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Looking for a stock to bet against? Here’s how Tesla ‘ticks all the boxes’


It feels like a decent selloff is underway, with the S&P on track to open roughly 1% below last week’s record.

This morning’s global stock slump is being blamed on crude oil’s












CLZ7, -1.18%










crumble due to supply worries, the ongoing uncertainty over tax reform and even fresh concerns around equities looking stretched.

“There is a corrective theme developing,” says Richard Perry from Hantec Markets.

Market darlings often end up faring the worst when the mood shifts, and that brings us to our call of the day target — Tesla












TSLA, -2.12%










 . The maker of electric cars is due for a reckoning and still looks like a textbook short, according to Jim Chanos, the longtime Tesla critic who provides the call.

“If you wouldn’t be short a multi-billion-dollar loss-making enterprise in a cyclical business, with a leveraged balance sheet, questionable accounting, every executive leaving, run by a CEO with a questionable relationship with the truth, what would you be short?” the Kynikos Associates hedge fund founder said at a Reuters event yesterday.

“It sort of ticks all the boxes.”

Chanos has offered a prediction about Tesla CEO Elon Musk, saying the serial entrepreneur will leave that post by 2020 to focus on SpaceX, as rival auto makers expand their electric lineups. That won’t be good at all for Tesla’s shares, the storied short-seller suggests.

“Obviously this is not being valued as a car company, it’s being valued on Musk,” Chanos said at the event. “He’s the reason people own the stock.”

Chanos revealed that he has added to his bet against Tesla this year even as the stock has gained. Shares are up 44% in 2017, though they’re well off their September peak.

Key market gauges

Futures for the Dow












YMZ7, -0.53%










 , S&P 500












ESZ7, -0.49%










 and Nasdaq-100












NQZ7, -0.49%










are down between 0.5% and 0.6%, after the Dow












DJIA, -0.13%










 , S&P 500












SPX, -0.23%










and Nasdaq Composite












COMP, -0.29%










 closed lower yesterday.

European












SXXP, -0.90%










and Asian stocks have been dropping, and the dollar index












DXY, -0.25%










 is slumping. Gold












GCZ7, +0.17%










 is gaining.

See the Market Snapshot column for the latest action.

The chart

This is the first year ever that a key global stock benchmark has posted a gain every single month, notes Schwab strategist Jeff Kleintop. He shares the chart below that shows the performance of the MSCI All-Country World Index












892400, -0.28%










— which has been around for three decades.

See another Schwab chart here: Why investors have shrugged off high valuations

Of course, the monthly winning streak is in jeopardy, as November hasn’t been so hot so far. But next week you should “bring this stat to Thanksgiving dinner and amaze your family and friends,” advises Reformed Broker blogger Josh Brown.



The buzz

In other Tesla news, the electric car maker has fired back at claims that it’s a “hotbed for racist behavior” via a blog post titled “Hotbed of Misinformation.”

Target












TGT, +0.52%










 is on the earnings docket before the open, and Tencent












0700, -1.29%










has posted better-than-expected results.

There has been a “health-care twist” for the tax overhaul. The Senate’s tax bill appears likely to include a repeal of Obamcare’s individual insurance mandate, injecting a major GOP policy goal into an already-complicated effort.

A school lockdown likely saved lives during yesterday’s shooting in Northern California that left four dead.

Trump is back in Washington and expected to make an announcement at some point this week, perhaps on trade.

Airbus












AIR, +2.65%










 has secured one of the largest aircraft deals in history with a 430-jet agreement.

The quote


Reuters


Soldiers stand beside military vehicles just outside Harare, Zimbabwe.

“A bloodless correction of gross abuse of power.” — That is how Chris Mutsvangwa, chairman of a war veterans group in Zimbabwe, has described the move by that country’s military to take control of the nation. President Robert Mugabe is reportedly under house arrest.

Read: Military takes control in Zimbabwe

The economy

Readings on inflation, retail sales and the Empire State index are due before the open, then a release on business inventories will get attention once trading is underway.

Check out: MarketWatch’s Economic Calendar

The Chicago Fed’s Charles Evans spoke at a UBS conference in London today, saying the central bank should convince markets it would tolerate 2.5% inflation.

The Boston Fed’s Eric Rosengren is slated to talk at Northeastern University after the closing bell.

Don’t miss: Here’s why investors look too complacent about the Powell Fed

Random reads

Denver has high hopes for a hyperloop-inspired startup.

“Cards Against Humanity” buys land in a bid to block Trump’s border wall.

There are reasons to hate Keurig that have nothing to do with politics.

Australians endorse same-sex marriage, opening the door to legalization.

Other marriage news: Happy 70th anniversary to Queen Elizabeth and Prince Philip.

37% of Netflix users binge-watch at work, according to this survey.

Here’s the correct way to make your last name plural on Christmas cards.

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