U.S. Auto Sales Set Annual Record Auto makers rolled out stronger-than-expected December U.S. sales results, amid robust demand for trucks and hefty year-end incentives, boosting the tally for 2016 to a record.
(…) December’s sales pace, one of the strongest monthly performances in the industry’s history, was fueled by discounts of $3,542 per vehicle on average, according to J.D. Power, an independent research firm.
That represents a 10% discount off the original asking price and is an incentive level not seen since the beginning of the financial crisis. (…)
Auto makers sold 1.69 million vehicles in December, 3.1% more than the same period in 2015 despite one fewer sales day. The seasonally adjusted selling pace of 18.43 million was the highest since July 2005, when General Motors Co. and other auto makers stoked demand with a new campaign that offered employee pricing to all customers. A total of 17.55 million vehicles were sold in 2016, roughly 60% of which were classified as light trucks.
That compares with 17.48 sales million a year earlier and a mix of 56% light trucks. (…)
Bespoke has this stat, just as gas prices are coming back up:
Forget about Lexus. It was definitely a “December to Remember” for sales of Ford F-Series trucks. While we have been updating our running total of all US car sales for December over here, Ford sold a lot of F-Series trucks in December. While the figures below aren’t adjusted for selling days, we would note that total sales of F-Series trucks in December came in at 87.5K, which is the best month of December for Ford F-Series sales since 2005 and the third best December in the last 20 years.
With December’s strong showing, total sales of F-Series trucks came in just shy of 821K in 2016, which was also the best year for total sales since 2005. While everyone knows that sentiment has improved since the election, it has also translated into sales of F-Series trucks as 159.6K were sold in the last two months of the year. The only other year where the last two months of the year saw a higher sales total was in 1996 (161.9K).
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- Cyclical peak? (CalculatedRisk)
- Doug Short gives us two other views:
1- The 9-m moving average remains below the recent peaks:
2- Per capita, the trend remains down:
Macy’s Axes Jobs and Stores, Echoes Kohl’s on Weak Holiday Macy’s slashed thousands of jobs, detailed plans to close dozens of stores and joined rival Kohl’s in warning that holiday sales were weak, adding more evidence that department stores have lost their once-central place.
Macy’s Inc. said it will slash more than 10,000 jobs and detailed plans to close dozens of stores after another holiday season of weak sales, providing more evidence that department stores have lost their once-central place in American retailing.
Like its rival, Kohl’s Corp., which also warned Wednesday of lackluster holiday results, Macy’s hasn’t been able to solve consumers’ shift to online shopping. Macy’s will close stores from San Diego to Bangor, Maine, and use the savings to boost its efforts to capture more e-commerce spending. (…)
Mastercard SpendingPulse estimated that e-commerce spending jumped 19% during the holidays, compared with an overall 4% increase in retail spending.
On Wednesday, Kohl’s warned that holiday results were weak, saying comparable sales declined 2.1% in the months of November and December from a year ago. The chain, which operates 1,100 stores, lowered its profit targets for the current year.
“Strong sales on Black Friday and during the week before Christmas were offset by softness in early November and December,” said Kohl’s CEO Kevin Mansell. (…)
Macy’s said its sales declined 2.1% on a comparable store basis in November and December from a year ago. Assuming business doesn’t pick up considerably in January, it would mark the eighth consecutive quarter that Macy’s sales have declined on that basis. (…)
Wal-Mart closed more than 100 U.S. stores last year and agreed to spend $3 billion to last fall to acquire online retailer Jet.com.
The transition to on-line purchases is having profound effects on the whole retail ecosystem. This year will likely see major problems for the retail real estate market for instance. Collateral damages could be greater than perceived. On the other hand:
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Amazon to Open First Manhattan Bookstore Online retailing giant Amazon.com plans to open its first New York City bookstore in Manhattan’s Time Warner Center, the company said.
Trump’s Pro-Business Stances Don’t Ensure Economic Growth The surge in stocks since Donald Trump was elected may be a sign of optimism over his pro-business cabinet picks, Greg Ip writes, but whether that justifies increased optimism in the economy depends on the policies they implement.
(…) Eventually, though, that confidence must be validated by results. In 2012, Shinzo Abe’s landslide victory in Japan sent Japanese stocks soaring. The economy didn’t follow. “Mr. Abe’s mere ‘willingness’ to undertake strong policy actions was sufficient to power a sustained and significant rally,” wrote Stephen Jen, a hedge-fund manager, last month. “Questions about his ‘ability’ to succeed only became relevant two years later.”
(…) few presidents entered office with a better business resume than Herbert Hoover. He’d made his fortune in mining and his reputation managing war relief and as commerce secretary. The stock rally that greeted his election in 1928 was the last to rival Mr. Trump’s. His postelection stock rally is among the strongest on record.
Yet Mr. Hoover couldn’t stop the Depression, in part because he sought purely private-sector solutions to problems that needed government intervention. (…)
Fed Minutes Cite ‘Considerable Uncertainty’ About Trump’s Impact on Economy President-elect Donald Trump’s name doesn’t appear in the minutes from the Federal Reserve’s December meeting. But a robust discussion about the potential economic impact from his election victory does.
(…) Almost all officials indicated that the prospects for fiscal stimulus—such as infrastructure spending or tax cuts—could boost economic growth in the coming years. Officials emphasized the timing, size and composition of Mr. Trump’s proposals once he takes office are wild cards in deciding how to adjust interest rates.
Officials “agreed that it was too early to know what changes in these policies would be implemented and how such changes might alter the economic outlook,” the minutes said. Many officials also worried the uncertainty “made it more challenging to communicate to the public about the likely path of the federal funds rate.” (…)
Depending on the mix of tax, spending and regulatory policy changes that lawmakers pursue, several officials said economic growth might turn out to be faster or slower than they anticipated in December. Many officials also emphasized the importance of monitoring risks to the forecast, including the possibility of further strengthening of the dollar, financial instability overseas and the fact rates are still close to zero.
Some officials warned the possibility for stronger economic growth and further increases in oil prices, as well as a rise in inflation compensation in recent months, could lead to higher inflation. But others noted that a stronger dollar could continue to keep inflation at bay. (…)
Officials in the minutes also flagged the possibility that the jobless rate may fall below the rate where they see it settling in the long term, which may require them to raise rates faster than they currently expect “to limit the degree of undershooting and stem a potential buildup of inflationary pressure.” (…)
Chinese Media Say ‘Big Sticks’ Await Trump If He Seeks Trade War
“There are flowers around the gate of China’s Ministry of Commerce, but there are also big sticks hidden inside the door — they both await Americans,” the Communist Party’s Global Times newspaper wrote in an editorial Thursday in response to Trump’s plans to nominate lawyer Robert Lighthizer, who has criticized Beijing’s trade practices, as U.S. trade representative. (…)
SENTIMENT WATCH
The flows into US equity ETFs have been spectacular. (The Daily Shot)
Source: Credit Suisse
MANAGING BY TWEETS
More tweets coming:
Excellent Bloomberg piece:
This is also entering the equation:
