Video Length: 00:26:22

Last week’s stock market action has people throughout the market asking questions. I think we always need to respect the market and the directions that it’s taking. The bond market especially is smart. So when rates rise like they do, it’s something we need to pay attention to closely.

I love Tesla (TSLA) as a company, but rising rates and one-time issues for their gross margins last quarter are also important to watch. I’m not ready to look to 2022 earnings, so the company is in an in-between valuation stage. And the semiconductor shortage that is hitting the whole auto industry could affect them too.

I talk about both issues in the video above. I also talk about a semiconductor company I like as a result of the auto industry issues and general supply tightness. Limited supply and high demand equals good things for Micron (MU).

Full contents:

Market outlook – The recent sell-off and why it makes sense - 00:30-10:45

• The increasing risks in the market, driven by bond rates and inflation

• High PCE report as a warning sign

• The bond market’s push for higher rates despite the Fed’s efforts

• The power of momentum and algorithms, with GameStop as an example

• What’s the near-term outlook and direction for the market

Stock Focus – Concerns for Tesla – 10:45-18:15

• One-time issues in the Q4 report around gross margins

• The importance of gross margins to the Tesla story

• Semiconductor shortage and interruptions to the delivery story for Tesla models

• The importance of showing that the Q4 issues were one-time and not recurring

Bonus stock – Micron looking attractive – 18:15-23:00

• DRAM pricing driving upside

• There may be more room to run than the usual Micron cycle

• The importance of zeroing in on the key driver for a given stock

Final thoughts – Respect the down move – 23:00-26:00

• The case for selling down and buying up, selling weakness and buying strength