STOCKS GO NOWHERE: Here's what you need to know
First, the scoreboard:
- Dow: 17,642, -8, (-0.05%)
- S&P 500: 2,048, -2, (-0.1%)
- Nasdaq: 4,713, -12, (-0.3%)
- WTI crude oil: $44.30, +1.2%
US Economy
In what's been a busy week for the US economy, Thursday was a bit quieter with only the latest weekly report on initial jobless claims crossing the wires at 8:30 a.m. ET.
Claims totaled 274,000 last week, the most in five weeks though overall initial claims remain near historic lows. This does, however, give us our 61st straight week of claims not topping 300,000 in a given week, which remains the longest streak since 1973 and on a population-adjusted basis is effectively the lowest level for claims on record.
The big economic news, however, was looking ahead to tomorrow morning's April jobs report, which is expected to show US payrolls grew by more than 200,000 yet again while the unemployment rate should fall to 4.9%.
Akin Oyedele has the full preview here.
Tesla
We wrote about Tesla on Wednesday as there were some bearish comments out of Jim Chanos earlier in the day and reports that executives were leaving and then earnings.
Well, the earnings beat expectations. But the real story is Tesla pulling forward its production goals for its new, low-cost Model 3 car by two years.
In the company's letter to shareholders, Tesla said it wants to be producing Model 3's at a rate of 500,000 per year by 2018, with Musk saying on the company's conference call this is the biggest strategic change the company is making. Which, yeah, I'd imagine pulling forward production guidance by two years on a new hotly-anticipated product that brings you from the realm of luxury to mass-market consumers is a challenge.
But on the conference call, Musk said it can be done because the Model 3 is the simplest car that Tesla has produced yet. And while the company also has a penchant for missing production deadlines, previous experience cannot inform the future.
Or as Musk lectured analysts on the company's conference call:
Doom, Gloom
Bob Bryan went to the Sohn Conference yesterday.
And the positive views? Hedged.
Now, hearing bearish views on the global economy from folks like Stan Druckenmiller and Jeff Gundlach won't come as a total surprise to those who follow the space. Gundlach is, after all, a bond guy.
But the bearish case that really caught my eye was PointState's Zach Schreiber outlining why all the economic changes he sees dreamed up in Saudi Arabia are simply not going to work. The kingdom wants to shift its economy away from oil and into services. A big ask, surely.
Saudi Arabia will also tap the markets for cash by floating a chunk of its state-run oil company Saudi Aramco, all while keeping the riyal stable against the dollar, and, in Schreiber's view, likely needing to keep its defense budget robust if not growing.
A challenge. Or as Schreiber said Wednesday, "Saudi Arabia is economically unsustainable."
We'd note that two years ago, Schreiber made a bold call that the price of crude oil was headed lower.
That worked out: he has our attention.
Additionally
Deal volumes are crushing Wall Street banks.
Donald Trump is a lot like the collapse of Long-Term Capital Management.
Cupertino, California is mad at Apple.