Dow went up 68 (well off early lows to session highs), advancers over decliners about 5-4 & NAZ added 50. The MLP index rose 3+ to the 225s & the REIT index was fractionally higher to the 404s. Junk bond funds fluctuated & Treasuries were sold. Oil slid back to the 62s (off AM highs) & gold gained 16 to 1568, nearly 7 year high, (more on both below).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
The British economy appears to set to pick up in the early months of 2020 as more clarity over Brexit emerged in the wake of the convincing election win by Boris Johnson's Conservatives. In their monthly gauge of business conditions, financial information firm IHS Markit & the Chartered Institute of Procurement & Supply found that the services sector stabilized in Dec as order books picked up & optimism rose to its highest level in 15 months. The services sector is particularly important as it accounts for around 80% of the British economy. The survey's headline purchasing managers' index, a broad measure of activity in the sector, rose to 50.0 in Dec from 49.3 during Nov. Though the index is not showing any growth - the 50 mark separates growth from contraction - the rise in optimism augurs well for the immediate future. “The modest rebound in new work provides another signal that business conditions should begin to improve in the coming months, helped by a boost to business sentiment from greater Brexit clarity and a more predictable political landscape,” said Tim Moore, Economics Associate Director at IHS Markit. Greater Brexit clarity emerged after the election of Dec 12, which saw the Conservatives win an 80-seat majority in the House of Commons. That means Johnson has the numbers to drive thru his Brexit withdrawal deal with the EU so the country leaves the bloc as scheduled on Jan 31. Britain will remain within the EU's economic arrangements, including the tariff-free single market & the customs union, until the end of 2020, during which time Johnson hopes to conclude a wide-ranging trade agreement for the EU. Though that ambition is considered by many experts to be optimistic, the election result at least provided clarity about the immediate future. There had been concerns that Brexit uncertainty would persist or worsen if the election was inconclusive. Brexit uncertainty has weighed on the British economy since the country voted to leave the EU in Jun 2016. Business investment has taken a particularly big hit as execs voiced concerns over a potential no-deal Brexit that would have seen Britain crash out of the EU without a withdrawal agreement & would have seen tariffs & other impediments imposed on trade. Further signs of economic improvement emerged in new car sales figures, which showed a 3.4% year-on-year improvement in Dec. The lingering effect of the Brexit uncertainty was evident in the overall 2019 figures, which showed a 2.4% decline to 2.31M. That was the weakest level since 2013 & 14.2% below the 2016 peak, the year the country voted to leave the EU.
Foreclosures hit a 14-year low in Nov, according to new data by real estate analytics company Black Knight. The national foreclosure rate fell by 3% from Oct, reaching its lowest level since 2005, the report says. Mississippi, Louisiana, Alabama, West Virginia & Arkansas had the highest foreclosure rates while California, Idaho, Oregon, Washington & Colorado had the lowest. The 33K US foreclosure starts that happened in Nov marked a 26% decline over one year & the lowest monthly foreclosure volume recorded by Black Knight since 2000. Additionally, delinquencies in Nov stayed 5% below the 2018 level & prepayment activity in Nov was 123% above prepayment activity at the same time last year, Black Knight found. 2019 also saw some of the most expensive home sales ever recorded in the US. The top 10 most expensive homes sold in 2019 totaled nearly $1.2B, with Citadel founder Ken Griffin's $238M purchase of a 24K-square-foot Billionaires Row apartment in NYC ranking #1.
Automakers sold more than 17M vehicles in the US for a 5th consecutive year in 2019, an unprecedented feat that many presumed was unsustainable when the streak began. Domestic light-duty vehicle sales totaled almost 17.1M vehicles last year, a 1.6% decline compared with 2018, according to automotive research & forecast firm Edmunds. The Detroit Big 3 automakers as well as many large foreign competitors such as Toyota (TM) reported slight declines in sales of 3% or less in 2019. New vehicle sales for 2019 were originally forecast to fall to 16.7-16.9M, but they are in line with revised estimates after sales proved to be stronger than anticipated last year. For 2020, auto analysts see US sales of roughly 16.7-17.1M vehicles. “We’re seeing less headwinds and more tailwinds than in the past,” said Jeremy Acevedo, senior manager of industry insights at Edmunds. “2019 showed a bit of resilience and shows that there’s a bit more left in the tank.” Cheap & available credit, low unemployment rates & healthy consumer sentiment all contributed to a robust market for US auto sales in 2019. These trends are expected to continue for 2020. “The foundation is an incredibly healthy economy,” said Karl Brauer, exec publisher at Cox Automotive. “I don’t see any of the major influential forces on new car sales drastically changing in 2020.” Analysts also expect sales of crossovers & utility vehicles to continue to dominate those of passenger cars, which have experienced significant declines in recent years. Cox Automotive & JD Power/LMC Automotive are both predicting US auto sales of 16.7M in 2020, while Edmunds expects 17.1M for this year. Changes in the economy or consumer sentiment, a spike in gas prices & rising vehicle prices could derail those projections.
