Car Manufacturers in the News
For some reason there has been quite a flurry of auto headlines recently. Most of these are good news, so it seemed reasonable to gather a list.
Ford to Hire 7,000 to Help Make Electric, Hybrid Cars - Ford manufacturing jobs typically have a high multiplier for the economy at large (directly for suppliers, indirectly through simple economic activity multipliers).
Toyota Plans Higher Output as VW Targets Top Spot - This also directly translates to Brazilian, Chinese, American, Japanese, and German jobs. Toyota will be opening a new plant in Blue Springs, Mississippi.
Marchionne Wants Chrysler Group to Pay Back U.S., Canada Loans This Year - This is a little more positive than the AP article I found today, but reducing debt via any means is a good thing for Chrysler. Also, It looks like Fiat has boosted their Chrysler holdings.
Honda `Aging Champion’ Civic Seeks Revival Amid Hyundai Rivalry - I just wanted to find more car news links, but I am a bit of a Honda fan. If I bought a vehicle with four wheels, it would likely be a Honda.
Mercedes Designer Goes `Off the Charts’ to Draw Younger Buyers - I admit to scraping the bottom of the barrel with this link, but the first three links were really good. And this list looks quite impressive with 5 links.
It is my wife’s birthday, and it is time for ice cream cake.
Signs of Struggle or Better than it Seems?
New Home Sales and Durable Goods Orders were reported today. Both are looking pretty poor.
Durable Goods Orders Off But Business Spends More - The article takes the position that the news is better than the headline number of -1.3%. CNBC keeps stating that this—excluding transportation—indicates a rebound. The actual census report didn’t look very good to me. Remember, our trade gap is in a widening trend. Goods manufactured in the US are off. Non-defense orders are down. Defense orders are up. Is that supposed to be a silver lining? Exclude transportation, but not defense? The logic makes sense if all you want to find is good news.
August New Home Sales Second Slowest on Record - I actually read elsewhere that it was the third slowest on record. It is the worst August on record. I only link to it because when it aired on CNBC, they tried to spin this as great news, indicating that we’re steering clear from a double dip. Interesting that the article on their website is far less sanguine.
It seems as if there’s no negative scenario for anyone any more. These numbers are better than they look. If they aren’t, the Fed will step in with QE2. That will make everything go up. So even if they are bad, they’re good!
Interesting.
The Almost-Important Report Day
Today was the day of the month that a few reports I only loosely follow were released. The rundown:
ADP Employment Report - ADP uses their payroll data to give us a bit of a preview on Friday’s Employment Situation report. ADP claims a seasonally adjusted 42,000 jobs were added to private payrolls in July. As a warning, we’re expecting about -100,000 jobs from the census again (give or take 20k). Bloomberg consensus is -70k jobs for Friday’s report, but this little bit of good news provided some people with hope for a surprise to the upside.
Challenger Job Cut Report - 41,676 planned layoffs in July. They note that despite 3 consecutive months of increases, this is near the lowest level since the 2001 recession. Every Thursday, however, we’re reminded that new unemployment claims are stuck at levels near the peak of that recession.
Non-Manufacturing ISM Report - The NMI came in at 54.3%, indicating expansion. The Employment Index came in at 50.9%, which is too close to flat to be considered good news.
They call it WHAT? - Not actually a report. The number of stories in my RSS feed with some variation on “Backdoor Stimulus” today really brought out the inappropriate humor. I’m confident that there are ways to describe refinancing a few trillion dollars in mortgages in a way that doesn’t promote anal sex jokes.
Tomorrow brings the unemployment insurance report. Everyone is waiting for Friday’s jobs report, though.
European Snapshot
Europe will be in the crosshairs until Friday, when the EU bank stress tests results are announced. Let’s get a quick checkup on the area.
Ireland was downgraded by Moody’s. This wasn’t a big surprise, but the timing couldn’t be much worse for Ireland. They will attempt to auction a decent amount of debt tomorrow.
Hungary and the IMF ended talks unsuccessfully. Hungary has received a loan from the EU and the IMF. These talks were over a bit of deficit spending (a small fraction of, say, deficit spending in the US). The Forint and Hungarian stocks both took a beating.
Spain and Portuguese debt yields improved today. This was badly needed, as it appears as if the ECB has been a significant buyer of Spanish debt recently.
The previous link also offers a condensed version of recent Greek news:
Greece, which sparked Europe’s debt crisis in October when a new government said the budget deficit was more than twice the previous administration’s estimate, sold 1.625 billion euros ($2.1 billion) of 26-week bills on July 13. The notes were sold at a yield of 4.65 percent and investors bid for 3.64 times the amount offered.
4.65% on 6 month debt? Yeah, no problems with funding here.
There are already rumors about specific banks failing the stress test. However, Goldman said that the stress tests won’t force banks to sell many additional shares. This was one of the mechanisms that the US banks used to buy their way back out of TARP. This was previously discussed as one of the ways that banks would raise capital if they failed the stress tests. Curious.
Friday is going to be an interesting day. I can’t say that this has been the best PR exercise by the EU. I am genuinely curious how the announcement is going to be made so as to cushion the blow to any banks that do fail the tests.
