"BMT Investors" Bulletin Board

[kscarbel2]

Ford fell to $9.84 today, a new 52-week low for the company. I read today's close was the lowest in five years.

[Dirtymilkman]

13 hours ago, kscarbel2 said:

Ford fell to $9.84 today, a new 52-week low for the company. I read today's close was the lowest in five years.

I heard $8 rumors. 

[kscarbel2]

Hackett does not inspire confidence, particularly at a time when Ford is making so many questionable decisions.

If Ford gets down to $8, I still would invest elsewhere.

[Maxidyne]

Hackett needs to be transferred somewhere he can't do any more harm... Maybe cleaning up the pigeon droppings at that abandoned railroad station he bought?

[kscarbel2]

Ford set a new 52-week low of $9.82 today on volume of 41 million, but it needs to fall below $7 before it can be viewed as a bargain buying opportunity given the lack of visibility and solid management.

[Maxidyne]

If there's no Fords left up to running Ford, maybe they should let the Koc family of Ford Ottosan give it a try...

[kscarbel2]

Continuing to move downward, Ford set a new 52-week low today of $9.72.

[kscarbel2]

US core inflation rises at fastest pace in 10 years

The Financial Times  /  August 10, 2018

Strong data keep Fed on track to raise interest rates two more times this year

Core consumer prices in the US rose by their quickest pace in a decade in July and topped market forecasts, keeping the Federal Reserve on track to raise interest rates twice more this year.

The data add to a robust picture of the US economy, which grew by a speedy annual rate of 4.1 per cent in the June quarter. The unemployment rate is close to its lowest level in 18 years.

Core inflation, which strips out volatile energy and food prices and is closely followed by the Fed, rose 2.4 per cent year on year in July and up from 2.3 per cent in June. That was the fastest annual pace of core inflation since September 2008, and topped market forecasts for 2.3 per cent.

Growth in headline consumer prices held steady with June at 2.9 per cent year on year in July from a year ago, buoyed by higher fuel prices and in line with the median forecast among analysts surveyed by Thomson Reuters.

While headline inflation is rising more quickly than average hourly earnings, Michael Feroli, US economist at JPMorgan Chase, said he expected wages to pick up given the strength of the labour market. The picture, he said, is “pretty close to Goldilocks”, leaving the Fed well positioned to carry on tightening policy at its current pace, with no reason to either speed up or slow down. 

The Fed was last year surprised by the weakness of inflation readings, but more recently price growth has fallen closer in line with its expectations given the broader strength of the economy. The Fed has already raised interest rates twice this year, and is expected next month to pull the trigger on the first of two additional rate increases forecast for the remainder of 2018.

Jay Powell, the Fed’s chairman, said last month in his half-yearly testimony to the Senate Banking Committee that with a strong job market and inflation close to the central bank’s target of 2 per cent, the Federal Open Market Committee “believes that — for now — the best way forward is to keep gradually raising the federal funds rate”.

The US dollar was relatively steady following the inflation data. The DXY index, tracking the US currency against a weighted basket of global peers, was up 0.8 per cent following the inflation figures, having been up 0.6 per cent before the data release. The index rose above 96 on Friday for the first time in 11 months.

With the US locked in a trade war with China and other nations, Gregory Daco at Oxford Economics suggested that higher tariffs could gradually filter through to producer and consumer prices, supporting expectations of a gradual pick-up of inflationary pressures.

“Solid economic momentum supported by fiscal stimulus should underpin further gains in inflation,” he added. “Barring a rapid escalation of trade tensions that would disrupt economic activity, we foresee another two Fed rate hikes before the end of the year.” 

.

[kscarbel2]

Ford set a new 52-week low today of $9.42.

It's telling when the market feels Hyster-Yale Materials Handling is worth $58 but Ford only $9.

[kscarbel2]

Trump Asks SEC to Look Into Frequency of Corporate Reports

Associated Press  /  August 17, 2018

NEW YORK — President Donald Trump says he’s asking federal regulators to look into the effectiveness of the quarterly financial reports that publicly traded companies are required to file.

In a tweet early Aug. 17, Trump said that after speaking with “some of the world’s top business leaders,” he’s asked the U.S. Securities and Exchange Commission to determine whether shifting to a six-month reporting regimen would make more sense.

