Auto Sector to Lift US Retail Sales
Ford Motor Company NYSE:F, General Motors NYSE:GM, Toyota ADR NYSE:TM, M, KSS, SBUX
Sales at US retailers probably rose in November as the holiday shopping season got under way and demand for automobiles rebounded after Superstorm Sandy, economists said before a report this week.
The projected 0.4% gain would follow a 0.3% fall in October, according to the median forecast of 60 economists surveyed before 13 December figures from the US Commerce Department.
Other reports may show a gain in industrial production, while cheaper gasoline helped push down the cost of living.
Vehicle sales last month rose to the fastest pace since February 2008 after slowing in the wake of Sandy’s destruction along the eastern seaboard. While job gains are helping sustain consumer spending, fiscal tightening slated for early next year threatens growth and may set back employment, one reason US Federal Reserve policy makers will weigh increasing stimulus when they meet this week.
Cars and light trucks sold in November at a 15.5-M annual rate, up from 14.2-M a month earlier when Sandy kept East Coast shoppers away during auto dealers’ busiest time of the month, according to Ward’s Automotive Group.
Ford Motor Co. NYSE:F deliveries of cars and light trucks climbed 6.4% and General Motors Co. NYSE:GM sales gained 3.4%, the companies said on 3 December.
Other retailers may have had less success in bouncing back from early-month weakness related to Sandy.
Same-store sales for the more than 20 companies tracked by Retail Metrics Inc. rose 1.6%, excluding drugstores, trailing the estimate for a 3.5% gain, the firm said on 29 November. That followed a 5% increase in October.
Sales at Macy’s Inc. NYSE:M, the 2nd-biggest US department store company, fell 0.7%, compared with the average projection for a 2.5% gain from analysts surveyed by the researcher Retail Metrics.
Kohl’s Corp. NYSE:KSS said same-store sales fell 5.6%, trailing estimates for a 2.1% gainer and prompting its biggest stock decline in 20 yrs.
Starbucks Corp. NASDAQ:SBUX said failure by lawmakers to avert the F-Cliff of tax increases and spending cuts poses a threat to consumer spending.
“I think we are highly, highly sensitive to the seismic change that could result in consumer confidence and consumer behavior by the unintended consequences that could happen as a result of the Congress and the administration not reaching a compromise and a long-term agreement,” Howard Schultz, CEO of Starbucks, said at a 5 Decembe conference.
US Fed policy makers will consider at their 2 day meeting this week whether more monetary stimulus is needed to provide a bigger boost the economy.
Fed officials will consider whether to supplement their $40-B a month of mortgage bond purchases with US Treasury buying, following the month-end expiration of the Operation Twist program to replace $667-B of short-term debt with the same amount of longer-term bonds. Stay tuned…
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Shayne Heffernan oversees the management of funds for institutions and high net worth individuals. He is also an active consultant working with Corporations around the World.
He is recognized as one of the leading Economists in South East Asia, as well as the preeminent authority on ASEAN. His opinions and forecasts are widely read by decision makers in the region and Internationally.
Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reached a peak of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.
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