Broadcasting live to New York, Bloomberg eleven to Washington, d C, bloom to Boston, Bloomberg dwell underd to San Francisco, Bloomberg nine to the country is at the General one nine and around the globe the Bloomberg Radio book and Bloomberg Got Gone. This is taking Stock. I'm Kathleen Hayes at our San Francisco bureau. We wrapped up a very interesting conversation with President of the San Francisco Fed, John Williams
and two of his top researchers. And now we're gonna be diving into a topic that they are certainly watching closely, and that is otto sales PIM Fox. Of course back in New York. Yes, the US may be the lone bright spot in another wise sluggish global economy. American consumers continuing to buy expensive new vehicles at record levels. We're going to find out what this means for investing in automobile companies. But right now, let's go to Catherine Cowdery
in the Bloomberg newsroom for a Bloomberg business flash. Thank you, Bam, and Bloomberg. Taking Song is brought to you by Sector Spider E T S. Why buy a single stock when you can invest in the entire sector. Visit sector spdrs, dot Com or full one six six sector e t F. More weakness in Chinese and UK manufacturing is weighing on the stock market. It's renewing concerns at China's economy is slowing down. European officials trim their economic growth forecast for
the nineteen countries that share the euro currency. US surnames remain mixed, with A I G declining after posting a third Street on profitable quarter as biser Games after it raised its outlook an Apple on track to break its eight session news in the Street. The retreat wiped out
about seventy nine billion dollars in Apple's market cap. Walter Piecheck is an analyst at bt I G. I think the concern is more of a trust factor with the company, whether they can actually develop new products to provide an incremental revenue stream, or provide something interesting enough and the next iteration of the phone in the September to actually return to growth. The thing it's holding the stock where it is today is this hope that you're still going
to get growth in the December Corps. Apple shares are up one point nine percent, trading at ninety one. We checked the markets every fifteen minutes throughout the trading day. Down Industrial l average is down one forty seven points eight seven eights of a percent, trading at seventeen thousand, seven hundred forty two. SMP five fundered down nineteen points and nine tens of a percent, trading at two thousand,
sixteen one. The NAZZAC is down fifty one points, the loss of one point one percent, trading at forty seven sixty six. West Texas Intermediate for oil down a dollar seven of barrel two point four percent to forty three seventy one ten year Treasury seconds with the yield of one point seventy five. And now let's get an update of some of the other stories we're following today. Thank you, Catherine from the Bloomberg news room. I'm Rami in aescent cio.
This news update is brought to you by the Jeep Grand Cherokee, the most awarded suv ever. The Grand Cherokee continues to raise the bar with its luxurious interior and legendary four by four capability. Drive on at your local Jeep dealer today. Democratic presidential candidate Hillary Clinton is walking back comments she made earlier this year saying she wanted
to put coal miners out of business. I don't know how to explain it other than what I said was totally out of context from what I meant, because I have been talking about helping Cold Country for a very long time, and I did put out a plan last summer, and it was a misstatement. Clinton apologized after being asked about her comments by a West Virginian who recently lost his job at a coal company. On the fifth anniversary of the death of Osama bin lad And, President Obama
is defending his targeted approach to fighting terror. In an exclusive interview with CNN, President Obama said the use of drones as a mechanism of war is handled with extreme caution. He insisted on near certainty that not only is the individual that we're trying to strike h or the compound that we're trying to strike and act to terrorist threat,
but also that we're avoiding civilian casualties. Mr Obama also said the next president would most likely follow his lead rather than his predecessors, and the State has redesigned the domestic Violence Incidents Report form used by police so officers can record more details that could be used in investigations. Global News twenty four hours a day, powered by our journalists in more than one under fifty news bureaus around the world. From the Bloomberg Newsroom, I'm Ramie and essentio Catherine.
