Michigan's publicly-traded companies are riding the wave of a recent Wall Street rally, driven by strong corporate earnings and promising economic data.
In fact, public companies in the state are outperforming the market, shows an index tracked by David Sowerby, portfolio manager at Bloomfield Hills-based investment firm Ancora. According to an index of some 80 publicly-traded companies in the state, the average Michigan stock is up 18% year-to-date — compared to 11% for the S&P 500.
And looking back to the end of September, he said, the average Michigan stock is up by about 50%.
Sowerby attributes the outsize performance to the large number of cyclical companies — or, businesses that are sensitive to the economic cycle — based in Michigan. Vehicle manufacturers are a prime example of cyclical stocks, and the automotive sector is one of the backbones of Michigan's economy, with three major automakers and a slew of parts suppliers. The performance of the financial sector, too, is closely tied to the economy overall.