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Comfort Zone Investing: Road signs, good and bad, to navigate the market

Unlike Commissioner Gordon who can send out the Bat signal to call his helpmate against crime, there is nothing investors can do to summon aid in times of stress. They have to go it alone. But they can be armed with intelligence that helps. Here are few of the most prominent data points that will make a difference for all stocks, a macro perspective that should make navigating the stock market highway a little easier.

However, taken on a one-time basis, these aren't going to solve the mystery that is the market. Rather, data has to show a trend before it can be used. Even then, a trend stops and another begins. So even though the trend can be your friend, it can just as easily turn and become your enemy. As they used to say on Hill Street Blues: Be careful out there.

Continue reading Comfort Zone Investing: Road signs, good and bad, to navigate the market

Congress approves $2 billion 'cash for clunkers' renewal

Late Thursday night Congress approved another $2 billion for the "cash for clunkers" program.

On the Democratic side, Senator Debbie Stabenow of Michigan said: "The reality is this is a program that has been working. Consumers believe it's working. People who make steel and aluminum and advertisers -- and everyone who's involved in the larger economic impact of the auto industry -- believe it is working."

On the Republican side, Senator Judd Gregg of New Hampshire said: "What we are doing is creating debt -- The bill to pay for those cars is going to come due on our children and grandchildren."

Continue reading Congress approves $2 billion 'cash for clunkers' renewal

General Motors shares sink below the century mark

Shares of General Motors Corporation (NYSE: GM) have fallen more than 30% in trading today on reports that the company's bankruptcy filing will come on June 1st. They're currently trading around 75 cents per share -- their lowest point in more than 75 years.

The interesting thing is that they're trading as high as they are. To the people who purchased the more than 200 million shares that have changed hands today: The market cap of General Motors currently values the company's equity at $470 million when the equity is about to be made worthless with a bankruptcy filing. If this were any company other than GM, investigative reporters would be calling it the most overvalued, over-hyped company on the NYSE.

Continue reading General Motors shares sink below the century mark

Detroit dealer cuts: Not deep enough to get Japanese parity

There's a great post on the lean manufacturing blog Evolving Excellence about the auto industry and what it might really take to fix it. Bottom line -- Evolving Excellence says more dealer cuts needed so General Motors Corporation (NYS: GM) and Ford Motor Company (NYS: F) will have to take more inventory write downs and buyout more dealers. Even with these reduced dealer levels, the U.S. automakers still only sell roughly one-half as many cars per dealer as their Japanese counterparts.

Continue reading Detroit dealer cuts: Not deep enough to get Japanese parity

Toyota posts first annual loss in 59 years

Toyota 2009 LossGiving a clear indication of just how low demand for new autos has fallen, the world's largest car maker, Toyota (NYSE: TM) posted its first annual loss in 59 years this morning.

We all know that the auto industry is in major trouble. We have America's big three all fighting for their lives, and Chrysler has already been forced to file Chapter 11 bankruptcy.

Continue reading Toyota posts first annual loss in 59 years

It's official, Chrysler files for Chapter 11

Chrysler Files Chapter 11For months we have been questioning the fate of America's big 3 automakers, and today one of those 3, Chrysler LLC, made it official and filed for Chapter 11 bankruptcy protection.

While no one likes to see a company go bankrupt, in this case, the writing has been on the wall for some time now, and there are plenty of reasons to think that filing Chapter 11 is the best thing for the ailing automaker.

Continue reading It's official, Chrysler files for Chapter 11

Ford is driving a positive message

If less bad news is good news than Ford Motors Co. (NYSE: F) delivered that today. Early this morning, Ford's earnings report revealed better than expected numbers, albeit another loss. Ford lost $1.4 billion in the first quarter, but it burned through less money.

Analysts expected a loss of $1.23 per share, and were positively surprised when the Detroit automaker said it lost, excluding special items such as gains from the company's debt restructuring, 75 cents per share.

The stock closed yesterday at $4.28 but is moving up over 20%, getting a jump on the market in early trading.

Continue reading Ford is driving a positive message

Ford drives home weak January sales

Struggling auto maker Ford Motor (NYSE: F) announced its January sales figures today, and as you may have guessed, they weren't pretty.

During the month, the Dearborn, MI. auto maker says it sold 93,060 vehicles in the U.S. Compared with the 155,832 vehicles sold during January of 2008, we are talking about a massive 40% year over year decline. Definitely not the way the company would have liked to kick off the new year.

Continue reading Ford drives home weak January sales

Trouble at Toyota (TM) grows

Toyota (NYSE:TM) is cutting production capacity as fast as it can. The US is not the only place where its sales are down. In its native country the recession is so bad that car sales could hardly get worse.

As Toyota increased the number of places where it could build cars in a push to become the world's largest car company, the quality of its products started to fall. It was much harder to make sure vehicles were "defect free" when manufacturing was done all over the world and not just in Japan. In the US, quality measurements like JD Power's surveys of vehicle defects started to rank some car firms above Toyota after it had been at the top of the list for years.

Getting overextended has cost Toyota in overblown expenses and the first loss in the company's history. Toyota would probably love to have fewer of the production facilities it built.

Just as Toyota is pulling back, the effects of its expansion are hitting it harder. In China, according to Reuters, "Toyota Motor Corp is recalling 121,930 cars in China to fix a problem that could result in loss of steering control."

Toyota now faces two major problems, which may be one of the reasons it is putting in a new president. Expansion that did not foresee the huge drop in vehicle sales is costing the firm money and its most valuable asset -- its reputation.

