US Drivers Shift to Expensive Suvs and Trucks in Strong Recovery

US Drivers Shift to Expensive Suvs and Trucks in Strong Recovery

#automotive #trucks #drivers #strongrecovery #Ford #GM #Chevy

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The pace of US auto sales is expected to rise 3% in October, helped by a strong recovery in consumer demand and tighter inventories at dealerships, industry consultant JD Power said Wednesday.

Retail sales of new vehicles are estimated to reach about 1.2-M units in October, a 3% increase from a year ago when adjusted for selling days, the consultancy said.

This year, October had 1 additional selling day compared to last year. Without the adjustment, the increase would be 6.8% Y-Y.

“Two consecutive months of year-over-year retail sales increases demonstrates that consumer demand is showing remarkable strength,” said the President of the data and analytics division at JS Power.

Average incentive spending per unit in October fell $425 to $3,678 from a year ago, as lean inventories have allowed dealers to reduce the discounts they typically offer on new vehicles.

Incentive spending, which peaked at $4,953 per unit in April 2020, is below 9% for the 1st time since June 2016.

The shift towards more expensive trucks and SUVs (sport utility vehicles) is expected to drive average transaction prices to an all-time high of $36,755 in the month of October.

The consultant estimates the seasonally adjusted annualized sales pace for new vehicles in October to be about 15.9-M vehicles, down just 0.8-M units from 2019.

Wednesday, the benchmark US stock market indexes finished at: DJIA -943.24 to 26519.89, NAS Comp -426.48 to 11004.80, S&P 500 -119.65 to 3271.03

Volume: Trade on the NYSE came in at 1.1-B/shares exchanged.

HeffX-LTN’s overall technical outlook for the major US stock market indexes during this healthy pullback is Neutral with a Bullish bias.

  • NAS Comp +22.7% YTD
  • S&P 500 +1.3% YTD
  • DJIA -7.1% YTD
  • Russell 2000 -7.5% YTD

Notes: Longer-dated Treasuries gave up early gains to close flat to little changed. The 2-yr yield and 10-yr yield both finished at 0.15% and 0.78%, respectively. .DXY advanced 0.6% to 93.46. WTI Crude Oil futures fell 5.3%, or 2.10, to 37.45bbl on bearish inventory data, and demand concerns and Gold futures settled 32.70 lower to 1,879.20 oz

Separately, the weekly MBA Mortgage Applications Index increased 1.7%. 

Looking Ahead: Investors will receive the advance estimate for Q-3 GDP, the weekly Initial and Continuing Claims report, and Pending Home Sales for September Thursday. 

Have a healthy day, Keep the Faith!

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Paul Ebeling

Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he is the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.