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Economic News March 1

|Includes:Ford Motor Company (F), GM, JWN, M, SKS

Friday will be a no economic news day as a variety of economic reports for the week has already been released. And while most of the economic news reports released this week have been minor, together they can be a good indicator of the direction the US economy along with the stock market will head.

Thursday economic reports investors and traders alike should spend at least some time digesting includes the following:

Automotive Sales Rose. Despite soaring gasoline sales, auto sales were up in February with buyers buying smaller cars in particular. The two big winners were Volkswagen AG (OTCPK:VLKAY), which saw sales rise 42% thanks to their redesigned Passat midsize sedan) and privately held Chrysler, which saw sales rise 40% with the Ram pickup being its most popular model. Meanwhile, Ford Motor Company (NYSE:F) reported that US sales rose 14% led by the Focus small car, General Motors (NYSE:GM) reported a 1% rise led by its small cars (GM had offered big discounts in February 2010, skewing the results) and Toyota reported a 12% rise on demand for its fuel efficient vehicles.

It's been noted that the average car on US roads is now 10.8 years old - a record. Since credit availability is now improving and the Japanese automakers have (for the most part) recovered from the devastating earthquake last year, more cars and more buyers have entered the market.

Department Store Sales Were Up. Mild weather helped push up department store sales by 3.85 for February with sales at high-end or luxury stores posting strong rises. Specifically, Nordstrom (NYSE:JWN) announced that same store sales rose 10.2% (thanks to a decision to move a March shoe sale to February) and Saks (NYSE:SKS) saw sales surge 6.6% (apparently driven by women's apparel, handbags and men's accessories). Macy's (NYSE:M) also reported a 4.6% increase.

Construction Spending Slipped Slightly. A slight 0.1% decline in US construction spending was reported for January with the construction of factories, hotels and power plants all falling sharply while spending on residential construction rose 1.8% thanks to a big gain in single-family home building. However, the full construction spending figure was muddied by data revisions for both December and November.

Unemployment Claims Fell Slightly. The number of people seeking unemployment benefits fell slightly last week from 353,000 for the previous week to a seasonally adjusted 351,000 people. While this is being reported as the lowest figure in four years and a further sign that the job market is improving, at least 13 million people are still (officially) unemployed for an 8.3% unemployment rate. In other words, it will be years before the job market can be considered anything close to healthy.

So what do all of these economic reports and accompanied data mean for investors and traders? Probably not much - other than the fact that together they show a slow but tepid economic recovery that could still come grinding to a halt should the unexpected happen (e.g. a Eurozone default or breakup, a direct confrontation with Iran, another major natural disaster somewhere etc.)

Nevertheless, it would be a good idea to check on Next Candle stock forecasts for automotive and department store stocks before the market opens on Friday after investors and traders have had time to digest all of the above mentioned reports and any excitement in market sentiment has worn off.


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Stocks: F, M, GM, JWN, SKS