First Trust NASDAQ Global Auto Index Fund

Continuing with the strategy of enhancing shareholders’ wealth, Ford Motor Company (NYSE:F) declared a dividend for the first quarter of 2020.

Tesla (TSLA) stock continues to rally. The stock has risen 77% sequentially and 28% year-to-date. The stock might rally to new highs in 2020.

Ford is planning to invest over $1.45 billion in its two North American facilities in Michigan, with a focus on autonomous, electric, and big vehicles.

Ford Motor (F) is one of the few US publicly traded auto stocks with attractive returns this year. With a 17% year-to-date gain, the stock has outperformed most of its peers.

China’s central bank, the People’s Bank of China (or PBoC), announced on January 4, 2019, that it will cut the reserve requirement ratio (or RRR) of Chinese (FXI) banks.

One often-cited reason for the current market volatility and the reason for expected pressure on companies’ earnings is trade uncertainty, especially between the United States (SPY) and China (FXI).

Trade wars muddying US economic outlook Another factor impacting the US (SPY) growth outlook is the unfolding of the trade war between the US (SPY) (DIA) and China (FXI). The US has already imposed three rounds of tariffs on Chinese imports covering a total of $250 billion worth of imports, which have been met with […]

The US job additions in July reached only 157,000, lower than the expectations of 190,000 job additions.

The consumer confidence index has increased to 128.0 in May as compared to a downward revised April reading of 125.6.

Industrial production continued to rise in March after strong growth in February.

The University of Michigan final consumer sentiment for March was reported at 101.7, up by 1.7 as compared to the final February reading of 99.7.

Canada, the European Union, South Korea, Mexico, and Brazil are the largest exporters of steel and aluminum to the United States.

The recently proposed import tariffs on steel and aluminum imports by US President Donald Trump are an effort to protect the interests of US manufacturers.

The US Bureau of Economic Analysis (or BEA) has released its second 4Q17 GDP estimate, projecting that the US economy increased at an annual rate of 2.5%.

The advance estimates for US retail (XRT) and food services in January 2018 were $492 billion—a decrease of 0.3% from December.

The Fed’s December industrial production report was released on January 17. The report indicated that industrial production continued to improve throughout 2017.

Retail sales (RTH) have posted impressive growth in 2017. However, the growth is still below the long-term average.

In this part of our focus on the top 18 cheap S&P 500 stocks, we’ll discuss another six stocks: General Motors (GM), Ford Motor (F), Owens-Illinois (OI), The Goodyear Tire & Rubber Company (GT), Navient (NAVI), and Brighthouse Financial (BHF).

The United States Census Bureau’s latest retail (XRT) sales report was released on December 14, 2017. It reported that retail sales for November have risen 0.8%.

Comparing the economic performance with economic expectations and the previous cycles gives investors an idea of whether the economy is expanding or contracting.

The Conference Board Consumer Confidence Index for November came in at 129.5, up from 126.2 in October.

At the November meeting, the FOMC staff review indicated that US labor market conditions continued to strengthen and that the US economy continued to expand at a solid pace.

Core sales—excluding energy (XLE), building materials, and auto sales—also rose 0.4% in October, which is a positive sign for the economy.

The University of Michigan Preliminary Consumer Sentiment for November was reported at 97.8, which was 2.9 lower than the final October reading of 100.7.

The latest report was released on November 3 and indicated that the goods and services deficit was $43.5 billion in September, or $0.7 billion higher than in August.

FOMC members noted that labor market conditions have continued to strengthen since their last meeting in June.

Retail sales in Malaysia rose 13.9% YoY (year-over-year) in June 2017, compared with its 13.6% gain in May 2017.

Manufacturing activity in July 2017 South Korean (EWY) manufacturing activity dropped in the July 2017, with a sharp reduction in output. The Nikkei South Korea (EEM) manufacturing PMI decreased to 49.1 from 50.1 in June, according to an IHS Markit report. Manufacturing activity in South Korea returned to contraction, with reduced orders for its key export markets, […]

The auto industry in Mexico depends on NAFTA, as major auto manufacturers in the United States have made Mexico their manufacturing and export hub.

Despite the strong growth in employment numbers, the Fed’s latest monetary policy report had some comments about slow wage growth.

In any economy, the cost of fuel plays an important part in retail sales (XRT) and inflation (TIP).

In this series, we’ll explore the trends in consumer spending in recent months and try to shed some light on the retail sales data that will be released on July 14.

The Fed’s decision had a limited impact on the S&P 500 (SPY), which closed last week at 2,433.2, a gain of 0.06% for the week.

Mexico’s auto production rose 3.2% to 278.2 thousand vehicles in April 2017 as compared to April 2016 but decreased as compared to March 2017.

Mexico recorded a modest trade deficit in March 2017, as compared to its trade surplus in the previous month.

The First Trust NASDAQ Global Auto ETF (CARZ) is the most traded auto-focused ETF. The three-year return for the ETF is 48.32%. YTD, CARZ provided a return of 2.23%.

Ford (F) uses a high amount of financial leverage. Its debt-to-capital ratio is 81.1%. This is significantly above the industry average of 53.1%.

The auto industry has lower margins primarily because of intense competition. It makes it difficult for companies to pass on increases in raw material prices to the customer.

