Morning Commentary
Monday was a historical session. The action on the surface felt a little mundane, and that’s why we must go a little deeper.
Yesterday was all about the auto sector from Ferrari (RACE) to Tesla (TSLA) down to the wheels. In fact, one of the biggest winners of the session was Superior Industries (SUP), which rallied 25% on financial results.
The company makes amazing aluminum wheels that were once in vogue big time as an aftermarket upgrade.
(I had great rims back in the day, but the rough and tumbled streets of New York shredded them badly. After replacing a few at a hefty price, I could have simply bought a new car. However, I decided having a cool whip in New York was dumb unless your album sales depended on it. I bought a Jeep instead to deal with the potholes.)
I’m not sure how much the auto parts names have on the upside, but for investors seeking extremely oversold stocks, these names are attractive:
Auto Parts Suppliers |
Close |
One-year High |
SUP |
$3.13 |
$10.14 |
AXL |
$11.05 |
$17.20 |
TEN |
$15.57 |
$37.27 |
The auto industry got a boost from new cars in Germany, which has shifted into higher gear in its efforts to get more drivers in electric vehicles. With even greater financial incentives, Germany plans to have 10,000,000 electric vehicles on the road by 2030.
Autos up to €40,000 sticker prices:
Autos over €40,000 sticker prices:
Also, Germany will invest €3.5 billion in the buildout of charging stations.
Governments around the world are going to make use by buying electric vehicles. If they can’t use financial inducements, it will only be a matter of time before more direct incentives take place, such as taxing combustion engines and making them illegal to drive in certain locales.
Of course, beaten-down stocks can’t lead markets higher, so there still has to be leadership from blue-chip names and big tech. Semis remain hot, which means latecomers to the rally won’t be able to find “cheap” stocks, and we could see the kind of valuation expansion that triggers excitement and urgency.
Portfolio Approach
Today’s Session
The market has a bid (indicating higher) in part to the stories that the United States and China are moving closer to a trade deal. The stories and numbers vary from Financial Times, Bloomberg and Global Times, but the theme is the same. The United States is ready to roll back some tariffs, and China is ready to do more on agriculture and intellectual property.
Of course, the markets(Dow, S&P 500 and Nasdaq) are at all-time highs amid the trade war. Investors should know that what’s most important is the performance of individual companies, and they are doing well because of the mighty American consumer who is empowered by a surging economy.
The financial media hates the trade war and has worked tirelessly to paint the wrong picture of it while mitigating any good or great economic data.
It’s true, the rally could get stronger with a trade deal, but great companies are powering this market higher and that is the fundamental reason to be in the stock market.
Let the media, algorithms and people with political hatred as the main motivators of their lives use China for all the moves in the market (yet can’t explain why we are at an all time high). If you are in the stock market to create wealth, then focus on the fundamentals.
Tweet |
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7/8/2025 9:55 AM | MORE SUMMER BLAHS THAN FEAR OF MYANMAR'S TARIFF |
7/7/2025 1:27 PM | Trade Talks and Profit Taking |
7/7/2025 9:51 AM | LOVING MOOD |
7/3/2025 9:45 AM | NICE & STEADY AS SEMIS CONTINUE TO CHIP IN |
7/2/2025 1:44 PM | Materials' Strength Continues |
7/2/2025 9:38 AM | BARNBURNER |
7/1/2025 1:29 PM | Rotation |
7/1/2025 9:45 AM | FEAR OF MISSING OUT IS CREEPING IN |
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6/30/2025 9:54 AM | SUMMER RALLY STARTS |
6/27/2025 1:35 PM | Reaching New Heights |
6/27/2025 9:39 AM | THERE'S MORE! |
6/26/2025 1:10 PM | S&P Approaches Record |
6/26/2025 9:51 AM | CHIPS MOMENTUM CONTINUES |
6/25/2025 1:42 PM | Tech Stocks Power Nasdaq 100 |
6/25/2025 9:47 AM | CLIMBING MOUNTAINS OF WORRY |
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