With the Federal Reserve hawkishly indicating that interest rates could remain high as long as 2026, you’re going to see a lot of investors looking for safety plays in order to hedge against doldrums in the stock market.
One of the classic “blue chip” stock categories is automobile companies, mainly because Ford Motor Company (F) and General Motors Co (GM) are household names. And with the United Auto Workers on strike, the auto sector is back in the news in a big way, so the renewed interest here doesn’t surprise me.
The trick to finding the best opportunities among car companies is to play both the long game and the short game at the same time. On the far horizon, we know that all the talk is about electric vehicles and driverless automation, but a lot of the plays in that arena are very speculative. We’re still a long way off from a future where infrastructure will allow for EVs to be the norm.
In the here and now, the best way forward is to do some good old-fashioned Economics 101 and see who comes out on top – who’s profitable, who’s loaded with debt, and who’s got the most growth potential in a business sector that’s been hit hard by runaway inflation, tightening consumer credit availability, and flagging sales.
For the biggest winners and the worst losers, check out this week’s video:
— Shah Gilani
Source: Total Wealth