There’s a direct correlation between the size of a country’s GDP and its automotive industry. The auto industry has been expanding at a fast pace over the past several years.

There are higher maintenance and repair costs as a car gets older. This supports the option of leasing a vehicle.

Typically, automakers provide incentives in a slow market. They offer incentives for low-selling models. The total number of vehicles sold in the US in 2014 was 16.5 million.

The auto industry has high operating leverage. Operating leverage represents fixed costs as a percentage of total costs. High operating leverage magnifies gains and losses.

The automotive industry is one of the biggest spenders when it comes to advertising. General Motors (GM) paid out $928 million during the first half of 2014.

The automotive sector plays a crucial role in job creation. Car manufacturing activity has an employment multiplier value of five.

German automakers lead the luxury space in the US. Daimler AG had an 18.4% share. It was followed by BMW. It had a 16.8% share.

The domestic giants have a significant US presence in trucks. These automakers show their muscle in the midsize SUV segment.

The competition between light trucks and cars characterizes the US automotive market. Over the past four years, consumers steadily moved towards SUVs and pickups.

The automobile industry is one of the most highly concentrated industries in the world. The market continues to be dominated by a few major companies.

The automotive industry is geographically concentrated. The top 15 countries produce 88% of the world’s vehicles. Almost all of the G20 nations have a manufacturing unit.

Although monetary policy mainly impacts government bonds, equity investments are also impacted. It’s important to understand why and when equities react to policy announcements.

The Monthly Wholesale Trade Survey gives you nationwide estimates of monthly sales, end-of-month inventories, and inventories-to-sales ratios by businesses for wholesale firms.

Over this series, we’ve seen that Honda’s heritage is rooted in innovative engineering and customer satisfaction. It has been a daring company in the past.

Amazingly, the millions of engines Honda produces each year only account for 3% of the company’s revenue. Let’s look at Honda’s operating income to find out why.

Honda is global, with relative over-reliance on Japan and North America while being under-represented in the slow-growth market of Europe and higher-growth Asia.

We’ll take a brief look at industry sales to assess Honda Motor Company’s (HMC) position in the global industry. First, we’ll look at industry sales, and second, we’ll assess Honda’s ability to capture its share of the market.

In this series, first, we’ll look at Honda’s strategy. Then, we’ll dig into the company’s revenue and earnings to see how Honda compares to other industry players.

The bottom line on the income statement is that Tesla remains a start-up or newer business that’s not generating earnings from its sales.

Tesla states in the annual filing that it wants to maintain ownership of distributions and repairs to differentiate itself from the market, keeping greater control over local sales and services.

Tesla is selling luxury and battery power. Logically, as Tesla’s market share increases, it’ll take share out of the luxury automobile market.

Tesla is significant in terms of technology and finance, with its $26 billion market capitalization. Let’s take a look at Tesla’s competition.

Tesla, to most readers, is a beautiful, fast car. To most investors, it’s been an incredible stock. Let’s take a deeper look at this company that’s gained so much attention.

Toyota’s history is one of growth. Over the past 30 years, Toyota (TM) successfully entered a new market segment and took market share in the U.S., the largest market in the world.

Toyota is investing in R&D (research and development) for new products, has free cash flow to internationalize its manufacturing footprint, and has significant market share in leading economies.

We’ll take a brief look at industry sales to assess Toyota Motor Company’s (TM) position in the global industry. First, we’ll look at industry sales, and second, we’ll assess Toyota’s ability to capture its share of the market.

Toyota Motor Corporation (TM) designs, builds, and sells automobiles worldwide. It’s the largest automobile manufacturer in the world based on units sold in 2013.

General Motor’s (GM) stated vision is to design, build, and sell the world’s best vehicles. In reality, it’s seeking to sell the most cars and gain economies of scale across its global footprint.

GM’s revenues are driven by light trucks in the U.S. and cars in China. Earnings are pulled down by inefficient operations. Let’s see how they compare to the industry.

General Motors Company (GM) designs, builds, and sells automobiles worldwide. It’s the largest U.S.-based automobile manufacturer and the second largest automobile manufacturer globally.

Global automobile manufacturers each have their form of globalizing their manufacturing, prompted by changes in the market. For GM and TM, the benefits of these programs will be delayed.

The U.S. market is dominated by truck sales, with trucks outselling cars at 51% of market share versus cars accounting for 49% of the market.

Relative measures become significant when you look at the dollar amount differences between Toyota and GM in terms of the scale of the two businesses.

Global market share is dominated by the top ten original equipment manufacturers (or OEM), which account for 81% of the global automotive industry’s annual sales.

The strongest growth remains in Asia Pacific, North America, and Latin America. These are the areas where Ford (F), General Motors (GM), Volkwagen AG (VOW), and Toyota (TM) are investing.

The global automobile market is impacted by global GDP, consumer confidence, employment, the availability of credit, the price of fuel, and consumer confidence.

The global automobile industry is small relative to GDP, estimated to be in the mid-to-low single digits. It represents 3.5% of GDP, according to the Center for Automotive Research.

Light vehicle auto sales for March will be released on Tuesday, April 1. The light vehicle annualized selling pace came in at 15.3 million in February.