Ford and General Motors are two of the most powerful automotive companies in the United States, yet for some reason, both of these companies have been struggling on Wall Street. While it hasn’t necessarily been a shock, given the fact that we are still fairly close in distance from the recession that nearly collapsed GM, both companies have seen improvements in their stock overall. If there were an exception to that rule, it would most certainly be GM, who has experienced a challenged year due to a high volume of recalls.
That being said though, there seems to be new reason to get excited about Ford and GM heading into this week, and the next several weeks on Wall Street. Right now, it’s all about sales. In April, strategists and reports suggested that sales were down and they lived up to such estimates. Things remained relatively flat and it didn’t appear as though any automaker was going to do much in the month of May on Wall Street as result.
That’s changing now as analysts believe that a strong sales month is coming up. Jessica Caldwell, of Edmunds.com pointed out that, “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.” However, it wasn’t just a holiday weekend that will have done major work for the auto industry.
David Kudla, chief investment strategist of Mainstay Capital Management pointed out that, “This is going to be one of the best months ever.” He believes that this will wind up going down as one of the best months in the automotive industry as a whole, for sales.
Jack Ablin of BMO Private Bank in Chicago pointed out that, “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.” The speculation right now is that these companies are undervalued on Wall Street and that in the coming weeks and months, things are going to really start turning around for their shares.
That means it could be the right time for the automotive industry to really start turning around. While there isn’t any rock solid data on that in this moment, it would appear as though there is a definite chance that a change is in the winds. This week will be very telling in terms of actually identifying who the big players will be in the automotive space, as sales figures are realized.