The SEC requires such companies to share profit, revenue and other figures publicly every three months.

Some believe that executives are making decisions based on short-term thinking to satisfy the market at the expense of the long-term viability of their companies.

There are also tremendous expenses tied to preparing quarterly and annual reports.

[Maxidyne]

The auto makers will love that... Now they can hide their excess inventory and delinquent loans for twice as long!

[kscarbel2]

Delphi Technologies PLC (DLPH), the popular fuel injection supplier for Volvo and Mack-badged Volvo engines, set a 52-week low today of $37.44 on abnormally high volume. Their 52-week high was 104.09.

Interestingly, today was an up day for the market...........the number of companies hitting 52-week lows on the NYSE and Nasdaq was quite low.

On another note, Ford (F) has bounced somewhat off the bottom, closing the day at $9.69.

[kscarbel2]

The S&P 500 vs. everyone who said the market was about to crash

.

[kscarbel2]

Trump says he is thinking about pegging capital gains taxes to inflation

Market Watch  /  August 30, 2018

President Donald Trump on Thursday said he was considering linking capital gains taxes to inflation. Speaking with Bloomberg News in the Oval Office on Thursday afternoon, Trump told the publication: "I'm thinking about it."

Reductions to capital gains are seen by some as benefiting the ultrarich, including hedge funds and private-equity firms, with a cut trimming the tax bills on the sale of stocks, real estate and other assets depending on the going rate of inflation.

Trump economic adviser Larry Kudlow has argued that such a move would promote job growth and economic expansion.

In commentary last year, Kudlow, who had been a longtime CNBC contributor, explained how he viewed capital gains "perverse" effects on Wall Street investing:

"Consider this: You invest $1,000 and, after ten years, you sell that investment for $1,200. But if inflation averaged 2.5 percent in that period, the $1,200 you receive will be worth less in real terms than the $1,000 you invested. And yet, under current law, you will pay a tax on your $200 capital gain."

Kudlow estimated then that pegging capital gains taxes to inflation "would by 2025 create an additional 400,000 jobs, grow the U.S. capital stock by $1.1 trillion and boost gross domestic product by roughly $500 billion," citing economic research.

To be sure, skepticism about the merits of such an approach to capital gains abounds. A Penn Wharton Budget Model analysis released in the spring estimates that the top 0.1% of earners, in particular, would reap more than 60% of the tax cut. The middle class, by contrast, would get a mere 0.1%.

Another analysis projects that such a plan would cost $102 billion over 10 years, wrote MarketWatch's Robert Schroeder earlier in the month.

[kscarbel2]

Ford (F) set a new 52-week low today of $9.32.

Volvo fuel injection supplier Delphi Technologies PLC (DLPH) continues to plummet, setting a new 52-week low today of $33.93.

Tenneco also set a 52-week low today of $41.26.

[kscarbel2]

Navistar International (NAV) is up 3.5% to $42.01 this morning after reporting third-quarter earnings. 

The trucking company earned $1.71 a share on revenue of $2.61 billion. Analysts were looking for earnings of 93 cents on revenue of $2.67 billion.

For the full year, Navistar sees revenue of $10.1 billion to $10.4 billion, compared with the $9.95 billion consensus estimate.

[kscarbel2]

Navistar profit beats estimates on higher truck sales

Reuters  /  September 6, 2018

Truck and engine maker Navistar International Corp topped Wall Street’s quarterly profit estimates on Thursday, as hauliers replaced more trucks and strong freight demand boosted vehicle sales.

Revenue in its trucks business, its biggest, jumped 25.1 percent to $1.92 billion in the third quarter ended July 31.

The Lisle, Illinois-based truck maker raised its fiscal 2018 revenue forecast to between $10.1 billion and $10.4 billion, from between $9.75 billion and $10.25 billion it previously forecast.

Navistar, which posted its first full-year profit in six years in 2017, has changed management, cut costs and redesigned its products to recover from a disastrous bet it made on a costly proprietary [EGR] smog-reduction system.

The company also raised the low-end of the number of Class 8 trucks it expects to sell in fiscal 2018 to 260,000 units from 250,000, while keeping the high-end at 280,000 units.

Orders for Class 8 trucks have been rising every month this year through July.

Net income attributable to the company rose to $170 million, from $37 million a year earlier.

