Tuesday, September 01, 2009

Turn the calendar and stocks drop?

The general consensus floating around Wall Street seems to be September is historically weak so when the calendar says 9/1/09 you obviously must sell stocks (sarcasm free of charge!).

You might just as well run your investments according to the position of Saturn and Jupiter relative to Mars. It's silly logic, but I don't make the rules, we just have to be aware of what the market is thinking.

Surprisingly, much of today's economic data was pretty decent, but I think most people view the "less worse" data as being in the rear view mirror. Asian markets continue to slide in early trading and the volume in the US today was substantially to the downside. I still contend that many Wall Street money managers are on vacation this week so the kids at the controls this week have 1 job - don't lose too much money. The really action should kick in next week after the big boys (and girls) get back from the Hamptons.

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Cash for Clunker follow-up: August car sales came in at 1.17 million which was the best month since May 2008. While this should be viewed as a positive for the industry, I think it speaks to the fact that the US consumer remains tapped out. Most people believe that around 550,000 cars were sold under the CFC program in August. When you back that number out of the total auto sales number you get a monthly total of around 557,000 units. Now that's not an accurate view because some cars bought under the CFC program would have been bought anyway, but I think it's clear that September will show a dramatic decline in vehicle sales and I'd put the over/under at 700,000 units.

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