Shares of Ford Motor Company (NYSE:F) were moving higher on Friday, amid a broad-based market rally following the release of better-than-expected May employment figures. The figures add to other signs that the economy might be starting to recover -- just in time for several important new-product launches from Ford.
As of 1:45 p.m. EDT, Ford's shares were up about 13.8% from Thursday's closing price.
Before the market opened on Friday, the U.S. Bureau of Labor Statistics reported that total confirmed payroll employment rose by 2.5 million in May and that the unemployment rate fell to 13.3%. Both figures were significantly better than expected, and taken together, they suggest that the worst of the coronavirus-induced recession might be in the past.
Auto investors shouldn't have too much trouble figuring out why that's good news for Ford. The Blue Oval's stock has been hammered this year, as investors feared that lost revenue from factory closures would put Ford in a deep financial hole. But while the economy is still in rough shape, current indications suggest that the disruption won't be as bad as investors had feared.
That's especially good news for automakers, as auto sales tend to jump early in economic recoveries. And it's good news for Ford in particular, because Ford has several new products on the way, including an all-new iteration of its huge-selling F-150 pickup by the end of this year and the much-anticipated Bronco SUV early in 2021.
Put another way, the company's new-product cycle might turn out to be especially well timed, driving some market-share growth later in the year and into 2021.
Autos are a complicated business, but there's a simple rule of thumb: New products drive profits. That's why investors' eyes will be on Ford on the evening of June 25, when the company takes the wraps off the new F-150 in an online event. As for the new Bronco, Ford confirmed this week that it'll be revealed in a separate online event next month.