How Auto Stocks Are Faring during Q1 Earnings Season

Broader market 

In the first quarter, the broader market recovered sharply after seeing the massive sell-off in the fourth quarter of 2018. In the quarter ending in March, the S&P 500 Index, the NASDAQ Composite Index, and the Dow Jones Industrial Average rose 13.1%, 16.5%, and 11.2% after losing 14.0%, 17.5%, and 10.8%, respectively, in the previous quarter. The possibility of no near-term interest rate hike and gradual progress in the US-China trade negotiations kept investors optimistic in the first quarter.

How Auto Stocks Are Faring during Q1 Earnings Season

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Auto stocks in 2019

So far in 2019, the two largest US automakers have outperformed the broader market. As of April 25, General Motors (GM) and Ford (F) have risen 16.9% and 22.9% YTD (year-to-date), respectively. The S&P 500 Index has gained 16.7%.

During the same period, Fiat Chrysler Automobiles (FCAU), Ferrari (RACE), Toyota (TM), Honda (HMC), and Harley-Davidson (HOG) have risen 6.3%, 36.3%, 6.1%, 5.0%, and 6.9%, respectively. In contrast, Tesla (TSLA) have lost ~25.6% YTD.

First-quarter earnings season

The auto industry’s first-quarter earnings season started this week with Harley-Davidson’s first-quarter report on April 23. Tesla and Ford announced their first-quarter results on April 24 and 25, respectively.

General Motors and Fiat Chrysler Automobiles are scheduled to release their first-quarter earnings report on April 30 and May 3, respectively.

While most of the auto stocks are still trading on a positive note on a month-to-date basis, nearly all of them have erased some of their gains in the last week.