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 ...

 TCCIMA Secretary-General Bahman Eshqi speaking in Vienna on Nov.16
Iranian banks are expected to open their first branches in...
Iran has 9,000 online retail stores.
With the ever-growing developments in the World Wide Web,...
Helping the Quake-Stricken?  Not If They Are Iranians!
Iran is a hotspot of earthquakes and several of them have...
Tehran-Accra Expand Agro Coop.
Three memoranda of understanding were signed between Iran’s...
USD at  41,000 Rials
After the US dollar’s recent bull run that pushed the value of...
Wide-Ranging MoU With Mexico
A memorandum of understanding on agriculture and rural...
Tesla Roadster Speeds in Front of Electric Truck
Tesla Inc upstaged its own debut of an electric heavy duty...
The first Iran-Luxembourg Forum opened on Wednesday and hosted...

Add new comment

Read our comment policy before posting your viewpoints

Enter the characters shown in the image.