(New York)

Stocks have done very well over the last month and a half. The correction—one of the longest on record—ended and stocks are back near an all-time high. But where do we go from here? One Wall Street analyst says the S&P 500 is in for major gains, with the index set to rise 12% before the end of the year. The analyst, from Cannacord Genuity, sees surging corporate earnings and rising consumer confidence as key to the market expansion. He sums up his view this way, saying “There is no doubt the unpredictable news backdrop of a potential trade war with China and a rise back to 3 percent in the 10-year U.S. Treasury yield can cause increased volatility, but the fundamental backdrop commands using it as an opportunity to add risk”.

FINSUM: The principal components of the argument seem sound, but we will admit we are a bit concerned about an earnings peak even though history tells us not to be.

(New York)

Some of the best forward looking recession indicators are in the commodities markets. Because they are generally a gauge for demand in the economy, they indicate where things are headed. Well, one of the best—copper—which is utterly ubiquitous across the global economy, is flashing some very worrying signs. Copper has had a very rough summer, but it has been worsening lately despite better share prices. The commodity just hit its lowest price in over a year. China accounts for around 40% of global copper demand. One analyst summarized the situation, saying “Copper is widely considered to be a bellwether for the global economy and so a weak price is cause for concern”.

FINSUM: Copper is partly at the mercy of the big fears in emerging markets, but that does not seem to account for the extremity of the selloff. This does worry us.

(Istanbul)

A lot of investors are worried that the turmoil in Turkey could spark a global financial crisis. In particular, Turkey’s weak position could spread to European banks, letting the situation balloon from there. However, the reality is that such fears are overblown, according to a credit analyst. Europe’s banks are actually in a strong position and can absorb losses from Turkey, so there does not seem to be any contagion to spread. Turkey’s problems are largely self-inflicted and unique as well, so it is hard to see all EMs succumbing to the panic.

FINSUM: From an American investor’s standpoint, the Turkey situation should not be very concerning as it does not seem to have much direct relationship to the US economy or markets. Hence our shares rising while Europe’s are falling.

(New York)

Any investor will already know that Tesla is locked in an interesting and precarious situation. Elon Musk is apparently fixed on taking the company private, which has pushed its share price up, but the effort looks highly vulnerable, which could send things crashing back down. Add into the mix that the SEC is investigating the fact that Musk announced his intentions via Twitter, and you have a dangerous mix. Many are wondering when the SEC might decide if Musk broke the rules with his tweet, but the reality is that it may take some time for a judgment.

FINSUM: In our view the lack of a ruling on Musk’s tweet could mean this whole deal sits in limbo for some time.

(Washington)

The White House has been demanding that special counsel Robert Mueller wrap up his investigation into potential collusion with Russia by September 1st. However, the reality is that Mueller is under no obligation to do so and can continue his closed-door investigation up and through the November 6th elections. Bringing indictments near the election would also not violate Justice Department policy meant to deter using indictments to manipulate elections, according to current and former US officials.

FINSUM: We highly doubt Mueller will acquiesce to ending his investigation in the near-term, which means Trump may escalate the situation. Fireworks seem likely.