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What Drove Optimism for Mainstream Automakers in September 2017?

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What Drove Optimism for Mainstream Automakers in September 2017? PART 1 OF 8

What Made 3Q17 Positive for Mainstream Automakers?

Auto stocks

Last week, which ended September 29, 2017, the broader market continued to trade on a mixed note. The S&P 500 benchmark (SPY) ended the week with a minor rise of ~0.70%. The stocks of US automakers General Motors (GM) and Ford Motor (F) outperformed the broader market, rising 2.4% and 1.1%, respectively.

What Made 3Q17 Positive for Mainstream Automakers?

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In 3Q17, mainstream automakers outperformed the market. In the third quarter, GM, Ford, and Fiat Chrysler (FCAU) rose 15.6%, 7.0%, and 69.2%, respectively.

In contrast, popular electric carmaker Tesla (TSLA) turned negative and fell 5.7% in 3Q17 against 4.0% gains for the S&P 500 Index.

Did high expectations drive auto stocks in 3Q17?

In August, US auto sales remained weak. According to Autodata, sales that month fell 1.9% on a year-over-year basis. Lower vehicle sales have ignited a debate about a downturn in the US auto sector.

In areas affected by Hurricane Harvey, US vehicle sales have been weak. However, many experts expect auto sales to get a boost going forward as soon as people from hurricane-affected areas begin to look for replacement options for their damaged vehicles.

Expectations for a possible increase in US auto sales in the near term could be one of the reasons for the recent optimism in auto stocks.

Series overview

In this series, we’ll see how mainstream auto companies traded in the week ended September 29, 2017. We’ll explore key updates for the auto industry in the last few weeks and take a look at some key technical levels for auto stocks.

Let’s start by looking at GM’s recent stock movement.

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