Cool News US auto sales rose in June make drop in gas prices

US auto sales rose in June drop in gas prices

Gas prices hit a sweet spot for automakers last month. They fell far enough to spur pickup truck sales, yet remained so high that small cars sold well, sometimes just hours after reaching dealers’ lots. Toyota and Honda couldn’t take advantage, however. Their sales plummeted more than 20 percent each as they ran short of cars because of the ongoing problems from the March earthquake in Japan. Those declines - and the continuing weakness in the US economy - meant sales grew more slowly in June than they might have. US sales rose 7 percent to 1.05 million. Analysts had expected a double-digit gain. Sales aren’t expected to pick up until fall, when Japanese production is at full capacity. “Some consumers have decided to sit on their hands and delay their purchases,’’ said Don Johnson, GM’s vice president of US sales. General Motors Co. and Ford Motor Co. both said their sales rose 10 percent. And the Chevrolet Cruze small car vaulted past perennial best-sellers such as the Toyota Camry and the Honda Civic to become the best-selling car in America. Chrysler Group’s sales increased 30 percent thanks to popular new products such as the Jeep Grand Cherokee and Chrysler 200 sedan. Gas prices averaged $3.68 per gallon in June, cheaper than in May but hardly inexpensive. It was enough to change some buyers’ behaviors. “There is a certain portion of consumers that react to gas prices almost on a daily basis, and they decide what to buy based on those prices,’’ said Jesse Toprak, vice president of industry trends and insights for car pricing site TrueCar.com. That made June a good month for General Motors and Ford, which have traditionally relied on truck sales and now have strong lineups of smaller, fuel-efficient models as well. The drop in gas prices lured more pickup truck buyers. Chrysler reported a 35 percent increase in Ram truck sales, while Chevrolet Silverado sales rose 5 percent. Any jump in pickup sales helps the Detroit automakers, which sell more than five times as many pickups as foreign-based brands. But even Nissan Motor Co. benefited. Sales of its Frontier small pickup rose 51 percent. Ford said even pickup buyers had their eye on gas prices. More than half of F-150 buyers chose smaller V-6 engines over V-8s. It was the first time smaller engines outsold larger ones since the 1980s. Small cars also remained hot sellers. Sales of the Cruze more than doubled those of the car it replaced, the Chevrolet Cobalt, while sales of the Ford Fiesta subcompact were up 438 percent from last June. But automakers could have sold more small cars without the supply disruptions in Japan. Sales of the Toyota Prius hybrid fell 61 percent to 4,340, their lowest level in seven years, according to TrueCar.com, while Honda Civic sales were down 35 percent. US automakers sold as many small cars as they could make, but they couldn’t meet the demand for small cars alone. The industry began June with a 30-day supply of compact and subcompact cars, and inventory has only gotten tighter, Ford’s top US sales analyst George Pipas said. Chevrolet has only 18 days’ worth of the subcompact Aveo to sell. Some new Ford Focus small cars sold within hours of arriving at dealerships.

Financial Losers, Bank of America

Regional banks were among the few bright spots. SPDR KBW Regional Banking(KRE_), an exchange traded fund that tracks regional bank stocks, was higher by 0.28%, with all of its top three holdings, East West Bancorp.(EWBC_), Cathay General Bancorp(CATY_) and Signature Bank(SBNY_) all showing gains.

The largest U.S. bank stocks were lower on Monday following lower analyst estimates and PNC Financial(PNC_)'s acquisition of Royal Bank of Canada(RY_)'s U.S. assets for less than tangible book value.

The Financial Select Sector SPDR(XLF_), a widely-followed exchange traded fund that tracks financial stocks, was down .07% to close at $14.88 on lighter-than-average volumes.

The fact that PNC was willing to pay more than BB&T, but still less than tangible book value, was taken as a largely negative sign for U.S. bank stocks, analysts said.

PNC shares fell by 1.96% to $56.66 on more than triple their average volumes as many analysts criticized the deal. They argued RBC's branches, located throughout the southeastern U.S., made little sense from a strategic point of view for PNC, as it will face competition from powerhouses like Bank of America(BAC_) and Wells Fargo(WFC_), not to mention BB&T Corp.(BBT_), which was seen as being in the best position to bid for the RBC assets because its branches overlap significantly with those of the Canadian bank.


Bank of America, JPMorgan Chase(JPM_) and Citigroup(C_) saw shares fall by 0.75%, 0.78% and 0.37% respectively following reduced analyst estimates related to concerns these banks would be forced by international regulators to hold higher capital cushions. Goldman Sachs(GS_) and Morgan Stanley(MS_) also saw their estimates reduced, and shares of those companies fell by 1.52% and 1.93% respectively.

