All Aboard The Stimulus Express 🚆 US Auto Comeback 💪

Table of Contents

 

1. All Aboard The Stimulus Express 

China has signaled its intentions to open its wallet once more and cough up an estimated $296.21 billion stimulus package to offset Q4’s dismal trade and manufacturing data. It’s a good thing the world’s second largest economy has such deep pockets!

So far, monetary stimulus has done little to save China from the ravages of its trade war with the US and now President Xi Jinping is looking to get a bit more forceful with the reigns of the economy.

Analysts are murmuring about sizeable cuts in taxes and fees and even larger endowments for local governments to spend on infrastructure projects to drag China out of its downward growth spiral. While positive developments in trade war talks have boosted Asian markets from their October lows, the damage done to international trade will have a lingering effect on the region.

The stimulus package is predicted to add roughly 0.46% to GDP, benefiting China’s construction, manufacturing, and basic materials producers the most. The goal is to generate growth in small and medium sized businesses through targeted lending without flooding the economy and putting pressure on its currency.

China had a rough 2018, but President Xi is taking the gloves off in 2019. The stimulus express has left the station. Next stop growth?

 

2. US Auto Comeback

Amidst extensive skepticism about a weak macro environment, the US auto market is making a considerable comeback in 2019 with both GM and Ford entering new bull markets. Now that’s the American muscle we like to see!

Despite a persistent chorus of analysts shouting down the prospects of a growing US automotive industry, Ford and GM have managed to snatch back 21% and 23% respectively from their December lows.

GM managed to silence the naysayers expecting dismal guidance numbers from US firms by posting a positive outlook for 2019 last Friday and bouncing 7% on the day to cap off a strong week.

The recent bout of auto optimism has also been fueled by a budding relationship between Ford and VW on innovative commercial, electric and self-driving vehicle solutions in the pipeline.

The collaboration is set to save both firms billions of dollars every year and may be the X-factor that helps the US automotive industry weather the persistent effects of the trade war and slowing global growth.

Positioned a long way off their 52 week highs, both companies still have extensive upside potential should investors start believing in American muscle again. Long may the comeback last!

Today we are watching…

1. JP Morgan Chase (#jpm)

JP Morgan is the next big bank on the chopping block to report earnings after Citi published better than expected results yesterday. The consensus in the market is mixed with some expecting a neutral outcome while others are banking on it to outperform. Citi’s lower bond trading figures will worry the trade-heavy JP Morgan, but at the moment the outcome is anyone’s guess!

2. Delta Air Lines (#delta)

The highly-anticipated release of Delta’s earnings data is on the cards for today and airline investors will be watching closely. With competitors slashing revenue estimates towards the end of the year and Bank of America’s recent ratings downgrade from buy to neutral, things are looking grim for Delta. The consensus earning per share estimate is $1.27 and revenue is $10.77bn. Let’s see if Delta can pull a positive outcome out of the bag!

 

 

 

 

 

 

 

Share:
More Posts
PGA Tour Enters Investment Talks 💪

As reported on Thursday, both Endeavor Group and Fenway Sports have displayed interest and begun discussions to provide investment in the PGA Tour.

Nike Just Didn’t Do It 📉

Providing one of the biggest earnings reports of the week, $140 billion shoe and clothing retailer Nike posted a significant slip.

Market Recap – September 28th 💰

After the 10-year Treasury yield bond fell off from its 15-year high, investors added some value back into the market, focusing all short-term attention on Friday’s PCE price index reading.

The Crude Oil Bust 🛢

Surging global crude oil prices, driven by factors like OPEC+ production cuts have pushed U.S. West Texas Intermediate futures to over $95 per barrel.

Get your daily Invstr Crunch

Get the market news and updates you need, delivered to your inbox or available on our daily podcast.

Risk Disclosure:

Invstr is not a bank and banking services are provided by Vast Bank, N.A.

Brokerage and Banking services are currently only available to U.S. residents.

Invstr app and web services are provided by Invstr Ltd. Advisory services are provided by Invstr Financial LLC, an investment adviser registered with the Securities Exchange Commission (SEC) details of which can be obtained here. Securities brokerage and custody services are provided by Apex Clearing, a broker dealer registered with the SEC and a member of FINRA and SIPC. There is no bank guarantee on securities and securities may lose value.

Investing involves risk and can lead to losses. Past performance does not guarantee future results.

Invstr app and web services are provided by Invstr Ltd. Invstr+ advisory services are provided by Invstr Financial LLC, an investment adviser registered with the Securities Exchange Commission (SEC). Securities brokerage and custody services are provided by Apex Clearing, a broker dealer registered with the SEC and a member of FINRA and SIPC. There is no bank guarantee on securities and securities may lose value. Vast Bank N.A. a nationally chartered bank and member of the FDIC, provides the banking products, including the products and services related to digital asset accounts. As with any asset, the value of Digital assets can go up or down and there can be a substantial risk that you lose money buying or holding digital assets. You should carefully consider whether trading or holding Digital assets is suitable for you in light of your financial condition. Your digital account does not support wallet to wallet transferring of your digital assets (i.e. cryptocurrencies) outside the platform. Any Digital Assets in your digital asset account are not insured by any government entities, including but not limited to FDIC or SIPC. The Invstr Visa® Debit Card is issued by Vast Bank, N.A. pursuant to a license from Visa U.S.A Inc and may be used everywhere Visa debit cards are accepted. Invstr Ltd, Invstr Financial LLC and Invstr Securities Ltd are subsidiaries of Marketspringpad Holdings (collectively “Invstr”) and Invstr is solely responsible for the application services and website content.

Watchlists provided when users first access the service are not a recommendation to invest. Instead they are provided to help users better navigate the service. Users are free to edit and create their own watchlists. From time to time, Invstr will suggest instruments solely based on an individual’s interest and the interest levels of the Invstr community. The statistical and portfolio builder models generated by Invstr do not reflect actual investment results and are not guarantees of future results. Comments provided by Invstr leaders, influencers or members of the Invstr Community are not recommendations and should not be construed as such. Invstr does not endorse the content or the positions posted by them. Their investment approach, and that of the models provided by Invstr, may be different from yours and may not be appropriate for you.