Detroit Big 3 Stocks Driving Higher

Fiat Chrysler stock is trading at record highs, while GM is pacing for its best day in months

Sep 1, 2017 at 2:46 PM
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U.S. stocks are trading higher this afternoon, with the Dow attempting to conquer the 22,000 mark for the first time in two weeks. Also trading higher after reporting August sales are Detroit's "Big Three" car stocks Ford Motor Company (NYSE:F)General Motors Company (NYSE:GM), and Fiat Chrysler Automobiles NV (NYSE:FCAU). Plus, investors expect that damage caused by Tropical Storm Harvey could boost car sales in the coming months. Here's a quick look at how the data is driving shares of F, GM, and FCAU.

Ford Motor Stock Boosted by Expected Post-Harvey Demand

Ford Motor stock is up 3.4% to trade at $11.40 -- set for its highest close in nearly five weeks -- after the August U.S. sales data showed a 15% increase in the company's F-series pickup truck sales, which was boosted by its introduction of the new 2018 Ford F-150 model. The car company's total sales for the month, however, declined 2.1% compared to a year prior, though some were expecting a steeper drop in the wake of Harvey-related dealer closures. Ranking among the most active by volume on the New York Stock Exchange (NYSE) today, F stock is poised to close above its 120-day moving average for the first time since late July.

As the No. 1 automaker in the Houston market, per IHS Markit, Ford plans to ship used cars to Houston dealers to meet the demand of thousands of residents whose cars were damaged during the storm. After Hurricane Katrina ravaged New Orleans in 2005, Mark LaNeve, Ford's sales chief in the U.S., said the company saw "a very dramatic snapback" in vehicle demand.

Ford option traders have had quite the bullish appetite. F's 10-day call/put volume ratio stands at 3.25 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and the NASDAQ OMX PHLX (PHLX) -- in the 91st percentile of its annual range -- indicating traders have bought to open more than three F calls for every F put. 

General Motors Pacing for Best Day in Months

Like Ford, General Motors plans to transport used cars to Houston in order to meet market demands and to reduce its inventories. Also joining Ford stock among the most active by volume on the NYSE is General Motors stock, last seen trading 3% higher at $37.65 -- on track for its biggest one-day percentage gain in nearly six months. Driving GM shares higher is the company's 7.5% increase in year-over-year August sales.

GM is now up roughly 8% year-to-date, and is nearing its annual high of $38.55, which it set on March 6. Still, just five of the 13 analysts rate GM a "buy" or better, and not one analyst suggests selling the stock. A flood of upgrades could lure even more buyers to General Motors' bandwagon.

Fiat Chrysler Stock Revs Up to Record High

Shares of Fiat Chrysler are also trading higher today, last seen up 5.1% at $15.91, after hitting a record high of $16.03 earlier. Although the car company reported an 11% decline in U.S. vehicle sales this August compared to the year before, the company gained market share in Italy, and Standard & Poor's (S&P) revised its outlook on the Jeep parent to "positive" from "stable."

FCAU stock has been on a tear since plowing through resistance in the $11.50-$12 region in mid-August, hitting a string of all-time highs. What's more, a short squeeze could add fuel to the car stock's fire. Short interest represents more than six days' worth of pent-up buying demand, at Fiat stock's average daily trading volume.

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