Diamonds and Dogs

1/2/2019

'January Effect' good for GE (GE). One of the worst performing stocks for 2018 is bouncing significantly to start the New Year up 5% to a one month high. No news on the stock, but typically the worst performing stocks one year get a boost in the following year as investors look for bargains. GE still faces a long road to recovery as they divested non-core businesses, fix liquidity issues and try to get troubled power unit back on track.

Tesla (TSLA) comes up short. Tesla is down 7% today as fourth quarter deliveries rose 8% sequentially to 90,700, below estimates of 92,000. In 2019 a big tax break goes away so Tesla will cut prices of its Model 3, S and X vehicles in the U.S. by $2,000 each, effective immediately, to halve the federal EV tax credit of $3,750 from $7,500. This may not be good for sales or profits in 2019 as tax credits go away. The company also has some debt coming due so they may have to raise capital once again.