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Two Ways: Cloudy Future for Global Auto Market


Strengthen your portfolio in good times and bad.

Cannibalizing Car Sales?

Demand for Toyota (TM) vehicles in Japan surged at some dealerships by as much as 50% on a monthly basis because of the country's own "Cash for Clunkers" program. But, according to Bloomberg, now that the 370 billion yen ($4 billion) program has come to an end, car dealerships are fearful of what's ahead.

Toyota spokesman Yuta Kaga said the global market is seeing a temporary boom in car sales. "For fiscal 2010, we can't forecast sales as economic and business environments are still unclear." But Goldman Sachs says auto sales next year may plunge 10% from 2009 estimates to 4.27 million vehicles in Japan and to 13 million in Western Europe.

For context on consumer spending, see Mish Shedlock's The Multigenerational Spending Collapse.

From the Bull Pen: For those who are looking for automaker exposure, consider Tata Motors (TTM). Using the "fat crayola" method, one can identify support near $11 which could provide one with an entry point. If and when.

From the Bear Cave: Bears playing Toyota to the downside are likely eyeing a back test of its 50-day moving average (currently at $81). A bounce to $84 to $85 could be another opportunity for a downside entry.

Quick Check Around the World

Asian trading closed with the Nikkei -0.27%, India 1.89%, Hang Seng 2.82%, Shanghai 0.58%, and Taiwan 0.68%.

Across the pond, we see the FTSE 0.90%, CAC 0.47%, DAX 0.79%

As of 8:15 a.m. EST, S&P Futures are trading +4.50 to 1006.00 and Nasdaq futures are +9.50 to 1613.50.

A Look at Commodities

Over in commodities, crude oil is +0.57 at 68.53 while gold is -6.20 at 991.50 this morning. Silver is -0.28 to 16.01 and copper +0.350 to 284.70.

The dollar index is -0.1200 to 78.4000.

On the Radar


08:30 Average Workweek 33.1 cons.
08:30 Hourly Earnings 0.1% cons.
08:30 Nonfarm Payrolls -225k cons.
08:30 Unemployment Rate 9.5% cons.

Happy Friday! Good luck and have a great three-day weekend!
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No positions in stocks mentioned.

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