Stocks recover some losses after tumultuous trading, calls grow for a Fed rate cut
(NEW YORK) — Stocks plummeted on Monday as markets worldwide reckoned with a disappointing jobs report last week that fueled concern of a possible recession.
When markets opened on Monday morning, the S&P 500 fell about 4% and the tech-heavy Nasdaq dropped more than 6%. The Dow Jones Industrial Average fell roughly 1,000 points, or nearly 3%.
By the end of the trading day, markets had recovered some of the losses but each of the major stock indexes remained down more than 2%. The S&P 500 fell 3%, suffering its largest loss in a single trading session since 2022.
The market downturn triggered calls for a large interest rate cut at the Federal Reserve’s next meeting in September. Some investors voiced an even more urgent request for a rare emergency rate cut as soon as this week.
Japan’s main Nikkei 225 stock index dropped more than 12%, its worst day of trading since 1987.
In early U.S. trading, chipmaker Nvidia plunged more than 14%. Apple fell more than 8%.
“Investors are feeling massive pain globally,” Dan Ives, a managing director of equity research at investment firm Wedbush, said in a note to clients. U.S. markets, he added, are “trading heavy in the red across the board.”
Employers hired 114,000 workers in July, falling well short of economist expectations of 185,000 jobs added, U.S. Bureau of Labor Statistics data on Friday showed. The unemployment rate climbed to 4.3%, the highest level since October 2021.
The unemployment rate has soared this year from 3.7% to 4.3%. That trend has triggered a recession indicator known as the “Sahm Rule,” which says that a rise of 0.5 percentage points in the unemployment rate within a 12-month period typically precedes a recession.
On Sunday, Goldman Sachs economists raised the probability of a U.S. recession in the next year from 15% to 25%.
(NEW YORK) — They’ve got sleek styling, impressive fuel economy and added power. Hybrids are the hottest vehicles right now and some Americans are struggling to find one.
Jeff Buchanan, vice president of vehicle marketing and communications at Toyota, said there’s still a wait list for the newest Prius model, which launched in November of 2022. He expects a similar situation with the upcoming Camry, which will be sold exclusively as a hybrid powertrain for model year 2025.
“Some people are not ready to switch to electric vehicles,” Buchanan told ABC News. “Hybrids offer flexibility — you don’t have to depend on charging infrastructure but you can still reduce emissions.”
The hybrids on sale today — from sport utility vehicles to six-figure sports cars — are faster, sexier and more efficient. They’ve also lost that nerdy, uncool image from the early 2000s.
“The Prius was always known for great fuel mileage. But the new one has changed everyone’s opinion,” Buchanan said. “The styling is unbelievable, the performance is unbelievable. People say to me, ‘Wow, that’s a really good looking car.'”
If styling won’t convince consumers to buy a hybrid, fuel economy will, he said. Toyota’s popular hybrids — the Prius, Corolla, Highlander, RAV4 and Camry — get anywhere from 40 to 57 combined mpg, according to EPA estimates.
Nearly 1.2 million Americans bought hybrids last year versus 763,000 in 2022, according to Robby Degraff, an analyst at AutoPacific. He said hybrid sales will continue to grow year-over-year as more automakers pull back on their electric vehicle rollouts and add hybrids to their lineups.
“Hybrids are offered in such a greater mix of body styles and segments,” he told ABC News. “Electric vehicles don’t work for a lot of people. Plus, EVs are more expensive than hybrids and gas-powered cars and trucks. Hybrids are the most equitable way to lower your carbon footprint.”
Sports car makers are also turning to hybrid technology to boost performance and acceleration. British marque McLaren currently offers two hybrids for enthusiasts: the Artura coupe and Artura Spider, a convertible that went on sale earlier this year. The Spider, which company execs call the “most fuel-efficient McLaren convertible ever,” produces a combined 691 horsepower from a 3.0-liter twin-turbocharged V6 and E-motor powertrain. The E-motor is powered by a battery pack made up of five lithium-ion modules, allowing drivers to get up to 21 miles of EV range.
