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Stellantis was created out of the merger of US-based Fiat Chrysler Automobiles, or FCA, and French-based Peugeot, or PSA, in January 2021, resulting in the fourth-largest automotive original equipment manufacturer, or OEM, by vehicle sales. In 2023 it sold 6.4 million vehicles, 44% and 30% in Europe and North America, respectively. North America is the most profitable region, contributing 53% of operating income. Its brands include Fiat, Jeep, Chrysler, Ram, Peugeot, Citroen, Opel, Alfa Romeo, and Maserati.

Stellantis was created out of the merger of US-based Fiat Chrysler Automobiles, or FCA, and French-based Peugeot, or PSA, in January 2021, resulting in the fourth-largest automotive original equipment manufacturer, or OEM, by vehicle sales. In 2023 it sold 6.4 million vehicles, 44% and 30% in Europe and North America, respectively. North America is the most profitable region, contributing 53% of operating income. Its brands include Fiat, Jeep, Chrysler, Ram, Peugeot, Citroen, Opel, Alfa Romeo, and Maserati.

A healthy job market is fueling a strong U.S. economy, based on our analysis of an array of economic indicators and company earnings reports. On Friday, we expect the Bureau of Labor Statistics (BLS) to report that the November unemployment rate ticked up to 4.2%. The consensus is also 4.2%. With the ratio of job openings to unemployed nearly balanced at 1.1 and with fewer workers quitting their jobs, we see employment conditions that are close to the equilibrium level that the Federal Reserve has been trying to achieve as it balances employment growth and inflation. Nonfarm payrolls data may, once again, be a little difficult to interpret. While October's report was hurt by two massive hurricanes and the strike at Boeing, payrolls in November should get a lift as these workers return. Our estimate is 210,000 and the consensus is 195,000, with a range of 160k to 270k. We expect that average hours worked ticked up to 34.4 and that growth in average hourly earnings remained at 4.0%. Looking ahead, we expect the unemployment rate to be in a range of 4.1% to 4.5% in 2025. Based on analysis with the Federal Reserve Bank of Atlanta's Jobs Calculator, we'd estimate that average monthly payroll gains of about 112,000 would be needed to hold the unemployment rate at 4.1% over the next year. Our analysis suggests that monthly payroll increases would average approximately 75,000 if GDP is growing at 2% over the next year. Unemployment would probably rise slightly and payrolls would average about 200,000 if GDP is growing at 3%, because unemployment would probably fall.

In the second half, the U.S. large-cap market has continued its rotation toward new favorite sectors. A surprising six sectors are doing better than the market. In 2H23, the three growth sectors that led in the first half won the year and were the only outperformers in the second half of that year. The rotation toward new sectors includes an intense pivot toward perceived beneficiaries of a lower interest rates. The best sector in the second half has been Financial, with a 25.9% gain between midyear and the end of November. The second- and third-best sectors in 2H24 have interest-rate sensitivity. The Utility sector is up 20.1% in 2H24 to date; and Real Estate is up 17.7%. Utilities have a well-established history of outperformance in a falling interest-rate environment. REITs have a less-clear relationship. They were long buried in the Financial sector. And REITs are impacted not only by the yield curve but by secular changes wrought by COVID-19. The Industrial sector has had a big 2H, rising 20.5% with gains partly weighted to the post-election period. Consumer Discretionary has done an about-face from the first half, rising 21.9% in the second half on hopes that lower rates will drive big-ticket consumer spending. The sixth of six sectors beating the market in 2H24 is Communication Services. Within this sector, social media plays such as Alphabet and Meta appear positioned to monetize AI in multiple ways, from licensing of multimodal LLMs to delivery of AI-as-a-service. For the full year, six sectors also are either beating the S&P 500 or within a point of catching up. The clear takeaway from the 2024 sector map is impressive breadth. (Jim Kelleher, CFA)