FINAL ASSEMBLY
In doubt about the Dow? Just watch auto sales
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Where is the stock market going? Look no further than car sales.
Jesse Toprak, analyst for TrueCar.com, observes that since January 2007 the Dow Jones Industrial Average and annual U.S. light-vehicle sales have marched hand in hand.
He sees the Dow having a stronger correlation with auto sales than with either consumer confidence or the employment rate. It comes down to this: Consumers are more comfortable buying autos when they see the stock market rising, he says.
Let's get out Toprak's crystal ball. Boosted by a strong January, U.S. sales in 2013 will reach 15.5 million light vehicles, he predicts, up from 14.5 million last year.
So he says the Dow, which last week was a little below 14,000, should be at 14,500 to 15,000 by year end.
| Hand in hand | ||
| U.S. auto sales and the Dow Jones Industrial Average have moved together since 2009. | ||
| Dow at year end | Auto sales, thousands | |
| 2007 | 13,265 | 16,154 |
| 2008 | 8,776 | 13,246 |
| 2009 | 10,428 | 10,431 |
| 2010 | 11,578 | 11,590 |
| 2011 | 12,218 | 12,779 |
| 2012 | 13,105 | 14,492 |
| 2013 | 14,500-15,000* | 15,500* |
| *TrueCar.com forecast, analyst Jesse Toprak | ||
