The Dow fell 41 points today closing at 17,541 on heavy volume as traders eyeball the Federal Reserve open market committee meeting taking place today and tomorrow. It is expected that interest rates will be kept steady.
Oil prices continue to pull back as fears of oversupply continue to mount even in the face of production cuts. Analysts are thinking that production cuts will not affect prices until sometime next year which means current stockpiles might continue to grow. Adding downside pressure was news out of Washington DC that a budget deal to avoid a shutdown included the release of oil from US strategic reserves sometime between 2018 and 2020. WTI crude hit a multi week low today closing at $43.23 off 1.7%.
Ford Motor reported earnings that, while they were impressive, did not beat earnings estimates. Ford posted revenues above the guru estimates climbing 9%. Net income was up 88%. Margins also jumped but the stock was whacked because the numbers missed earnings estimates by 2 cents! Seriously? North American sales were strong while sales to China and the emerging markets were challenged. Sales of the new aluminum F-150 pushed truck sales to a nine year high. Word on the street is that these new F-150s are nice! I talked to an auto body shop and they said the mechanics like working on the new trucks.
Paccar, the Renton, WA based #3 global truck maker reported earnings and they were up 16% from last year while sales were off 1.6%. Both top and bottom lines beat estimates. Sales of big rigs in North America and Europe were good while emerging market sales were under pressure. The company announced an additional share repurchase program of $300 million after completing a similar program in the 3rd quarter. Shares were lower however as word got out that DAF, the European division of Paccar, might face fines for “uncompetitive” sales tactics.