Markets opened higher but then pulled back as car company stocks hit the brakes with weak sales numbers. Toward the close however the Dow recovered before finally ending the day with a small 13 point loss to 20,650. Trading volume was on the high side. Today’s reversal shows support at the 50 day moving average.
Car sales for March were reported and with the exception of Tesla they were disappointing. All the major car makers including Ford, GM, Honda and Chrysler missed estimates despite heavy sales incentives. Ford saw an overall 7.2% decline in sales as car sales fell hard while truck sales continue to increase. Chrysler’s sales were off 5% and even the Jeep division posted an 11% decline. GM reported a 1.9% increase in sales which missed estimates. One note of interest is that GM trucks sold in the NW are shipped in through the Port of Aberdeen.
Tesla deliveries hit a new high rising 69% in Q1 and coming in above targets. Tesla delivered just over 25,000 vehicles in the quarter and is on track to begin deliveries of the Model 3 in July. The Fremont factory is ramping up and the goal is to move from 100,000 deliveries this year to 500,000 by the end of 2018. Now that is what I call productivity growth! The Tesla factory in Fremont, CA is amazing. Check it out on this short Youtube clip. https://www.youtube.com/watch?v=hOXaBto7giY
Trim Tabs reported that approx. $160 billion has moved out of money markets and into stocks and bonds so far this year. This represents the highest flows since 2010 but even after that, $2.65 trillion still remains in money markets which is a sizable chunk of change. Bank of America also reported that average equity allocations amongst money managers is 52.9 which is considered “neutral”. These two readings indicate that markets, from a historical perspective, still offer upside potential even though volatility and risks remain.
Troop 100 had an Eagle court of honor on Sunday. These two young men became the 153rd and 154th Troop 100 Eagle Scouts. Well done lads!