Core Viewpoint - U.S. franchise auto dealerships are showing resilience in fundamentals despite potential macroeconomic headwinds, with demand performing better than expected in the near term [1][2]. Demand and Affordability - Retail new-vehicle sales are experiencing mid- to high-single-digit growth in Q3, driven by stable consumer spending and limited price increases from OEMs despite tariffs [4]. - The expiration of certain EV incentives has accelerated demand, increasing the battery-electric vehicle mix to approximately 10% in the current quarter, up from about 7% in the previous quarter [4]. Inventory and Profitability - Inventory levels and days' supply are stable, contributing to a gradual normalization in gross profit per unit (GPU) rather than a sudden reset [5]. - Used vehicle volumes remain strong, and service lanes are experiencing healthy traffic and pricing, indicating robust higher-margin fixed operations [5]. Market Outlook - JPMorgan has raised its Q3 estimates, projecting them to be about 2% above previous estimates and roughly 7% above consensus [6]. - The bank's top picks in the sector are Lithia & Driveway and AutoNation, although a recent cyber incident may impact certain U.K.-exposed operators [6]. Used Vehicle Market - Industry checks indicate mid- to high-single-digit year-over-year gains in used retail sales through July and August, with tight late-model supply expected to ease in the coming quarters [7]. - Wholesale prices have cooled after an initial spike due to tariffs, and retail/wholesale spreads suggest a favorable GPU environment, although sourcing remains competitive [7]. Future Risks - Beyond Q3, there are increasing risks to demand and GPUs as EV credits expire and tariffs are fully reflected in vehicle prices amid a softening labor market [8]. - JPMorgan projects a U.S. SAAR of approximately 15.5 million in 2026, slightly down from 16.0 million in 2025, with potential upside if trade outcomes with Canada and Mexico improve [8].

Core Insights - Long-run inflation expectations have increased for the second consecutive month, raising concerns about the sustainability of price stability in the future [1][8] - Consumer sentiment in the U.S. has sharply declined, particularly among lower- and middle-income groups, indicating heightened financial strain and vulnerability [1][3][6] Consumer Sentiment Trends - The latest consumer sentiment index has dropped to its lowest level since May, reflecting a growing caution among American households, especially those with lower incomes [3][4] - The sentiment index fell by 5% month-over-month and has accumulated a 25% decline over the first nine months of the year [3][5] Inflation and Economic Concerns - Forward-looking assessments within the consumer sentiment index saw a significant 7% decrease in September, standing 29% below December's levels [5] - The current index, which measures present consumer situations, contracted by 0.8%, totaling a 19% decrease over the nine-month period [5] Specific Consumer Concerns - Business conditions, labor markets, and inflation are the primary worries for consumers, with around 60% mentioning tariffs during interviews [7][10] - The Consumer Price Index rose by 0.4% in August and 2.9% over the past year, with notable increases in food prices [7] Inflation Expectations - Year-ahead inflation expectations remain steady at 4.8%, while long-run expectations have risen to 3.9% in September [8] - Consumers are increasingly aware of vulnerabilities in the economy, with current and expected personal finances easing by about 8% this month [9]

Market Predictions - J.P. Morgan predicts a slight decline in the stock market, forecasting the S&P 500 to end the year around 6,000, a decrease of about 6% from its current level of approximately 6,400 [2][3] - The firm anticipates a 40% chance of recession by the end of 2025, a reduction from a previous estimate of 60% [3][4] Economic Factors - The predictions are influenced by political uncertainty, particularly regarding tariffs and inflation's impact on the U.S. economy, leading to sluggish growth due to high interest rates [3][4] - J.P. Morgan expects higher inflation prints in the coming months, which could negatively affect consumer spending and increase recession risks [4] Commodity Market Outlook - In the commodity markets, J.P. Morgan forecasts that gold will continue to outperform, driven by political uncertainty and market volatility [5][6] - Oil prices are expected to drop into the mid-$60 range due to an increase in global oil inventories, with nearly 240 million new barrels added since February [5] Additional Market Predictions - J.P. Morgan has set specific targets for various indices: 345 for the MSCI Eurozone, 9,000 for the FTSE 100, 3,000 for the TOPIX, and 1,250 for the MSCI EM [7]

Cost Management & Efficiency - Corporations face rising input costs and limited ability to raise prices for end consumers, especially with tariffs [1][4] - Companies are forced to find solutions to maintain profitability when input costs increase and pricing power is limited [1] - Companies are increasing efficiency and reducing reliance on human capital to offset rising costs [3] - Companies' obligation is to shareholders to create a return on capital and pay back debt, necessitating efficiency improvements [4] Impact of Tariffs - Tariffs have accelerated the trend of companies seeking greater efficiency [3] - Tariffs are forcing companies to figure out how to deal with the equation or conundrum [1] Labor Market Implications - Companies are cutting down on the number of employees needed to run their businesses [3] - This trend may be counterproductive to efforts to rebuild the center of the country [3] Data Analysis & Unexpected Trends - Data reveals trends not initially anticipated, causing head-scratching [2] - Companies are struggling with the cost of goods and sales costs [2]

