Read More : Consumers Spending Less; Just Ask Wal-Mart

All of the talk about the negative impact of the sequestration on consumer spending appears to have some validity.

While the rich consumers are continuing to spend on luxury items, those who are making less money and are influenced by the fragile jobs market and flat income levels continue to worry, which could likely impact consumer spending going forward. The effects of this, along with the widening gaps between the rich and the poor and the middle class are affecting consumer spending by Americans. In fact, we are seeing a widening income gap in many countries around the world, so it’s not just an American phenomenon—its impact on consumer spending is global.

Wal-Mart Stores, Inc. (NYSE/WMT) is a good barometer on the state of consumer spending around the world, especially with the lower- to middle-class consumers.

The company reported its results last Thursday, and it seems like Wal-Mart is facing some hesitation in consumer spending.

In the fiscal first quarter, the company’s net sales grew a mere one percent year-over-year to $113.4 billion, which was below the Thomson Financial consensus estimate of $116.4 billion. The sales reading was also shy of the low range of the estimate of $114.6 billion.

The low-cost retailer blamed the decline in consumer spending on a delay in tax refunds, adverse weather, and the rise in payroll taxes. The key comparable U.S. store sales fell 1.4% for the 13 weeks ended April 26, 2013, which represents the first contraction in this key metric in many quarters.

My concern is that Wal-Mart is facing sales pressure at a time when money is cheap. What will happen to consumer spending when interest rates edge higher due to rising carrying costs?

While the decline in same-store sales is worrisome for Wal-Mart, there are also concerns regarding the foot traffic in the stores worldwide. Retailers want to see rising and high foot traffic. The thinking is that everyone who walks into the store is a potential customer and represents an opportunity to convert the foot traffic into sales at the register.

In the case of Wal-Mart, there are issues, according to Patrick McKeever, a discount retail analyst at MKM Partners: “The foot traffic trend has been deteriorating at Wal-Mart, pretty much across the entire portfolio, both domestically and internationally,” he states. (Source: Chang, A., “Wal-Mart Has a Bigger Worry Than Sales Growth,” Yahoo! Finance web site, May 16, 2013.) McKeever says the foot traffic for Wal-Mart is declining in North America, Mexico, Brazil, China, and Japan, and predicts it to fall even further this year.

Wal-Mart estimates it will see a rise in comparable store sales in the next 13-week period. If the company doesn’t deliver on this estimate, then you have to pause and consider that maybe all is not as rosy as the media is letting on.

What Others Are Reading : Global Recession 2013

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Read More : Divergence Between the S&P 500 and Current Economic Recovery Grows; Are Investors Too Optimistic?

There continues to be mixed data regarding the strength of the economic recovery in America. This is creating an interesting divergence between the level of the S&P 500 and the growth rate of the economic recovery, which is far less than many had expected so far.

The Federal Reserve Bank of Philadelphia recently released its index of manufacturing activity, which dropped to -5.2 in May, versus a reading of 1.3 in April. (Source: “Business Outlook Survey,” Federal Reserve Bank of Philadelphia web site, accessed May 17, 2013.)

The survey shows no consistency over the past seven months regarding the current conditions of the economic recovery. The report indicates that the economic recovery has oscillated between positive and negative readings. Current demand for manufactured goods dropped substantially to -7.9 in May, from -1.0 in April. As well, the level of inventories increased to 4.1 in May, versus -22.2 in April.

This indicates that for the surveyed businesses during the month of May, there appears to be less demand for manufactured products, and inventories are piling up, which is clearly not a sign of strength. However, the S&P 500 continues to move higher. The question is: is this upward movement sustainable?

Obviously, no one can predict the future, but investors in the S&P 500 try to anticipate future shifts in the business landscape. While the economic recovery is currently weak, people who are now buying the S&P 500 believe that growth is close at hand. The current data do not support such a strong economic recovery; however, there is the possibility that such a recovery might occur.

One such data point that supports an economic recovery over the next six months is the future activity index, also part of the Philadelphia Fed’s survey, which increased to 32.3 from 19.5 in the previous month. According to this survey, 45% of businesses expect to see an increase in business activity over the next six months, compared to only 12% expecting to see a decrease.

