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Saturday, May 8, 2021
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Fed Ramps Up Auto Bond Buying with Industry in Recovery

#Fed #bonds #autoindustry #recovery

$DIA $SPY $QQQ $RUTX $VXX

The auto industry is a significant job and capital source for the national and local economies. The automotive sector has rewarded many business owners and employees with prosperity.

The Fed’s entry into the credit market has benefitted auto companies the most, supporting an industry that has borrowed its way through the medical emergency chaos and now is show signs of recovery.

The Fed can only buy short-dated debt of companies that mostly employ Americans, making notes linked to car manufacturers prime candidates. The Fed bought another $224-M of debt tied to auto companies since its last update on 10 July, the most of any sector.

That debt is now the 2nd-heaviest exposure overall, according to a CreditSights analysis of Fed data released Monday.

Among the Fed’s biggest holdings are the US finance arms of German manufacturers Daimler AG and Volkswagen AG, Japan’s Toyota Motor Co. and Ford Motor Co.

When asked for comment, the New York Fed referred us to its purchasing methodology, while BlackRock Inc., its investment adviser for the transactions, declined to comment.

Tuesday, the major US stock market indexes finished at: DJIA -104.53 at 27686.91, NAS Comp -185.53 at 10782.89, S&P 500 -26.78 at 3333.69

Volume: Trade on the NYSE came in at 956-M/shares exchanged

HeffX-LTN’s overall technical outlook for the major US stock market indexes is Bullish with a Very Bullish bias.

  • NAS Comp +20.2% YTD
  • S&P 500 +3.2% YTD
  • DJIA -3.0% YTD
  • Russell 2000 -5.6% YTD

Looking Ahead: Investors will receive the Consumer Price Index for July, the Treasury Budget for July, and the weekly MBA Mortgage Applications Index Wednesday.

Have a healthy day, Keep the Faith!

Paul Ebeling
Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he is the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.   

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