Earnings per share from continuing operations rose to $1.71 per share from 37 cents per share.

Excluding items, the company earned $1 per share, topping analysts’ average estimate of 90 cents, according to Thomson Reuters I/B/E/S.

Revenue rose 17.8 percent to $2.61 billion, but missed expectations of $2.66 billion.

[kscarbel2]

 

[kscarbel2]

U.S. producer prices post first drop in one-and-a-half years

Reuters  /  September 12, 2018

U.S. producer prices unexpectedly fell in August, recording their first drop in 1-1/2 years, as declines in the prices of food and a range of trade services offset an increase in the cost of energy products.

Despite the surprise weakness in producer prices reported by the Labor Department on Wednesday, overall inflation is steadily rising, driven by a tightening labor market and robust economy.

The Federal Reserve is expected to raise interest rates later this month for the third time this year.

“Inflation pressures should intensify in coming quarters,” said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania. “The unemployment rate is low, GDP growth is above trend, wage growth is accelerating ... and fiscal policy is supportive for the economy.”

The producer price index for final demand slipped 0.1 percent last month after being unchanged in July. August’s fall in the PPI was the first since February 2017. That further lowered the annual increase in the PPI to 2.8 percent from 3.3 percent in July.

Economists polled by Reuters had forecast the PPI increasing 0.2 percent in August and advancing 3.2 percent year-on-year.

A key gauge of underlying producer price pressures that excludes food, energy and trade services edged up 0.1 percent last month. The so-called core PPI gained 0.3 percent in July.

In the 12 months through August, the core PPI increased 2.9 percent after rising 2.8 percent in July.

The dollar was trading lower against a basket of currencies, while U.S. Treasury prices rose. Stocks on Wall Street were mixed.

Declining Margins

The correlation between producer and consumer prices has weakened after the government revamped the PPI basket and changed the methodology several years ago.

The Fed’s preferred inflation measure, the personal consumption expenditures (PCE) price index excluding food and energy, increased 2.0 percent in July, hitting the U.S. central bank’s 2 percent target for the third time this year.

Government data on Thursday is expected to show consumer prices rising 0.3 percent in August after gaining 0.2 percent in July, according to a Reuters survey of economists.

There has so far been no widespread price increases from the Trump administration’s import tariffs on lumber, washing machines, solar panels, steel and aluminum, as well as a range of Chinese goods.

But with the trade war between the United States and China escalating, economists believe this will change and expect the import duties to boost inflation in the coming months. Recent manufacturing surveys continue to show increases in raw material prices amid growing strains on the supply chain.

Wholesale food prices fell 0.6 percent in August, pulled down by sharp declines in the costs of eggs and fresh fruits and melons. Food prices, which dipped 0.1 percent in July, have now decreased for three straight months.

Wholesale energy prices rose 0.4 percent in August, with gasoline prices surging 0.6 percent after slipping 0.1 percent in the prior month. Energy prices fell 0.5 percent in July.

Overall, the cost of wholesale goods was unchanged in August after edging up 0.1 percent in July. Prices for iron and steel scrap fell 5.6 percent last month, the biggest drop since October 2017. Nonferrous scrap prices decreased 8.7 percent, the largest decline since January 2009.

The cost of services slipped 0.1 percent last month, led by a 0.9 percent decline in the index for trade services, which measures changes in margins received by wholesalers and retailers. Services dipped 0.1 percent in July.

Over 80 percent of the drop in the cost of services last month was attributed to margins for machines and equipment wholesaling, which fell 1.7 percent.

“Declining margins at machinery and equipment firms suggest producers may be struggling to pass on rising input costs related to recent tariffs,” said Sarah House, a senior economist at Wells Fargo Securities in Charlotte, North Carolina.

The cost of healthcare services rose 0.3 percent as a 0.5 percent drop in prices for hospital outpatient care was offset by a 0.6 percent jump in the cost of doctor visits, which was the largest gain since June 2010. There were also increases in prices of hospital inpatient and dental care.

Healthcare prices ticked up 0.1 percent in July. Those healthcare costs feed into the core PCE price index.