It appears that business owners are quite a bit more optimistic regarding the potential for an economic recovery in the second half of 2013. Considering where the S&P 500 currently trades at, there needs to be a substantial improvement in the economic recovery if prices are to be sustained at current levels. We are getting to the point where the S&P 500 is priced to perfection.

Chart courtesy of www.StockCharts.com

Considering the substantial move upward in the S&P 500 since last year, one would think that the economic recovery was going full steam ahead. Clearly, that has not been the case, but investors are quite optimistic about the future.

Personally, I think most of the good news has already been priced into the market. This means that any setback could potentially cause a significant pullback in the S&P 500. Considering that the economic recovery is not markedly different from this time last year, one has to raise the caution flag for new purchases in the S&P 500.

While I am glad to see that more business owners are optimistic about the future, the current data does not support the premise that a strong economic recovery is close at hand. I would need to see additional data indicating that current business activity is improving—not just optimism about the future—to fully trust in this premise.

Most people are generally optimistic about the future, but actions speak louder than words; if business activity does not improve by a considerable amount, investors in the S&P 500 could start heading for the exits and booking their profits, leading to a sell-off.

What Others Are Reading : Global Recession 2013

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Read More : http://www.investmentcontrarians.com/stock-market/why-this-market-is-reminiscent-of-2000/2053/

There is simply nowhere else to put your money to work, which is why the stock market continues to edge upward to new record highs.

You can earn a yield of 0.23% on a two-year U.S. Treasury, 0.79% for five years, 1.90% for 10 years, and up to 3.13% if you extend it to 30 years. (Source: “United States Government Bonds,” Bloomberg, May 17, 2013.)

Of course, unless you have tens of millions of dollars to invest, I highly doubt you, or anyone for that matter, would be happy with these petty returns on bonds.

You could always go out and buy Spanish 10-year bonds yielding 4.29% as of Friday. Heck, you can do this out of your own kindness and help Spain out of its financial crisis, with an unemployment rate at over 25% and massive debt loads that will hinder the country for decades.

Or you can simply invest in higher-yielding U.S. blue chip companies, such as General Electric Company (NYSE/GE), Johnson & Johnson (NYSE/JNJ), and The Procter & Gamble Company (NYSE/PG), which all offer dividend yields of more than three percent.

The reality is that investors have been rushing into the stock market and not wanting to miss out on the Wall Street party, which appears to be attracting many party goers.

JPMorgan Chase & Co. (NYSE/JPM) is the party organizer and the biggest bull on Wall Street after coming out with a year-end target of 1,715 for the S&P 500. Now with over seven months left in the year and with the index already at 1,660 as of last Friday, another 55 points in this frothy stock market really shouldn’t be that difficult to achieve.

My own target for the S&P 500 was around 1,650, which has already been surpassed. I’m not going to provide another target at this point, though, because I really don’t want to chase the market higher.

I recall back in 1999 when the stock market was going through the roof. Wall Street was one of the biggest cheerleaders back then, with some calling for the Dow to target 20,000.

Sounds a bit familiar, don’t you agree?

The reality is that the stock market continues to ignore the negative signs. In the past week, we saw some soft economic readings, including housing starts, manufacturing, and initial claims, but the stock market pushed aside the readings and edged up higher.

My feeling is that there’s some froth developing, as there appears to be very little connection between what the stock market is doing and what the economy is telling us.

Even suggestions from some Federal Reserve members and non-members regarding a potential exit plan for its bond buying failed to send sellers to the exits.

In fact, the easy money is flowing worldwide and driving up the stock market.

The European Central Bank cut its main refinancing rate to a record 0.5% and said it would continue to inject money into the monetary system for “quite a long time.” (Source: Melander, I., “ECB to keep monetary policy loose for as long as needed,” Reuters, May 17, 2013.)

In Japan, the country wants to triple its infrastructure exports and double its farm exports by 2020 through what are extremely aggressive plans by Prime Minister Shinzo Abe. (Source: Kaneko, K., “Japan PM sets targets in latest growth strategy tranche,” Reuters, May 17, 2013.)

The key for you is not to fight the trend, but to be wary of the advance in the stock market—and do yourself a favor by taking some money off the table.

