Mexico, our neighbor to the south has had many problems through the years with corruption, drugs, and poverty, but that is all starting to change. For many decades, the political culture of Mexico has kept the country and its wealth in the hands of the few, but that has been changing for some years now. Mexico is becoming a symbol of the global economic transformation that is currently in progress.  

  • Annual auto sales in Mexico rose to the highest level since 2007 as car financing expanded and the economy grew for the fourth straight year.

As things settle down there, meaning the war against the drug cartels is won, look for American companies to start investing in the economy there. The current president is currently spending an amount roughly equal to 1/3 of the GDP on rebuilding infrastructure. There is opportunity in the land of sombreros and siestas.

All the way across the pond, the two biggest economies in Europe are also demonstrating some economic strength, which is pointing the way to the European economic recovery.

  • German industrial production rose for the first time in three months in November, adding to signs that Europe’s largest economy is gathering pace. Factory orders rose more than economists expected in November and Ifo business confidence surged to the highest level in 20 months at the end of last year.
  • Companies in Britain are hiring permanent staff at the fastest rate in almost four years, figures released on Thursday showed, increasing the chance that unemployment will fall to the key 7 percent level sooner than the Bank of England (BoE) expects.

Back here in the good ol’ USA, the economic momentum is increasing as well, which means more consumer spending, which means more earnings for companies, which means more impetus for the market.  

  • The number of planned layoffs at U.S. firms plunged by 32 percent in December to the lowest monthly total in more than 13 years, a report on Thursday showed.

Thirteen years is a long time, but the larger number is the 32% decline in planned layoffs. My guess is that big number directly correlates with the big numbers coming out about the holiday season. Yup, you go it, the same holiday season that the breathless media told us was a bust, a huge bust.  

  • Promotions and discounts offered by U.S. retailers drove a 2.7 percent rise in holiday season sales despite six fewer days and a cold snap that kept shoppers from stores.
  • Retail sales between Thanksgiving and Christmas rose for the fourth consecutive year, even though the number of people walking into stores fell 14.6 percent in the period.
  • U.S. online retail spending rose 10 percent to $46.5 billion in the November-December 2013 holiday season.

I want to be amazed by the sheer incompetency of the news media, but I am long past that. The corruption of the basic objectives of journalism is reality, as is the corruption found in the financial media. In any case, the above retail sales information points to some good earnings potential, which will add even more fuel to an already hot market.

So, again, don’t worry about the down days we are experiencing now. Buy all you can because the big money buyers are just waiting for opportunity.

Trade in the day; Invest in your life …

Trader Ed