Market Digest \u2013 Week Ending 8\/9\r\n\r\nThe S&P 500 declined just over 1%, retreating below the 1,700 mark after crossing it for the first time last week. Selling pressure was driven by two Fed official\u2019s comments that stimulus reduction could begin as early as next month. A strong export activity report from China provided an encouraging sign that a sharp slowdown there may be avoided. Bonds were up modestly.\r\n\r\nWeekly Returns:\r\nS&P 500: 1,691 (-1.1%)\r\nFTSE All-World ex-US: (+0.0%)\r\nUS 10 Year Treasury Yield: 2.58% (-0.02%)\r\nGold: $1,314 (+0.1%)\r\nUSD\/EUR: $1.334 (+0.5%)\r\n\r\nMajor Events:\r\n\r\n \tMonday \u2013 The Obama administration overturned an International Trade Commission ruling against Apple, introducing a new dynamic in global patent wars.\r\n \tTuesday \u2013 Chicago Fed President Charles Evans said the central bank may curtail its bond-buying program at its September policy meeting.\r\n \tWednesday \u2013 President Obama cancelled a scheduled meeting with Russian President Putin as a result of Russia granting NSA security leaker Edward Snowden temporary asylum. \r\n \tWednesday \u2013 Tesla Motor Company exceeded earnings expectations and said it sold over 5,000 of its Model S sedans.\r\n \tThursday - July trade data showed stronger-than-expected global demand for China's exports, reducing concern about a slowdown in the Chinese economy.\r\n \tFriday \u2013 President Obama on Friday announced plans to overhaul a secret national security court and pledged to disclose more information about secret NSA programs.\r\n\r\nOur Take:\r\nTesla shares were up 10% this week and the company is now worth $17 billion. It is quite a sum considering the company is only selling about 20,000 cars per year. Ford and GM each sell this amount every three days. Justified or not, the high valuation will allow Tesla to pursue aggressive growth goals including building more charging stations. Sometimes, the stock market acts as a bit of a self-fulfilling prophecy.\r\n\r\nOur interest lies not so much with Tesla but with the broader implications of the proliferation of electric cars. Bob Lutz, the former Vice Chairman of GM recently said he thinks electric cars will struggle to reach 10% market share in the next 10 years. But even at 10%, this would be a huge change. A 10% marginal decline in demand for retail gasoline could lead to a much larger decline in prices. That would be bad for oil companies but good for consumers and the overall economy.\r\n\r\nThe Tesla Model S reminds me a bit of the iPhone when it first came out. You would see one here and there and they seemed cool, but it was hard to envision how quickly and dramatically it would change the world. Electric cars aren\u2019t affordable to the mass market yet and there is little chance they will have similar market share as smart phones in the next 25 years. But they may be more important than most people realize, especially their impact on stock portfolios.