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Click here to visit : Is Wal-Mart Stock in Danger of a Pullback?

Let’s analyze this question by taking a look at Wal-Mart Stores, Inc. (NYSE/WMT). Wal-Mart just released its forecast for second-quarter corporate earnings, which was less than most analysts had expected. The company now forecasts corporate earnings on a per-share basis for the second quarter to be $1.22–$1.27, lower than the average estimate by analysts of $1.29. (Source: “Walmart reports a 4.6 percent increase for Q1 EPS of $1.14; U.S. businesses forecast positive comp sales for Q2,” Wal-Mart Stores, Inc. web site, May 16, 2013, accessed May 16, 2013.)

As a sign of the health of America’s economic growth level, Wal-Mart reported that comparable same-store sales dropped by 1.4% between January 26, 2013 and April 26, 2013. Internationally, Wal-Mart is doing better, with sales up 2.9% during the first quarter.

However, corporate earnings suffered during the first quarter due to several reasons, including very cold weather, continuing weak employment levels, and the payroll tax hike. Many businesses that cater to the lower- to mid-level consumer will most likely encounter similar problems due to these issues and general sluggish economic growth.

Recent data have been relatively mixed regarding the potential for economic growth to begin moving upward. However, for Wal-Mart’s corporate earnings, there is the potential for a slightly stronger second half because some of the company’s initial hurdles have been lowered.

This includes the price of gasoline dropping approximately seven percent over the past few months, which will have a positive impact on discretionary spending. In addition, the weather has improved, and while the pace of job creation has been weak, it’s at least moving in a positive direction. For shareholders, Wal-Mart has been cutting costs as an attempt to maintain corporate earnings expansion.

However, all of these factors are short-term in nature, and we would need to see a significant increase in overall economic growth for corporate earnings to continue rising over the next few years. You can only cut so many costs before you’re running a business on the bare minimum of staff and equipment.

Wal-Mart’s stock chart is featured below:

Chart courtesy of www.StockCharts.com

In spite of weak economic growth, the share price of Wal-Mart has risen tremendously. Part of this rise is due to the hunt for income through the dividend yield, and not the expectations for significant corporate earnings growth.

This hunt for income is dangerous to follow, because as quickly as the money enters a stock, it could leave just as fast. While corporate earnings might not be as crucial to these income investors, with interest rates so low, there is very little possibility of a further decrease and a huge risk of higher rates over the next few years.

This means that an increase in interest rates will hit companies that investors are primarily looking at for dividend yields. Unless economic growth rises to such a level that corporate earnings can begin increasing to a substantial level, the stock price is likely to sell off.

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Read More : Changes to International Tariffs Giving This Stock a Boost

When it comes to buying stocks for long-term investing, the short-term gyrations can be difficult for investors. It’s important from a long-term investing viewpoint to look out onto the horizon over many years, and search for short-term pullbacks and opportunities that might allow attractive entry points.

We are all aware of the troubled situation economically in Europe; however, there are still potential opportunities for buying stocks that could benefit from significant market changes when it comes to long-term investing.

One example is the automobile industry. While no one would suggest that Europe is a strong sector for growth in automobiles, don’t discount the carmakers when considering buying stocks. Volkswagen AG (OTC/VLKAY) is continuing to set the foundation for growth globally over the next decade.

The company’s Audi division is continuing to make inroads in many markets, including India, China, and the U.S. Additionally, a decrease in tariffs for many countries is now opening the door for European automobile makers to gain market share.

South Korea recently dropped the import duty on European vehicles from eight percent to only 3.2%, which has resulted in an increase of foreign automobiles making up 41% of the South Korean market versus 28% just two years ago. (Source: Kim, R., “BMWs Cheaper Than Hyundais in Korea as Tariffs Crumble,” Bloomberg, May 15, 2013, accessed May 15, 2013.)

The U.S. has also cut tariffs for imported cars substantially and will completely eliminate them by 2016. This will open the door for competition, and vehicles such as Audis, which are of premium quality, have the potential to gain market share.

Volkswagen is continuing its expansion in emerging markets, as it is investing $1.95 billion in a new manufacturing plant in China set to begin production in 2016. Over the next few years, Volkswagen plans to build 10 additional manufacturing plants around the world, with seven in China.