The E-motor and twin-turbo V6 give the Artura Spider “razor-sharp throttle response,” according to the company, and ridiculously fast acceleration (0-60 mph in 3 seconds). Dani Marcos, a longtime test driver for McLaren, said owners still get that exhilarating rush from the hybrid powertrain.
“The goal was to make the Artura Spider more engaging and enjoyable for customers,” Marcos told ABC News. “It’s comfortable for every day driving but we also preserved McLaren’s [racing] DNA.”
McLaren is not the only automaker to make a hybrid convertible sports car. The Corvette E-Ray’s electric motor adds 60 hp and 125 lb-ft of torque through the front wheels via a 1.9 kWh battery pack, giving the car a combined 655 hp from the motor and naturally aspirated Small Block V8 engine. Moreover, E-Ray owners can start their drives in “Stealth Mode,” an electric drive mode that operates at speeds under 45 mph.
“The first time I floored the E-Ray, it was just so quick,” said Tony Quiroga, editor-in-chief of Car and Driver. “People want sports cars as light as possible and the E-Ray is heavy. But you can’t really notice the weight compared to the regular [Corvette] Stingray.”
He added, “It’s a performance hybrid and not tuned for efficiency. But it’s spectacular and the electric motor fills in the power before the gas engine does.”
Stephanie Valdez Streaty, industry insights director at Cox Automotive, said ongoing education about hybrids, plug-in hybrids (PHEVs) and pure battery-electric vehicles (BEVs) will ease Americans’ “journey toward electrification.”
“What’s a mild hybrid? Gas hybrid? PHEV? Consumers still ask that,” she told ABC News. “Some people think you have to charge a gas hybrid.”
According to Cox Automotive data, the U.S. auto market will soon “pass the milestone of 1-in-5 new vehicles sold including a sizable battery pack – adding millions of batteries to our roads each year.”
“I am not surprised at this trend,” Streaty said. “There really are no barriers to hybrids. They’re easier to sell to consumers: ‘This is how you save money on gas.’ And a lot of popular models are under $35,000.”
Honda Motor executive Jessika Laudermilk said the introduction of the 2025 Civic hybrid would likely appeal to a broad range of motorists and could even account for 40% of overall Civic sales.
The Japanese automaker’s hybrid sales have been growing since the second half of 2022, she said, and set an all-time sales record in 2023. The CR-V and Accord hybrids represented over one-quarter of total Honda brand sales last year.
“The CR-V hybrid and Accord hybrid have carried this strong momentum into the first six months of 2024,” Laudermilk told ABC News. “The market for EVs is going to fluctuate in the early stages of this transition and hybrid vehicles play an important role during this period.”
Randy Parker, CEO of Hyundai Motor America, said the company’s sales of hybrid rose 42% between April and June versus 15% for fully electric models.
The appeal of hybrids can help reassure “EV-curious and cautious customers” that electrification is the way to go, he noted.
“We have always understood the EV transformation to have near-term and long-term requirements,” he told ABC News. “That is why we developed a lineup with this diverse choice of drivetrains. We want to meet the customer where they are on their EV transformation journey, including the readiness of their local and regional charging infrastructure.”
He added, “More models are coming, and more buyers will continue to trade in their ICE [internal combustion engine] models for vehicles with appealing, efficient designs and advanced technology.”
For consumers still clinging to their big engines, Degraff said it’s time to give hybrids a serious look.
“Today’s hybrids are not the same hybrids from the early- to mid-2000s,” he said. “You can buy a Hyundai Elantra, for example, that gets almost 60 miles per gallon — that’s how far hybrid technology has come. Hybrids are pretty fantastic vehicles and are only going to get better.”
Buchanan of Toyota said the company “will build cars our customers want.” Right now, that’s gas hybrids.
