The next big test for Elon Musk arrives this week


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Elon Musk is being sued by the SEC

1. Again to enterprise: The SEC is off Elon Musk’s again. Now he and Tesla can return to that different pesky downside — making and promoting vehicles.

Tesla will flip in a important manufacturing report on Tuesday that may present buyers whether or not the corporate can maintain and surpass its long-promised goal of constructing 5,000 Mannequin 3s per week.

That report will go a good distance towards figuring out whether or not Tesla (TSLA) can fulfill Musk’s pledge to show a revenue within the third and fourth quarters.

Because it went public, Tesla has recorded solely two quarters within the black. It posted the biggest loss in its historical past within the second quarter because it cranked up manufacturing to clear the 5,000 bar within the final week of June.

That looks as if a very long time in the past. In early August, Musk despatched the tweet that led to his tangle with regulators — a cryptic announcement that he had “funding secured” to take Tesla non-public at $420 per share.

The SEC mentioned he had no such factor, and sued Musk final week for deceptive buyers.

Underneath a settlement introduced Saturday, Musk agreed to step apart as chairman for 3 years, and he and Tesla every agreed to pay $20 million fines. Musk neither admitted nor denied wrongdoing beneath the settlement.

The SEC lawsuit could also be behind him, however Tesla nonetheless has some severe IOUs developing. A complete of $2.7 billion of Tesla debt is due this yr and subsequent, in line with Goldman Sachs.

That is one motive the manufacturing and revenue targets are so vital: Tesla wants the money to pay down all that debt.

The markets have mirrored buyers’ fear. Tesla bonds maturing in August 2025 traded at 84.5 cents on the greenback on Friday, near a document low. And Tesla inventory has fallen 31% from its excessive within the hours after the ill-fated tweet.

The inventory might bounce again Monday, now that the uncertainty over Musk’s future is eliminated. However Wall Avenue nonetheless desires one thing else — outcomes.

2. Jobs, jobs, jobs: Analysts count on one other month of stable progress when the US Labor Division points its September jobs report on Friday.

Extra vital will be the wage progress determine: Will it hit three% for the primary time since April 2009? In that case, will that unnerve buyers fearful about an excessively aggressive Federal Reserve?

three. Altering of the guard at Goldman: Lloyd Blankfein is ending his run as CEO of Goldman Sachs (GS) on Monday. He shall be changed by Goldman president — and part-time DJ — David Solomon.

The funding agency’s inventory is down greater than 10% since starting of the yr. Solomon might want to take care of decrease income from Goldman’s buying and selling desk, which collects consumer charges to purchase and promote bonds, commodities and currencies.

four. Earnings watch: It is a comparatively sluggish week for company experiences, however among the many notable names handing over outcomes are Pepsi (PEP), Sew Repair (SFIX), Bon-Ton (BONTQ) and Costco (COST).

For Pepsi, this would be the final earnings report beneath CEO Indra Nooyi, quickly to be succeeded by the corporate’s international operations chief, Ramon Laguarta. The inventory might use a caffeine enhance: It is down 7% this yr.

5. Rebooting enterprise information: On Thursday, CNNMoney turns into the all-new CNN Enterprise, masking the businesses, personalities, and improvements driving enterprise ahead.

This new initiative will concentrate on the one largest monetary story of our technology: how expertise is upending each nook of the worldwide economic system, forcing companies, staff, and society itself to adapt quickly, or be left behind.

6. Coming this week:

MondaySew Repair (SFIX) and WageWorks (WAGE) earnings; David Solomon turns into Goldman Sachs CEO; Eurozone unemployment price

TuesdayPepsiCo (PEP) earnings; US auto gross sales for September

WednesdayLennar (LEN) and Pier 1 (PIR) earnings; ADP employment report

ThursdayCostco (COST) earnings; CNN Enterprise launches

Friday — US jobs report

CNNMoney (New York) First printed September 30, 2018: eight:55 AM ET

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