By Gorilla Trades. Originally published at ValueWalk.
Commenting on the decline in industrial production and today’s markets strategist Louis Navellier wrote in a note to investors:
Q4 2020 hedge fund letters, conferences and more
Industrial Production Decline In February
The big freeze and blackouts in February probably were the driving force the industrial production decline of 2.2% in February.
The big news this week was February’s shocking retail sales which plunged 3% in February, substantially below the consensus estimate of a 0.4% decline. January’s retail sales were revised up to a 7.6% surge, up from 5.3% initially estimated. The other good news is that retail sales are now up 6% in the past three months after all the Commerce Department revisions.
What market observers are now thinking is if the $600 debt cards from the federal government could spark a 7.6% surge in retail sales in January, there is a lot of excitement building about March retail sales due to the $1,400 checks in the mail from the federal government. I should add that warmer spring weather should also boost March retail sales.
Industrial production in China surged 35.1% in January and February compared to the same period a year ago, retail sales were up 33.8% in in January and February compared home sales soared 143.5% in January and February, with home prices up 38.3%. We are now estimating that China’s GDP is expected to grow at a 15% annual pace in the first quarter.
Shockwaves from Volkswagen’s Power Day
Shockwaves in the auto industry from VW’s Power Day with the announcement of six gigafactories making batteries with multiple suppliers, like Northvolt, plus thousands of new fast charging stations in Europe, China and the U.S. The consensus that VW would pass Tesla in overall electric vehicle (EV) sales in 2025, can be moved up to 2023.
VW Group already has more than double the models that Tesla offers and will soon have 25 EVs via it Audi, Porsche and SEAT divisions. VW Group is also making a smaller, less expensive city car via a new Seat EV that is expected to be a big hit in Europe.
Also important, VW Group is developing solid-state batteries with QuantumScape (QS) that will first appear in its top secret Artemis project, code named Landjet.
The head of the Artemis project, Alex Hitzinger, was poached from Apple’s secret EV project. Hitzinger previous developed the Porsche 919 hybrid race car that won LeMans three times and six world championships. Aerodynamics and system integration is expected to be ground breaking on the Artemis project, which will be a new luxury EV model for Audi, Bentley and Porsche in 2025.
The inevitable comparisons between Tesla and VW persist. After Tesla announces a new manufacturing plant in Berlin, VW announced that four manufacturing plants around the world would be making its popular ID.3 and ID.4 EVs. While Tesla may have up to three gigafactories in conjunction with new manufacturing plants, VW is opening six gigafactories in Europe alone. VW is striving to beat Tesla by having substantially more models, faster charging, more gigafactories, more manufacturing plants and cheaper EVs as well as luxury EVs with solid-state batteries. No wonder why VW Group’s stock, VWAGY, is soaring this week, while Tesla (TSLA) is stumbling.
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