The flagship division of Volkswagen (DE:VOWG_p), Audi, has announced that it will now increase its spending on technology as well as new plants and models until 2019. The goal is to surpass Audi’s German rival, BMW, as the world’s largest manufacturer of luxury vehicles with Audi currently the world's second biggest luxury automaker. Today, Audi contributes 40% of operating profit at Volkswagen which is currently Europe’s largest automotive group. The new plan aims at boosting investments by 2 billion euros in car-making operations. This means that over the next five years, the company will commit over 24 billion euros to the company’s operations.
With this latest spending, 70% of the funds will be allocated to developing new technologies as well as new models. According to Audi, one of their key focuses is on developing plug-in emission-cutting vehicles. Audi is also committed to producing 100% electric cars so that they can compete evenly with the likes of Tesla Motors (O:TSLA) and BMW (DE:BMWG). Funds will also be allocated to the two German Audi factories which are located in Neckarsulm and Ingolstadt. According to Reuters, these factories have accounted for half of Audi’s 9-month output of over 1.34 million autos vehicles. Audi is also aiming to increase its current range of 50 models to 60 models and the company will also allocate over 1 billion euros to developing new factories in Brazil and Mexico. According to Audi, an additional eight hundred and fifty workers will be employed in Mexico next year. From 2016, Audi’s Q5 sport-utility vehicle will be assembled in Mexico. The shares of Volkswagen AG are currently trading at €182.10 per share.
It seems that it really is the season for giving as investors have also been showered with gifts as the Dow Jones and the S&P 500 index closed at record levels again on Friday. To top it off, the Nasdaq Composite index also closed at its highest level since March 2000. At the close of U.S. trading on Friday, the Dow Jones Industrial Average (DJIA) marked its 38th record close after gaining 0.1%, or 23 points, at 18,053. Over the last seven consecutive trading sessions, the Dow has gained and the last time this index enjoyed a 7-day straight gain was on the 4th of November in 2008. Meanwhile the S&P 500 index also made its mark with its 52nd record gaining 0.3%, or 6.89 points, to 2,088.7. Over the last ten weeks, the Nasdaq has been up for eight out of these ten and on Friday, the index gained another 0.7%, or 33.39 points, to close at 4,806.8. Despite all the gains, all of these three major indices displayed low trading volumes, the lowest for the year. According to BATS exchange data, approximately 3.06 billion shares were traded on all U.S. platforms, down compared to the month-to-date average of 7.39 billion. On the Dow Jones, the best performer were the shares of McDonald's Corporation (NYSE:MCD) which increased by 0.95 points or 1.01%.
On Monday, the euro (EUR) held steady against the U.S. dollar (USD). Due to concerns regarding the political instability in Greece, the EUR hovered close to its 2-year low while the USD remained broadly supported. Due to the upcoming New Year holiday, trading volumes are expected to be light this week. During late Asian trading, the EUR/USD currency pair hit 1.2167. This marked the currency pair’s lowest mark since August 2012. The pair eventually consolidated at 1.2190 with resistance levels at the high reached on the 25th of December of 1.2255 and support at 1.2132. The euro was impacted after Antonis Samaras, the Greek Prime Minister, will make his 3rd and final attempt today to avoid an early election in parliament by getting his candidacy for president confirmed. On the 23rd of December, the second vote, Samaras got the backing of 168 lawmakers which was an additional 8 from the first ballot which took place on the 17th of this month. Meanwhile, the greenback remained supported by data released last week which showed that the U.S. GDP (gross domestic product) increased by 5.0% in the 3rd quarter, up 3.9% since June. This number exceeded expectations for a growth of 4.3%. In response, investor sentiment was boosted with investors expecting the Federal Reserve to hike interest rates in the New Year.
On Monday, after declining over the last two trading sessions, oil prices rose. This came in response to investor concerns regarding the escalating violence and clashes in Libya which will impact supplies from this OPEC member. According to officials, the clashes between the various factions fighting for control resulted in a fire which destroyed over 800,000 barrels of crude oil at the country’s main export terminal. This amounts to over 2 days of output from Libya. Earlier in the day, Brent crude was up 48 cents at $59.93 a barrel. This came after the commodity reached over $60 at $60.40 earlier in the day. Brent crude finally settled down 79 cents from the previous trading session. Oil prices have also been supported by plans in Japan and China to boost liquidity. On Saturday, the Japanese government approved $29 million worth of stimulus spending in order to boost the country’s GDP by 0.7% while next year, the People's Bank of China will loosen loan-to-deposit ratios for Chinese banks.