Markets continue their upward bias although in a mixed fashion. The Dow finished the day up 122 at 26,773 on higher trading volume. Both the NASDAQ and S&P 500 finished the day slightly lower. Amazon today announced it was upping its minimum wage to $15 per hour for all warehouse employees.
Reactions to the Canada-US-Mexico trade deal continue to come in. The South China Morning Post said China was being “Threatened with isolation” by the deal. The Canadian dairy farmers said they were being “sold out” by their gubment. The US Chamber of Commerce and the US Dairy Farmers Association were both pleased with the deal. Labor unions were supportive as well as it protects higher wage jobs and opens the door to unionization in Mexico.
Hedge fund guru David “Silky Seamore” Einhorn is having a rough year as his investment portfolio is down over 20%. This is in stark contrast to the years of stellar results that David has given his clients. The problem began when Silky went long GM at a 45 degree angle and at the same time shorted Tesla, Amazon and some other big movers. In terms of his choice between GM and Tesla, if we look at the latest quarterly sales and production results, it might appear that he backed the wrong horse. GM’s sales were down 11% from Q3 2017 to Q3 2018. The company blamed hurricane Florence on the drop. The Bolt, which is GM’s electric car, saw its sales fall 41%. GM blamed falling Bolt sales in part because the company is moving production to Canada and Asia. Tesla on the other hand, produced 80% more cars in Q3 2018 than it produced for all of 2017! Both Tesla and GM report their numbers on a quarterly basis. All in all, the US car industry is doing well but with changes in trade policy we could see some disruption as supply chains start to refocus on North America. During the quarter Tesla produced 80,142 and delivered 83,500.