Ford Can’t Make Its Cars Fast Enough

Despite the weaker-than-expected jobs report on Friday, the S&P 500 managed to close higher and make another all-time high close. The futures so far indicate a flat open for the major indexes. Stocks in Europe rose for the sixth day in a row.

There’s been some interesting news in the bond market. Interestingly, it was exactly two years ago today that S&P made its foolish decision to cut the credit rating of the United States.

But what’s caught my attention recently is that the spread between yields on the five- and ten-year Treasuries is the widest it’s been in two years. If the dollar were falling this would probably be troublesome, but with a stronger dollar the wider spread probably suggests that the market is expecting stronger growth in the U.S.

Think of it this way: Treasuries will suffer as investors finally start to go back into riskier asset classes. That’s only natural. Bloomberg notes that “the cost to insure against default is the lowest since 2009, the dollar has risen the most since 2008 and the S&P 500 Index reached a record on Aug. 2.”

fredgraph08052013

At TheStreet.com, Ted Reed notes that Toyota outsold Ford in the U.S. last month because Ford can’t build its cars fast enough:

In July, for the first time since March 2010, Toyota led Ford in U.S. auto sales, one more sign that Ford can’t make vehicles fast enough.

Ford has inventory shortages of the Fusion and the Escape, top sellers in the midsize sedan and utility segments, and plans to resolve them with production increases this fall. Until then, the automaker is losing an uncounted number of sales because it doesn’t have enough product.

In July, when U.S. light-vehicle sales rose 14%, Fusion sales fell 12% to 20,522 units and sales of Escape, the best-selling utility vehicle this year, rose just 3.6% to 22,343. During the month, Toyota — with light-vehicle sales in July of 193,394 — beat out Ford light-vehicle sales of 193,080.

Posted by on August 5th, 2013 at 8:11 am


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.