S&P and NASDAQ close lower on the week after sharp declines today

S&P is out with it expectations for the UAW strike and implications. They say

  • Warns that if the UAW strike continues for over a week and expands, it could lead to significant reductions in earnings and liquidity in the US auto sector for 2023.
  • Predicts a slowdown in U.S. auto sector momentum in the second half of 2023 and expects volumes to remain flat in 2024.
  • Anticipates that a quick resolution to the UAW strike is unlikely.
  • Expects automaker ratings to remain stable, accounting for industry volatility in their financial risk assessments.
  • Believes the Detroit 3 automakers have a modest inventory cushion compared to the industry average.
  • Believes that as of September 1, both GM and Ford had sufficient vehicle inventories to prevent any significant permanent earnings or market share loss.
  • Notes that GM seems to be about two weeks short on SUV segment inventories compared to the industry average.
  • As of September 1, believes Stellantis might have proactively overstocked some high-volume models.
  • Suggests the UAW strike might temporarily boost new vehicle gross profits for dealers, but GPU is expected to decline to more normalized levels in the coming year.
  • Warns that if the UAW strike lasts beyond 8 weeks, dealers might begin to run out of parts, impacting them negatively.
  • States that a UAW strike will not significantly impact the majority of auto suppliers from a ratings perspective.

This article was written by Greg Michalowski at www.forexlive.com.

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