Auto stocks are caught in the crossfire of the trade war again. Here's how to get exposure to the group with less risk.
GM, for example, would have to fall back to $32 to offer good value, he adds. GM would need to fall by 11% to get to that level.
Instead of directly investing in them, Baruch says he has an "interesting" way to gain exposure to the U.S. automakers. "Take a look at the ETF RXI — Toyota is the number three name in there, and then it's surrounded by Amazon, McDonald's and Home Depot, and that gives you a way to diversify without idiosyncratic risk," said Baruch."That has a good support line coming in at $112, as the chart would show, and the 200-day moving average is there. So I think that's a good place to look to get some exposure in autos," said Baruch.
"When you think about the tariff issue here, you know [Friday's] announcement is not a big deal. The bulk of their business is done in the United States," Chiavarone said Friday. "The bigger deal might be what comes [next from the Trump administration], because they are importing a lot of goods — steel, aluminum. It's the import tariffs that are really hurting this group, not so much the export tariffs into China.
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