|Dow||-25.94 to 17,111.42|
|S&P 500||-6.17 to 2,001.54|
|Nasdaq||+9.39 to 4,592.29|
|10-YR Yield||+0.008 to 2.469%|
|Gold||-$11.70 to $1,255.60|
|Crude Oil||-$0.30 to $92.99|
The lithium-ion plant will rise out of the Northern Nevada desert at the Tahoe Reno Industrial Center. Together with partner Panasonic, Tesla will start cranking out batteries in about three years. Officials say the factory will employ 6,500 workers — making around $25 an hour — once it’s complete. It’ll take another 3,000-plus workers to build the 10 million square foot “gigafactory.”
In order to secure the deal, Nevada shelled out tax abatements and credits totaling hundreds of millions of dollars. There’s no guarantee that Tesla’s “middle market” Model 3 (the one that will use those batteries) will see the same success down the road that its higher-end Model S is seeing now. But clearly visionary Tesla CEO Elon Musk is ready, willing, and able to spend billions of dollars investing in America!
|Elon Musk, left, and Nevada Gov. Brian Sandoval, closed a deal giving Tesla a $1.25 billion tax incentive package that should provide a return of $100 billion in 20 years.|
The same is true of Apple (AAPL, Weiss Ratings: A+). The firm is shelling out $5 billion to build a futuristic s new corporate headquarters that’s slowly rising out of the dirt in Cupertino, California.
It will reportedly have everything from “secret” underground passages … to advanced earthquake-proof features … to its own mini-farm. The building will also include 700,000 square feet of solar panels to generate electricity and six square kilometers of glass. Upon its projected completion in 2016, it’ll house 13,000 employees.
Someone had the good sense to fly a camera drone over the property recently, and post the video online. When you look at it, you really get a sense for the size and scope of the massive project. Again, this is a landmark American company investing billions of dollars in America.
But you know what? Most retail investors AREN’T doing the same thing!
“Many investors are still reluctant to invest in America, even if some of the most visionary corporate leaders we have are doing so.”
As Bloomberg notes today, the S&P 500 is kicking the pants off of global stocks — making six times as much as them in 2014. That hasn’t happened since at least 1969, as far back as the data goes.
Yet only $13 billion has flowed into U.S. stock funds this year. Four of the last six years have seen net outflows from domestic equity funds. One manager quoted in the story called the advance in stocks “one of the most unloved rallies of all time.”
I’ve been crystal clear about the opportunities I’m seeing, in select domestic sectors like energy, aerospace, food and beverage, industrials, and more. Many of my favorite names have done very well over the past two to three years.
But it’s clear that many investors are still reluctant to invest in America, even if some of the most visionary corporate leaders we have are doing so.
Why do you think that is? And what does it say about this rally? Does the lack of the kind of euphoria and love for U.S. stocks — like we saw for dot-bombs in 1999 and housing in 2005 — mean there’s more room for it to run? Or is it doomed to collapse if investor inflows dry up?
What about you personally? Are you hesitant to invest in U.S. stocks? If so, why? Or are you making money while others miss out? Let me know at the Money and Markets website.
|OUR READERS SPEAK|
I hope you are having a great Monday. Sadly, my New England Patriots whiffed yesterday in the hot Miami sun. My wife’s Chicago Bears lost, too. But we still had a great time at the game — and at least our family’s fantasy league team won the weekly match up!
Now, getting back to business, Reader Robert C. weighed in on the euro currency’s recent weakness. He said: “The euro experiment will end in failure. By devaluing the euro, the devaluation is subtracted from purchasing power!
“This is the taxation by stealth that we call inflation. No country in the history of the world has successfully devalued their currency, in order to make exports cheaper and pay back debt with currency with less value, without destroying the currency in the process. The dollar will be no different.
“Both our economy and the economies of Europe have serious structural problems which cannot be addressed by the central bank; high taxes, excessive regulations, excessive litigation in the US particularly. These structural problems have to be addressed by the legislative and executive branches of governments.”
Good points all around, Robert. Monetary policy has exhausted its usefulness, and is completely off sides when compared to where it should be at this stage in the economic recovery. It’s just that right now, I believe Europe’s policy failures are even worse than ours. That makes the dollar the relative victor in this battle among losers.
Meanwhile, Reader Art A. weighed in on the economic situation. He said: “Speaking as the controller for the company I work for, I would say that business has improved. We are somewhere slightly above the middle of the range of great to terrible.”
Thanks for the report, Art. I agree this isn’t a 1990s-style boom-time economy, but it isn’t a 2008 crisis-era one either.
Finally, when it comes to investing strategy, Reader Tom had the following insights: “This should be a lesson to all that the only way to get rich is to invest in the stock market. You don’t have to start with a lot, you just need to be vigilant and dollar cost average over a long period of time. The average annual return since 1950 has been 12 percent.
“Don’t waste your time with gold or speculative investments, get in the market and get in now. The sooner you do, the richer you will be.”
Tom, I agree that right now there are select stocks you can invest in sensibly and profit from. I’d much rather recommend them than lousy alternatives like government bonds.
But I don’t think you should dismiss gold even though it has had a rough couple of years. I’m personally watching for signs that the downtrend there is over — and I’m seeing some encouraging evidence in that regard.
Again, please continue to share your thoughts on these or other topics at the Money and Markets website here.
|OTHER DEVELOPMENTS OF THE DAY|
It’s not exactly Mel Gibson (as Scottish folk hero William Wallace in the 1995 movie Braveheart) yelling and screaming and giving England the dust off. But independence-minded Scots are getting much closer to winning a nationwide referendum for secession from the U.K.
As recently as a month or two ago, it looked like Scotland was a lock to remain in the U.K. Now, the Sept. 18 vote could go either way. The British pound plunged to a nine-month low today amid fears of a break up and its implications for U.K. growth, banking regulation, political harmony, and more.
General Electric (GE, Weiss Ratings: B) is selling its household appliance business to Electrolux AB of Sweden. That would give Electrolux roughly 26 percent of the U.S. market, vaulting it ahead of Whirlpool (WHR, Weiss Ratings: A-). GE will be able to redirect its focus and money toward other industrial businesses.
Harvard University is already swimming in money thanks to large donations from alumni and smart investing over the years. Now, it’s getting even richer because of a whopping $350 million donation from Gerald Chan. The Hong Kong investor and property developer has an estimated net worth of about $3 billion.
Finally, congratulations to Prince William and Kate on the announcement that they’re expecting a second child. No word on a due date yet.
Reminder: You can let me know what you think by putting your comments here.
Until next time,
P.S. Don’t miss out on Martin’s new Q&A video that addresses your questions! It was posted just today, click here to view now! You will also be able to catch up on the urgent video briefings that he posted last week.