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Stock market looks like ‘Wile E. Coyote,’ running off ‘a cliff,’ says expert



Stock market looks like 'Wile E. Coyote,' running off 'a cliff,' says expert

The S&P 500 index is teetering on the edge of a rarefied perch, persistently brushing aside uncertainties created by the COVID-19 pandemic in its ascent.

Although arguably the most important stock-market benchmark in the world is clambering toward a record, the rally by has stalled out in recent days and its proximity to an all-time closing peak has made a number of investors uneasy to say the least.

“Never before have I seen a market so highly valued in the face of overwhelming uncertainty,” James Montier, behavioral economist and member of GMO’s asset allocation team, wrote it in a recent research paper titled “Reasons (not) to be cheerful: Certainty, Absurdity, and Fallacious Narratives.

The U.S. stock market looks increasingly like the hapless Wile E. Coyote, running off the edge of a cliff in pursuit of the pesky Roadrunner but not yet realizing the ground beneath his feet had run out some time ago

— Montier

“It appears as though the U.S. stock market has drunk from Dr. Pangloss’ Kool-Aid – where everything is for the best in the best of all possible worlds,” he wrote, referring to Voltaire’s character in Candide, who asserted the Pollyannish philosophy that the current state of affairs always represents the best of all possible worlds.

Of course, like Voltaire’s satirizing in Candide of 17th century philosopher Gottfried Wilhelm Leibniz, who also espoused the thesis of a sort of dauntless optimism, Montier thinks market participants may be far too cavalier about the equity index’s burst higher in the face of a unprecedented economic calamity created by the worst pandemic in modern times.

“It is as if Mr. Market is taking a tail risk (albeit a good one) and pricing it with certainty,” Montier wrote.

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On Friday, the Dow Jones Industrial Average
booked a weekly gain of 1.8%, finishing about 5.5% from its Feb. 12 record close, and the S&P 500
rose 0.6%. The S&P 500 briefly traded above its Feb. 19 closing high of 3,386.15 on Wednesday and Thursday, but was unable to hang on.

The Nasdaq Composite Index
meanwhile, finished barely positive for the week, up 0.1%. The index has posted 32 records so far in 2020.

If the S&P 500 is able to join the Nasdaq Composite in record territory at any point over the next several weeks, it will have traversed its bear-market low to a record high in the shortest span of time on record, according to Dow Jones Market Data. The current record recovery was 310 trading days from Feb. 9, 1966 to May 4, 1967. Thus far, 102 trading days have passed between the S&P 500’s March 23, 2020.

Montier’s concern at the pace of the recovery in stocks is one held by a number of bearish and bullish investors alike. How can the market surge so mightily after tumbling more than 30% to its lows in March against a backdrop of economic carnage.

The GMO investor said that only the Great Financial Crisis of 2008-2009 represents a parallel to the so-called V-shaped, fast and potent, bounce higher that we have observed in the market.

GMO and Global Financial Data

“It is certainly true in theory that the stock market is meant to be a forward-looking device, capable of seeing through short-term issues,” Montier notes. “History teaches us that the market is usually a master of double-counting, attaching peak multiples to peak earnings, and trough multiples to trough earnings,” he adds.

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Worries about a further fiscal stimulus from Congress, a China-U.S. flare-up, as the two countries indefinitely canceled plans to hold talks about Beijing’s adherence to terms of a phase-one trade accord, and worries that the viral outbreak could mount a punishing resurgence in the fall and/or winter are just a couple of pressing concerns for market participants.

However, Thomas Lee, founder of Fundstrat Global Advisors, remains unabashedly sanguine about the market’s outlook. He raised his year-end target for the S&P 500 by 75 points to 3,525.  “From our vantage point, this is just a waiting game.  That is, we believe there are catalysts to support a move well beyond 3,393.52,” he wrote in a Friday research note.

That said, Lee’s prediction for the start of a bullish burst higher for the market, sparked by so-called epicenter stocks, financials, energy and other sectors, that have been left behind in the recent rally, failed to materialize on Aug. 14 as he had predicted. It’s, perhaps, worth giving the strategist a few more sessions to see how that call shapes up into next week.

It’s hard to glean the outlook for the economy and the market by observing Wall Street luminaries either.

Read: Jobless claims fall below 1 million for first time since start of coronavirus pandemic
Also checkout: Did the expired $600 federal jobless benefit keep people from going back to work?

On Friday, a backwards looking peek into funds run by billionaire George Soros indicated that he was loaded up on financial firms, including Bank of Americ
a, Morgan Stanley
Wells Fargo & Co
, Citigroup
and PNC Financial Services
which would suffer the most if the economy fails to manifest the V-shaped recovery that stocks appear to predict. At the same period, Warren Buffett’s Berkshire Hathaway
was unloading or lightening his position in many of the same names and scooping up shares of gold miner Barrick Gold Corp
according to public filings that offer a snapshot of investor holdings at a given point.

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So, who’s right about the outlook?

Montier offers some advice, though: “Rather than acting as if the uncertainty doesn’t exist (the current fad), the value investor embraces it and demands a margin of safety to reflect the unknown.”