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US stocks rose on Tuesday after encouraging earnings

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paulvigna‎ So yesterday stocks freaked over US debt fears, but today they're placated because housing starts rose? Really? Is that your final answer?

US stocks rose on Tuesday after encouraging earnings from healthcare and materials companies and unexpected strength in housing, but weakness in technology and banks tempered gains.

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DailyFXTeam‎ US stocks rose as benchmark indexes rebounded from the worst declines in a month; S&P rose 0.16% to 1307.24 at 01:02 p.m. EST

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HYMarkets‎ U.S. stocks rose, as benchmark indexes rebounded from the worst declines in a month, after housing starts increased

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U.S. Housing Prices Fell 2010 - 2011

U.S. Housing Prices Fell Again in January

Portland was one of 11 cities in the Case-Shiller index that reached another low for the current downturn in January. Prices fell 1.8 percent from December, pushing them back to 2005 levels.

“You do kind of wonder where the bottom is,” said Mr. Thoele. “Sellers know in the back of their mind that their home is worth less than at the peak, but they’re still a little surprised when you tell them their $400,000 house is now worth $300,000.”

Case-Shiller is a three-month moving average, which means it is resistant to quick changes. On a seasonally adjusted basis, January’s drop was 0.2 percent, the same as in December. In the slower winter months, the adjusted numbers are considered less indicative of the market’s true condition.

Prices were down 3.1 percent from their levels a year earlier. Only two of the 20 cities in the index recorded price increases during that time: Washington and, barely, San Diego.

US house prices fall in October, set to tumble further still

Atlanta was hit the hardest. Overall, house prices fell by 1.3 percent in the month.

in October and have dropped roughly 2 percent nationwide since June, according to data released by Standard & Poor's Tuesday.

Prices fell in October in every city in the index, from Miami and Washington to San Diego and Seattle. Overall, the 20-city index was down 1.3 percent for the month, and has fallen 1.8 percent since June.

Six metro markets – Atlanta; Charlotte, N.C.; Miami; Portland, Ore.; Seattle; and Tampa, Fla. – hit their lowest levels since home prices started to fall in 2006, although many other cities are still above lows reached in the spring of 2009.

"Although prices are falling again in all 20 cities, they are not in a freefall, as they were in 2007 and 2008," Patrick Newport, a housing analyst at IHS Global Insight, wrote in an analysis of Tuesday's numbers. The forecasting firm expects house prices to drop another 6 to 8 percent, he says, "and then turn around" after bottoming in 2011.

The Case-Shiller house price index is based on three-month moving averages, so October's readings may be only the second report to fully reflect the expiration of the federal tax credit, which helped to support housing transactions through June. The size of the price declines in October came as a surprise to analysts.

If the tax credit caused a kind of artificial rise and then fall in the housing market, other forces will now have a bigger effect on home prices going forward. Foreclosures and a glut of homes for sale are major reasons analysts expect modest home price declines to continue in many cities. But an improving economy could offset that trend, helping to buoy demand for homes as the job market improves.

Interest rates are a wild card. It's unclear if mortgage rates will keep rising, and thus diminish the amount that home buyers can afford to bid. Even though rising rates pose a threat to the market, in the short run they could lure some buyers into the market, as people worry that attractive rates may disappear.

Home prices have ridden a roller coaster over the past decade, with a dazzling upward surge followed by a harrowing bust in many markets. Prices in some markets have fallen sharply since 2006, but are still up for the decade, even after adjusting for inflation. Those include Los Angeles, New York, Seattle, Boston, and Washington.

Other boom cities have fallen harder, with home prices now down for the decade on an inflation-adjusted basis. Those are Phoenix and Las Vegas. In those cities, home prices are now roughly where they were in 2000, while a 27 percent advance would have been needed to keep pace with inflation.

Detroit has fared the worst of any city in the Case-Shiller index over the past decade, with prices down 31 percent even before adjusting for inflation.

Inflation Affects the Forex

The Forex market is influenced by many different factors. Because of the world wide economy, knowing the economic reports in Switzerland may be as important to one trader as what the Yen is doing against the US Dollar. Countries release economic reports to show the health of their local economies, and one of the major reports that all Forex traders look forward to is the Consumer Price Index (CPI).