Long-term investing is not about reacting to month-to-month news; it is about focusing on buying stocks that have the potential to grow revenue significantly over time. More companies are becoming global in scope, and just because a certain region of the world is in economic difficulty does not mean that one should avoid buying stocks from a country there.

Most analysts and investors have already written off any possibility of growth in the automobile sector for Europe, which means that the share price incorporates this view. At some point, the bottom will be reached and there will come a time of growth. Although, markets such as China are crucial for long-term investing—buying stocks with low expectations and significant potential for upside surprises can be a successful strategy.

When developing a long-term investing roadmap, there will certainly be bumps along the way. Buying stocks that have a plan for continued growth is one way to increase the probability of long-term investing success.

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Read More : How Understanding the Investment Climate Equals Stock Market Success

Of course, you could also make a lot of money, especially with how well things are going in the current bullish stock market that continues to somewhat defy gravity.

Yet this is also the time you need to take some extra precaution and think about where you are at and what your end goal is in the stock market.

You don’t want to risk your entire investing capital on the stock market, in spite of any temptation to do so. This is when you have to fight against the greed that might be in you—the greed that’s in most of us—and it won’t be easy.

Remember what happened after each of the multiyear peaks in the stock market over the past decades, when the stocks retrenched. I’m not saying the stock market is at a peak. In fact, the bulls look like they are in full control and heading higher on the chart.

You just need to be on top of things, and don’t let greed ravage your sensibility toward the stock market.

Chasing dreams is one thing, but being prudent is another.

I’m not going to say you should run for the exit, but you need to be aware of where your capital is being invested and understand the associated risk factors.

The reality is that a sound investment strategy means understanding asset allocation and diversification to increase the risk and return of your portfolio.

By asset allocation, I refer to the asset mix of your portfolio allocated to the three major asset classes: cash, fixed income, and equities. As I said, if you have excess equities, you open yourself up to downside risk. If you are too much in cash, you will have missed out on some great gains over the past few years. You need to monitor the investment climate and periodically rebalance your portfolio to adapt to the ever-changing market.

For instance, with the Dow and S&P 500 at record highs, you really should think about absorbing some profits. For instance, say you are up 100% on a stock. In this case, why not take the profits on half of your position and let the remaining half ride as free money.

You should also consider some put options as a hedge against weakness in the stock market.

The problem is that with bonds yielding so little, it’s hard to want to be invested in bonds.

I would also be hesitant, given the insignificant returns in the bond market.

An alternative that we have been seeing in the market is the shifting of capital to some of the dividend-paying cyclical and consumer staples stocks.

I’m talking about General Electric Company (NYSE/GE), Johnson & Johnson (NYSE/JNJ), and The Procter & Gamble Company (NYSE/PG). All three companies are solid with sound fundamentals, excellent leadership, and long-term durability. For those seeking some income, they also pay out a dividend yield in excess of three percent.

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“Nothing is normal: not the economy, not the financial system, not the financial markets and not the political system.  The system remains still in the throes and aftershocks of the 2008 panic and the near-systemic collapse, and from the ongoing responses to same by the Federal Reserve and federal government.  Further panic is possible and hyperinflation is inevitable. 

“The economic and systemic solvency crises of the last eight years continue.  There never was an actual recovery following the economic downturn that began in 2006 and collapsed into 2008 and 2009.  What followed was a protracted period of business stagnation that began to turn down anew in second- and third-quarter 2012.  The official recovery seen in GDP has been a statistical illusion generated by the use of understated inflation in calculating key economic series (see Public Comment on Inflation).  Nonetheless, given the nature of official reporting, the renewed downturn likely will gain recognition as the second-dip in a double- or multiple-dip recession.

“What continues to unfold in the systemic and economic crises is just an ongoing part of the 2008 turmoil.  All the extraordinary actions and interventions bought a little time, but they did not resolve the various crises.  That the crises continue can be seen in deteriorating economic activity and in the panicked actions by the Federal Reserve, where it proactively is monetizing U.S. Treasury debt at a pace suggestive of a Treasury that is unable to borrow otherwise.” 

