GM shares advance, Boeing stock jumps, Dollar General stock dips

Yahoo Finance Live anchors discuss Ford outselling General Motors when it comes to electric vehicles, Boeing stock soaring after China cleared the 737 Max for flight, and Dollar General stock dipping after reporting earnings.

Video transcript

- Getting to some of the top movers that we're watching this morning, I want to talk about General Motors, first of all. The company says it's actually gonna do better than it expected this year, in part because of what's been going on with semiconductors and maybe that situation getting a little bit better. So now it says its pretax profit this year is gonna be about $14 billion. The forecast previously had been at $11 and 1/2 to $13 and 1/2 billion pretax and pre-interest profit as well.

Brian Sozzi, how are you reading this, even as we are also getting out some of the monthly auto sales numbers this morning?

BRIAN SOZZI: Meh. I think this is just more General Motors just being very crafty with how it articulates its guidance to the Street. So they're coming out. They're seeing adjusted earnings this year, $14 billion. Their previous guidance was 11 and 1/2 billion to 13 and 1/2 billion.

It sounds like they are-- they've been able to get a little bit more access to chips. That is good. I would have liked if they would have come out here and given some form of guidance for 2022. They did not do that.

But again, this is a GM that has lost the narrative to Ford this year. Ford CEO Jim Farley, a fun person to follow on Twitter, has been very out front, very aggressive on him, taking the battle to Tesla here. And I look at Ford's stock, up 128% year to date. GM, about 46% after this latest push higher here.

And speaking of Ford, sales out this morning here. Stock down a little bit, but sales in the month of November up 5.9%, year-over-year truck sales up 4.6%, SUV sales up 20.8%. Most importantly, sales of electric vehicles of Ford up 153% year-over-year. In large part, that reflects, of course, they have more electric models on the market. But again, if you have been a buyer of Ford stock over the past year, you've ridden this 128% year-to-date gain. You like that electric vehicle sales number.

BRIAN CHEUNG: Yeah, and to come back to GM, really interesting interaction that kind of keeps in vein with what we were talking about with Apple with the chips. But there was a Credit Suisse investor presentation yesterday where the analyst just asked, well, look, did you just get more chips? And the CFO, Paul Jacobson, went, basically, yeah.

But what's interesting is that when you speak to the question of why aren't they being a little bit more clear on their guidance, well, it's because of the Omicron variant, right? What was the reason for the chip shortage? It was because of the Delta variant shutting down factories overseas. And that's the exact risk that we face here with the Omicron variant as well.

Now, the CFO was kind of telling at this investor presentation yesterday that we're not seeing that right now. We're not seeing the impact right now, and that's just simply because it's so preliminary what the kind of data is on how many people have it, where it is, kind of how much it might spread. But at least until then, you're gonna see a lot of companies try to punt on offering more guidance, because if there are more supply chain shutdowns, why would you promise what your margins are gonna be in the next two or three quarters to come? So that's very much a big headwind for 2022.

BRIAN SOZZI: Glad you mentioned that, Brian. And if that is the case, if they don't want to come out here at GM and put out their 2022 guidance, as an investor or an analyst or trader playing GM, then you have to call into question them, in late October at their investor day, saying that they're going to double revenues over the next decade because of their push to electric vehicles. Can you still believe that guidance if they're unwilling to come out here and put out any form of guidance for next year? I think you have to start questioning it and questioning it in a big way.

- Well, I think those are two very different questions, to be fair, Brian Sozzi.

BRIAN SOZZI: You can't get to the next decade if you don't get to 2022.

- Well, I mean, really, what this gets at is should companies be offering guidance at all. And a lot of companies would defer to we don't want-- we wouldn't want to. It's difficult to do this type of forecasting, especially right now.

- Yeah. I mean, I think longer-term and shorter-term are two very different questions. And the secular case for electric vehicles and that shift is very different than what's gonna happen with the supply chain in the next year. But we got to move on. All right.

I want to mention what's going on with Boeing this morning as well because obviously, that company has struggled quite a bit with the grounding of its 737 Max. It looks like that China may be nearing a lifting of the grounding in that nation. That's been going on for three years now, and we're seeing Boeing shares get a lift this morning.