“Demand used to be more specific to the East and West Coasts, but every dealer would take more hybrids right now,” he said. “It just underscores the overall acceptance of this technology.”
(NEW YORKI) — Lamborghini has sold adrenaline-inducing speed and spaceship-like designs for decades, to much success.
The brand’s executives are blunt, however, when it comes to their cramped cabins: “We’re not very famous for the interior.”
That’s about to change. The Italian marque’s latest sports car, the Temerario, was designed, it seems, with one type of customer in mind: lanky drivers.
“We increased the roominess in the car … tall people can sit comfortably,” Lamborghini CEO Stephan Winkelmann told ABC News.
The Temerario, a plug-in hybrid that debuted in August, lives up to previous models: 10,000-rpm redline; top speed of 210 mph; 907 horsepower produced from the all-new twin-turbo 4.0-liter V8 powertrain; and an 8-speed dual-clutch gearbox. Yet it’s the added comfort that executives were eager to discuss.
Winkelmann said his team put a lot of emphasis and attention on storage space and headroom in the Temerario, partly to appease owners in the United States, the brand’s No. 1 market. The Temerario is being billed as more of a “weekend car,” with enough real estate to squeeze luggage behind the two front seats — unheard for the brand.
The storied carmaker is in the process of electrifying its lineup. In addition to the Temerario, Lamborghini showed off the Urus SE in April. The company’s first hybrid, the beastly 1,001 hp Reveulto (three electric motors assist the naturally aspirated 6.5-liter V12 engine), has a nearly three-year wait list. The flagship supercar went on sale last year.
“This is the best lineup we have,” Winkelmann said.
The Lamborghini exec spoke to ABC News about the company’s electrification strategy, industry challenges and what could put the brakes on the company’s upward sales trajectory.
The interview below has been edited and condensed for clarity.
Q: What’s been the early reaction by customers and enthusiasts to the Temerario, Lamborghini’s new hybrid sports car and successor to the Huracan?
A: It’s been very positive. We will see in the next weeks, months what the order collection is like. And I will be surprised if it’s negative.
Q: You made a point to underscore how comfortable this car is inside versus previous models as well as the added room for luggage. Is the company responding to customer feedback?
A: Everybody now wants everything. They want design, they want speed, they want a luggage compartment, they want space in the interior. We worked over the years on finding a way to create space without jeopardizing the design and the height of the car.
People are getting taller, especially in North America. We have a lot of tall, male customers. We worked on the performance of the car, the design and roominess, the handling. In a supercar, performance is more important than comfort. And design is more important than the luggage compartment. But now you have to try to get at least best in class in this type of segment so you work on everything.
Q: Could the Temerario have been built with a V10 engine?
A: We wanted to create something that sets apart the V12. The choice of the V8 … was something unique in our world — it’s also a matter of C02 emissions. We all agreed this was the choice. There was no way to continue with the V10.
Q: What will you miss most about the Huracan?
A: I was part of the team when we started to develop the car. These are memories I will never forget. The “baby Lamborghini” was a very important car for us and we really exploited what was possible to do.
The variant I love the most is the Sterrato. I wanted to do the Sterrato almost 10 years ago. Then I was away for some years [from the company] and I came back at the end of 2020. And they still hadn’t done the car. So I said, “We will do it.” And I think we did the right choice because it’s unique, and I really like it. It’s a lifestyle car but it’s also really fun to drive.
Q: Is there really a two-year wait for the Revuelto?
A: Even more. Two-and-a-half years at least in the U.S.
Q: You recently debuted the Urus SE, a hybrid SUV. What has reaction been like to this model?
A: We presented it in Beijing [in April]. The car is not on the road yet. The order bank is incredible and we’re happy.
Q: The first six months of 2024 show record results in terms of deliveries, revenues and operating income. What are you expecting for the second half of the year?
