Stocks began the day mildly higher and then drifted as the transportation sector was lower and the House was debating impeachment. Tesla shares hit an all-time high as reports came out about the company lowering car prices in China. At the close the Dow was off 27 points at 28,239 on heavier trading volume. This was the first down day in the past 5 trading sessions.
Fiat Chrysler and French car maker Peugeot have agreed to a 50/50 merger as disruptive pressures in the auto industry drive change. The deal needs to meet regulator and union approval but if it goes through it will be valued at $50 billion and create a company that has the capacity to make 14 million cars per year. Fiat, while originally from Italy is now based in London and owns Ferrari, Alpha Romero, Maserati as well as Jeep and Dodge. The thought behind the merger is that disruption caused by EVs and autonomous driving can partially be offset by volume and economies of scale. In other auto related news Volvo agreed to sell its Japanese UD truck business to Isuzu for $2.3 billion. Ford also agreed to terms with labor unions and the deal includes plans for Ford to invest $1.45 billion in two Michigan plants that will result in up to 3,000 new jobs.
FedEx posted lower earnings and shares took a hit as weak results and weak guidance caused gurus to jump ship. Revenue was off 3% and net profits fell 38% as the company is dealing with the disruption in trade patterns as well as the loss of its Amazon business. Amazon also is now forbidding some third-party sellers to ship via FedEx as it continues to build out its own logistics and air freight service. CEO Fred “The Gambler” Smith said trade disputes had affected international business and was hopeful that with trade deals coming into place these issues would dissipate.