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Afternoon Note

American Consumers to the Rescue

By Charles Payne, CEO & Principal Analyst
11/27/2018 2:05 PM
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There continues to be a lot of chatter on General Motors (GM), with many missing the point beyond the business moves.

I think management should have seen the need for restructuring a long time ago.

The market has been saying the company wasn’t performing well for years.  Since January 2013, GM’s stock is up only 37%, while Ford (F) shares are down 11%, but Fiat Chrysler (FCAU) shares are up 382% (at one point they were up 600%).

General Motors (GM)-Ford (F)-Fiat Chrysler (FCAU)

More recent Red Flags in the most recent earnings report:

Volume

US Market Share

As for my warnings of the threat to capitalism, those that mock or dismiss it aren’t paying attention to the political tea leaves.  Moreover, American taxpayers lost $11.3 billion on the GM bailout.

I don’t begrudge companies from doing what they must do, but more recently, there have been disingenuous reasons mentioned for closing businesses and moving operations offshore.

Today’s Session

The market has been grappling for anything that might stop the slide today, but pressure from Apple and others with exposure to higher tariffs continue to turn back rally attempts.

Despite that, there have been two rebound tries that lifted the S&P and NASDAQ into positive territory – still half a day to go, but there seems to be more buying the dip than we saw last week.

Meanwhile, we are reminded of how strong and confident American consumers are, with record breaking Cyber Monday sales and reaction today to “Travel Tuesday.”

It’s going to be interesting to see if the market can rally into the close, after hinting all session long, buyers are nibbling.

Let’s see where the market goes from here, but it is acting better, even after Larry Kudlow made worrisome comments about the G20 meeting (then again Kudlow has rarely said anything positive about the China trade battle).


 

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