Douglas A. McIntyre is an editor at 247wallst.com.

November auto sales down on economy and bankruptcy concerns: J.D. Power

Tom Libby with J.D. Power and Associates indicated Monday that November automobile sales in the U.S. will probably fall sharply due to the sagging economy and the state of all three U.S. automakers (possible bankruptcies or other maladies). In fact, the CEOs of the big three are on Capitol Hill today to try again for a $25 billion aid package lest they fail and fall hard.

But the November sales hit won't just be affecting the three U.S.-based automakers. The Japanese automakers are also set to see a sales shortfall due to tighter credit standards and lower consumer confidence in the economy. Libby indicated that sales at all the major automakers would fall at least 10% in November. During December and the end of the model year, expect to see the best bargains yet if you're planning an auto purchase.

Bloomberg News' survey of 26 analysts and economists also indicated that a seasonally adjusted sales rate of just 11 million automobiles were sold in November, down a full 32% from the same month in November when gas prices were much higher but the perception of the U.S. economy was not in the toilet yet. Have you bought a car -- any car -- recently? What kind of deal or incentive did the exasperated dealer give you to move anything out of inventory? Let me know in comments below.

Car Biz: Dark days in Detroit and beyond

This is part of a weekly series about the car business. The auto industry plays an important role in the global economy, and record-high oil prices and a global slowdown have contributed to a crisis in the sector. This column will highlight some of the interesting stories that emerge as that crisis plays out.

September car sales reports are due this week, and no one in the auto industry is looking forward to the monthly numbers, especially no one in Detroit.

Expectations are that car sales will be lower once again. According to analysts quoted at Bloomberg, sales at General Motors (NYSE: GM) and Ford (NYSE: F) will be down over 20%, while sales at Chrysler will be down over 30% from last year. Japanese producers also are expected to see lower sales, with the Japanese Big Three Toyota (NYSE:TM), Honda (NYSE: HMC) and Nissan (NASDAQ: NSANY) all down in the 20% range.

The industry is sliding down toward the magic number of one million cars sold in the U.S. for the month. The last time fewer than a million cars were sold in a month was February 1993.

Continue reading Car Biz: Dark days in Detroit and beyond

General Motors to continue employee pricing

General Motors Corp. (NYSE: GM) will offer customers wanting to buy its cars the same discounts as employees for another four weeks, according to Bloomberg News.

The incentives, on most 2008 and some 2009 models, were to have expired today but, according to Bloomberg, "GM will continue the deals through the end of the month because the initial two-week offer boosted sales."

Of course, this is great news for consumers, particularly the few who are confident enough in their economic circumstances to be in the market for a new car. Maybe it will encourage people leaning toward a Honda (NYSE: HMC) or some other foreign automaker to give GM a second look or even a third one. Chances are, though, it won't do much to help.

As my colleague Michael Rainey
noted earlier, imports accounted for 68% of all passenger car sales in the U.S., a new low for the Big Three. These are the vehicles that consumers stung by high gas prices are most interested in purchasing. Good luck in trading in your gas-guzzling SUV for a fuel-efficient hybrid. Many dealers are reportedly no longer interested in the big vehicles because their trade-in value has plummeted.

Continue reading General Motors to continue employee pricing

Rich people and Maserati ask, what economic slowdown?

As most of us struggle with surging gas prices, food costs and the possibility of losing our jobs, it's good to know that one little niche of people are oblivious to the current economic environment, and continue on with business as usual.

Sales of Fiat's Maserati brand are up 16% this year, as the rich continue to buy the $115,000 car. Add on that the Maserati gets a whopping 13 miles per gallon in the city and 19 on the highway.

Maserati's are being sought after by buyers wanting something better than your typical Mercedes-Benz, yet more affordable than Italian competitors Ferrari and Lamborghini. Nice to know that even these buyers are impacted by sticker shock!

According to an article in Bloomberg, Wes Brown who is an automotive analyst commented: "If you've got money, you want people to know you've got money, and people want to find something that not everybody has,'' Brown said. "They are saying, `I don't want a BMW or Mercedes, which you can see on every corner.'"

We all know that problem! Who can afford to buy a Maserati? The company says that the typical buyer is a 54-year-old male with household income of $750,000.

For those of you who decided to leave your car at home and take the bus in order to save a couple of bucks, you'll be glad to know that by freeing up the road, that new Maserati owner will have less traffic to deal with and be able to take the car up to its top speed of 177 miles her hour.

Who cares if gas is over $4 a gallon?

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 7/10/08.

GM gets to cut next

GM (NYSE: GM) is about to join Ford (NYSE: F) in a series of job cuts. Rising gas prices and hard economic times are pushing domestic car sales down. According to The Wall Street Journal, the company's CEO, Rick Wagoner, "will announce his new restructuring measures at the annual shareholder meeting on June 3."

The plans raise an important question at both Ford and GM. Have they reached the point where further cuts will ruin their capacity to manage growth in the US market when the downturn is over? If the companies end up with only a skeleton crew of executives and white collar workers that could be an issue.

More troubling is the issue of why the cuts were not made much earlier. If an employee is expendable now, why wasn't he expendable last year? Did GM carry too many people for the last several quarters?

Optimism got the better of GM, and its did not cut as far as it might have. Now, it gets to pay the price for thinking things might get better.

Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 letter.

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Last updated: November 10, 2009: 01:32 AM

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