tuesday, the market generally freaked out about multiple reports of slowing Apple (AAPL) iPhone X sales. Apple supplier stocks such as Broadcom (AVGO) dove in sympathy. But the bigger story perhaps is the continued weakening in semiconductor stocks. The SPDR Semiconductor ETF (XSD) , which contains big tech names like Intel (INTC) , Advanced Micro Devices (AMD) and Cree (CREE) , closed below its 50-day moving average on Tuesday. Over the past month, the XSD has shed about 5%. The Philadelphia Semiconductor Index has also fallen 5% or so during the same stretch. The sell-off is odd in front of a corporate tax cut that is showing early signs of unlocking a good bit of frozen capital investment.
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And who said old school retail was dead: Readers of this fine daily free newsletter should have already made bank on retail stocks in the last month. Since Black Friday, yours truly has pounding the table on how retail fared this holiday season. Online sales for Black Friday were beyond strong. Store traffic on the weekends since Black Friday has been good considering the shift to mobile. Retailers haven't given the store away, seeking to capitalize on more confident U.S. consumers. All signs point to strong fourth quarter earnings pre-announcements from the retail space soon. Accordingly, retail stocks have caught fire. Now may be prime time to book some profits, especially in the department store sector. Kohl's (KSS) shares are hovering around a 52-week high, Macy's (M) is up 25% inside a month and Nordstrom (JWN) has tacked on 15%. The reality is that despite all the near-term positives, retailers will unlikely beat fourth quarter profit estimates by 25 cents or more, analysts are unlikely to hike their 2018 estimates up materially and store closure announcements are still highly probable. Remember, this is a world increasingly dominated by Amazon (AMZN) , a fact the internet beast proudly showed off on Tuesday.
2018: The Year of Ripple?
Cryptocurrency ripple has been firing on all cylinders during the latest plunge in bitcoin (see chart above). Ripple is up almost 400% in December compared to a 60% gain in bitcoin. Surely, ripple trading around $1.00 makes its the ultimate "cheap" speculative investment on a hot topic. Buying penny stocks is so 1998.
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