In this briefing:
- Tesla Motors Inc: Come Hell or High Water
- 2019: Five Key Elements to Watch for in the Oil Market
- How To Spot The Bear Market Bottom
- Are US Stocks A Buy Yet?
- Uber IPO: Its Sprawling Empire And Battle Lines (Part 3)
1. Tesla Motors Inc: Come Hell or High Water
It is our view, that come hell or high-water, in 2019, Tesla Motors (TSLA US) will establish itself as the pre-eminent large-cap growth stock. Those that are short would cover the position at a loss and those that are long are looking at another Apple Inc (AAPL US) or Amazon.com Inc (AMZN US) in the making. The ride may be volatile, but will be worth it.
2. 2019: Five Key Elements to Watch for in the Oil Market
As we turn the page into 2019, uncertainties over the world’s economic environment are stacked so high, that it would be presumptuous to try and read the fortunes of the oil market in great detail.
We expect plenty of volatility and surprises in a very event- and sentiment-driven environment for the oil market next year.
In this year-ender, we cast our eye over the first half of 2019, which promises to be action-packed, with major deadlines and signposts that could set the tone for the rest of the year.
We have identified the following five key elements that will shape the oil market:
- Economic sentiment to remain in the driver’s seat
- OPEC/non-OPEC compliance will be strong
- Demand growth rather than oversupply will be key
- Prices could rebound by end of Q1
- Wild cards: Iran sanctions, US recession
3. How To Spot The Bear Market Bottom
The outsized daily swings in the major U.S. equity averages tell the classic story of a bear market. Normal bull markets simply do not experience consecutive multiple daily moves of 2% or more.
The market’s panicked price action is highly reminiscent of past panics in 1962, 2002 and 2015. In those cases, the market bounced, and made a lower low several months later. In all cases, stock prices were higher a year later. Our base case scenario calls for an initial low, rally, followed by choppy price action, and a final low in 6-8 months.
Our analysis finds that the technical price action of the market is consistent with a bear market. We offered a checklist of events that occur at market bottoms, but we do not know where the market may bottom out. Much depends on the fundamental drivers of the bear market, policy risks from the White House and the Federal Reserve, and how they are ultimately resolved.
4. Are US Stocks A Buy Yet?
- 5%-like rallies on Wall Street are signs of a bear market not a bull market
- Bull markets require strong liquidity and low risk appetite, neither yet apply
- Risk appetite readings at minus 12.6 are still above the minus 40 criterion for an upturn
- Recent large fall in risk appetite consistent with upcoming economic recession
5. Uber IPO: Its Sprawling Empire And Battle Lines (Part 3)
Although Uber aims to be an Amazon for transport, we will focus on the ride-hailing market in part 3 of this series. Here, we try to answer the following questions:
- What are the indicative ride-hailing market shares of Uber vs Lyft in North America?
- What is Uber’s share in other key countries?
- What are the lawsuits investors should watch out for?
- How do Uber’s revenue drivers compare with Lyft’s?
- What are the timelines and key figures for both companies’ IPOs?
This is the third note in a series about the expected 2019 IPO of global ride-hailing giant Uber Technologies (0084207D US) and Lyft. Please read the earlier two pieces in the series for better contexts:
Uber IPO Preview: Its Sprawling Empire and Battle Lines (Part 1) written by me.
Uber IPO Preview: Fast-Growing Uber Eats Has Become a Material Part of Uber (Part 2) written by Daniel Hellberg
