The strike by United Auto Workers against the Big 3 carmakers is sparking a broader worry among stock-market investors over the outlook for corporate profits.
Stocks slumped Friday, with the S&P 500 SPX down 1.1%, and turning fractionally lower for the week. The Dow Jones Industrial Average DJIA declined around 275 points, or 0.8%, while the Nasdaq Composite COMP shed 1.6%.The UAW, which initially called for a 40% wage increase over four years, is now pushing for an increase in the mid-30% range. American Airlines AAL, +0.49% earlier this summer agreed to a 40% raise for pilots over four years, while United Parcel Service UPS, -0.
It speaks to a continued rise in real wages that may not be fully appreciated, he said, arguing that consensus expectations for 12% earnings growth in 2024 may prove overly optimistic.Around 13,000 of the UAW’s 146,000 members are on strike at the three plants targeted so far. Margins bottomed in the final quarter of last year and have rebounded over the past two quarters as real growth recovered, they noted.