Height Capital Markets is keeping a close watch on the tariff news impacting the automobile industry, waiting in particular for confirmation from Beijing on the cut of the 40% tariff on U.S. imports (it was 25% in July).
The firm sees the Trump auto tariff claim giving the biggest benefit to Mercedes-Benz (OTCPK:DDAIF, OTCPK:DMLRY) and BMW (OTCPK:BMWYY) due to the sizable level of SUV shipments to China from the U.S., while Ford (NYSE:F) and General Motors (NYSE:GM) have a smaller benefit because they already produce locally in China through joint ventures. Tesla (NASDAQ:TSLA) is also a beneficiary since its China plant is seen as being at least two years away.
Investors seem to agree with the assessment, as the German auto stocks are outgaining their U.S. counterparts, including a 6.2% pop for BMW in Frankfurt.
Keep an eye on the auto supplier sector (DAN, BWA, MTOR, DLPH,GNTX, SMP, AXL, MPAA, ALV, MOD, DLPH, VC, THRM, WPRT, ADNT, APTV, TEN) sector which stands to benefit in the U.S., China and Europe if tariff anxiety cools off.
Premarket in the U.S. - GM +3.2% premarket, Ford +3.0%, TSLA +3.6%.
Related EFT: CARZ.
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