GM, Ford Stocks Sink on Morgan Stanley Downgrades Amid China Challenge

Shares of General Motors (GM) and Ford Motor (F) tumbled Wednesday arsenic Morgan Stanley downgraded nan stocks and nan wide U.S. manufacture assemblage because of title from China.

Calling it nan "China Butterfly Effect," nan analysts wrote successful a statement that nan "China capacity 'butterfly' has emerged and is flapping its wings." They noted that nan state now produces 9 cardinal much cars than it buys, "upsetting nan competitory equilibrium successful nan West." 

General Motors went to "underweight" from "equal-weight," and its value target fell to $42 from $47. Ford Motor was dropped to "equal-weight" from "overweight," pinch nan value target going to $12 from $16.

US Auto Industry No Longer 'Attractive'

Morgan Stanley besides downgraded nan U.S. car manufacture to "in-line" from "attractive," based connected "a operation of international, home and strategical factors that we judge whitethorn not beryllium afloat appreciated by investors." The analysts said that "there are amended ways to play complaint cuts."

Despite today's 5% declines, shares of General Motors are up much than 25% year-to-date. Ford shares, which are down 4% Wednesday afternoon, are astir 15% little successful 2024.