Again, Wall Street's reaction to auto earnings defies logic

Your spouse is wealthy as hell, but nutty as a loon and virtually incomprehensible.So do you leave?Frankly, that ought to be the question auto executives ask this week when it comes to the stock market -- because man, this makes no damn sense.How else do you explain this market? You have another descriptor? I’m all ears.Consider this: General Motors beat analysts’ expectations so hard on Tuesday with its record earnings that -- if Mitt Romney were right and corporations were people -- GM would be in jail right now on charges of assault with intent to kill.Instead, GM’s stock price dove over 5 percent. So what exactly did GM investors want? A loss?The same day, Fiat Chrysler Automobiles delivers Q3 results that were good -- its North American profit margin hit 7.6 percent -- but FCA’s profits were still middling and the company still has way more debt than cash.FCA’s reward? A 12 percent jump in its share price. Why? Hell, why not? I can’t explain it otherwise. I got nothin’.When Wednesday rolled around, the most incomprehensible automotive stock of all flashed its goodies. Tesla delivered only the second quarterly profit in its young history as a public company.In comparison to GM, Tesla’s $22 million quarterly profit was a rounding error. Yet its overamped stock price -- Tesla’s stock symbol really should be ELVN to reflect the volume at which its fan-base listens to the company’s self-serving pronouncements -- shot up 6.4 percent before falling slightly back only into the stratosphere.Finally today, Ford technically beat analyst expectations with its much weaker third-quarter results. I say technically “beat,” but it was more of a limp-wristed accidental glove slap in rhetorical violence terms.Ford warned investors months ago that there was bad medicine on the way.When the relatively bitter pill arrived, investors still seemed surprised, sending Ford shares slightly lower, but nothing that would raise an eyebrow in an average day of trading.In this crowd? That’s a win.Auto executives seem to live and die by the whims of the market, maybe because so much of their own personal compensation is directly tied to their company’s share price. And the market remains the best way to satiate the industry’s unending Jones for a constant supply of smack, uh, cash.(Yes, the industry’s still a Capital Junkie. Your 2015 intervention didn’t work, Sergio. Time to try another 12-step program.)You can say that investors are simply trading on the future of these auto companies and not their immediate past performance, and you might be right. But I think there might be a simpler explanation, one that doesn’t rely on investors suddenly becoming savvy.That’s right: They’re crazy.

Again, Wall Street's reaction to auto earnings defies logic

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