These 2 Economic Reports Will Move the Dow This Week

In a short week, economic data will potentially have an even bigger impact on the Dow Jones Industrials.

Jun 29, 2014 at 7:02PM

The Independence Day holiday will make this week a short one for investors following the Dow Jones Industrials (DJINDICES:^DJI), but that doesn't mean there'll be any less economic data for them to keep an eye on. In particular, one key economic report will play the biggest role in the direction of the Dow and the broader stock market this week, as investors will get the latest look on how employment fared in June. Yet investors in Ford (NYSE:F), General Motors (NYSE:GM), and other auto companies will want to watch closely at how auto sales fared last month, as they provide a key barometer to an important part of the U.S. economy. Let's take a closer look at what investors are expecting to see from these economic reports.

Source: Ford.

How will the automakers fare?
On Tuesday, the major automakers will release their sales figures for the month of June. Investors expect sales to drop slightly from May's annual rate of 16.8 million, with consensus figures looking for roughly 16.4 million total sales on an annualized basis. The head of sales at Chrysler Group predicted that Chrysler's June sales figures would be up from year-ago levels, but he had less encouraging views on the rest of the industry, projecting overall U.S. sales to come in flat to down 2%. For Ford, one concern will be whether sales of its F-Series pickup trucks continue to slide even as General Motors and Dodge models see stronger sales. As Ford anticipates the debut of its newly designed 2015 F-150, keeping sales of its older-model trucks will force the company to decide between volume and margins in order to get the best business result.

US Unemployment Rate Chart

US Unemployment Rate data by YCharts

In a compressed week, the June monthly employment report will come on Thursday rather than Friday, at the same time as weekly jobless claims data gets released. Economists expect the unemployment rate to hold steady at 6.3% while nonfarm payrolls rise by about 211,000, a small drop from the 217,000 jobs that the Bureau of Labor Statistics reported for May and consistent with the range we've seen over the past several years.

US Change in Nonfarm Payrolls Chart

US Change in Nonfarm Payrolls data by YCharts

Last month's job gains were notable as many reported how they finally brought the U.S. economy back to its pre-recession levels, having regained all the jobs reported lost between early 2008 and early 2010. But looking beyond the headline numbers, many investors will want to see evidence that efforts to fight long-term unemployment and chronic underemployment are making progress as well. All in all, at the current pace of gains, it could take years for the economy even to approach full capacity in the labor market, and employers will still have to struggle with finding potential workers with the skills they need.

Be ready for volatility
With the Dow Jones Industrials only trading for half a day on Thursday and being closed on Friday, traders will have to cram a lot of response to economic data into a short timeframe. Long-term investors should be ready for volatility and use it to take advantage of opportunities that could arise as a result.

Warren Buffett's worst auto-nightmare
A major technological shift is happening in the automotive industry. Most people are skeptical about its impact. Warren Buffett isn't one of them. He recently called it a "real threat" to one of his favorite businesses. An executive at Ford called the technology "fantastic." The beauty for investors is that there is an easy way to invest in this megatrend. Click here to access our exclusive report on this stock.

Dan Caplinger owns shares of Ford. The Motley Fool recommends Ford and General Motors and owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information