United States equities are on the slide Tuesday as traders react to reports President Donald Trump is considering a payroll tax cut as a way to juice the economy. The New York Times added that a reversal of trade tariffs against China and other nations was another possible option. The White House has downplayed both rumors, leaving a feeling of disappointment on Wall Street.
One of the areas being hardest hit is the automotive sector, with inventories bloated, buyers balking and higher interest rates weighing on affordability. The result is that prices are starting to fall, production is likely to be cut and profitability will come under pressure.
No surprise then that these four auto stocks are suffering as a result. They should be sold now.
Auto Stocks to Sell: Ford (F)
Ford (NYSE:F) shares are threatening to break down further away from their 200-day moving average. Already down more than 13% from their double-top highs, watch for a return to the January-March trading range near $8.20 which would be worth a loss of nearly 10% from here.
The company will next report results on Oct. 23 after the close. Analysts are looking for earnings of 29 cents per share on revenues of $35.3 billion. When the company last reported on July 24, earnings of 28 cents missed estimates by 3 cents on a 0.4% rise in revenues.
General Motors (GM)
General Motors (NYSE:GM) shares have also fallen just below their 200-day moving average, setting up a test of the early June low near the $33 per share level. This line of demarcation has been toyed with multiple times since the stock topped out in late 2017. Management is putting a lot of hope in its trucks business, which is fiercely competitive.
The company will next report results on Oct. 29 before the bell. Analysts are looking for earnings of $1.88 per share on revenues of $36.6 billion. When the company last reported on Aug. 1, earnings of $1.64 beat estimates by 19 cents on a 1.9% decline in revenues.
Amid what seems like daily reports that Tesla (NASDAQ:TSLA) is catching on fire (see here and here), shares of the company have dropped back below their 50-day moving average and are threatening a decline back to its early June low near $180. Such a drop would be worth a loss of more than 20% from here.
The company will next report results on Oct. 23 after the close. Analysts are looking for a loss of 44 cents per share on revenues of $6.4 billion. When the company last reported on July 24, a loss of $1.12 missed estimates by 76 cents on a 58.7% rise in revenues.
Fiat Chrysler Automobiles (FCAU)
Fiat Chrysler Automobiles (NSYE:FCAU) shares have fallen down to test their recent lows — set back in December and in early March — trading well off of the highs set in early 2018. A breakdown here would put the mid-2017 lows in play, which would be worth a loss of more than 20% from here. The stock has been hit by the stalling of merger talks with Renault after the French government hardened their position.
The company will next report results on Oct. 31 before the bell. Analysts are looking for earnings of 94 cents per share on revenues of $31 billion. When the company last reported on July 31, earnings of 59 cents per share missed estimates by a penny.
As of this writing, William Roth did not hold any of the aforementioned securities.