What’s ahead?

Looking into next, week the economic calendar looks light also as corporate earnings reporting season winds down to a trickle.

The usual report on U.S. weekly jobless benefit claims on Thursday take center stage and before that on Wednesday, the Federal Reserve will release the minutes to its July 28-19 meeting, which provide some further insights about policy makers’ views of the economy.

Many Fed members have been insistent that fiscal stimulus is a key pillar of the next phase of the economy’s recovery after the Fed has doled out trillions to prop up financial markets.

There is also regional manufacturing surveys of the New York and Philadelphia regions due next week, which will help investors gauge whether the revival in heavy industry accelerated in August, as is likely.

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Everything has been delivered. 10 Bugatti Centodieci are already in the hands of the owners



Everything has been delivered.  10 Bugatti Centodieci are already in the hands of the owners

OAll Bugatti Centodieci have been delivered, the Molsheim-based brand said on Monday. Cristiano Ronaldo received the number 07 in October this year. and Bugatti has now revealed that the latest unit – #10 – is already in the possession of its owner.

“The Centodieci combines all the values ​​of the Bugatti brand in an extraordinary package: rarity, innovation, heritage, craftsmanship and unrivaled performance. The production batch of 10 units was so in demand by our customers that it was sold before the Centodieci. was even officially presented,” said Christophe Piochon, president of Bugatti.

This latest example is finished in Quartz White with carbon fiber trim on the bottom and matte grilles. The brake calipers are painted in Light Blue Sport, as is the logo on the rear that refers to the EB110, the iconic Bugatti model that inspired this Centodieci. Inside, the predominant color is also blue, as you can see in the images above.

This block is powered by the same block as the other nine instances. The 8.0-liter W16 with four turbines is capable of developing 1600 hp. In terms of performance, this allows the Centodieci to hit 100 km/h in just 2.4 seconds and reach a top speed of 380 km/h.

Recall that each unit costs the owners eight million euros before taxes.

Read also: We already know when the Bugatti Centodieci fell into the hands of Ronaldo.

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The first Dacia hybrid. “The cheapest hybrid family on the market”



The first Dacia hybrid.  "The cheapest hybrid family on the market"

BUT Dacia revealed this Monday that the hybrid engine has been available since March on the Jogger, the Romanian brand’s model known to be available with a seven-seat variant.

The Jogger Hybrid 140, Dacia’s first hybrid, will hit dealerships in March, but customers can expect and order it as early as January.

The price has been revealed by Dacia and since it’s only available in the seven-seater SL Extreme, it starts at €28,800. The brand claims it is “the most affordable hybrid family car on the market.”

Available in six existing colors to celebrate the launch of this hybrid, there will be a slate gray version, as you can see in the images above.

Equipped with a 1.6 liter four-cylinder petrol engine with 90 hp, the Jogger is also powered by two electric motors (a 50 hp engine and a high-voltage starter-generator). The total power is 140 horsepower. The electric transmission is automatic, four-speed, connected to an internal combustion engine, and two speeds are connected to an electric motor. This combined technology was possible, according to Dacia, only due to the lack of clutch.

Combined with the energy recovery levels of the 1.2kWh (230V) battery pack and the efficiency of the automatic transmission, regenerative braking delivers all-electric traction on 80% of urban journeys and saves up to 40% of fuel compared to a combustion engine vehicle.

Read also: Dual-fuel Dacia Jogger Eco-G. We tried 5 seater and LPG…

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See how Tesla tests its electric Semi truck in the worst-case scenarios



Tesla Semi camião elétrico testes

Tesla has finally been able to bring its long-awaited Semi to market. This electric truck promises to revolutionize transportation and bring all the unique characteristics of this type of electric vehicle to this class of vehicles.

Now that the first units have been delivered, there is hope that they will finally be mass-produced and reach more transport companies. With so many promises to be kept, a new video is now emerging showing Tesla testing its Semi truck under worst-case scenarios.

Tesla Semi is already on the market

Like all Tesla electric vehicles, Semi follows the same line of creating a unique design associated with a platform with the most modern technology available. The proof is in what was presented to the public and surprised most people.

To prove the quality of this new proposal, Tesla published in your LinkedIn account new video. In it, he reveals some of the testing he's done to determine the strength and quality of the Semi's design and its (potential) durability.

Tests to prove its durability

It has been revealed that the Tesla electric truck is subjected to numerous tests and its application in the worst scenarios that drivers may face. It doesn't stop at the ruggedness of the Semi's designs, but goes further and focuses on the motors and batteries themselves.

This is the proof that many have been waiting for to ensure that this new proposal is not limited to a lot of autonomy. Its resistance is great and will provide greater durability, further enhancing the Semi's value and performance.

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high quality electric truck

Tesla has already showcased the Semi's quality with a video showing its truck driving roughly 500 miles on just one charge. The big news here is that he managed to make this long journey with a maximum load of about 37 tons.

Now Tesla remains to widely place the Semi on the market. At the moment, only a few companies have access to this new product, with a very long list of pending deliveries, who want to start mass-using this electric truck offering.

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