Stocks opened the trading week with a low volume selloff as the Dow shed 51 points to finish at 20,954. As Washington DC melts down, the Federal Reserve now appears ready to act on a 0.25% rate hike next week amidst a slew of positive economic indicators.
General Motors announced it had reached a deal to sell its European operations to PSA Group (aka Peugeot). The deal is valued at about $1.9 billion. GM’s operations were mostly under the Opel name which they have owned for 70 years. Lately however Opel has not turned a profit and keeps missing profitability goals in a market that is mature and very competitive. GM wants to become less global but more profitable and the deal, while resulting in a loss, will free up about $2 billion which can then be used to reduce share counts or invest in other areas. Could this also be related to some Brexit issues?
Oil prices continue to hold steady as WTI crude traded at $53.23 down 19 cents. US production is rising and OPEC is once again discussing more production cuts.
Gold was unchanged at $1,226 per ounce. I did see an article somewhere that the value of Bitcoin has risen sharply in the past 60 days and now trades at a higher price than an ounce of gold for the first time ever. While this is interesting, Bitcoin seems like a growing but nebulous thing that is more “wild west” than mainstream.