More Green Shoots
Auto makers are posting May salesthat are the best for 2009; Ford's economists are estimating that May vehicles sales were roughly 10.4 million; if true that is well above the consensus of 9.4 million.
GM reported vehicle sales dropped 29.6 percent, better than the expected decline of 37 percent; Ford also reported better than expected sales.
The Senate may vote on a plan to underwrite some of the cost of buying fuel-efficient cars; it would provide up to $4,500 n vouchers to buyers who trade in their old cars for more fuel-efficient models.
The PPIP: not necessary? There is talk that the Public Private Investment Program to buy bad assets from banks may not be necessary because the markets are recovering.
Next up: May retail sales on Thursday. This is a tough call; retailers were up huge Monday as personal income was stronger than expected...value players like TJX, Ross Stores, Family Dollarand others have had huge runs off their November bottoms, but so have the department stores like Nordstrom and Macy's (up 197 percent and 144 percent, respectively).
Department stores? Isn't business terrible? Yes, but they are the most leveraged to the economy, and traders have been buying them under the theory that their profits will be strong...when the economy recovers.
It's a gutsy call.