“April Employment and Unemployment, M3 and Monetary Base,”

John Williams, Shadowstats.com, 05/03/2012

It had to happen. And now it has begun. The very biggest bubble in financial history has begun to deflate. And over the next few months, we expect that deflation to accelerate and morph into a bursting.

And that bursting will affect the price of nearly every financial asset on the planet, and many key non-financial ones as well.

Independent (non-main stream media) financial analysts generally agree that The Fed, Bank of Japan, and increasing numbers of other Central Banks’ orgy of fiat money printing (i.e., competitive fiat currency purchasing power debasement – i.e., the “currency wars”) will likely come to a very bad end.

One likely result: hyperinflation. (The U.S., e.g., is already threshold hyperinflationary with real CPI at 9.15% per shadowstats.com.) and consequent collapse of one or more sectors. Think Argentina (50% inflation) as a distinct possibility.

So it is crucial to recognize the 3 key warning signs that a collapse of one or more sectors is impending, so one can profit and protect. Unfortunately, 2 of these indicators are already “hinting” that collapse in one and quite possibly two key sectors may not be far off – beginning within the next few weeks or very few months. Do these signs of key sector collapse mean one is certain? No, but they are ominous indicators of probability nonetheless.

Indeed, it is the possible collapse in one of these sectors about which Goldman Sachs’ CEO Lloyd Blankfein warned just a few days ago and about which we have been warning for weeks, that is most likely.

Carefully consider the four-month chart of the benchmark 10-year U.S. T-Bond which confirms that bond technicals confirm bond fundamentals.

Note the violation of the short rising trend-line in early May. Not good. Note the key support level is the March low of 132.21.

It has now been violated conclusively with this past Monday’s (05/13) close of 131.31.

If the US 10 Year continues down, a massive collapse in the bond market (i.e., much lower bond prices / much higher interest rates) becomes increasingly probable. Such a collapse would wreak havoc on the economy because credit would become very expensive or unavailable, as it became in the late 1970s to early 1980s and again in 1994.

Consider Blankfein’s Warning:

“I worry now…I look out of the corner of my eye, to the ’94 period … you’d think in hindsight (it) should have been expected … (it) really was stunning.”

Lloyd Blankfein, CEO, Goldman Sachs, 05/01/2013

Going forward, watch the U.S. 10Yr Chart very carefully. It is Indicator #1 that a one or two sector, and perhaps broader collapse is impending and it is already “hinting”.

Indicator #2 is the U.S. Dollar. Short-term (next few weeks) we have already forecast continued strengthening basis USDX because of continued Eurozone weakness, Bank of Japan Yen (and several other Central Banks intensified) printing, i.e. the ongoing, and intensifying currency war, i.e. competitive devaluation.

But given The Fed’s ongoing orgy of printing ($85 billion per month) long-term the $US is toast vis à vis real assets.

So looking again at a 5-year $US chart we see key support is at 78 basis USDX. If the $US were to close below 78 it would be Indicator #2 that a major collapse is quite likely impending. At present, we see no “hinting” yet for the $US.

In sum, short-term (next few weeks or very few months) we continue to forecast the $US remains above 80. However, short-term the 10-year U.S. T-bond is already hinting at collapse with the yield popping to 1.95% very recently. We shall watch very closely, and are indeed prepared to recommend shorting the 10-year at any time. (Regarding Profit and Protection from the foregoing, Deepcaster’s recent Letters and Alerts.)

Indicator #3 that a key sector or, at broader, financial, collapse is impending would be crude oil prices.

A serious spike in crude oil prices would / will stop Fed and other Central Bank money printing dead in its tracks. And such a halt would remove support from Equities and other markets. Therefore, consider well that a 3-year chart of crude prices presents a triangle pattern, a pattern which is coming closer and closer to the breakout point.

The question is, which way will it break?

With WTI crude in the mid-$90s and trending up recently, it is hinting that a sector collapse resulting from a spike in crude prices may be impending.

Some month (or weeks) not too far off, Fed and other Central Banks money printing will likely cause a price breakout most likely to the upside (i.e., above $100). Equities will then tank. Given the Central Banks intensified money printing a breakout is likely just a matter of a weeks or a very few months.

The crude price is an indicator to watch, and it is already “hinting”. In sum, if crude spikes up, or bonds down (and thus, interest rates up), Equities will tank and both crude and bonds are hinting.