For example, in an economy that started booming, similar to the way China has grown in recent years, more people make more money. They start buying more. Stores not directly affected notice this, and raise their prices. So the workers demand more money, the company pays more money, and the stores keep raising prices. Without any checks or balances, this economic boom can send the inflation through the roof. A CPI report can show this, and encourage the government and federal banks to counter.

The CPI can sometimes be affected by a large hike in price of one commodity. For example, the huge jump in oil prices in the United States. This affects transportation, heating, food, and cuts into retail sales because of the squeeze on workers' budgets. In that case, one major commodity jumping in price created a domino effect that the CPI would alert traders and investors to.

see this example on forex trading

The Great Britain pound recovered somewhat after it dropped on the speculation that the falling house prices signal about problems in Britain’s economy.



GBP/USD traded at 1.5434 as of 03:38 GMT today after it dropped yesterday from 1.5497 to 1.5366. GBP/JPY traded at 125.79 after yesterday’s decline from 126.47 to 125.46.

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DETROIT — A week after catastrophe struck Japan in the form of an earthquake, a tsunami and a nuclear crisis, manufacturers that rely on Japanese factories are concluding that their operations will be affected more severely — and for a longer time — than they had initially hoped.

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Toshiyuki Aizawa/Bloomberg News

Nissan's engine plant in Iwaki, shown in 2008, was damaged in the quake. The company does not know when it will reopen.

Nissan, for example, has at least nine Japanese vehicle and parts factories and 35 suppliers that have been disrupted by the disaster. The company’s engine plant in Iwaki, damaged by the quake, could take so long to get back to normal production that Nissan is considering the extreme step of shipping engines made at its Tennessee plant to Japan to go in cars there, the chairman of Nissan Americas said in an interview Friday.

“This is a serious situation, and it has the potential to affect many markets, including the Americas,” the executive, Carlos Tavares, said. “We are going to make sure we address the issues as fast as we can. We have a buffer, a cushion, that’s going to give us a little bit of time to bring things back on track.”

But Mr. Tavares said it could be weeks or months until the supply chain is back to normal. He just doesn’t know.

Many other companies are also uncertain about when or how they can return to full production, from chip makers dependent on Japan’s silicon wafers to cellphone makers like Sony Ericsson. As the crisis evolves, the early optimism has given way to caution.

Honda, which had earlier hoped to restart its shuttered Japanese plants on Monday, announced Friday that it was extending the shutdown by at least three days, reassessing the situation after that “based on the status of the recovery of parts supply as well as Japanese society as a whole.”

The company has also told dealers in the United States that it will delay taking orders for Japanese-made cars and trucks that they would normally receive in May until it has a better idea of its ability to ship them.

Tony Iskandar, the owner of Goudy Honda in Alhambra, Calif., one of Honda’s largest dealerships, said even before the disaster he expected to run low this summer on his more fuel-efficient models, like the Fit subcompact, which comes from Japan, because of rising gasoline prices.

“In the short term we’ll have enough cars, but in a few months it’s going to be crazy,” Mr. Iskandar said. “We’re trying to buy as many used cars as we can. At least that’s an option if a customer wants a Honda. We could give them a year-old or two-year-old certified car.”

Nissan restarted two of its Japanese plants Thursday but warned that it might need to shut them again any day as available parts are depleted. The rest are staying down until at least next week. Mr. Tavares said 35 Nissan suppliers in Japan were “addressing issues in their plants,” and some lower-tier suppliers undoubtedly have to repair their buildings or equipment as well.

Toyota’s plants in Japan, which build nearly half the vehicles the company sells worldwide, also remain closed. Of particular concern to many dealers is the Prius, a gas-electric hybrid car that is assembled only in Japan and has been experiencing a surge in demand.

TrueCar.com, which tracks vehicle pricing and sales, said the uncertainty about Prius availability already had caused the average price customers are paying for the car to soar by about $1,800 since the earthquake. Jesse Toprak, TrueCar’s vice president for industry trends and insight, predicted that dealers will be charging sticker price — or even hundreds or thousands of dollars higher, a practice automakers discourage but cannot prohibit — as soon as next week.

“The problem is that there’s so much uncertainty,” Mr. Toprak said. “The supply-chain problem is a much more dramatic one than what the automakers are portraying. Even if they were able to come online in two weeks, which I think is wishful thinking, there’s a couple hundred thousand units to make up already, and nobody exactly knows how long this is going to last.”

General Motors is halting output at a pickup-truck plant in Louisiana next week because it is running low on an unspecified part from Japan, with ripple effects on other G.M. operations.

http://www.nytimes.com/2011/03/19/business/global/19auto.html