MorningWord 3/28/17: ‘Merica F’Yeah

by Dan March 28, 2017 9:29 am • FREE ACCESS

No matter where you fall on the political spectrum in this fine country, this tweet is good news, I think:

I suspect this was already in the works, but nonetheless, American companies thinking more about manufacturing in America is always a good thing. That is of course unless all our jobs are taken by robots and Amazon has to pay us a salary as consumers. But I’ll save that for another post.

But I got to ask, no matter where cars are made, did we already hit peak auto?

Here’s Peter Boockvar this morning:

Of note has been the sharp rise in inventories sitting on car dealer lots. Inventories at motor vehicle/parts dealers in February was higher by 1.5% m/o/m after a 2% gain in January. The increase versus February last year was 9.5%. This helps to explain the 10% y/o/y increase in auto maker incentives in February needed to move these cars off the lots. Combine this with the rising delinquency rate for subprime borrowers and the now falling value of used cars makes it clear that the car business is now more challenged. This of course was the bright spot area since the last recession.

And here’s Ford’s chart:

F 10yr chart from Bloomberg

This thing has been a slow-motion car crash for three years. No thanks.