[By the way, we discount somewhat the enthusiasm with which the recent IEA Report (the U.S. production would increase by 3.9 Million/bbl/day in the next five years appx due to fracking) was accompanied. Even if true that would increase U.S. Production to appx 12 Million/bbl/day. But the U.S. consumes 18 Million bbl/day and fracked wells have much higher depletion rates.]

The great bond-bubble bursting is near (and a $US swoon is likely not too many months off either) thanks to Fed and other Central Banks printing, the only issue is which month, or week, will the acceleration to that burst occur.

In sum, bonds and crude oil are the indicators hinting that the collapse of one or more sectors impending, the US$ not yet.

Best regards,

Deepcaster
May 16, 2013

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Read More : http://www.investmentcontrarians.com/stock-market/one-sports-car-stock-thats-shocking-the-market/2033/

Well I wish I had now, as Tesla is seeing its shares supercharge on the price chart, up 70% in the first few weeks of May and 167% so far in 2013, based on my stock analysis. Tesla is up a sizzling 198% over the past 52 weeks compared to the S&P 500’s 23% increase.

My stock analysis suggests that the maker of the sharp-looking electric sports car has really shocked the stock market with its superlative price appreciation. Who would have known?

Chart courtesy of www.StockCharts.com

I thought Tesla was interesting and gimmicky in some ways, but never in my wildest imagination did I expect the stock to surge as much as it has.

According to my stock analysis, you can thank the short-sellers for running to the exits and unloading their positions in a classic short squeeze. At the end of April, there were 27.5 million shares of Tesla shorted. The share price was $53.99. Fast-forward 10 sessions, and the price has surged to over $90.00.

Now you can’t blame short-covering for all of the increase in the share price. Tesla did deliver some awesome numbers that tore apart Wall Street’s estimates, according to my stock analysis.

In the first quarter, Tesla sold 4,900 vehicles. That’s it. By comparison, General Motors Company (NYSE/GM) sold 237,646 in the month of April alone. For the entirety of 2013, Tesla expects to sell just over 20,000 vehicles. General Motors (GM) will sell over two million.

My stock analysis suggests that the growth in Tesla is strong, with sales up 83% in the first quarter. While the small quantity makes me shake my head, the company is estimated to turn a small profit in 2013 and earn $1.04 per diluted share in 2014, according to Thomson Financial.

Tesla is estimated by Thomson Financial to see its revenues grow 366.5% this year and 31.7% in 2014. Again not bad numbers, but they’re not supportive of the share price and valuation, as my stock analysis indicates.

Consumer Reports does love the Tesla “Model S” sedan that was assigned a score of 99 out of 100.

Now, if you base the share price of Tesla purely on valuation, it’s clearly out of whack versus both GM and Ford Motor Company (NYSE/F), as you can see in the table below.

But Tesla is trading based not on valuation but on potential. Yet even based on potential, the company is way overpriced, based on my stock analysis, which makes the stock tempting.

Of course, the current short sellers have paid dearly, but the stock was at a much lower price. At nearly $100.00, it may be time to get in on some of the action, but on the short side.

The chart may indicate upward movement in the stock, but my stock analysis indicates it’s more likely to move downward in the near term.

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Read More : The New Hidden Eurozone Risk

A year ago, I was able to take a close look at a cool-looking electric-powered sports car. I even got to sit in it. I noticed that it was not made by a manufacturer that I had recognized—it was built by Tesla Motors, Inc. (NASDAQ/TSLA), but I really didn’t give it a second thought.

Well I wish I had now, as Tesla is seeing its shares supercharge on the price chart, up 70% in the first few weeks of May and 167% so far in 2013, based on my stock analysis. Tesla is up a sizzling 198% over the past 52 weeks compared to the S&P 500’s 23% increase.

My stock analysis suggests that the maker of the sharp-looking electric sports car has really shocked the stock market with its superlative price appreciation. Who would have known?

Chart courtesy of www.StockCharts.com

I thought Tesla was interesting and gimmicky in some ways, but never in my wildest imagination did I expect the stock to surge as much as it has.

