Monday, April 3rd

Today the dollar rose, the financial sector fell, and new car sales were somewhat less than expected. Still, the overriding news is the upcoming meeting between President Trump and Chinese President Xi Jinping to take place on April 6th and 7th. Current market consensus worries that President Trump will continue to take a hard line on protectionism, putting global trade into a tailspin.

Following up on a proposal from last week – Ford Motors (F) announced a 7.2% fall in new car sales, even worse than the expected 6.1% drop. Ford fell 1.72% in today’s session, closing at $11.44. Expect them to fall again tomorrow – but if the analyst consensus is to be believed expect them to trade as high as $14.00 by the end of the year. Personally I fail to see that becoming reality – Ford’s recent trend towards bringing cars they designed for the European market to the US is still not gaining any traction. I do however believe that $12.75 is a realistic target (that’s around 11.5% annualized).

Peabody Coal – the largest of the coal companies to go belly-up during the worst of cheap natural gas – announced today that it is finally coming out of bankruptcy. As such, their actions over the next few weeks definitely are worth watching as they begin to arrange new business and credit structures. It’s possible that they may become profitable again before 2018.

 

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