U.S. auto sales figures are released monthly, about two days after the month’s end, and reflect the annualized number of cars and trucks sold domestically during the previous month. While the data is released monthly, it is reported in an annualized, seasonally adjusted format.
Monthly auto sales figures are a major indicator of the health of the U.S. economy, and they can have an immediate impact on the stock market. Higher-than-forecasted monthly auto sales are an indicator of a strong—or strengthening—economy, as it is a reflection of increasing discretionary spending. If monthly auto sales figures come in below those forecast, it means consumers are cutting back on their discretionary spending, signaling a weakening economy.
The Sector That Continues to Benefit from Low Interest Rates
A sector that has truly benefited from the low-interest-rate environment over the last several years has been the automobile sector, which could now be an investment opportunity. Armed with financing rates as low as zero or free money, car buyers have been rushing to the dealers looking for a new set of wheels. Rising per-capita income levels around the world, especially in the emerging markets in China, Asia, and Latin America, have all combined to drive up demand. Investment guru Warren Buffett just announced last week that his fund Berkshire Hathaway, Inc. (NYSE/BRK-A) would add a majority stake ... Read More
Three Stocks to Profit from New and Old Cars Alike
Spring is finally here, but that certainly doesn’t mean corporate America will cease to use the cold weather as an excuse for abysmal corporate earnings. Throw a dart at any sector, and you’ll find CEOs blaming the weather in some capacity—well, save for the utilities companies. One sector that might be able to (on some level) justifiably blame the weather for a weak start to the year is the auto sector. Overall, U.S. auto sales were up eight percent year-over-year, while Canadian auto sales were up four percent. (Source: Isidore, C., “Car sales make a strong comebac ... Read More
Why Consumers Have Been Increasing Spending in This Sector Since 1994
The U.S. economy is weak. Everyone knows it. We just don’t know where to lay the blame. Businesses on the S&P 500 have been using the weather as an economic scapegoat. And not a small number, either. Between January 1 and March 12, 2014, 195 companies on the S&P 500 used the term “weather” at least once in their conference calls. This represents an 81% increase over the 108 companies that mentioned the weather in their conference calls in the same period last year. (Source: “How many S&P 500 companies have commented on the weather?” FactSet, March 14, 2014.) And if you want to not-so-subtly warn investors things aren’t looking too good, just blame the weather. The estimat ... Read More
Sin Stocks Posting Impressive Gains in Struggling U.S. Economy
As the investing adage of the day goes, “When the going gets tough, the tough get eating, smoking, and drinking.” And there’s plenty of tough economic data out there to send people into the arms of their favorite vices and sin stocks. In a nutshell, U.S. unemployment has improved year-over-year to 6.7%, but the improved numbers are the result of an increase in low-wage-paying part-time retail jobs. The underemployment rate remains high near 13%, as does the long-term unemployed at 2.3%. And despite the soaring S&P 500, wages haven’t really budged in y ... Read More
Should Investors Leave Auto Stocks Behind This Spring?
According to Wall Street, the cold winter weather is responsible for holding back an economy that’s just itching to take hold. And as we’ve recently learned, when it comes to poor earnings and revenues, nothing makes for a better excuse than the weather. After all, the cold harsh winter that has blanketed much of North America doesn’t care how much money you make. But while the cold winter weather might not care what area code people live in, the feeling is mutual—people in the wealthy area codes don’t care about the cold weather either, especially when it comes to auto sales. February auto sales figures came in ea ... Read More
Where Investors Can Find Stability in These Economically Unstable Times
While most astute investors would point to a weak U.S. economy as the reason for the recent lackluster U.S. employment data, economists, in their infinite wisdom, point to Mother Nature. She seems to shoulder a lot of the economic blame in this country. In January, the U.S. economy added just 113,000 new jobs, far fewer than the expected 180,000 jobs. Freezing winter weather is being blamed for the weak U.S. unemployment data. This is the second straight month of disappointing jobs data from the U.S. Department of Labor. Last month, the U.S. economy ... Read More