June auto sales were slightly disappointing and could be an indication that consumer spending is retreating. After two strong months in April and May, auto sales were down in June with a final report of 16.66 million light vehicle cars and trucks sold on a seasonally adjusted annual rate basis versus consensus of 17.3 million SAAR. For the month 79% of the total sales were from domestic vehicles and 21% from imports. The total count for domestic sales was 13.19 million SAAR and the total for imports was 3.47 million SAAR. Domestic auto deliveries were down 4% from the previous month, while sales from imports were down 7%. Auto imports are one area where deliveries could potentially slow as a result of Brexit and its trading affects across Europe.
Consumer spending overall in the U.S. will be more closely on watch after the June auto sales report, as it has been one of the leading factors helping the economy in recent weeks. July consumer spending could see some deviation from its previous upward trend with the Brexit vote also affecting spending from consumers.
U.S. manufacturing reports on Friday, however, continued to show strong momentum and especially following the Commerce Department’s last revision to GDP on June 28, which showed GDP at a final rate of 1.1% SAAR. The PMI Manufacturing Index was higher at 51.3, increasing from 50.7 in the previous month. The ISM Manufacturing Index was also higher at 53.2, increasing from 51.3 in the previous month and above consensus of 51.5.
Ford (F, Financial) and General Motors (GM, Financial), the nation’s leading automakers continued to show resilience in June despite the slightly lower levels. Both manufacturers have been reporting steady sales and earnings as the industry has recovered considerably in recent years.
In June, General Motors led the auto vehicles sales list with total light vehicle sales of 255,210, followed by Ford with sales of 239,096. Sales for General Motors were down 1.6% from the comparable month bringing its annual total to 1,438,915, which is down 4.4% from the previous year. Sales for Ford have been steadily improving in 2016. For the month, sales were up 6.4% from the comparable month to a total of 1,345,170 for the year, with annual sales now up 4.4%.
In June, Tesla (TSLA, Financial) also reported strong sales for the month. Total light vehicle sales for June were 3,100, up 55% from the comparable month to a total of 16,500 for the calendar year. In 2016, calendar year sales are up 84.4% from 2015.
All three U.S. auto manufacturers gained in trading on Friday. General Motors was up 2.08% to $28.89. Ford was up 1.19% to $12.72. Tesla was up 1.9% to $216.50. In the auto sector, General Motors and Ford have also been leading the list of high yielding dividend stocks in the current market. General Motors has a forward dividend yield of 5.26% and Ford has a forward dividend yield of 4.72%. Tesla still continues to pay no dividend as a leading growth stock investment.
On Friday, CNBC provided insight on sales for General Motors and Ford. Meanwhile, Tesla was in the spotlight Friday after a fatal crash from a self-driving car and Elon Musk’s recent announcement to possibly merge its auto business with SolarCity.
Disclosure: I do not own any shares of any stocks in this article.
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