Although the prospect of higher interest rates is getting most of the blame, there are investment analysts who believe the recent destabilization of the Bush administration has caused stock prices to fall sharply in recent days.
So the RV industry may need to ask itself whether declining stock prices will lead to deteriorating consumer confidence and thus, result in RV sales cooling off from their recent torrid pace?
Although the Federal Reserve reported last week that it would move quickly to raise interest rates to head off inflation, the next regularly scheduled Fed meeting is not until June 29-30.
And, as one analyst told CBS.MarketWatch.com today (May 10), “The Fed could triple rates tomorrow” and interest rates still would be low by historic standards. Consequently, the analyst, Brian Westbury of GKST Economics, said the impact of interest-rate fears on stock prices is “overdone. It’s terrorism and Iraq that are driving stock prices lower, not the Fed.”
The world’s most watched stock market gauge, the Dow Jones Industrial average, fell below 10,000 points today for the first time since Dec. 10. Among the hardest-hit stocks today were the firms involved in heavy industry, including diesel-engine manufacturers Cummins Inc. and Caterpillar Inc.
Cummins stock lost $2.90 a share today to close at $55.55 and Caterpillar’s declined $4.24 a share to close at $72.88. Both companies supply diesel engines to the motorhome sector.
Among publicly traded RV industry firms, most saw their stock prices decline today, although there were exceptions. Monaco Coach Corp.’s stock gained 55 cents to close at $25.07 and Winnebago Industries Inc. gained 19 cents to close at $26.59.
Supplier firm Drew industries Inc. also saw its stock price increase 95 cents a share today to close at $36.60 and Coast Distribution System Inc., which reported sharply higher first-quarter sales and earnings, saw its stock price climb 72 cents a share to close at $6.72.