It looks like shareholders of the US automakers are in for a good year. Investors are carefully looking towards next week's release of the May sales data, which is actually expected to be near record levels.
"This is going to be one of the best months ever," explains Mainstay Capital Management chief investment strategist David Kudla.
Kudla explains that May sales are approaching $ 40 billion, which is extremely close to the $ 40.3 billion record set in August 2014.
Indeed, then, this could be a great sign that the slumping US auto industry is poised to rebound.
Edmunds.com senior analyst Jessica Caldwell notes that the timing of the Memorial Day holiday also managed to bump up sales in the month of May.
Caldwell says, "Because there was a full week of May after the holiday weekend, shoppers had plenty of time to take advantage of the deals being widely communicated in dealer and automaker marketing messages."
Estimated sales numbers in May is approaching 1.6 million new cars and trucks, reaching a seasonally-adjusted annual rate of approximately 17.4 million vehicles, according to online car-buying platform Edmunds.com
And, it seems that credit for auto loans has been expanding, which is one of the best signs for the auto sector, according to BMO Private Bank chief investment officer Jack Albin.
Albin goes on to say, "The strong dollar created a headwind, and GM had some high-profile product recalls, but given current trends, I would expect sales growth to continue."
Finally, experts state, "Good data would make the Fed raise rates sooner. I believe the stock market would sell off (on strong auto data) because it would shorten that timeline."
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