Last year was big year for automakers.
And while we heard all about Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM) and their banner years, there wasn’t a lot press talking up what I consider the top automakers on the planet right now – Tata Motors Limited (ADR) (NYSE:TTM), Toyota Motor Corp (NYSE:TM) and Fiat Chrysler Automobiles NV (NYSE:FCAU).
There’s great expectation that cheap oil and low interest rates will
be a boon for global demand for cars and trucks. Plus, dealerships are
offering seven-year loans to help consumers leverage up the luxury while
keeping monthly payments reasonable.
The loans seem to be paying off. Americans’ average new-car loan
payment hit a record $482 in Q4 2014, according to Experian Automotive. (more)
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This is why the Dow Jones Home Construction Index is down 2.7% right now. Many of the individual homebuilders are down 3-4%. Even if the jobs report were bona fide, all those newly minted bartenders and waitresses will not be buying a home.
Mortgage purchase applications have declined in 7 out of the first nine weeks of 2015. Based on seasonality, they should be increasing every week…Just so you don’t think my view on the housing market is a lone voice out there:
The complacency in evidence today is not dissimilar to that seen during the sub-prime era, when both Mr. Bernanke and Ms. Yellen admitted they did not see the problems coming. The real estate market is now accustomed to an ever increasing level of happy drugs. Now that the Fed has clearly come to the end of providing additional support, withdrawal is going to be quite painful (LINK)
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