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What’s happening: Shares of Ford Motor Company fell in after-hours trading on Monday, following the release of the company’s third-quarter results.
What happened: The automaker reported better-than-expected sales and earnings for the third quarter.
However, Ford’s guidance came in at the lower end of its earlier profit forecast, exerting pressure on the stock.
How were the results: The Detroit-based automaker reported single-digit growth in sales for the latest quarter.
Why it matters: Elevated interest rates have been dissuading customers from taking auto loans, which has impacted the overall sales by major automakers. Ford was forced to offer higher incentives to address its increased inventory levels, which has weighed on its overall earnings.
The company’s earnings this year was also impacted by increased warranty costs and supply-chain issues, which were further worsened by the latest hurricanes in the US.
Ford Blue sales rose 3% year-over-year to $26.2 billion during the latest quarter, despite global wholesales falling 2% after the discontinuation of low-margin internal combustion engine vehicles. Ford Pro sales climbed 13% to $15.7 billion.
Ford Model E sales declined 33%, with global hybrid vehicle sales surging 30% year-over-year during the quarter. Ford said its electric division continued to show improvements in profit trends due to cost savings.
Management guided to adjusted EBITDA of around $10 billion, compared to its previous outlook of between $10 billion and $12 billion. They projected EBIT from Ford Pro and Ford Blue of approximately $9 billion and $5 billion, respectively. The company also guided to a loss of around $5 billion for the Ford Model E segment.
How shares responded: Ford’s shares tanked 6% to $10.69 in the after-hours trading session, following the release of quarterly results. The stock has lost around 11% over the past six months.
What to watch: Investors will continue monitoring rising competition from rivals like General Motors. Markets will also watch interest rate cuts by the Federal Reserve and inflation levels.
Context: The CAD/USD forex pair was almost flat on Tuesday, as investors monitored the Bank of Canada’s monetary policy outlook.
Details: The Bank of Canada has slashed its benchmark interest rate by 125 basis points (bps) to 3.75% since June this year, including the rate cut of 50 bps announced last week. Markets widely expect the BoC to cut rates by another 100 bps by September next year.
Strength in price of crude oil, one of Canada’s major exports, lent support to the loonie. WTI crude oil prices gained 0.5% to $67.74 per barrel this morning.
Weakness in the US dollar also supported the CAD/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, slipped 0.1% to 104.25 this morning.
The CAD/USD forex pair traded almost flat at 1.3891 this morning. The S&P/TSX Composite Index ended Monday’s trading with gains of 0.42% at 24,565.66.
What to watch: Investors await the release of economic data on wholesale sales and CFIB’s business barometer from Canada today. Wholesale sales in Canada, which fell 0.6% to $81.9 billion in August, are expected to grow by 0.4% in September.
Analysts expect the CFIB’s Business Barometer in Canada to ease to 54.3 in October, from 55 in September.
Other Markets: European indices closed higher on Monday, with the FTSE 100, CAC 40 and STOXX Europe 600 Index up by 0.45%, 0.35%, 0.79% and 0.41%, respectively.
NATO confirmed that North Korea has sent troops to join Russia against its war with Ukraine. The news sent the RUB/USD pair higher in forex trading this morning.
Japan’s unemployment rate eased to 2.4% in September, from 2.5% in August. Despite this being the lowest reading since January, the JPY/USD forex pair remained under pressure.
Colombia’s industrial confidence indicator surged to 1.3 in September, from -1.4 in August, which sent the COP/USD pair higher in forex trading this morning.
Mexico’s trade deficit narrowed to $0.579 billion in September, from $1.5 billion in the year-ago month. The MXN/USD forex pair remained under pressure due to strength in the US dollar.
US Dallas Fed manufacturing index in Texas rose to a reading of -3 in October, from September’s level of -9, which sent the Dow Jones index higher by more than 250 points on Monday.
South Africa’s money supply M3 and private sector credit, Germany’s GfK consumer climate indicator, UK’s consumer credit, net mortgage approvals, mortgage lending, money supply M4 and net lending to individuals, Brazil’s current account and foreign direct investment, US goods trade balance, wholesale inventories, Redbook index, S&P CoreLogic Case-Shiller 20-city home price index, FHFA house price index, number of job quits, Dallas Fed general business activity index for services sector, Dallas Fed services revenues index and API crude oil stocks change, as well as Singapore’s unemployment rate.
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