Will Key Data Lead to Celebration?
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While many market players will be resting on their laurels on Wednesday in celebration of the Fourth of July, not far from their minds will be key economic data that is being released this week that may cause more heartburn than the barbequed meats they devoured over the holiday.
This represents another week where the entire market stands to be affected by a bounty of economic news. On tap during this week of the Fourth of July are the auto manufacturers’ sales report, stimulus efforts in Europe and the U.S. jobs report.
First, the auto report. On Tuesday, the auto industry helped to shed light on the economic recovery by releasing their sales numbers for the month of June. The so-called Big Three – Chrysler, Ford (NYSE: F) and General Motors (NYSE: GM) – all showed their strength by posting double-digit gains, with Chrysler and GM posting some of their best numbers in years.
Chrysler posted a 20% increase in its June sales compared to June of last year. It sold about 145,000 vehicles, which is the most it’s sold in the month of June since 2007. GM posted a record gain with the sale of almost 250,000 vehicles in June. Its sales were up 16% year over and year, and those numbers represented the company’s highest sales since 2008. Pulling up the rear was Ford, which posted a 7% increase in sales for the month of June. It sold about 208,000 vehicles.
Foreign car makers Honda (NYSE: HMC) Hyundai (HYMTF.PK), Toyota (NYSE: TM) and Volkswagen (VLKAY.PK) also showed strength in U.S. sales. Honda was up 49%; Hyundai was up 8%, Toyota was up 60% and Volkswagen was up 34%.
All of these major auto makers were up when the Dow closed early on Tuesday. Considering these numbers are indicators of how the economy is doing as whole, the fact that they were strong is telling.
The next important piece of information to come out this week may come Thursday from Europe. Market players are anxious to see if the European Central Bank will lower a key refinancing rate, called the deposit rate, to less than 1% when it meets on Thursday.
For months, investors have been wringing their hands in anticipation over what the European leaders will do to deal with its economic crisis. Naturally, the unknowns have led to wild fluctuations in the market with each new hope that something effective will come to fruition. Stocks were up last week when European leaders at a summit revealed a plan that will help its ailing banks. It will be interesting to see if they cut interest rates on Thursday, which could lead to another boost in stocks.
Lastly is the all important jobs report for June that is set to be released on Friday. I think that the numbers won’t be as dismal and as shocking as they were for the month of May.
One piece of jobs-related data I will pay close attention to comes out on Thursday. That is ADP’s private-sector employment report, which I’m curious about in light of a comment from President Obama last month that the private sector is doing fine.
TwillyD has no positions in the stocks mentioned above. The Motley Fool owns shares of Ford. Motley Fool newsletter services recommend Ford and General Motors Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. If you have questions about this post or the Fool’s blog network, click here for information.