[kscarbel2]

NAV earnings conference call 6-Sep-18

https://finance.yahoo.com/news/edited-transcript-nav-earnings-conference-181746949.html

The alliance with Volkswagen Truck & Bus, now the TRATON Group, proceeds according to plan as we progress with the procurement joint venture and settle in on an array of exciting technology projects. Given Q3 performance and the strong truck market, we will again increase guidance for 2018. And Walter will provide the details in a minute.

And last but not least, although we normally talk about the coming year on the December call, I'd like to provide some early insight. We are bullish on 2019, and we believe that it will look a lot like 2018 with Class 6 to 8 trucks and buses in our core markets coming in, in a range of 385,000 to 415,000 units. Class 8 was in those numbers in the range of 255,000 to 285,000 trucks.

First, let's talk orders. GDP growth in Q2 was 4.1%, the strongest quarter since Q3 of 2014. In July, the Consumer Confidence Index rose to 127.4, the highest level since 2000. And year-to-date, the ISM Purchasing Managers Index is well above 50, the highest level since 2004. These conditions support fleet utilization, higher freight rates and improved carrier profits. Look, it's just a great time to be in the truck business. July was a record month for Class 8 orders at over 52,000 units. These numbers have created industry backlogs into Q2 of 2019.

So we're now questioning if all these orders will be built. Are customers placing orders with several OEMs, ready to cancel one if the other is delivered first? Or how many orders are placeholders or slots reserved for stock units that can be moved out or canceled at a later date? These are all good questions. Look, at Navistar, we attempt to manage the reporting of orders as accurately as possible. July was a good order month for us as well. We don't expect a lot of cancellations. Let me tell you why.

In the third quarter, our core market net orders were up 90% year-over-year. July was Navistar's highest order receipt month in more than a decade. Navistar's order share grew to 18%. At the end of Q3, Navistar is the only OEM to have grown Class 8 retail share during the fiscal year. In the third quarter, we achieved strong year-over-year growth in Class 8 heavy retail market share, thanks to the performance of the LT Series on highway truck and the 12.4-liter A26 engine. The company's share of the 13-liter heavy registrations more than doubled year-over-year through June 2018. And this did not detract from the company's 15-liter share, which also grew during that time frame. July was the first big month for orders for the new MV Series medium-duty truck as many dealers sold down the old DuraStar and now need to restock. The MV is generating real excitement. And through July, our order receipts in medium were up by a percentage point year-to-date and the July order share in Class 6 and 7 was 38%. So we took in a lot of orders in Q3, July in particular, yet incidental order cancellations have remained very stable for the last 18 months, and we don't see it changing much going forward. We expect to build the units in our backlog.

In summary, the current strong economy and order backlog support a strong truck market for the remainder of the year and well into 2019. And although Q3 performance is impacted by supplier constraints, we continue to monitor the supply base very closely to avoid major disruptions. We are expecting a strong Q4. And as such, we're increasing guidance. The LT and the LT with the A26 is gaining share in the market. Our order share in the new MV medium truck is growing and all International trucks are delivering the best uptime for our customers that anyone can remember. And now we're taking orders for the new Class 4/5 CV Series, which launches before the end of the calendar year. We believe 2019 will be another very good year for the industry and for Navistar.

Navistar President & CEO Troy Clarke

[james j neiweem]

Great news for Navistar and VW. BMTR's silver is at a historical low. Stock up on poor mans gold before prices soar.

[kscarbel2]

NAV is one of the BMT Fund's* major holdings. The board expects it to outperform through 2019.

* Closed to new investors.

[Maxidyne]

It's good to see NAV back from the death's door, and it's still selling for about half of asset value. But most of the analysts are giving NAV lukewarm "hold" ratings. Makes sense, given that the U.S. big truck market is currently being fluffed up by Chapter 179 subsidies and may cool once the market is glutted with new trucks and those tax loopholes go away. There's also the long term trend of intermodal growth that will reduce truck mileage... Instead of trading every 5 years, the big truckload carriers could end up keeping their trucks 10 years. That could shrink the U.S. Class 5 market to an unprofitable 100k units a year pace...

[kscarbel2]

The fleets may hold trucks longer, but I predict no longer than 5 years. I expect most fleets to lean more and more on warranty, replacing trucks at the end of the warranty period. The used truck buyer will be seeing nicer offerings, as in Europe.

[kscarbel2]

Mark, will you be attending the BMT Investors winter retreat conference in Rio next January?