Thank you, And here's a quick check of the equity benchmarks. Down. Industrial averages down one hundred sixty four points at seventeen thousand, seven hundred twenty six SMP five, Founder down twenty one points to two thousand sixty mast Act down fifty five points to forty seven sixty two. And that's a Bloomberg Business flash. You're listening to Taking Stock with Kathleen Hayes and Pimpox on Bloomberg Radio. The automobile industry taking a
look at Americans love affair with the automobile. All Alan boun is the principal at Boum and Associates, based in West Bloomfield, Michigan, and he joins us now, Alan, thank you very much for being with us. Good afternoon. All right, so just give us the lowdown on today's sales reports for April and what does that tell you about a trend, if anything, for the rest of the year. Well, it's to be honest, it's kind of boring. It's kind of been what we've seen in the last few months. Crossover
is good. Uh, new pickups doing well. Uh. Cars struggling depending on incentives, sometimes doing better than others. That's just the trend we're seeing. So Alan, Uh, when you is there a chance that we have to take the last two months together to get a sense of what the trend is now? Last year was such a hot year, and yeah, it looks at me like car companies are still doing really well, a lot of them. But in terms of pushing the economy forward, people say that, you know,
they have to be net growing. What what's going to happen next month? What kind of trajectory on? Well, the biggest issue this year is going to be incentives, and that is will the automakers hold the line and not try to gain market share as the market plateaus. If the answer is no, ironically, that means that we're gonna see stronger sales with a bit of a payback coming forward. If the answer is yes, that they hold the line, then we'll have very modest increases from last year, which
was an excellent year. Will plateau this year, and then we'll start to decline fairly modestly UH next year UM and and so the question then is how high do we go this year before we start to as I say, plateau and modestly decline. And in terms of volume, the impact is going to be somewhat modest. In terms of earnings, the impact can be rather significant UM and So, for example, GM has been losing market air this year because they've
been holding the line on fleets. UH. Their their incentives are are creeping up, as is most of the industry UM, but they're there. Their results are excellent forward, of course, because of the full year of the F one fifty being available this year, UH is doing extraordinarily well. Their volumes are going up, they had an excellent first quarter and UH and and they're in increasing their fleet sales a little bit to make up for some lost time that they say they will they will scale back later
in the year. Chrysler, on the other hand, f C A UM is somewhat treading water. Their volume is decent, their incentives they're high. They're clearly not making the kind of money they need to make at this point part of the business cycle. And obviously UH Sergio Marcion's discussions about needing a partner are related to this. Alan, can you comment on the RAV for the small SUV from Toyota, because I note that it broke a monthly record with sales up Yes, and and the and that whole segment
is on absolute fire UH in a good way. And it's a question of incentives. For example, the Ford Escape UH is not growing at that rate simply because they can't make more of them. In the case of the RAP four, they've got a little bit more availability. In the case of the CRV, they're building them in three plants, so they have strong availability. In the case of the Rogue UH, it's doing really well, primarily on the strength of imports, again because they don't have enough capacity that segment.
If you throw enough product at it, you're gonna sell and UH with with very modest incentives because of the demand. If I'm Volkswagen, Alan, should I be happy that my not state sales drop is the smallest inse December? Well, you know what they've done is they've they've increased their production over the last few months of gas models. Um, I suppose you should be because of all the diesels they can't sell. I suppose you should be happy about
the volume. You're certainly not happy about the profits. The the incentives on those vehicles are dramatic. Uh, and they're gonna get bigger. You've got a dealer body that is an open revolt. Uh. And this isn't going to change because of the requirement of the court to keep this under wraps until they get every I dotted and and T crossed, and that's gonna take some time. Can automobile
factories easily switch from making cars to making SUVs? Now they can make cars to crossovers, they can't necessarily switch from making cars to sport utility vehicles. And I the distinction between the front wheel drive product and the rear wheel drive product, and most of the demand is in the crossovers now. Again, just because they're on the same
platform doesn't mean you can make that change easily. But you are seeing automakers make those kinds of changes in the production design process so that they do have flexibility going forward. And uh. You know, for example, at Ford, you've got the fusion in the edge. You're on the same platform, they're built in different plants, so there's a little that the flexibility is not immediate by any means, but from an engineering standpoint, you can plan for that
going forward. Alan Bound, Principle, Bound and Associates, thank you for joining us talking about automobile maker shares a Ford down about one and a half percent, GM lower by nearly one in coming up on taking stock, We're gonna take stock of where to put your money. We've got Michael Kujino. He is the president and portfolio of the Permanent Portfolio family of funds. That's next