What Happened to Auto Stocks Last Week?



Auto stocks

Last week (ended November 10), the broader market traded on a mixed note, and the S&P 500 (SPY) witnessed a minor 0.2% fall. Meanwhile, the stocks of automakers Ford Motor (F), Toyota Motor (TM), and Fiat Chrysler Automobiles (FCAU) underperformed the broader market, falling 2.8%, 4.8%, and 0.9%, respectively.

Investors’ concerns about a possible delay in the proposed corporate tax cut could be the key reason for the mixed and negative sentiments on Wall Street. Notably, General Motors (GM) gained 0.8%, while Tesla (TSLA) ended the week with a ~1% loss.

3Q17 earnings season

Japanese auto giant Toyota reported its fiscal 2Q18 (ended September 30, 2017) results last week. The company’s earnings rose 19%, while its revenues rose ~10%. TM also managed to expand its net profit margins to 6.4%, compared with 6.1% one year ago.

The majority of mainstream automakers have already reported their third quarter results over the past few weeks. Legacy auto companies (IYK) GM, Ford, and Fiat Chrysler reported YoY (year-over-year) rises in their earnings, while Tesla reported its biggest quarterly loss.

According to Autodata, October 2017 US auto sales fell 1.3% YoY after rising ~6.1% YoY in the previous month. Higher demand following hurricane-affected areas could be one of the key reasons for solid September US auto sales as people from these areas began looking for replacement options for their broken cars.

Series preview

In this series, we’ll discuss how mainstream auto companies traded in the week ended November 10. We’ll explore what key updates came in for the autos over the past few days and take a closer look at some key technical levels.

Continue to the next part (below) for a look at GM’s recent stock price movement.

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