Ed’s Daily Notes for July 10th   Leave a comment

Bloomberg: China Exports Unexpectedly Drop With Imports in Economy Drag

Uh oh:

China’s exports and imports unexpectedly declined in June, underscoring the severity of the slowdown in the world’s second-biggest economy as Premier Li Keqiang reins in credit growth.

Overseas shipments fell 3.1 percent from a year earlier, the most since the global financial crisis, data from the General Administration of Customs showed in Beijing today, compared with the median estimate of a 3.7 percent gain in a Bloomberg News survey. Imports dropped 0.7 percent, while the median projection was for a 6 percent increase.

Exports to the U.S. and European Union declined for a fourth straight month while the drop in imports resulted in part from falling commodity prices. Weaker global and domestic demand, highlighted by China’s biggest shipyard outside state control seeking a government bailout, increases pressure on Li to support growth that’s at risk of sliding to the weakest since 1990 even as he vows to press on with restructuring the economy.

This report is coming straight from the Chinese government, and not some third party making a wild guess. Considering the Chinese government tends to be overly optimistic in it’s economic reports, this is a hugely bad sign, for both China and the world economy.

Bloomberg: Tesla Rises on Bump Up to Nasdaq-100 Index

Tesla Motors Inc. (TSLA), the world’s best-performing automotive stock this year, rose to a record after Nasdaq OMX Group Inc. (NDAQ) said it’s elevating the company’s shares to its Nasdaq-100 Index to replace Oracle Corp. (ORCL)

Tesla will be added to the Nasdaq-100, which tracks the biggest companies on the Nasdaq, before the start of trading on July 15, Nasdaq OMX Group Inc. said in a statement yesterday. Oracle, which last month said it will join the New York Stock Exchange, is the biggest company to jump between the competing exchanges. Tesla is the only U.S.-based automaker on the Nasdaq.

Even though this is a logical move for Nasdaq, with Oracle leaving, it does beg a comparison between the two companies. While I like Tesla, it’s stock is hugely overpriced at the moment (a forward P/E of 143?). Oracle is one of the blue chip tech stocks, with a safe dividend at a fair price, and with clean financials. I wouldn’t call Oracle a “buy”, but it is definitely a “hold” if you have it.

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Posted July 10, 2013 by edmcgon in Economy, Market Analysis, News, Stocks

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