Americans are falling out of love with their cars — at least when it comes to the daily commute.
Wolf Richter, of the Wolf Street financial blog, cites this growing challenge for the auto market, in our call of the day.
“Driving, while still by far the top way of getting to work in America, has lost some ground,” Richter writes. “For auto makers, this is not a propitious trend.”
Richter has created the chart below that’s based on recent Gallup polling. It shows a jump in the percentage of American workers who don’t use a car in their commute. That figure climbed to 16% this year, up from 9% in 2007.
Wolf Street/Gallup Watch that thin red line.
Instead of driving themselves or carpooling, these folks are taking public transportation, telecommuting, biking, walking or doing “something else” (maybe going by boat or scooter?).
“This shift is real,” Richter says. “While the annual increments are small, spread over time they will further impact the dynamics of the auto industry.”
Don’t miss: U.S. auto sales maintain momentum for now
Some 77% of U.S. workers drive themselves, down from 85% in 2007, he adds. “At this rate, the percentage might drop to something like 69% over the next decade.”
Shares in Detroit’s Big Three have struggled of late. General Motors GM, -1.25% , Ford F, -0.11% and Fiat Chrysler FCAU, +0.94% FCA, -0.87% have suffered year-to-date losses that range from about 3% to 24%, while the S&P 500 is up around 8%.
The car stocks been whacked by expectations of higher materials costs due to the recent U.S. tariffs on steel and aluminum, and the view that the auto industry CARZ, -1.68% will suffer from trade tensions more broadly.
Read more: Ford keeps investors in the dark, and shares pay the price
And see: How Trump’s European auto tariff proposal could backfire
Key market gauges
Futures for the Dow YMU8, -0.47% , S&P 500 ESU8, -0.37% and Nasdaq-100 NQU8, -0.39% are dropping, after the Dow DJIA, -0.05% , S&P SPX, -0.17% and Nasdaq Composite COMP, -0.23% slipped yesterday.
Europe SXXP, -0.52% is losing ground, with analysts yet again blaming the selling on global trade tensions. Asian gauges fell sharply, as fears about emerging-markets crises continued to weigh. Oil CLV8, -1.23% is lower, while gold GCZ8, -0.06% and the dollar index DXY, +0.21% are trading flat to slightly higher. Bitcoin BTCUSD, +0.14% is changing hands around $7,400.
Check out: South Africa’s unexpected recession adds to downbeat EM backdrop
The buzz
Reuters
Mind the gap...
A reading on the U.S. trade gap is on tap before the open. Why has the deficit been growing? Look in the mirror, says one MarketWatch story.
Check out: MarketWatch’s Economic Calendar
Talks with Canada about Nafta 2.0 are due to resume today, and a roast of tech execs kicks off on Capitol Hill, where it’s also Day 2 for hearings for Supreme Court nominee Brett Kavanaugh.
See: Kavanaugh hearings open with objections, arrests
Restoration Hardware parent RH RH, -4.86% waxed poetic about bricks-and-mortar retail as it posted mixed results late yesterday, while HR software seller Workday WDAY, +1.39% appears set for a down day after its earnings, also out after Tuesday’s close.
Tesla’s TSLA, -4.21% Elon Musk has doubled down on his personal attack on a British cave-diving expert.
The companies on the earnings docket ahead of the opening bell include Vera Bradley VRA, -2.52% , the accessories seller whose stock has rallied about 60% over the past 12 months. After the market’s close, watch for results from drones maker AeroVironment AVAV, -0.06% and a few software companies — DocuSign DOCU, +3.86% , Guidewire GWRE, +0.69% and Cloudera CLDR, +0.40% .
On the Federal Reserve front, the St. Louis Fed’s James Bullard is due to talk before the open, and the New York Fed’s John Williams is expected to make multiple appearances in upstate NY today and tomorrow. After the closing bell, the Minneapolis Fed’s Neel Kashkari and the Atlanta Fed’s Raphael Bostic are slated to make remarks.
The quote
“The already discredited Woodward book, so many lies and phony sources, has me calling Jeff Sessions ‘mentally retarded’ and ‘a dumb southerner.’ I said NEITHER, never used those terms on anyone, including Jeff, and being a southerner is a GREAT thing. He made this up to divide!” —President Donald Trump blasts a book by Bob Woodward in a tweet.
Read more: Trump refutes new Woodward book
The incendiary tell-all book by the reporter who helped bring down President Nixon has put the White House in damage-control mode, says an AP report.
The chart
Nick Maggiulli
This relationship holds despite different hiring practices, says Ritholtz’s Maggiulli.
“If we look at the FAANGM stocks (Facebook FB, -2.60% , Apple AAPL, +0.32% , Amazon AMZN, +1.33% , Netflix NFLX, -1.11% , Google GOOG, -1.74% GOOGL, -1.66% , Microsoft MSFT, -0.55% ), and plot their number of employees versus their annual revenues over their lifetimes (on a log-log chart) we would see a striking relationship,” says Ritholtz Wealth Management’s Nick Maggiulli, as he does exactly that with his chart shown above.
“Every time the number of employees doubles (a 100% increase), revenue goes up by 112% (more than double),” writes Maggiulli in a blog post that has been getting attention.
Check out: Amazon briefly crosses $1 trillion market-cap mark
Ritholtz Wealth’s analytics manager adds: “What’s even more amazing is that this relationship holds across all of these individual companies despite their different business models and hiring practices.”
Random reads
Here’s video of what’s being called “the first tennis match in space.”
Genre fiction is getting recognized with this alternative prize for literature.
“Dangerous” — a flight school’s director warns about a pilot shortage.
A company called Exit will quit your job for you for $450.
Watch this clip to learn why the tech sector is un-friending Facebook:
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