After weak May manufacturing numbers spoked the market, the June numbers should be predictably better. The market doesn't act like the facts matter, but the data should naturally improve considering the major impact to both jobs and the growth numbers have been the auto sector. The industry will undoubtedly see higher numbers possibly approaching February numbers prior to the quake.
Outside autos, no evidence exists that a significant slowdown is under way around the world. Heck, even Dr. Copper has lurched back to $4.13/lb signaling strong demand. Copper bottomed out in mid May most likely when global production especially in Japan saw the beginning of a rebound in the supply chains.
As the Fed remains super easy with interest rates at all time lows and the yield curve remains significantly positive, all of the fears of a double dip recession are very off base. In just about all cases it requires, the Fed to cut off liquidity in the markets to cause a recession. Its the lack of liquidity when an extraneous event hits, that eventually takes down the market. In the case of the Japan disaster, this only causes a pause in the market as the low interest rates encourages investment and not retraction. Guess its natural for the market to panic, but all the parts to the puzzle exist for a significant rally into year end.
Via CNBC report:
- The president of Toyota Motors said on Saturday he expects the automaker to resume full production globally in November and its Japanese output is expected this month to recover to 90 percent of levels seen before a March earthquake.
- That more optimistic outlook compares with a prediction last month for production to return to 70 percent of normal.
- Because Toyota builds 38 percent of its cars in Japan compared with a smaller 25 percent at Nissan Motor Co Ltd [NSANY 19.16 0.01 (+0.05%) ]and Honda Motor Co Ltd [HMC 37.51 -0.02 (-0.05%) ]the impact at Japan's biggest auto company has been greater.
- n contrast, South Korean rivals Hyundai Motor and Kia Motors posted double-digit sales growth and a record-high combined market share last month in the key market, putting their combined U.S. sales almost on par with that of Toyota.