U.S. auto sales up (GM), JPMorgan Chase (JPM) settles lawsuit and Oil hits new lows.

Bourbon & Bayonets / Monday, January 5th, 2015

Markets were heading lower on Monday after U.S. auto sales data was released for the last month of 2014. General Motors (GM) surpassed expectations with a 19% gain to a total of 274,483. Pickup-truck sales reached 87,000, which brought the company’s total sales for the year to 2.9 million. This also marked the strongest December on record for the automaker in seven years. Ford (F) announced that their sales were up 1.2%, to a total of 220,671. The company partially attributed the lower data to smaller-than-expected sales to rental companies and fewer supplies of their top-selling F-150 pickup. In total for the year, Ford reported sales of 2.5 million, down 1% from 2013. Nissan Motor C. (NSANY) reported that they sold 117,318 vehicles in December. The sales were pushed by an increase of 12% in car sales. The strongest selling cars were the Altima and the Lead. Annual sales came in at 1.4 million, which was an 11% increase over the year before. Analysts are projecting sales to slow down in the coming year to between 16.7 million to 17 million. Adam Jonas, an analyst with Morgan Stanley, said, “U.S. auto sales are dancing to a very different (and we believe unsustainable) beat.”

Shares of JPMorgan Chase & Co (JPM) were sinking down over 3% after the company announced a settlement in the currency-rigging lawsuit against them. This goes down in history as the first bank to settle and a U.S. antitrust lawsuit. The suit involved 12 major banks and accused them of rigging currency prices, which affected nearly $5 trillion per day on the foreign exchange market. The amount of the settlement has yet to have been released. The news comes after a mediation period with famed lawyer Kenneth Feinberg and still must be approved by the court. Michael Hausfeld, a lawyer for the investors suing the banks, said, “The settlement is a responsible step by Chase in addressing its involvement. It is a beginning with respect to the accountability of other banks engaged in the same trading.”

The price of oil continued to sink on Monday. They have dropped as much as 6% hitting levels below $50 per barrel. This marks the lowest level for black gold since spring of 2009. Phil Flynn, an analysts at Price Futures Group, said, “There’s no doubt that we have a combination of supplies hitting their zenith at a time when demand is weakening.”

That’s all for today,

Warren Gates, Normandy Research

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