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Panicked over Tesla? Here’s the first thing you shouldn’t do

(Source: marketwatch.com)

The last trading day of the month is setting up as a test of the faithful—the Tesla

TSLA, -13.90%

  faithful that is.

Pressure was building for the iconic car maker Friday after CEO Elon Musk got hit with a lawsuit from the SEC, which wants him out as head honcho after that now infamous taking-Tesla-private, “funding secured” tweet. Shares could be looking at their worst session in two years if the pace of selling keeps up.

From chat rooms and Twitter burning up over the topic, comes our call of the day from Ross Gerber, co-founder and CEO of Gerber Kawasaki Wealth & Investment Management, who says first and foremost, investors need to keep their cool.

“Don’t do anything emotional. First rule. Don’t let headlines scare you. The stock will go down tomorrow as it should, next week we can asses the issues more clearly with more information,” said Gerber in a tweet. He followed that up with a few more.

The SEC didnt remove Steven Cohen from the investment business for insider trading. I can’t think of anytime a CEO was removed by the SEC. Madden shoes maybe. So lets be real twitter. Name a few. $TSLA

— Ross Gerber (@GerberKawasaki) September 27, 2018

Gerber was getting a little flak for that tweet. Tesla was in his top five buys in the second quarter of 2018, according to 13F data, so clearly he sits on the side of the bulls. Those less in love with Tesla weren’t holding back:

The fact that $TSLA is down 10% on something that was so obviously coming speaks to the level of delusion in this stock. Remarkable $TSLAQ

— Grant Williams (@ttmygh) September 27, 2018

As for where shares go next, Mott Capital Management founder Michael Kramer said Tesla is nearing a big support level, given the late-session losses. “Support is now around the $250 level. If the stock falls below that, it could get much worse in a hurry,” he said in a blog post. After that, he said, look for support at $180.

Here’s his chart:

Mott Capital Management

And in a case of viral stories colliding, one section of that SEC filing explains how Musk got to that $420-per-share public-to-private price tag.

“This calculation resulted in a price of $419 and Musk stated that he rounded the price up to $420 because he had recently learned about the number’s significance in marijuana culture and thought his girlfriend would ‘find it funny, which admittedly isn’t a great reason to pick a price,’” the statement said of the guy who triggered a 5% drop in shares earlier this month after appearing to smoke a reefer during an interview.

Read: Could Elon Musk’s tweets cause him to lose his job as Tesla CEO? 5 of the costliest tweets ever

Opinion: If Tesla had a real board, it would remove Elon Musk as CEO in light of SEC lawsuit

The chart

The eurozone is possibly plunging into a new crisis after Italy’s ruling antiestablishment parties pushed through a budget deficit target of 2.4%, putting the government on a collision course with the European Union. Economy Minister Giovanni Tria clearly caved in as he was looking for ballpark 1.6%.

On Friday, Italian stocks

I945, -3.72%

 were getting crushed, down nearly 4% for their worst day since early 2016, with banks like Banco BPM SpA

BAMI, -9.43%

 tumbling 7% in Milan. The chart of the day shows the choppy action over the last few sessions:

MarketWatch

Painful day for Italy

The markets

Rhe S&P

SPX, +0.00%

Dow

DJIA, +0.07%

 and Nasdaq

COMP, +0.05%

 have all kicked off trading lower,

Check out the latest in the Market Snapshot column

Plus: Banking on a stock market rally? Check out this chart first

Gold

US:GCU8

is slipping, while crude

US:CLU8

is steady, but looking at a solid gain for the week. The dollar

DXY, +0.15%

is moving up, mostly against the euro

EURUSD, -0.3264%

which is taking a hit on Italy budget worries. 

Europe stocks

SXXP, -0.83%

 are seeped in red, thanks to slumping Italian names. Japan stocks

NIK, +1.36%

 saw a powerful 5.5% gain for September, in what was a mostly upbeat day for Asian markets

ADOW, +0.41%

ADOW, +0.41%

Read: The ‘7 worst words in the world’ could signal trouble for this stock market, warns Oaktree Capital’s Howard Marks

The buzz

Eli Lilly

LLY, +0.58%

 says the FDA has approved the drug Emgality for preventing migraines in adults. It is one of three in a new class of drugs recently approved to revolutionize migraine treatment, all with identical $6,900 price tags.

A day after gripping testimony by judge Brett Kavanaugh and his accuser Christine Blasey Ford, attention will stay fixed on DC Friday as the Senate Judiciary Committee gets ready to vote on whether or not to move the Supreme Court nomination of Kavanaugh to the Senate floor for confirmation. Political betting market PredictIt says Kavanaugh’s odds of getting confirmed jumped after his testimony.

Read: Women contrast Christine Blasey Ford’s ‘poise’ with Brett Kavanaugh’s ‘anger’

In the U.K., former foreign secretary Boris Johnson has come up with a post-Brexit plan B, laying on the criticism over Prime Minister Theresa May’s troubled Chequers compromise.

Data showed consumer spending rose in August at the slowest pace in six months, while personal incomes rose 0.3% and core inflation was flat against July. The Chicago purchasing managers index and consumer sentiment expected later.

Quote of the day

Getty Images

Judge Brett Kavanaugh on Capitol Hill September 27

“The basic principles that underscore the Senate’s constitutional duty of advice and consent on federal judicial nominees require nothing less than a careful examination of the accusations and facts by the FBI.” — That was a statement from the American Bar Association — cited by CNN and other outlets — that called on the Senate Judiciary Committee to delay ruling on nominee Brett Kavanaugh until the FBI completes its probe into allegations against him.

Earlier this month, the ABA gave Kavanaugh its highest “well-qualified” rating for his nomination, which was mentioned by the judge Thursday.

Random reads

46 passengers and 11 crew members on #AirNiugini flight that crashed in ##Chuuk, #FSM today. The airline confirmed that its Boeing 737-800 series aircraft, P2-PXE landed short of the runway whilst landing at Chuuk Island of the Federated States of Micronesia this morning. pic.twitter.com/kMhOvLWBdH

— makereta komai (@burebasgal) September 28, 2018

Miracle in Micronesia. Boeing 737 crashes into the sea, all 47 people make it out

Canada politicians unanimously vote to strip Aung San Suu Kyi of honorary citizenship over Rohingya crisis

Morning Joe’s co-host Mika Brzezinski says she had to ask five times before she got a raise

Video shows the moment Dutch cops foiled a massive terrorist attack plot

In a first, man charged with drunken driving—on a scooter

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More Info: marketwatch.com

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