US auto sales fall in 2019 but still top 17 million for fifth consecutive year
General Motors (GM) sales slipped in 2019 as it discontinued some models & demand for its profitable pickups & full-size SUVs fell. GM said it sold nearly 2.9M vehicles last year, a 2.3% decline compared with 2018. That includes a drop of 6.3% to 736K vehicles in Q4 from the last 3 months of 2018. But the results are in line with expectations for the company, however worse than the 1% decline expected for the overall industry in 2019. GM sold more than 1M crossovers for the 2nd year in a row, an increase of 12.7% from 2018. That wasn’t enough to make up for the 30.5% decline in passenger cars & a 2% slide in trucks, which include pickups, fulls-size SUVs & vans. “We’ve focused our resources on what our customers want – crossovers and trucks – and that has paid off,” Kurt McNeil, VP of US sales operations at GM said. In Q4, GM said crossover sales rose 5.8% while demand for passenger cars plummeted 35.1% & trucks declined 5.9%. Sales for the Buick, Cadillac & GMC brands were flat or slightly up for 2019, while the company's largest brand, Chevrolet, declined 3.8%. Most notably, sales of the redesigned Chevrolet Silverado were down by about 2.6%, including a 7.5% drop for its heavy-duty pickup models. Production & sales of the heavy-duty pickups were hurt by a 40-day strike by the UAW union that ended in Oct & as well as a changeover of the pickup to a redesigned model. In Oct, CFO Dhivya Suryadevara estimated the strike cost the company about 300K units in lost production. GM's overall sales for the year were also impacted by the discontinuation of several passenger car models, including the Chevrolet Volt, Chevrolet Cruaze & Buick LaCrosse. The stock gave back 48¢.
club.ino.com/trend/analysis/stock/GM?a_aid=CD3289&a_bid=6ae5b6f7
GM’s 2019 sales decline after discontinuing some models and demand falls for trucks, SUVs
After the first hour of trading, buyers returned & brought the popular averages well into the black by the end of the day. Rising investor enthusiasm throughout the day was very encouraging. The VIX, volatility index, finished even at 14 (near where it has been during the market rally). Investors are hoping increased tensions in the MidEast will be worked out, but it remains a very volatile place. More economic data for Dec & the full year of 2019 will be reported shortly with the big monthly jobs numbers coming on Fri. If there is no breaking news overseas, that data should drive the stock market this week.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
The British economy appears to set to pick up in the early months of 2020 as more clarity over Brexit emerged in the wake of the convincing election win by Boris Johnson's Conservatives. In their monthly gauge of business conditions, financial information firm IHS Markit & the Chartered Institute of Procurement & Supply found that the services sector stabilized in Dec as order books picked up & optimism rose to its highest level in 15 months. The services sector is particularly important as it accounts for around 80% of the British economy. The survey's headline purchasing managers' index, a broad measure of activity in the sector, rose to 50.0 in Dec from 49.3 during Nov. Though the index is not showing any growth - the 50 mark separates growth from contraction - the rise in optimism augurs well for the immediate future. “The modest rebound in new work provides another signal that business conditions should begin to improve in the coming months, helped by a boost to business sentiment from greater Brexit clarity and a more predictable political landscape,” said Tim Moore, Economics Associate Director at IHS Markit. Greater Brexit clarity emerged after the election of Dec 12, which saw the Conservatives win an 80-seat majority in the House of Commons. That means Johnson has the numbers to drive thru his Brexit withdrawal deal with the EU so the country leaves the bloc as scheduled on Jan 31. Britain will remain within the EU's economic arrangements, including the tariff-free single market & the customs union, until the end of 2020, during which time Johnson hopes to conclude a wide-ranging trade agreement for the EU. Though that ambition is considered by many experts to be optimistic, the election result at least provided clarity about the immediate future. There had been concerns that Brexit uncertainty would persist or worsen if the election was inconclusive. Brexit uncertainty has weighed on the British economy since the country voted to leave the EU in Jun 2016. Business investment has taken a particularly big hit as execs voiced concerns over a potential no-deal Brexit that would have seen Britain crash out of the EU without a withdrawal agreement & would have seen tariffs & other impediments imposed on trade. Further signs of economic improvement emerged in new car sales figures, which showed a 3.4% year-on-year improvement in Dec. The lingering effect of the Brexit uncertainty was evident in the overall 2019 figures, which showed a 2.4% decline to 2.31M. That was the weakest level since 2013 & 14.2% below the 2016 peak, the year the country voted to leave the EU.
