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Why Did Fiat Chrysler Stock Rise in December?

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December performance

In this series, we looked at recent updates and stock performances for Tesla Motors (TSLA), General Motors (GM), and Ford (F). General Motors outperformed all of its direct peers in 2016 including Fiat Chrysler (FCAU). Fiat Chrysler stock ended the year on a flat note compared to General Motors’ 2.4% gains. In December 2016, Fiat Chrysler delivered outstanding returns of 19.1%—far better than General Motors’ 0.9% and the S&P 500 Index’s (SPY) 1.8% returns.

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Is there optimism?

Recent strength in the US dollar against the euro could boost Fiat Chrysler’s profitability from the US market. The Italian-American automaker reports its earnings in the euro. It’s important to note that the company generates a substantial amount of its revenue from US sales.

The surprising US presidential election results raised questions about US automakers’ future. During his presidential campaign, Donald Trump spoke against US automakers manufacturing vehicles in Mexico to minimize production costs and importing them back to the US for sale. Trump suggested heavy penalties on such imports. While the move could have a negative impact on US automakers, Fiat Chrysler, being a European auto giant, might not be impacted by changes in US trade agreements.

These factors could have helped Fiat Chrysler stock post huge gains of over 19% in December 2016.

What to expect this week?

On Friday, Fiat Chrysler settled at $9.12 with 0.9% gains for the week. In the previous week, the stock violated a key resistance level near $8.80 which should continue to act as an immediate support level. On the upside, the $9.40 level should act as a stiff resistance level.

Read Year-End Review: Is Rally in Fiat Chrysler Stock Justified? to learn more about key highlights of Fiat Chrysler in 2016 and its growth in the first three quarters of 2016.

Visit Market Realist’s Autos page for more industry updates.

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