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Wall Street Strategies has been providing independent stock market research since 1991 to individual, retail and institutional clients through a balanced approach to investing and trading. Charles Payne, our founder and chief analyst, is routinely sought after for his stock market, political,... More
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  • Markets Slip And Slide But Are Still Up By WSS Research Desk 0 comments
    Jan 3, 2014 1:47 PM

    By Carlos Guillen

    After a rather negative start to this new year of trading, equity markets are making a modest move to the upside today, but volumes are low enough to cause fairly unstable price movements. That is right, yesterday the Dow Jones Industrial Average Index lost approximately 135 points as investors looked at Chinese manufacturing data that was below expectations and indicated growth at a decreasing rate. And today trading activity is looking better, but not that much, as auto sales were not very inspiring and manufacturing data from New York showed expansion but at a decreasing rate.

    Earlier today investors got a glimpse at sales activity from the three major domestic auto manufactures, which is often seen as a barometer for consumer confidence, and the results were overall below expectations. Ford Motor Co., which is the second-largest auto maker, reported a 2 percent gain in net sales in December to 218,058 vehicles, well below the Street consensus of a 5.9 percent gain. On the other hand, privately owned Chrysler Group LLC reported a 5.7 percent increase in sales last month to 161,007 units. But most surprising was that General Motors Co. reported a decline in U.S. vehicle sales for December to 230,157 units, down 6.3% from the year ago month, moving in the opposite direction than that expected on the Street which called for a 0.8 percent rise.

    In addition to auto sales, we also got a look at business activity in the New York City area, which expanded in December, but not as strongly as in the prior month. According to the Institute for Supply Management, New York's Current Business Conditions index declined to 63.8 last month after it rose more than 10 points to 69.5 in November, the highest level since October 2010. Given that a reading above 50 indicates growth, the data still showed expansion in the NYC area; in fact, New York City business activity ended 2013 with its best half-year of growth since 2010. Moreover, businesses are optimistic about the first half of 2014 as the six-month outlook index increased to 73.2 in December from 69.6 in November, reaching the highest in nearly four years.

    In all, given that Wall Street is still not all back from the Christmas holiday and given today's snow fall, trading activity is very light, which certainly can cause volatility. As such, the Dow is heading lower again but still trading in the green. Let's hold on tight to see where we end the session.

    Auto Sales Fizzle
    By David Urani

    Auto sales picked up well for most of this year, and through November it appeared as though auto sales would surpass the 16 million SAAR (seasonally adjusted annual rate) mark for the year, up from 14.5 million last year. However, the various automakers are putting out their December numbers today and they aren't coming in too encouragingly.

    GM posted a 6.3% decline in sales in December, whereas the Street had been looking for a 1.5% increase. Retail sales were down 6%, while fleet sales were off 9%. The yearly total, however, was still up 10.8%.

    Ford posted a 2% increase in sales for December, but that came in below estimates for a 5.9% increase. That made for 2.5 million units total for the year, an increase of 10.8%.

    Chrysler's December sales were up 6%, with increases in the Dodge, Jeep and Ram brands, partially offset by a 21% decline in the Chrysler brand.

    Toyota's December sales were up 2.2%, while the 2.24 million annual total was up 7.4%. Toyota management now expects continued strength in 2014, with sales rising to pre-recession levels.

    VW ended a disappointing year with a 22.7% drop in December, with its 407,704 unit total for the year being down 6.9%.

    So the results fizzled into year end, and in fact now two of the manufacturers (Chrysler and GM) are projecting industry sales to fall short of 16 million units for 2013. Nevertheless, total industry sales are still likely to be up in the range of 8% for the year which isn't bad.

    (click to enlarge)

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