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Investors sold after the investment bank's analysts warned about what they called the 'China butterfly effect':
Shares of General Motors and Ford Motor traded lower on Wednesday after Morgan Stanley downgraded the overall U.S. auto sector, citing worries that Western automakers might struggle in the intensifying competition with Chinese rivals.
General Motors was downgraded to "underweight" from "equal weight," and its shares fell 5.4 percentage points, to $45.50. Ford went to "equal weight" from "overweight," with its shares dropping more than 4 percentage points, to $10.43.
Electric vehicle (EV) maker Rivian Automotive and Canadian parts manufacturer Magna International were both downgraded to "equal weight" from "overweight." Shares of Rivian were down 5.7 percentage points while Magna's were off 4.7 percentage points.
Investors sold after Morgan Stanley analysts warned about what they called the "China butterfly effect," a metaphor suggesting that even small surges in China's industrial production capacity could have significant ripple effects across the global market.
[...] Bolstered in part by massive government subsidies, Chinese manufacturers have rapidly emerged as major players in the EV industry, accounting for 60 percent of worldwide EV sales and almost one in five EVs sold in Europe last year.
Both Washington and Brussels have hiked tariffs in response to China's excess production of low-price EVs.
Previously:
- VW Turns on Germany as China Targets Europe's EV Blunders
- Auto Woes
- Chinese Automaker Zotye Plans 2020 Entrance into the U.S. Market
(Score: 0) by Anonymous Coward on Saturday September 28 2024, @11:41PM (2 children)
So far no charges have been filed...
(Score: 3, Insightful) by Rosco P. Coltrane on Sunday September 29 2024, @07:59AM (1 child)
If you express an opinion and the market listens to you to such an extent that you have an immense impact on the entire economy, it can't possibly be your fault.
It becomes criminal when someone pays you to express an opinion.
Do you have proof that Morgan Stanley sells their influence for money? I mean I wouldn't be surprised: they've been found to be on the wrong end of unlawful shenanigan so many times it's even surprising that they're still allowed to be around. But you make a pretty specific accusation that requires equally specific proof.
(Score: 1, Insightful) by Anonymous Coward on Sunday September 29 2024, @06:35PM
This is their primary business, like any other broker. This is how they build up clientele with the biggest investors in town. Plus they, Warren Buffet, and all their cronies buy and sell enough stock themselves to have a big influence on the market. That's how they make their money. When they do well, people want in, pay a small commission, and Bob's your uncle. Nothing abnormal about it. Just remember, these are the same people that cause inflation and recession with all that free money they get from the fed, all legally apparently, because nobody is in jail for it. Regardless of the legalities, there is nothing about the stock market anybody could call "ethical". It is a casino that has undue effect on the economy at large