UK economy boosted by 'greater Brexit clarity' after conservative win
Foreclosures hit a 14-year low in Nov, according to new data by real estate analytics company Black Knight. The national foreclosure rate fell by 3% from Oct, reaching its lowest level since 2005, the report says. Mississippi, Louisiana, Alabama, West Virginia & Arkansas had the highest foreclosure rates while California, Idaho, Oregon, Washington & Colorado had the lowest. The 33K US foreclosure starts that happened in Nov marked a 26% decline over one year & the lowest monthly foreclosure volume recorded by Black Knight since 2000. Additionally, delinquencies in Nov stayed 5% below the 2018 level & prepayment activity in Nov was 123% above prepayment activity at the same time last year, Black Knight found. 2019 also saw some of the most expensive home sales ever recorded in the US. The top 10 most expensive homes sold in 2019 totaled nearly $1.2B, with Citadel founder Ken Griffin's $238M purchase of a 24K-square-foot Billionaires Row apartment in NYC ranking #1.
US foreclosures hit 14-year low: Report
Automakers sold more than 17M vehicles in the US for a 5th consecutive year in 2019, an unprecedented feat that many presumed was unsustainable when the streak began. Domestic light-duty vehicle sales totaled almost 17.1M vehicles last year, a 1.6% decline compared with 2018, according to automotive research & forecast firm Edmunds. The Detroit Big 3 automakers as well as many large foreign competitors such as Toyota (TM) reported slight declines in sales of 3% or less in 2019. New vehicle sales for 2019 were originally forecast to fall to 16.7-16.9M, but they are in line with revised estimates after sales proved to be stronger than anticipated last year. For 2020, auto analysts see US sales of roughly 16.7-17.1M vehicles. “We’re seeing less headwinds and more tailwinds than in the past,” said Jeremy Acevedo, senior manager of industry insights at Edmunds. “2019 showed a bit of resilience and shows that there’s a bit more left in the tank.” Cheap & available credit, low unemployment rates & healthy consumer sentiment all contributed to a robust market for US auto sales in 2019. These trends are expected to continue for 2020. “The foundation is an incredibly healthy economy,” said Karl Brauer, exec publisher at Cox Automotive. “I don’t see any of the major influential forces on new car sales drastically changing in 2020.” Analysts also expect sales of crossovers & utility vehicles to continue to dominate those of passenger cars, which have experienced significant declines in recent years. Cox Automotive & JD Power/LMC Automotive are both predicting US auto sales of 16.7M in 2020, while Edmunds expects 17.1M for this year. Changes in the economy or consumer sentiment, a spike in gas prices & rising vehicle prices could derail those projections.
US auto sales fall in 2019 but still top 17 million for fifth consecutive year
General Motors (GM) sales slipped in 2019 as it discontinued some models & demand for its profitable pickups & full-size SUVs fell. GM said it sold nearly 2.9M vehicles last year, a 2.3% decline compared with 2018. That includes a drop of 6.3% to 736K vehicles in Q4 from the last 3 months of 2018. But the results are in line with expectations for the company, however worse than the 1% decline expected for the overall industry in 2019. GM sold more than 1M crossovers for the 2nd year in a row, an increase of 12.7% from 2018. That wasn’t enough to make up for the 30.5% decline in passenger cars & a 2% slide in trucks, which include pickups, fulls-size SUVs & vans. “We’ve focused our resources on what our customers want – crossovers and trucks – and that has paid off,” Kurt McNeil, VP of US sales operations at GM said. In Q4, GM said crossover sales rose 5.8% while demand for passenger cars plummeted 35.1% & trucks declined 5.9%. Sales for the Buick, Cadillac & GMC brands were flat or slightly up for 2019, while the company's largest brand, Chevrolet, declined 3.8%. Most notably, sales of the redesigned Chevrolet Silverado were down by about 2.6%, including a 7.5% drop for its heavy-duty pickup models. Production & sales of the heavy-duty pickups were hurt by a 40-day strike by the UAW union that ended in Oct & as well as a changeover of the pickup to a redesigned model. In Oct, CFO Dhivya Suryadevara estimated the strike cost the company about 300K units in lost production. GM's overall sales for the year were also impacted by the discontinuation of several passenger car models, including the Chevrolet Volt, Chevrolet Cruaze & Buick LaCrosse. The stock gave back 48¢.
club.ino.com/trend/analysis/stock/GM?a_aid=CD3289&a_bid=6ae5b6f7
GM’s 2019 sales decline after discontinuing some models and demand falls for trucks, SUVs
After the first hour of trading, buyers returned & brought the popular averages well into the black by the end of the day. Rising investor enthusiasm throughout the day was very encouraging. The VIX, volatility index, finished even at 14 (near where it has been during the market rally). Investors are hoping increased tensions in the MidEast will be worked out, but it remains a very volatile place. More economic data for Dec & the full year of 2019 will be reported shortly with the big monthly jobs numbers coming on Fri. If there is no breaking news overseas, that data should drive the stock market this week.
Dow Jones Industrials
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