Brief Consumer: S&P 500 and S&P 600 Testing Resistance…Still and more

In this briefing:

1. S&P 500 and S&P 600 Testing Resistance…Still
2. Tesla (TSLA): Model Y to Be Unveiled in L.A. On March 14 – What We Know So Far

1. S&P 500 and S&P 600 Testing Resistance…Still

The S&P 500 is beginning to come off of short-term overbought extremes, consolidating near the confluence of key overhead resistance and the 200-day moving average. This level is roughly 2,817 on the S&P 500 and roughly 1,000 on the S&P 600 Small Cap index. Some consolidation or a mild pullback is possible in the near-term, which we believe would help alleviate current overbought readings and allow for a more orderly and meaningful move higher.  In today’s report we highlight attractive Groups and stocks within the Consumer Discretionary, Health Care, and Services Sectors.

2. Tesla (TSLA): Model Y to Be Unveiled in L.A. On March 14 – What We Know So Far

Other than CEO Elon Musk’s tweets, there is not a whole lot that has been announced about the Model Y other than that it will be unveiled at the company’s L.A. Design Studio on March 14.  Here is a brief list of what we know so far about the Model Y:

• Musk indicated during the 4Q earnings analyst call that Models 3&Y will have a 78% shared content ratio (see Tesla (TSLA): 4Q Earnings and First Impressions on the Company’s Strategy ), with media reports quoting Musk also referring to a 75% shared content ratio in other forums (see, e.g., https://electrek.co/2019/02/07/tesla-casting-lines-gigafactory-model-y-production/).
• Musk also had stated during the 4Q earnings call that the Model Y will begin production at the Shanghai Gigafactory 3 which is projected to be completed at the end of 2019.  The company has not confirmed that commercial production of the Y will begin in the U.S. simultaneously.
• There are no changes or additions in Musk’s tweets to previously announced commercialization target dates for the Model Y.  

Tesla’s new product launches historically have been mired in delays.  Assuming management does not repeat its assembly line prototyping mistakes prior to the Model 3 launch there should not be an issue currently with meeting its production target timeline of 1H20.  However, we also believe any such concerns would be legitimate given Tesla’s history.

A Tesla Model Y Teaser Shot