These days, auto sales aren’t the pure proxy for the economy it once was in part because of easy money and the dire need to replace aging cars and trucks. Still, it’s a reflection, to a degree, and on that note, today’s April sales figures paints a complex picture. The industry should have been able to breathe a sigh of relief, but instead stocks are lower, even for those companies that posted better-than-expected sales.
Ironically, all the domestic automakers missed consensus estimates, while those headquartered abroad came in better than expected.
Some market observers think April sales were still too weak and signal a topping of the big rebound in autos. I’m not so sure that’s the case, and think the fact that truck and SUV sales (more expensive and bigger margins) are surging is a great sign.
Note: Ford truck sales +14.8% and SUV +7.7%, while car sales were down 12%, pretty much sums up the industry trends.
Auto sales should climb about 17.5 million this year, which is a good sign for the economy, although not the prefect proxy.
Market
Stocks are climbing off the lows of the session. Investors remain spooked over the persistent weakness in the global economy. The fact is Australia’s central bank blinked, and in the process, it betrayed a concerted effort to seem firm and confident among its peers.
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