Fidelity Select Fundranker

Fundranker Blog—Select Automotive Shines

Select Automotive Shines

Select Automotive is up 18.8% for July 1 though 24, 38.9% for May 1 through July 24 (nearly three months), and 131.8% for February 2 through July 24 (nearly six months). It is only down 5.6% for August 1, 2008, through July 24 (almost 12 months). Given that two of the three major American automakers were bailed out by the federal government earlier this year and also made speedy trips into and out of bankruptcy in the last few months, this incredible runup indicates a lot of investor confidence in the automotive sector. Investors must like the new direction American automakers are taking, and they must think that consumers are willing, able, and starting to buy cars again.

The American automotive industry is hugely intertwined in the American economy as well as the world economy. Consumers buy cars all over the world, automakers hire lots of people to build them, their suppliers hire lots of people to build various parts for the cars, and all those workers go out and spend the money they earn. It’s a self-feeding circle of economic improvement that can’t help but bode well for the economy.

Posted 7/24/09 11:01pm ET in Economy