Where's The Beef Elon?

Ok - the year was 1984 and ad campaign that swept the nation during the summer was Wendy’s “Where’s the Beef” campaign....now for those of us who remember it - Clara Peller was cast as the old lady in the commercial that kept asking but - “Where’s the Beef” when she was shown an oversized bun with a tiny cheeseburger inside....a direct shot at both McDonald’s - Big Mac and Burger Kings - Whopper.....It was just one of those ad campaigns that took off – and the phrase then became popularized in the culture causing people to ask - “Where’s the Beef’ when they questioned someone’s analysis or line of thought on any subject...in fact - during the presidential campaign that year - Democrat Walter Mondale used that line as one of his tag lines during the campaign as he challenged Democrat Gary Hart in the primaries........ And so, you ask - Why am I bringing this up?

Because investors and the SEC along with a host of lawyers are all lining up and asking ‘Lonnie’ (Elon Musk) - ‘WHERE’S THE BEEF’? 

Look Dude - you opened your (big) mouth in a fit of anger and announced on Twitter that you were ‘considering’ taking TESLA private in a $70 bil LBO (Leveraged Buyout) at $420/sh and that YOU HAD THE FUNDING SECURED!

I guess if you had said that you were considering taking it private and that’s all – then this wouldn’t be the issue that it is apparently going to become.....it was your announcement that you HAD THE FUNDING SECURED (essentially the deal was tied up - all you needed was a vote) that is causing the SEC and nearly every litigation lawyer out there to ask you to prove it - prove what you said was true or risk being accused of ‘manipulating’ your stock price (for whatever reason - and there are apparently a long list of them) for your benefit......Now FYI – not one board member, person, institution, PE firm,  or foreign gov’t has stepped up to verify this claim of funding……and as the clock ticks the SEC is getting a bit more anxious…..And this story is just beginning…..

So yesterday TSLA gave back 9 pts or 2.4% and this morning in early trading the stock is down another 5 pts at $365/sh as the pressure builds on Lonnie to come clean…..You see – If the deal were all but done – the stock would be trading UP towards the $420 price )allowing for the time value of money) as the ‘go private’ date approaches…… Ladies and gentlemen – pull up a chaise lounge – sit back and relax – This one is going to get interesting…….

Stocks churned yesterday – digesting really the moves from earlier in the week…. with earning season all but over – investors are now once again looking to the macro data points and the ‘technical’ of trading as they make their next move….

Look – the S&P has finally,  successfully pierced 2850….it has been fighting this level since March 18^th….after the surge to 2872 in January and then the collapse to 2538 in February and the resurgence to 2850 in March…..ever since then – the broader S&P has been unable to push up and thru – for reasons ranging from Tariff and Trade War talk engulfing nearly every nation around the world – ally or not, Russian collusion, prostitution, Iranian sanctions, Russian sanctions, weakening global data, falling housing prices,  rising interest rates, falling oil inventories then rising oil inventories, crude oil production cuts, mid-term elections, BREXIT, FREXIT and any other acronym you can think of…..have all played a role in investor/trader psyche…but in the end – it is none of this noise that actually prices stocks in the long run…it is the very fundamental core businesses that these CEO’s run…and if 2Q was any indication and if future guidance is any indication and the most recent macro data points are any indication then – the ‘green shoots’ that had struggled to bloom for so many years are now in ‘full bloom’ kissing the sunshine each day as the sun rises over the Atlantic. The move back from February has been slow but steady…and like the old fable about the tortoise and the hare tells us – ‘Slow and steady WINS the race…’

The mkt did just about nothing yesterday churning in a tight range as the Dow ended the day down 45 pts, while the S&P ended down less than 1 pt and the Nasdaq gained 4 – but this is OK….you want it to churn a bit after the push up and thru…..you want 2850 to now be support and no longer resistance as the mkt prepares to challenge the January highs of 2872….it is only 14 pts away and early indications for today show us that futures are trading UP 4 pts hitting their head on 2860……My gut says that we will challenge 2872 before the week’s end…..because as we inch closer to it – the move will feed on itself – and the excitement will build until we reach that point of ‘no return’.

