Stocks opened the trading week with a bang following a Sunday evening trade deal with the US and our friends to the north. The Dow finished the day up 192 points at 26,651 on heavy trading volume. Both BTS and IBD indicators remain positive.
The Canadian gubment agreed to join the US- Mexico trade deal Sunday evening clearing the way for NAFTA 2.0 to proceed. The deal opens 3.5% of Canadian dairy markets to US farmers and keeps steel tariffs in place to prevent China from using places like Moose Jaw as a back door to dump steel into US markets. The most important part of the deal however is that it secures the auto supply chain in North America with the US, Canada and Mexico as valued partners. It protects this US/Canada/Mexico block from non-North American nations trying to usurp the supply chain. The deal now heads to congress for ratification and should be in place sometime next year.
Tesla CEO Elon Musk and the SEC reached an agreement allowing Elon to remain as CEO and pay a $20 million fine. Elon must step down as Chairman of the Board however and will be assigned a “Tweet Nanny” or as they say in North Korea, a “Tweet Minder”. Shares rebounded on the news and all is right with the world again as it looks like Tesla was able to hit its production targets for the first time. Some estimates say that they cranked out over 80,000 cars in the last three months. On Saturday I saw a big rig loaded with Model 3’s on I-5 northbound and there was a pack of millennials chasing it like hungry bulldogs after a meat wagon. To say that buyers are eager for delivery is an understatement.