A: Things are going the right way. We don’t know who is going to be the next president of the U.S. … but we think it can be another very good year for Lamborghini if it goes like the first six months.
Q: Do U.S. presidents impact Lamborghini sales?
A: So far no. Kamala Harris, though, is an unknown variable.
Q: Have the recent stock market gyrations and recession chatter impacted the company?
A: Nobody knows the future. We look at the order bank and residual values. We look at the showroom traffic, the hesitation of people who may cancel orders. We go down to each and every dealer to see how they’re doing.
Q: The Revuelto is not your traditional plug-in hybrid — the electric motor is really there to add horsepower and boost performance. Will we see a true hybrid from Lamborghini — one that posts better fuel economy and record stats?
A: The mileage of the Temerario and Revuelto is, for sure, not the highest, but you have mileage in purely electric mode. The Urus has a much higher mileage of electric — 60 kilometers, so around 40 miles.
Q: Everyone loved the Lanzador concept last year. Is that still coming in 2028? Or will it be sooner?
A: Not sooner.
Q: When will we see a fully electric Lamborghini, if ever?
A: We are planning for the end of this decade. We stick to our plans.
Q: Are you surprised that enthusiasts are clinging to their V12s and V10s?
A: No, because we forecasted this. We said it’s far too early for supercars to go fully electric. But for the daily useable cars, in my opinion, this is a good opportunity.
Q: What is the biggest obstacle facing all automakers now?
A: I would say electrification is the biggest challenge globally. The other is the software development … cars are more and more connected. These are the two major challenges for the industry. For other brands, challenges are the cost of developing [electric] cars and the pricing of these cars. Then it has to be a fair competition around the globe, which is sometimes not the case.
Q: I appreciate that there are still buttons in Lamborghinis. Will that change over time?
A: A touchscreen is nice, but we also want to have the haptic [feel] and click of the buttons. Voice control will increase in cars, but to me, buttons are more luxurious than a touchscreen. We believe in buttons.
(NEW YORK) — Consumer prices rose 2.5% in August compared to a year ago, slowing more than expected and delivering welcome news for the Federal Reserve, days before a widely expected interest rate cut.
Inflation cooled significantly from a year-over-year rate of 2.9% recorded in the previous month.
Price increases have fallen from a peak in 2022, but inflation remains higher than the Federal Reserve’s target rate of 2%.
The chances of an interest rate cut at the Fed’s meeting next week are all but certain, according to the CME FedWatch Tool, a measure of market sentiment. Market observers are divided over whether the Fed will impose its typical cut of a quarter of a percentage point, or opt for a larger half-point cut.
So far this year, the job market has slowed alongside cooling inflation. That trend was underscored last week by a weaker-than-expected jobs report, though employers added a solid 142,000 jobs. The unemployment rate has ticked up this year from 3.7% to 4.2%.
The Fed is guided by a dual mandate to keep inflation under control and maximize employment. In theory, low interest rates help stimulate economic activity and boost employment, while high interest rates slow economic performance and ease inflation.
Recent trends have shifted the Fed’s focus away from controlling inflation and toward ensuring a healthy job market.
Speaking at an annual gathering in Jackson Hole, Wyoming last month, Fed Chair Jerome Powell said the “time has come” for the Fed to adjust its interest rate policy.
At previous meetings, Powell said the Fed needed to be confident that inflation had begun moving sustainably downward to its target rate of 2% before instituting rate cuts. Last month, Powell appeared to indicate that the Fed had achieved that objective.
“My confidence has grown that inflation is on a sustainable path down to 2%,” Powell said.
Since last year, the Federal Reserve has held interest rates at their highest level in more than two decades. High borrowing costs for everything from mortgages to credit card loans have helped slow the economy and lower inflation, but the policy risks tipping the U.S. into a recession.
Last month, Goldman Sachs economists raised the probability of a U.S. recession in the next year from 15% to 25%. However, economists disagree about whether current economic conditions warrant serious concern.