OIL prices plunged yesterday after it was reported the US crude stockpiles hit a 7 month high – sending what they call ‘light sweet crude’ down 3.2% to end the day at $66.94/barrel…..breaking both the 50 and 100 dma’s……leaving it to struggle as it tries to stabilize…..and the continued rhetoric between the US and China only adds angst to the trade (in the short term) as any trade war could lead to softer economic growth – possibly reducing the demand for oil…..OMG really?  Production cuts will work well to put a floor under oil and it is going to be advancements in solar, wind and electric that will reduce the demand for oil…. Look for oil to try and stabilize right here at the 100 dma of $67.21 – if not then the next stop could be the June lows of $64/barrel.

Gold is flat and continues to trade in a tight range of $1,216/$1,225.

The dollar index – DXY is rallying a bit (think haven) as politics continues to wreak havoc in global FX markets…. (FX- Foreign Exchange).  The Russian Rouble plunges after Trump imposes new sanctions on Vlad, the Turkish Lira hits a new record low as Turkey and the US try to resolve ongoing NATO disputes.  The Japanese Yen rallies on the back of rising US/China tensions and after the BoJ disagreed on interest rate policy.  The British Pound weakens as the pressure builds around BREXIT and the lack of an agreement with the EU.  The Euro remains near the lows of the year and the New Zealand ‘Kiwi’ fell after the RBNZ (Reserve Bank of New Zealand) committed to keep rates at record lows thru 2020. 

In Europe – mkts there are mixed as the tariff talk, US – Russian sanctions and more BREXIT concerns dominate the talk shows.  FTSE -0.71%, CAC 40 – 0.48, DAX – 0.28%, EURSTOXX – 0.37%, SPAIN – 0.21% and ITALY -0.71%.   

Yesterday we learned that weekly mortgage apps declined AGAIN falling another 3% on top of the decline of 2.6% the week before…. (not bullish for housing).  Today’s eco data is the usual suspects – Weekly Jobless Claims of 220k, Cont Claims of 1.73 mil along with PPI (Producer Price Index) of +0.2%, Ex volatile food and energy of still +0.2%
 
The O’Neil Methodology has now moved firmly back into a confirmed UPTREND as all 3 indexes move back towards all-time highs….

“We are encouraged by this improvement but would still like to see more breakouts in high-quality growth ideas to gain further conviction in this rally. We continue to recommend a selective approach until this occurs.”
 

Steak Florentine 

Here's the Beef!   Steak...for the meat lovers - this is a great dish.... Start with a nice cut T-Bone or Rib Eye - always on the bone as the bone provides so much more flavor and makes a nicer presentation for your dinner guests.

You will need:  The steaks, Garlic cloves, Pork fatback, dried rosemary, coarse salt (kosher salt works nicely) and pepper. Remove steaks from fridge - rinse under cold water and pat dry with a paper towel.  Leave on a platter for about 20 mins so that they get to room temp.

In a food processor blend the pork fatback, garlic, rosemary to a paste like consistency.  Next - wash your hands and massage this mixture into the steaks - taking time to make sure that you have worked the meat and the mixture well. Now season with S&P.  Set aside.

Light the grill and turn the heat to high and allow the grill time heat up - it must be nice and hot.   Place the steaks on the grill and cook for about 5 min/side - depending on thickness - This will result in a med rare steak...so if you add a couple more mins on each side you will get a more cooked center.

Remember though - when you remove the steaks from the grill - you will cover and let them rest for 4 mins allowing them time to continue cooking and allowing for the juice to flow.    Once ready serve immediately on warmed plates.   Mashed potatoes and peas always works well with this dish along with a mixed green salad with red wine vinaigrette dressing.

This meal deserves a robust red wine - my favorite is Brunello di Montalcino – it’s like velvet.
  
Buon Appetito.