More good economic news continued the stock market rally this Thursday, with another 1% market gain built on the previous 2% gain, creating a net gain of over 300 points for the last two trading sessions. Double digit sales gains in the U.S. automobile industry helped to fuel the previous stock gains of 229 points. China also reported some big manufacturing increases which was good news because so many American firms do business with China, proving that the U.S. and China may be leading the way out of the global recession.
Ford, GM and Chrysler all cited double digit sales gains for November U.S. auto sales, which was terrific news and means that the controversial federal loan efforts helped GM and Chrysler to weather the worst days of the recession mostly intact. Both companies will also pay back the federal government loans at healthy interest rates up to 13%, earning the government billions in extra revenue as well.
Retail sales figures also are proving some new strength as well, which helped to further fuel Thursday’s strong Wall Street performance. Unfortunately, unemployment figures tend to lag behind the performance of the retail economy somewhat, so expect a longer recovery cycle in this critical consumer economy segment.