Stocks finished the day flat as earnings reports come in and everyone recovers from the wild Monday night football game last night between the Seahawks and Richard Sherman. The Dow closed flat while the S&P 500 and NASDAQ were up slightly. Trading volume was higher on the day. Markets are still in rally mode and economic fundamentals appear solid as investors eagerly await trade deal news.
Bloomberg did a survey of 5,000 Tesla Model 3 owners and the results reveal that buyers are very satisfied with the car and that BMW, on a relative basis, has lost the most sales to the Model 3. The study found that both Toyota and BMW are seeing the most lost sales to Tesla. Toyota however sells 7 times more cars in the US than BMW so the impact on BMW is significantly more than on Toyota. While people are switching from the Prius to the Model 3 the BMW’s 3 series luxury sedans, which define the small luxury segment, are being passed over like Bob Hope at the Oscars according to Bloomberg’s study. The trend also shows no sign of abating since Model 3 owners indicate they are happier than a kid in a candy store with their Tesla.
The nation’s largest homebuilder DR Horton posted better than expected earnings and issued bullish guidance for 2020. Revenue was up 12% and net profits were up 11% beating guru estimates. Home sales were up 9.2% and CEO David Auld used some very technical terms on the conference call when describing the housing market by saying "Homes, they're affordable as they're going to get .. but right now, the market feels really, really good," David noted that margins are at 21% but increased competition will most likely keep them there. Prices are generally lower and the company is focusing on the entry home segment instead of luxury homes. DR Horton also increased its common stock dividend by 16% and share hit an all-time high.