Market rotation, auto industry rebalancing: Asking for a Trend

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Kevin Roberts News

Josh Lipton,Auto Sector,Investor Attention

On Thursday's edition of Asking for a Trend, Host Josh Lipton breaks down some of the biggest stories and themes impacting markets. The auto sector is...

CarGurus director of industry insights and analytics Kevin Roberts explains that despite disappointing earnings, the auto industry is still"quite healthy." He notes that the earnings suggest the sector is going through"a bit of a rebalancing right now."The future of regulation for startups and big businesses rests on the 2024 election, as former President Donald Trump and Vice President Kamala Harris have vastly different agendas.

And I think we're in a bit of a rebalancing right now and that's really what we're feeling and starting to see uh this earnings season, let's dig in a little, a little more into some of the, some of the segments EVs, for example, uh Kevin, I think a lot of folks are wondering, you know, had we hit the trough and better times ahead?So I think you're still seeing automakers kind of rebalance their expectations and product plans in the face of there's expectations since...

And still, I mean, if you're looking for a hybrid, it's gonna be much more difficult to find those out in the marketplace right now.All right, we talked a vs, we talked hybrids before we got to let you go.Uh There's still healthy demand for them but the the demand for the kind of those higher price trims maybe is pulling back a little bit uh as consumers are, you know, dealing with higher interest rates.

Um, up about two te uh excuse me, up about 2/10 of a percent that is still down over the last one or two days. I'm a little bit worried, uh, weary, but I do take the strength, the strength of this move and I'll go back to this year today chart.Japan is capitulating, I've been looking at not only the Yen but also the Nikkei Stock Index.That was 1 6262 yen per dollar.And here we have the US dollar versus Japanese Yen.Doesn't sound like a lot, but in currency terms, it is a lot.

That could mean that we're on the precipice of a bear market or that the, the Federal Reserve is about to change the business cycle here.So we gotta keep an eye on the yen because um you know, one of the things in finance is called the carry trade. So the lack of exits, whether that's IP OS or M and A transactions um has really kind of locked up the entire, the entire ecosystem.

Uh It'll also be interesting to see if the M and A market picks up or not, that makes up the bulk of, of exits.Um You know, right now, obviously, I think if you're, if you're big tech, you, you know that the trust busters in Washington are, are looking much more closely.I mean, if, if you see if you do see a change in the White House, if Trump and Vance take the White House is the expectation.

OK, if it, Trump Vance wins the White House because Vance, as we were talking about, he has nice things to say about Lina Khan. So it's uh it's a little bit, it's hard to, it's hard to say with, with a Democrat or a Republican in um net net at the state and local level.Um I do think that professional investors, particularly early stage fund managers definitely see that, think that life was better whenever Trump was in office, last time compared to whenever Biden was in office or is in office.You're a venture investor, you're talking to a lot of smart entrepreneurs and founders.

Then on the earnings front, we'll be getting reporting from Bristol Myers, Squibb, Colgate Palmolive and three M are the top names to watch Dow component three M posting second quarter results ahead of the open.And finally the summer box office is heating up.Now, Deadpool and Wolverine is out tomorrow nationwide.

So in other words, you have initial site prep in some cases, sometimes that's the most expensive part of the process.He says we're not seeing equipment investment pick up next, which presumably would be kind of the next phase of this. So in other words, she doesn't think that who wins in the presidential election will matter much for infrastructure spending.

This company also raising though its full year guidance and announcing a new $1 billion share repurchase program.

 

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