Stocks continue to climb and today the S&P 500 Index touched an all time high. At the close the Dow gained 63 at 25,822. Trading volume was higher and both IBD and BTS continue to indicate that markets are in rally mode.
Home builders got a boost today when Toll Brothers reported better then expended numbers. Toll posted a 27% jump in revenue and a 45% surge in profits. The forward outlook was solid as well and Toll Brothers stock shot up like a SpaceX rocket. Guru Jade “Top” Rahmani at KBW noted that luxury brands should garner a premium as low unemployment and robust demand should offset the impact of higher constructions costs, labor shortages and rising interest rates. In the Seattle markets, home builders will buy a $600k 1940’s house, scrape it and then put up a luxury box which sells for $1.2 to $1.5 million. It is sad to see these older more affordable homes slowly disappear, but the high-end homes seem to be the only way developers can make hay. Recently however the luxury market in Seattle has cooled down.
Shares of Tesla moved higher today and have been bouncing between a low of $300 and a high of roughly $350. The company is caught between bulls and bears and is the most shorted stock on the market. Interviews with and tweets from Elon Musk are interpreted as evidence that Musk is cracking under the pressure but Catherine Wood, CEO of ARK Invest, is a Tesla bull and thinks the company will eventually trade at $4,000 per share for a market cap of $700 billion. What drives her theses is the notion that Tesla has built a battery powered computer/smart phone that looks and acts like a car while Ford, GM and the rest of the industry makes cars that are outfitted with computers. She also feels that Tesla is years ahead of other car makers and, if successful, could disrupt the auto industry as we know it.