Once again, markets are appearing impervious to bad news. Pre-market futures are up again following a Monday finishing moderately in the green across the board. Currently, the Dow is up 165 points, the Nasdaq +29 and S&P 500 +17. In the case of the S&P 500, it is now above the 200-day trading average, suggesting another possible breakout to the upside.
That this looks possible is quite strange when one turns on the TV or the Internet, filled in weeks past with new fatality totals of COVID-19 — over 106K Americans have now succumbed to the disease and 371K globally, for anyone still paying attention to these numbers — and now with protests, riots and most recently shows of force by U.S. law enforcement and a call from the president for more around the country. The market is keeping no news items (thus far) from its “V”-shaped recovery taking place.
The question is: Are we going too far too fast? Does current market exuberance in the face of dire realities (a new Employment Situation reports comes out Friday, speaking of dire realities) increase the chances this “V” might turn into a “W”? (OK, that’s more than one question.)
Motor Vehicle Sales Results Today
Throughout the course of today, we expect periodic releases from the major global car companies —General Motors (GM - Free Report) , Ford (F - Free Report) , Honda (HMC - Free Report) , among others — about May vehicle sales. These come with particularly low expectations, considering our months’ long lockdown that kept fewer people driving, let alone shopping for new cars.
Toyota (TM - Free Report) has already reported a drop of 25.7% new auto sales from last month — not a great number, but pent-up demand over time ought to bring these figures into something of a “V”-shaped curve (hopefully), as well. Overall, May sales are expected to come in around 11.8 million vehicles sold. This is well below the earlier estimate of 15.5 million sales, but already a marked improvement from April’s 8.6 million sales.
Auto companies had still been incorporating limited operations during the coronavirus lockdown period. But with factories now opening more fully, though not totally at this stage — workers in close confines are regarded as the current hotbeds of COVID-19 spreading — to match at least some of this expected pent-up demand, we are hopeful the numbers we’re seeing in May and April represent the veritable and historic trough in auto sales.