Your Thursday Market Blip 6/1/17

Your Thursday Market Blip 6/1/17

The Dow rose 135 points to close at a new all-time high of 21,144 on mixed trading volume. Both the NASDAQ and S&P 500 hit record highs as well.

Car sales across the US fell for the 5th month in a row coming in just over 1.5 million vehicles for May. This was down about 2% compared to this time last year. Ford beat estimates with a 2.2% increase while Honda, Nissan and VW also reporting higher sales. GM, Fiat Chrysler and Toyota posted sales declines. Inventories at car dealers usually run 30 days but they are currently running 40 to 50 days indicating that deals are out there since dealerships want to move inventory instead of letting it collect bird poop.

The markets are in “Mr. Walker and Mr. Wheeler” mode as stocks trade at or near all-time highs yet bond yields, as measured by the 10 year US Treasury, are falling. When rates fall they usually signal a recession is in the cards but the timing of that could be maybe a year away. Some market watchers like Art “the Fart” Cashin worry that too much money is being concentrated in just a few stocks like Amazon and Netflix but IBD shows the NYSE advance decline line is positive meaning that the rally is still nice and broad. This dichotomy of indicators could be originating from uncertainty over policy initiatives in Washington DC. While political battles rage it is well to remember that underlying US earnings and forward outlooks for jobs and consumer confidence remain positive.