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Elon Musk in Jeopardy
The Market Bull 2018

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The major averages enter the final hour with modest gains to begin the week on little real news. Doubts about Tesla going private and its viability grow rapidly as Elon Musk’s poorly considered Tweets are rapidly turning into a debacle for himself, the company and its share price.

In shades of 2000 when the NASDAQ was propelled to nose bleed heights by a smaller and smaller group of companies. We have a similar picture presently with the Standard and Poors 500 Index as nearly half of its 2018 advance is attributable to just 5-companies, Amazon. Microsoft, Apple, Netflix a profitless and debt laden company and Alphabet, aka Google. Of the 5 Amazon accounts for the lion’s share. At the sector level technology leads as the index reaches a valuation level that is 97% of the highest ever recorded. Per Goldman Sachs Group that reviewed 40-years of data.

It would seem that the Cass Transportation Index that measures trucking, railroad, air and barge freight transportation jumped 10.6% in July, on a year ago basis, to an 11-year high. With capacity tight despite Trumps blustery rhetoric, talk of trade wars and worse, transportation costs are surging. All of which suggests that the economy is actually doing quite well, despite a number of contradictory reports, and more than a few challenges.

This is Caleb Lawrence Registered Investment Adviser Scotts Valley Drive and Willis Road in the Scotts Valley Plaza, Suite 202 or call me toll free at 888-RICH PIG / 888-742-4744.

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