📈 Punching the Numbers

Stocks hit new record highs again last week, driven by optimism surrounding the Fed's rate cut, ongoing excitement around AI, and signs of broader market strength. While the looming presidential election hasn’t rattled markets yet, volatility could surface as November nears and policy proposals come into focus.

• Record Streak Continues — Stocks have gained 11% since early August, with last week marking the sixth gain in seven weeks. The Fed's recent rate cut and AI enthusiasm are key drivers of the rally.

• Market Fundamentals Reign: Despite political shifts, markets have historically performed well under both parties, with factors like economic growth and corporate earnings having a far greater impact on long-term performance.

The latest ZeroSum State of the Dealer report provides a detailed snapshot of new, used, and certified vehicle movement as of October 2024. Here are some of the takeaways on vehicle trends and inventory dynamics:

• New — New vehicle inventory hit 3M, with October movement forecasted at 1.2M units as incentives continue to rise.

• Used — Used vehicle movement has dipped, likely due to better deals on new vehicles pulling buyers away.

• CPO — Certified pre-owned movement dropped 8%, hitting its lowest point since February, as discounts on new vehicles soften demand.

Consumer spending on automobiles has slowed, with volatility persisting and retail vehicle sales continuing to decline for both new and used cars. However, auto loan rates have remained stable, showing minimal changes throughout September.

• Spending Growth Turns Negative: Consumer spending growth has been negative since mid-June, with fluctuations week over week.

• Slight Improvement in Sentiment: The Index of Consumer Sentiment saw a small uptick in August and September, driven by falling gas prices.

• Decline in Vehicle Sales: Retail vehicle sales have seen steady declines in both the new and used segments.