Thursday, September 5, 2013

The Second Recovery in US (excerpt)

US auto sales rose in August to a new cyclical high of 16.1 million units (saar), the best pace since November 2007. Domestic light truck sales are leading the auto industry’s recovery. This is the latest confirmation that our “Second Recovery” scenario for the US economy remains intact.

The simple thesis is that the delayed recoveries in auto and home sales built up plenty of pent-up demand, which is now boosting the economy. The recoveries in these two industries are self-reinforcing since the strength in light truck sales is partly attributable to more work in the construction industry.

Today's Morning Briefing: (1) Flat world exports put a lid on S&P 500 revenues during H1. (2) Global PMIs suggest better growth ahead. (3) Latest US data also looking up. (4) Auto sales confirm “Second Recovery” scenario. (5) Intermodal railcar loadings and trucking index show an economy on the move. (6) PMIs looking especially good in UK, euro zone, and US. (7) Looking OK in China. (8) Not so good in India and Brazil. (9) Focus on overweight-rated S&P 500 Transportation. (More for subscribers.)

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