Okay, I get it! Europe is dragging the global economy down. I get it that China’s economy is in check because Europe is struggling through a loss of investor and consumer confidence. I get it that Europe is buying less from the US, and so our manufacturing sector is producing less. Yup, I get it that the view is totally negative about what is going on out there. The headlines across the board this morning tell that story. Yet, one piece of positive data managed to poke its head through all the darkness.
Auto sales continued a slow but steady recovery in August, as all three Detroit automakers reported sales gains that outstripped expectations.
The combined US auto sales numbers are on pace to surpass the 14 million mark for the year, which would mean the US auto industry will land just about 4 million units above where it was at its worst some three years ago. Never say die, I say, and if you ask me (and no one did), I say that despite the contraction in Europe and China, the US economy is still holding on thanks to the US consumer. True, things are not robust, yet, but underneath it all, the US consumer seems to understand something about how this all works.
U.S. consumers, though, were in a slightly better mood this month. The Thomson Reuters/University of Michigan’s final reading on overall consumer sentiment for August rose to 74.3, its highest since May. The survey’s barometer of current economic conditions rose to 88.7 from 82.7, the highest since January of 2008.
Go figure! US auto sales in Europe and Asia drop off the edge, and the US consumer steps up amidst the doom and gloom to pick up the slack. Could someone please explain this to me? And while you are explaining the US consumer spending gobs of money on cars while the news is horrible, could you please explain to me how the data below is not an opportunity for both the US automakers and market players?
Europe’s volume carmakers are returning from summer breaks with their sleeves rolled up, ready to shut plants and lay off staff in what many see as an overdue push to cut costs as their U.S. counterparts did three years ago.
I believe retooling is the official term, and the European carmakers are getting ready to do that. As we know from our own experience, retooling means a loss of market share. Now, picture this – European carmakers cut back on production just as the ECB and the EU put a floor underneath the loss of investor, consumer, and business confidence. US automakers are positioned and ready. They are on a roll, and for them to fill the gap in Europe if demand increases is not a farfetched thought at all. . Keep an eye out for opportunity by looking ahead. Just sayin’ …
“I think we’re going to see more stimulus from pretty much every central bank on the face of the planet,” said Michael Ingram, market analyst at BGC Partners. “We’re living in a globalised economy. It’s a globalised slowdown. So policy makers have to step up to the plate.”
Coming soon to a country near you is the blockbuster of the year – combined and coordinated economic stimulus on a global scale. The story opens with all the heads of all the central banks across the globe deciding enough is enough. It is time to get the train rolling again …
Trade in the day; Invest in your life …
