The week ahead | Calamatta Cuschieri

A worse week for U.S. Market

The major U.S. stock indexes capped off their worst weekly performance in two years on Friday, following a steep sell-off. The Dow and S&P 500 pulled back 4.1 percent and 3.9 percent, respectively, last week. The Nasdaq lost 3.53 percent. The Dow fell 665.75 points on Friday or 2.5 percent, notching its biggest one-day sell-off since June 2016. For the week ahead, investors will look at Markets with trepidation waiting for the US opening market. The monetary policy decision is due in several countries: Australia, Russia, India, Brazil, Poland, Romania, the U.K., New Zealand, Serbia, Peru, and the Philippines. Earnings season will continue with reports from big companies like Ryanair, Toyota Motor Corp., BNP Paribas, General Motors, Walt Disney, Philip Morris, Tesla, L’Oréal and Twitter.

Harley-Davison launched new electric motorcycle

Harley-Davidson motorcycles have been a mainstay in the industry since the company was established in 1903 in Milwaukee. The Company operates in two segments: the Motorcycles & Related Products (Motorcycles) and the Financial Services. The Motorcycles segment designs, manufactures and sells at wholesale on-road Harley-Davidson motorcycles, as well as motorcycle parts, accessories, general merchandise and related services.

It's no secret that market conditions have not been that great lately for the iconic motorcycle brand.

The Thursday's earnings report marked the end of another difficult year, with the company posting a 6.7 percent decline in worldwide retail sales in 2017 compared with the year before. Motorcycle shipments were also at a six-year low.

While the company anticipates increased international retail growth this year, retail sales in the U.S. are expected to be down, according to the management. In order to inspire the new generation, the company is planning to produce smaller and cheaper motorcycles, replacing the ones who are aging out.

Last year, in an attempt to give riders what they want, Harley-Davidson launched eight new Softail motorcycles. The consumer response to the line has been positive especially among women.

The company also announced plans to launch an all-electric line of motorcycles within 18 months. A prototype of the yet-to-be named line of electric motorcycles was introduced in 2014 as part of Project LiveWire. The new bikes are expected to be faster, quieter and sleeker than traditional Harleys.

Meanwhile, competition is intense. The “Japanese Big 4”, Yamaha, Honda, Kawasaki and Suzuki make sleeker bikes that can be bought on a budget and are easy to drive around town.

Indeed their market cap has been increasing since 2007. In some cases, it was doubled. Harley Davidson’s market cap, for the same period of time, has fallen from $18 billion to $8.2 billion. While consumer’s preferences keep changing, the registration numbers of new motorcycles are growing among the industry, passing from 3.8 million in 1995 to 8.4 million in 2004.

Daimler starts testing autonomous vehicle

Technology companies and carmakers are redefining to a shifting landscape in the auto industry as consumers increasingly use smartphones to locate, hail and rent vehicles, rather than buying cars. Daimler and automotive supplier Robert Bosch will start testing self-driving, known as robo-taxis in the next few months, senior executives told a German weekly.

As announced by Wilko Stark, vice president Daimler and Mercedes-Benz Cars strategy, the idea is to bring vehicles from autonomous level 3, in which the car needs a driver who can take over in case of a problem encounter to level 4/5, in which the car is fully autonomous.

Last month, Alphabet Inc's self-driving unit Waymo said it had started testing self-driving vehicles in Atlanta. Currently, there are 25 cities in US which are testing autonomous vehicles.

Stark also added that his company is building a vehicle that is a robot-taxi right from the beginning, and not as a technology kit mounted on a serial vehicle. That will make the difference.

Disclaimer

This article was issued by Linda De Luca, Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.