Autos Picking Up Speed

The American auto industry has been making a very nice comeback in recent years. In 2012, the U.S. produced 10.3 million vehicles, which was an increase of 19.4 percent over the previous year. We're far from the world leader in that category, though: China produced 19.2 million vehicles last year.

The next big automaker, though, might be Mexico. Mexico manufactured just 3.0 million vehicles last year, placing it eighth in the world, but that is expected to grow strongly in the next three years. Germany and South Korea, meanwhile, seem to be on the decline, with their production numbers dropping by 10.5 percent and 2.1 percent respectively last year.

The biggest gainer last year: Thailand. Thailand produced 2.8 million automotive vehicles in 2012, which constitutes a staggering 90.9 percent increase over 2011.

Earnings Preview

Second quarter earnings season kicks off  today, with Alcoa being the first major company to report its earnings, as it traditionally is each quarter. According to research compiled by S&P Capital IQ, revenues for the S&P 500 are expected to be down slightly from a year ago, with an overall decrease of 0.3 percent.

First quarter revenue for the S&P 500 had been up 1.1 percent, and the fourth quarter of 2012 had shown  revenue growth of 4.7 percent. So this quarter's decline, if the forecasts are accurate, would be a clear step down from recent quarters.

There is a bright side to this though: S&P Capital IQ does predict that earnings per share this quarter for the S&P 500 are likely to be up by 2.9 percent over the year-earlier period. Earnings growth was 2.1 percent in the first quarter, so we could  very well exceed that, which would be good for stock prices.

Today's Jobs Report

The employment report for June, which came out this morning, presented a more encouraging figure than we'd seen in recent months. The Bureau of Labor Statistics reported that the economy added 195,000 jobs in June, which was up from an average of 155,000 jobs over the previous three months, and up slightly from the 182,000 over the previous 12 months. The unemployment rate was unchanged at 7.6 percent.

Investors will be watching these figures even more closely now, ever since Fed chairman Ben Bernanke indicated he would taper off the Fed's bond purchases once the unemployment rate reached 7.0 percent. Although that figure didn't budge in June, the strong number of jobs added provides more fuel for those who expect it to reach 7.0 by year's end.

The biggest gainer among the industry sectors in June was the leisure and hospitality category, which added 75,000 jobs. The BLS also revised upward the jobs numbers from the previous two months: May went from 175,000 to 195,000, and April grew markedly from 149,000 to 199,000.

Thoughts for Independence Day

In the truest sense, freedom cannot be bestowed; it must be achieved. ~Franklin D. Roosevelt

America was not built on fear. America was built on courage, on imagination, and an unbeatable determination to do the job at hand. ~Harry Truman

America is much more than a geographical fact. It is a political and moral fact – the first community in which men set out in principle to institutionalize freedom, responsible government, and human equality. ~Adlai Stevenson

Welcome to America

This is obviously a big week for vacation travel, and one thing we can all be proud of as Americans is how many people come from around the world to visit this great nation. All those tourists are a real boon to our economy, too.

The nation sending the most tourists to America is of course Canada, which spent $26.1 billion in tourist dollars here last year. But other nations make strong contributions as well. Following Canada, these are the nations with the most visitor spending in the U.S. in 2012:

Japan: $16.6 billion
Great Britain: $13.0 billion
Mexico: $10.1 billion
Brazil: $9.3 billion
China: $9.2 billion
Germany: $7.0 billion
Australia: $5.5 billion
France: $5.3 billion
India: $4.9 billion

2013's Strongest Sector

With half of 2013 in the books, the strongest sector in the stock markets has been Consumer Discretionary stocks, which include such companies as Starbucks and Home Depot. The S&P 500's Consumer Discretionary sector has returned 19.72 percent so far this year. That's just an inch ahead of the second-place sector, Health Care, which came in at 19.58 percent.

All ten of the S&P's sectors have been positive this year, which shows how broad-based this rally has been. Here are the returns for the other eight S&P sectors so far in 2013:

Financials, up 19.02 percent
Consumer Staples, up 14.42 percent
Industrials, up 13.53 percent
Energy, up 9.16 percent
Telecommunication Services, up 7.99 percent
Utilities, up 6.32 percent
Information Technology, up 6.19 percent
Materials, up 2.45 percent

A Strong First Half

Friday marked the close of the first half of 2013, and it was certainly a happy six months for the stock market. The S&P 500 returned nearly 13 percent, giving that index its best first-half returns since 1998, when the dot-com mania was just getting started.

In addition to the good news for the first half, this performance also bodes well for the second half. Since 1946, the S&P 500 index has risen at least 10 percent 23 times in the first six months of the year, according to data from S&P Dow Jones Indices. During those 23 years, the market also rose the second half of the year 19 times. In eleven of those years, the S&P 500 rose at least 10 percent over the second half of the year.

Three of the stocks in the S&P managed the difficult feat of doubling in value over the course of the past six months. They are:

• Best Buy, up 134 percent
• Netflix, up 128 percent
• Micron Technology, up 126 percent