August Auto Sales Boost US Markets
Wednesday saw US stocks rise for the second consecutive day, with strong auto sales lifting investor confidence. The Dow Jones industrial average climbed 97 points (0.65%), the S&P 500 gained 13 points (0.81%) and the Nasdaq Composite rose 36 points (1.01%). Shares for both Ford and General Motors rose to their highest level this year, with Ford jumping 3.5 percent to $16.91 and General Motors climbing 5 percent to $35.85. Statistics for August reveal that the Chrysler Group had an increase of 12% compared with August 2012; General Motors was up 15%; Ford rose 12%; Nissan climbed 22%; and Toyota experienced an increase of 23% year-over-year. Economists are of the opinion that auto sales are an important gauge of consumer spending. It has also been noted that Americans who have held on to their cars for eleven years or more are taking advantage of the lower interest rates to buy new vehicles.
The news that President Obama is seeking congressional approval for a strike on Syria, and that congressional approval may be slow in coming, was another factor behind boosted markets on Wednesday. However, it is anticipated that the situation in Syria, and any potential action from the US, will continue to influence markets.
The Federal Reserve’s Beige Book report noted that the growth of the US economy in July and August was ‘modest to moderate’, with hiring increasing slightly across the districts monitored in the report.
It is generally agreed that August was a tough month, and prophets of doom are drawing attention to the fact that on average over the past 70 years September has been the worst performing month for markets. With the phrase “scary September” being bandied about, do investors have reason for concern? Statistics reveal that September has earned it reputation for being the worst month of the year for the broader market when measured over the past seven decades, but when looking at the last ten years it should be noted that September delivered positive results for seven out of the ten years, and some analysts are of the opinion that September 2013 could be a positive month for investors.