It is peak shipping season ahead of the holidays with this year looking a little bit different. President's tariffs are still under review. The Supreme Court's ruling could have a big impact on importers.Joining us this morning here at Post 9, Ryan Peterson, founder and CEO of shipping logistics company Flexport. Welcome to the NYC. It's good to have you in. Yeah, it's great to be here.Um are you thinking a lot about this core decision. I am. And our customers are having a tough decision to make right now.I ...

Core Viewpoint - The current economic environment poses significant challenges for RH, particularly due to inflation and tariffs, but the company remains optimistic about its growth potential in Europe and the Middle East [2][12]. Financial Performance - In the second quarter, RH reported an 8.4% increase in revenues, reaching $899.2 million, while net profit surged 79% to $51.7 million, generating $81 million in free cash flow [10]. - The company has adjusted its revenue growth forecast for the full fiscal year to 9-11%, down from a previous estimate of 10-13%, and revised its adjusted operating margin to 13-14% from 14-15% [11]. Market Impact - Analyst Cristina Fernandez lowered RH's target price to $220 from $255, citing the negative effects of tariffs on revenue and supply chain disruptions [3][4]. - Conversely, TD Cowen raised its target price to $265 from $235, maintaining a buy rating, indicating a positive sentiment shift towards RH shares [8]. Expansion Plans - The opening of RH Paris has exceeded expectations in foot traffic, and the company anticipates that RH Europe and the Middle East could enable it to double its size in the next five to seven years [5][6]. - RH England generated $46 million in total demand in its second full year, indicating strong performance and potential for future growth [7]. Industry Concerns - CEO Gary Friedman expressed concerns about the impact of tariffs on the broader furniture industry, particularly for small and medium-sized companies [13]. - He emphasized the need for the current administration to consider the implications of trade policies on the industry [14].

The US will urge its allies in the Group of Seven to impose tariffs as high as 100% on China and India for their purchases of Russian oil to pressure President Vladimir Putin to end his war in Ukraine: Here's your Evening Briefing. https://t.co/yKkNPXAbt5 ...

We worry about drought, we worry about pricing. We worry about equipment. We worry about financing. This tariff is just another thing that we have to worry about.Todd Western, the third is a soybean farmer in Waterloo, Iowa. He says trade tensions between the U.S. and China are fueling uncertainty for his business. China, the world's largest buyer of soybeans, hasn't pre-purchased any soybeans for the upcoming US harvest.The revenue on our farm is just like any other farm. It's volatile. Western and other f ...

Group 1: Warner Brothers and Paramount Bid - The Ellison family, particularly David Ellison, is preparing a majority cash bid for Warner Brothers, which has led to significant stock movements for both companies [1][4][5] - Warner Brothers shares rose nearly 30% following the news, while Paramount initially increased by almost 10% [4][11] - The bid includes the entire Warner Brothers company, encompassing cable networks and the movie studio, and is seen as a preemptive move against a potential bidding war involving other tech giants like Amazon and Apple [3][5][6] Group 2: Antitrust Concerns - The potential merger of Paramount and Warner Brothers could attract antitrust scrutiny due to the scale of the combined media companies [5][7] - Analysts have noted that both companies have not yet responded to the news, but antitrust concerns are likely to arise [7][8] Group 3: Adobe's Earnings Report - Adobe reported better-than-expected quarterly earnings with an adjusted EPS of $5.31, surpassing the expected $5.18, and revenues of $5.99 billion, exceeding the forecast of $5.91 billion [12][13] - The digital media segment showed strong performance with an annualized recurring revenue of $18.59 billion, an 11.7% increase from the previous year [13][14] - Despite the positive earnings, Adobe's stock faced pressure due to ongoing competition in the AI space, although analysts remain optimistic about its market position [15][16] Group 4: RH (Restoration Hardware) Performance - RH reported a revenue miss and cut its guidance, indicating challenges in the luxury furniture market [20][21] - The company anticipates a $30 million hit from tariffs in the second half of the year, primarily affecting its operations in China and Vietnam [21][22] - RH is facing difficulties in onshoring production due to the need for significant investments in facilities and workforce, which may not be feasible for many in the industry [24][25]

Core Viewpoint - Mexican officials are preparing to discuss planned tariffs on goods from China with Chinese representatives, as stated by President Claudia Sheinbaum [1] Group 1 - The discussions are scheduled for next week, indicating a proactive approach by Mexico in addressing trade relations with China [1] - The planned tariffs are part of Mexico's broader trade strategy, reflecting concerns over imports from China [1]