Auto dealers benefited from the Obama administration’s incentive plan, which ended this month, while retailers such as Kohl’s Corp. and J.C. Penney Co. struggled to lure customers shaken by mounting job losses. Spending gains aren’t likely to be sustained as incomes stagnate and households pay down debt, casting doubt on the strength of the economic recovery.
Despite the distortion of the auto subsidy spike, investors have still bid up stock prices at the behest of Wall Street. This market is levitating on the basis of pulled-forward automotive purchases that weaken both future car sales and current retail spending. Investors, be warned . . . you're betting on nothing.