I am beginning to see it. The market is starting to behave rationally again. The spikes in volatility seem to be fading. The VIX has held in the 16-17 range, which tells me stability is creeping back into the game. It is the Goldilocks scenario at play. Twenty is just too hot, 12 is just too low, but 16-17 is just right.
The reason the market is settling into stability is that the breathless media has nothing to sensationalize. Sure, it trots out a bear or two to tell us the market rise is a mirage, as there is nothing underneath to support it, but that is not enough to panic the market. In fact, it is like the cry wolf story. The market is not buying it anymore. The market looks at the fundamentals and sees things are moving right along.
- Ford (F) June U.S. sales: +13% to 235,643 vehicles to cruise past the consensus estimate of analysts calling for a 12.4% gain. Cars sales rose 12%, utilities 8%, and trucks 20%.
What the market sees in data such as the above is the US and global consumer is still very much alive. If you track US cars over the last three years, you will see a steady uphill climb in a chart. Consumers are buying US cars at a pace that puts the total sales in the 15-16 million range. That number is just about two million shy of where they were just before the Great Collapse.
These car sales numbers are good, but looking deeper into those numbers one can see the US something else is going on, something we all know about because it is headline news.
- Chrysler’s U.S. sales in June rose 8 percent on strong demand for its two best-selling vehicles, the Ram full-size pickup truck and Jeep Cherokee SUV, the company said on Tuesday. Overall U.S. auto industry sales in June are expected to show a rise of up to 8 percent and could reach their strongest monthly pace since before a recession pushed Chrysler and General Motors into bankruptcy in 2009.
The housing market is alive and well and lots of folks are buying trucks because of it. People are buying pickup trucks to get themselves to and from their job – construction. Housing construction is coming back, which means more people have jobs, which means the market now wants to see the unemployment rate come down.
Wall St. gains for second day; eyes on payroll data on Friday
The bears are still pushing, but that is what we want. No one wants to see the market rise too far too fast. A little bit here and there is just fine, as that matches the fundamental data.
- The Commerce Department on Tuesday said new orders for manufactured goods increased 2.1 percent. April’s orders were revised to show a 1.3 percent rise instead of the previously reported 1 percent advance.
Yes, a bit of fear is good, overall. It keeps the market in check, which allows us players to make solid plays. As well, it keeps commodity prices down, which means building is more affordable.
- Copper slipped on Tuesday from a near two-week high in the previous session as a stronger dollar weighed on the price and investors remained concerned about economic prospects in top metals consumer China.
Ok, now get out there and make some money. Cull through the data and you will see opportunity is everywhere. Seize it.
Trade in the day; Invest in your life …
