A surge in automobile sales following two U.S. hurricanes kept the bull market alive and Wall Street stocks finished at record high again on Tuesday.
According to a data released, U.S. auto sales surge 6.1 percent from the previous year period to 1.5 million as stocks have been on edge following the introduction of a tax cut proposal last week from President Donald Trump’s administration.
The said stocks have also boosted due to better economic data and positive expectations about the upcoming corporate earnings period which allows investors to relieve their cautiousness about geopolitical worries.
After Hurricane Harvey and Irma damaged hundreds of thousands of automotive, automakers such as Ford and General Motors reported a spike in car sales as consumers were forced to replace flooded vehicles. This resulted with all three major U.S. equity’s indices to notch records for the second day in a row, while European and Asian markets showed rising sales.
“Demand across the spectrum was up,” stated Alec Gutierrez, an analyst from Kelly Blue Book, highlighting the kinds of cars that sold well, recognizing the effect the hurricanes have brought with the increase in retail volume.
Europe’s projections are strong as it tracked Wall Street higher, with London and Paris both ending the session with gains of more than 0.3 percent; on the other hand, Frankfurt was shut for a German public holiday.
Federal Reserve’s implications for an additional interest rate hike in 2017 causes Friday’s U.S. jobs report for September to be scrutinized by observing traders.
Early Festive September Sales
September sales have been in favor for automobile companies as most are turning in strong wholesale volume. Brands from Hyundai to Ford India to Hero Motocorp have done well, recovering from June lows.
Analysts observed that demand for the early demand has been good, in their opinion, companies are pushing retail sales.
Two-wheeler manufacturer Hero MotoCorp dispatched 720,739 units last month from 674,961 units sold during last year’s corresponding month. The company’s sales surpassed the “seven-lakh-sales-mark” during September, which is the highest amongst the other months.
“With close to three weeks still remaining in the festival season, we have set an all-time record by selling over a million motorcycles and scooters in domestic retail sales in the festive period so far, further consolidating our market leadership,” stated Ashok Bhasin, Head of Sales, Marketing and Customer Care with Hero MotoCorp.
Honda Motorcycle and Scooter India also made good progress as sales rose to 601,998 units from 568,753 units sold last September. Domestic sales from the company held steady at 569,888 units, while exports stood at 32,110 units.
President and Automotive Sector of M&M, Rajan Wadhera, explained that the auto industry has experienced a buoyant demand, both in urban and rural markets, in September which led up to the festive season.
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