You're looking at the five-day chart there. Today's lift, though, is about 3%. And in what is sort of a rocky market overall, it's perhaps even more impressive that we're seeing that kind of a lift. Brian Cheung, this would be a big relief for Boeing if it gets up back up and going in China.

BRIAN CHEUNG: Yeah, well, certainly. I mean, a huge aviation market, right, is China. And for their aviation regulator to give the green light to reflying those 737 Maxes, that's a big deal, especially considering that here in the United States, they've already approved that.

So I think that, when it comes to China, that we have to remember that they have a little bit of their own kind of game going on here when it comes to the development of their own aircraft domestically. They have that Commercial Aircraft Corporation of China, also known as Comac. The C919 is apparently going to start flying commercially in China. Again, that's not to say or speculate or try to draw a link between the timing of them greenlighting the 737 Max getting back up to the skies in that domestic market. But that short-haul aircraft, that C919, could be a serious competitor to the 737 Max.

And keep in mind that Comac is also testing a long-haul model as well. I've seen some commentary that has said could the PR issues and the kind of engineering issues at Boeing spell something very similar to the fate of a McDonnell Douglas here in the United States. I think that's probably a little bit too dramatic, at least for right now. But you do wonder, with these other competitors coming out here to take on the likes of Airbus and Boeing, whether or not there could be a big tipping point here at this time.

- And moving on to one more mover that we're watching, and that is Dollar General, the company coming out with a forecast for a decline in same-store sales in the current quarter, which is really interesting. Obviously, it's the holiday quarter-- this after it saw a decline in profit last quarter. And it looks like analysts were-- it still beat analysts' estimates, but it looks like the shares are down because of that forecast. Soz, it's so interesting to me how the whole dollar store paradigm seems to be shifting before our eyes.

BRIAN SOZZI: Yeah, I'm not feeling too emotional on Dollar General here. I mean, the quarter is what you would expect from a dollar store-- margins under pressure, in large part because of transportation. I encourage any trader out there playing these [AUDIO OUT] at these retailers, Dollar General noting their expenses went up 100 basis points year-over-year, in large part because of labor price inflation.

But bigger-- two things I'll note here quickly. One, weakness in the apparel and seasonal categories, it mainly has me concerned how is inflation impacting the lower-income consumer, at least through the prism of Dollar General. It could really be hitting them hard.

And also, too, Dollar General noting that they're opening up 10 stores in Mexico. This marks the start of their international expansion. That could be, over time, very bullish for this company. They have opened thousands of stores over the past five years. This could be another big growth area for them.

BRIAN CHEUNG: Yeah, that concept for Dollar General, I think it's called pOp shelf, but the P is lowercase and the O is uppercase. I don't really understand the logic there. But I think it just underscores the importance of ambience. It's really not really the product itself.

I can imagine that a lot of the products that they might be selling in that pOp shelf store, which might be kind of more in the vein of a Five Below or so, are probably very similar to what they're already selling at Dollar General but in a store format that's a little bit more dolled up, a little bit more kind of Target-like, if you will.

And I think it just kind of underscores that the retail store, as a brick-and-mortar, is very much still alive. People do care about the shopping experience still. And there is something kind of not as emotional about sitting on your couch in your underwear kind of scrolling through things and buying things on Amazon, right?

So I think that very much, through the COVID-19 pandemic, a lot of questions about whether or not the retail landscape has changed. And I think that the decision to push forward with this pOp shelf design does very much underscore that retail is still alive and that people do very much care about the experience of going into a store.

BRIAN SOZZI: But they don't sell turtlenecks at pOp shelf, Brian.

BRIAN CHEUNG: No, they don't.

BRIAN SOZZI: They don't sell them there.

BRIAN CHEUNG: No, they don't.

- Well, we don't-- maybe they do. We don't know that yet, do we? We can confirm?

BRIAN CHEUNG: We'll have to reach out. We'll have to reach out.

BRIAN SOZZI: There's reviews online. Go on YouTube. They don't-- they don't sell them.

- There must be some online retailer that sells only turtlenecks, and we will have to find that retailer.

BRIAN CHEUNG: I'll start one.

- We--