Rake in "Rust Bucket" Gains

Billions of dollars in auto recalls getting you down? July 02, 2014     Rake in "Rust Bucket" Gains   Why a car is the best investment you can make today An unexpected breakout Plus: An important trading lesson   Greg Guenthner coming to you from Baltimore, MD... Greg Guenthner Billions of dollars in auto recalls getting you down? Maybe it's time to buy a new car... Out of all the economic data released so far this week, nothing stands out more than auto sales. That's right, consumers have found their way back to the car dealerships. After plodding along for years, the big automakers are finally seeing the light at the end of the Great Recession's tunnel... June auto sales were up 1.2%. While that might not seem like much at first, industry analysts were expecting a 3% decline. Oh, and the annualized sales rate hit 16.98 million vehicles. That's the best reading since July 2006, according to Autodata Corp. Toyota, Nissan, and Hyundai all reported year-to-year increases, according to Reuters. Even the Big 3 are topping expectations. The First Trust NASDAQ Global Auto Index Fund (NASDAQ:CARZ) broke out beautifully yesterday. It's now at all-time highs (the fund was started in 2011). So what the heck is going on here? What you're seeing is a situation where a slow economy has held down car sales for years. Just look in your neighbor's driveway. Chances are he's still driving that beige Ford Escort with the dented fender he bought back in 1996... In fact, the average age of cars on the road in the U.S. is at a record-high average of 11.4 years, according to Polk. Everyone's coaxed their ailing rust buckets along through a soft job market and lukewarm economy. But interest rates are low and employment is improving. Something had to give. Even with General Motors recalling 40% of its vehicles on the road today, sales are screaming higher. You've probably seen the recall disaster that's plaguing GM right now. Almost every day, a new recall is announced. In fact, earlier this week, shares were halted midday while the company announced six new recalls. It's getting ridiculous, with GM now expecting to take a charge of up to $1.2 billion in the second quarter alone. But even with the bad news looming, General Motors' U.S. auto sales were up 1% in June. Analysts were expecting a 6.3% drop. So throughout the recall madness, consumers are actually buying more GM vehicles. And yes, many of these sales have come after recalls were announced. As you can see, not even disastrous recalls can hold car sales back. As consumers rush to replace their rust buckets, car sales will continue to impress...         The New Swiss "Bank Account" Wall Street firms have poured almost $200 million into a new "underground banking system." Some are calling it "the new Swiss bank account." Regulators are confounded… but some investors have made as much as quadruple-digit returns already.   Click here now to learn more.           Rude Numbers Targets, Predictions and Wild Guesses   281,000 private sector jobs were added in June. That's the most since November 2012, according to MarketWatch... $4.41 marks the spot for natural gas prices this morning. Natty is quickly sinking toward its 2014 lows as the hot summer months take over from the brutal winter... $1,517 is where you'll find platinum prices this morning. Platinum held its breakout move yesterday and is looking to continue its run higher... $1,326 marks the spot for gold futures today. The yellow metal is in a holding pattern after sneaking higher this week... 1,966 is where you'll find S&P futures just before the bell. Looks like another green open is in store for stocks...     Rude Trends When to Buy... When to Sell   Yesterday's market action pushed the S&P 500 and the Dow to new all-time highs. Again... And there was plenty of talk about the melt-up. In fact, many stocks cut loose and tore higher throughout the day. You might have even seen a short squeeze or two... However, the market still has yet to register any type of "blow-off top". Sure, stocks are up nicely over the past several weeks. But believe it or not, the big indexes haven't even given up a major one-day move to the upside in some time. My friend Ryan Detrick over at Schaeffer's Investment Research keeps track of stats like these. According to his research, the S&P 500 hasn't had a 1% up day for 52 trading days. That's crazy. And it's one of the longest streaks of all time (tied for 12th longest, to be exact). Now, I don't expect the market to act this way forever. But it's important to understand how stocks are behaving. And right now, a slow and steady trend higher on low summer volume is what we're experiencing. Don't fight it... [Ed. Note: Send your feedback here: rude@agorafinancial.com - and follow me on Twitter: @GregGuenthner]     Ignore At Your Own Peril Today's Must Read Links   Shocking New Forecast: America Has a New Wealth Weapon... If you aren't saving these coins, you have to start now This Secret Savings Account Pays You 7% Interest!     BE SURE TO ADD dr@dailyreckoning.com to your address book.       Additional Articles & Commentary: Join the conversation! Follow us on social media:         The Rude Awakening is committed to protecting and respecting your privacy. We do not rent or share your email address. By submitting your email address, you consent to Agora Financial delivering daily email issues and advertisements. To end your Rude Awakening e-mail subscription and associated external offers sent from The Rude Awakening, click here. Please read our Privacy Statement. For any further comments or concerns please email us at rude@agorafinancial.com. 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