71906
Hurricane Harvey was the first major hurricane to make landfall in the United States in August 2017.
Hurricane Harvey was the first major hurricane to make landfall in the United States in August 2017.

Harvey Was Good News for American Auto Industry

Harvey Was Good News for American Auto Industry

Hurricane Harvey did for the auto industry what record profits for automakers, rising volumes for auctions and service-and-parts business had failed to do: Make Wall Street happy.
General Motors, Ford Motor Co., KAR Auction Services Inc. and the publicly traded dealership groups all had their stock prices jump last week in the wake of Harvey’s devastation, James B. Treece wrote on Automotive News.
Put aside the human cost of the disaster. It could be said that being callous about human suffering is one of Wall Street’s enduring characteristics, or that Wall Street has a different set of values than most people.
What the stock market cares about is business prospects several, often many, months away. And it liked what it saw in Harvey’s path of destruction.
While everyone saw families flooded out of the Houston homes, cars swept off highways, dealership lots that were inundated, Wall Street saw hundreds of thousands of cars and trucks that will have to be replaced in the nation’s third-largest market for pickups, the most profitable vehicles that automakers build.
It saw vehicles that will have to go to KAR Auction Services’ and Copart’s salvage auctions, as insurance companies seek to recoup some of their losses by selling flood-damaged vehicles for parts.
It saw the equivalent of a mini-cash-for-clunkers program taking used vehicles out of the market and thus partially offsetting the wave of off-lease vehicles that has been coming into the market and putting downward pressure on prices.
So GM and Ford’s stock price each rose more than 5% between August 24 and September 1, while the Dow Jones Industrial Average edged up 0.9%. Fiat Chrysler Automobiles’ stock price rose 7.3%, on top of the run-up earlier in August when China’s Great Wall expressed interest in buying Jeep.
Among the public dealership groups, Group 1, whose Houston headquarters were unscathed, rose 12%, while AutoNation, which gets roughly a quarter of its revenue from Texas, rose 8.1%. Sonic rose 11%, Asbury 7.1%, and CarMax 6.9%.
KAR Auction Services’ stock rose a more modest 2%, and Copart’s 2.6%, but their prices had been climbing since early August, when presumably the savvy investors started betting that Harvey would strike land.
On Tuesday morning, after the Labor Day holiday, things are beginning the slow, long return to normal in Houston. And on Wall Street, Ford and GM were flat, while the dealership groups were mixed: Group 1, CarMax and AutoNation up, and others down.
According to Wall Street insiders, the financial marketers of the United States are already eying Hurricane Irma off the coast of Florida.

 

Short URL : https://goo.gl/26RbPX
  1. https://goo.gl/Cx8UAy
  • https://goo.gl/tVwxfy
  • https://goo.gl/1vSLFA
  • https://goo.gl/SWNscY
  • https://goo.gl/xTWgQ8

You can also read ...

The rial has lost more than 30% of its value during the three months to April against the dollar.
Majlis Research Center, the parliamentary think tank, has...
Facebook, Google Hit by $8.8b in Lawsuits
On the first day of GDPR enforcement, Facebook and Google were...
Iranian Startup Boosting Value Added Services
Iranian startup SMS.ir has unveiled a new customer relations...
Tipax and Q-Post agreed to share their resources for the establishment of a courier network between Iran and Qatar to help boost bilateral trade.
A private Iranian courier service firm, Tipax, signed a...
There are 359,700 active heavy-duty vehicles in Iran’s cargo truck fleet, of which 125,000 (34%) are over 15 years old and almost 1,500 trucks are five decades old.
A number of truckers across the country have taken industrial...
Tehran Housing Market Rebounds
Following a very weak performance during the first month of...
Foreign Garment Prices Increase
The prices of foreign garments in the Iranian market have...
Ayandeh Named Iran’s Best Bank by Euromoney
The private Ayandeh Bank has continued its string of success...

Add new comment

Read our comment policy before posting your viewpoints

Trending

Googleplus