Stocks pulled back after a Thursday drone strike killed Iran’s top General as he left the Baghdad Airport taking the proxy war with Iran to a new level. The news sent Middle East tensions higher along with oil and gold prices as the risks of conflict between the US and Iran increased. At the close the Dow was off 233 at 28,634. Trading volume was higher and for the week the Dow was flat. Iran is in a weak position economically and just how they respond is anyone’s guess but things like this are reasons why investors are holding huge amounts of cash and irrational exuberance, except with Tesla, is nonexistent.
US manufacturing fell more than expected with an ISM reading of 47.2 down from 48.1. The reading was the worst since 2009 and marks the 5th monthly decline in a row. Tim Fiore, Chairman of ISM said the common tread between components in the report was global trade which remains the most significant cross-industry issue. He speculated that several sectors could see improvement with passage of USMCA and the China phase one deal.
Tesla jumped like a frog after the release of Q4 vehicle delivery figures. The gurus had forecast total deliveries of 106,000 cars while the actual figure came in at 112,000 putting the company at 367,500 for the year which is 50% higher than 2018’s total and above consensus. The company delivered 92,500 Model 3 vehicles along with 19,450 Model S/X vehicles. On New Year’s eve Elon Musk and his mom, Maye Musk, were seen helping deliver vehicles as long lines of buyers waited outside delivery centers. Shares hit all-time highs on the news. Short sellers are getting squeezed like oranges in a juicer. Tesla bear Mark Spiegel is looking like 10 miles of bad road right about now after he sent a letter to investors saying his fund was off over 11% in December due to his Tesla short position representing approx. 20% of holdings. Tesla in December alone gained 26.7% and is up 6% ytd.