This website uses cookies to collect usage information in order to offer a better browsing experience. By browsing this site or by clicking on the "ACCEPT COOKIES" button you accept our Cookie Policy.

The Inadequate Driving Machine


Visit: Finimize

What’s going on?

German car manufacturer BMW may have reported rising third-quarter sales on Wednesday, but the carmaker hasn’t exactly lived up to its ultimate reputation: it’s expecting a “significant decrease” in its profit for 2019 as a whole.

What does this mean?

After a series of setbacks earlier this year – both operational and regulatory – BMW reported an 8% increase in sales and an 11% jump in third-quarter profit versus a year ago. But profit for the year is down 37% so far, and between Brexit uncertainty, trade war tensions, and a global economic slowdown, the carmaker isn’t expecting any miracles this quarter either. Adding pressure to profitability is BMW’s need – whether due to regulation or competition – to invest big in electric vehicles, automated driving, and more. That might explain the $13 billion cost-cutting program it’s moving forward with, then…

Why should I care?

The bigger picture: Things are looking up.

With German carmakers like BMW struggling, it’s little wonder eurozone manufacturing activity is hovering near a seven-year low. But data released on Wednesday offers a glimmer of hope: it showed signs of life for German manufacturing, which has been the biggest contributor to the slump in the bloc’s activity. The data showed a rebound in German factory orders, with demand rising 1.3% in September – far exceeding estimates of a 0.1% gain.

Zooming out: Everyone has to leave home sometimes.

German sportswear brand Adidas also reported earnings on Wednesday, beating growth estimates for both sales and profits. The company makes more than 70% of its sales outside Europe, so it’s less exposed to the region’s weakening economy. Sales have been rising in North America, Asia Pacific, and emerging markets – and now that European sales have joined the party, growing last quarter, perhaps it’s time to start looking at the region more optimistically.

Originally Posted on November 6, 2019 – The Inadequate Driving Machine

Disclosure: Interactive Brokers

Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Finimize and is being posted with permission from Finimize. The views expressed in this material are solely those of the author and/or Finimize and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

trading top