Iran conflict latest: Trump says Iranian negotiators "begging" for peace deal
The stock market has been strong so far in September, which is a period of time when there is seasonal weakness. We had a big surge in all the data center stocks this week because of Oracle’s (ORCL) guidance and other AI stocks. But there are a couple of stocks that you can buy on pullbacks. One is Celestica (CLS), which has very strong sales and even stronger earnings. Their margins are expanding. The other stock that is a good buy on a pullback is Palantir Technologies (PLTR), which is a very powerful stock.
A subprime auto lender, Tricolor Holdings, filed for bankruptcy this week and plans to liquidate its business. Tricolor is based in Texas, and its liquidation is reported to potentially impact both BlackRock and J.P. Morgan.
There are allegations of fraud associated with this bankruptcy, which raises questions about whether its bundled auto loans were properly structured. The subprime auto loan market is estimated at $80 billion, and Tricolor’s liquidation is expected to hurt the entire subprime industry. The bonds tied to Tricolor’s vehicle loans are now trading for just pennies, when they used to be priced near a dollar. Ouch!
Speaking of vehicles, when the $7,500 EV tax credits expire at the end of September, EV sales are expected to slow, so GM is already curtailing its EV production despite surprisingly strong EV sales. Bloomberg reported that the Trump Administration’s EPA rollback of emission standards is also expected to provide GM, Ford, and Stellantis with a windfall, since they will no longer have to buy emission credits from Tesla and Rivian. GM has spent $3.5 billion on regulatory emission credits since 2022. Ford will now be able to cut almost $1.5 billion in regulatory emission credits this year.
While the Big 3 are getting a windfall from the Trump Administration, they also have higher operating costs due largely to tariffs on Canadian auto parts. According to Bloomberg, GM Chief Financial Officer Paul Jacobson said eliminating the fines “will save us money in 2026 and beyond for sure.” Ford Chief Executive Officer Jim Farley told analysts that the shift in policy “has the potential to unlock a multibillion-dollar opportunity over the next two years.” The bottom line is the Big 3 makes a lot of money on trucks, so now they will no longer have to buy regulatory emission credits to comply with the EPA.
