CNBC Takes Closer Look At Auto Stocks Amid Trade War Concerns.
Byline: Jayson Derrick
China is the world's largest market for cars, and a slowdown in its domestic economy presents a potential challenge for U.S. automakers who sell to Chinese consumers, CNBC's Phil LeBeau said Monday on "Squawk Box."
Whenever global trade tensions escalate, shares of automaker General Motors Company (NYSE:GM) come under pressure, since China is its biggest market, LeBeau said.
Smaller auto companies are not immune from China-related concerns, including Tesla Inc (NASDAQ: TSLA), which is reportedly raising prices in China as soon as Friday -- earlier than expected, according to CNBC.
A new U.S.-Japan trade deal that was discussed during the G-7 summit doesn't appear to remove tariffs on Japan-based automakers like Toyota Motor Corp (NYSE:TM) and Honda Motor Co Ltd (NYSE:HMC), LeBeau said.
A Diverse Auto Play
The auto maker is plagued with "too much uncertainty," but investors looking for some form of exposure may want to consider the iShares S&P Global Consumer Dis Sec (NYSE:RXI) ETF, Blue Line Futures President Bill Baruch said on a recent CNBC "Trading Nation" segment.
The ETF's two biggest holdings are Amazon.com, Inc. (NASDAQ: AMZN) and Mcdonald's Corp (NYSE:MCD), followed by global automaker Toyota, Baruch said.
The ETF offers access to the global automarket while also diversifying "without idiosyncratic risk," he said.
The Consumer Discretionary ETF shows a "good support line" at the $112 level and could be seen as a "good place" to get "some exposure in autos," Baruch said.
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|Date:||Aug 26, 2019|
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