According to my stock analysis, you can thank the short-sellers for running to the exits and unloading their positions in a classic short squeeze. At the end of April, there were 27.5 million shares of Tesla shorted. The share price was $53.99. Fast-forward 10 sessions, and the price has surged to over $90.00.

Now you can’t blame short-covering for all of the increase in the share price. Tesla did deliver some awesome numbers that tore apart Wall Street’s estimates, according to my stock analysis.

In the first quarter, Tesla sold 4,900 vehicles. That’s it. By comparison, General Motors Company (NYSE/GM) sold 237,646 in the month of April alone. For the entirety of 2013, Tesla expects to sell just over 20,000 vehicles. General Motors (GM) will sell over two million.

My stock analysis suggests that the growth in Tesla is strong, with sales up 83% in the first quarter. While the small quantity makes me shake my head, the company is estimated to turn a small profit in 2013 and earn $1.04 per diluted share in 2014, according to Thomson Financial.

Tesla is estimated by Thomson Financial to see its revenues grow 366.5% this year and 31.7% in 2014. Again not bad numbers, but they’re not supportive of the share price and valuation, as my stock analysis indicates.

Consumer Reports does love the Tesla “Model S” sedan that was assigned a score of 99 out of 100.

Now, if you base the share price of Tesla purely on valuation, it’s clearly out of whack versus both GM and Ford Motor Company (NYSE/F), as you can see in the table below.

But Tesla is trading based not on valuation but on potential. Yet even based on potential, the company is way overpriced, based on my stock analysis, which makes the stock tempting.

Of course, the current short sellers have paid dearly, but the stock was at a much lower price. At nearly $100.00, it may be time to get in on some of the action, but on the short side.

The chart may indicate upward movement in the stock, but my stock analysis indicates it’s more likely to move downward in the near term.

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Read More : SEC Raises Requirement for Chinese Companies for U.S. Listings; Chinese Companies Looking Elsewhere

Chinese initial public offerings (IPOs) could be hot again this year, but don’t look to America as the breeding grounds: the flow to the U.S. is dead.

The big market for Chinese IPOs will be at home in China where there could be as many as 349 IPOs this year, according to a calculation by Goldman Sachs. (Source: “IPO deep dive: The Sword of Damocles or Paper Tiger?,” Goldman Sachs web site, January 23, 2013, last accessed May 14, 2013.) Of course, we have seen only a trickle this year, so the Goldman estimate seems to be more fiction than fact.

In the U.S., there are no Chinese IPOs scheduled for the immediate future, a stark contrast to the 60 Chinese stocks that debuted on U.S. equities markets from 2008 to 2011.

The more recent numbers look even worse, and tell us a tale of misfortune for Chinese IPOs.

In 2012, there was one Chinese listing on U.S. equities markets, but we saw the delisting of several Chinese stocks that have been taken private. Since August 2011, 23 Chinese stocks have delisted from U.S. equities markets, according to Money Week magazine.

Based on what I have been reading, I doubt that there will be much activity this year or next for Chinese IPOs, unless the rules of engagement for financial reporting and auditing are made better and meet U.S. standards. The Securities and Exchange Commission (SEC) wants any Chinese company aiming for access to U.S. capital markets to use one of four approved U.S. Big Four auditors. That request is fine, but the problem lies in the SEC also wanting access to the underlying data and records that support the financial statements—China has refused to provide that access.

I have no issue with the SEC and believe its requests are the only recourse to try to prevent another reporting scandal associated with a China-based company. There are many Chinese companies that want access to the U.S. capital markets, but for that to happen, these companies must prove that they are clean and trustworthy.

Until that happens, I wouldn’t expect any Chinese IPOs anytime soon. There are still some good Chinese companies listed on U.S. exchanges, but for new deals, you will have to look to China, and I’m not sure if that’s a good idea given the high risk.

The last Chinese IPO was China-based social networking company YY Inc. (NASDAQ/YY), which has surprisingly more than doubled in price since its IPO debut at $10.50 on November 21, 2012. Chinese Internet plays continue to show above-average promise.

The only Chinese IPO that is expected to come onboard in the U.S. is the Beijing-based online retailer LightInTheBox, which is planning to raise nearly $90.0 million in an IPO on the New York Stock Exchange (NYSE).

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