Collapsing Autos Continue Collapsing

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The auto sector continues imploding. Latest stats from ACEA, show new car registrations dropped 8.1% in November. With the Brexit and the Italian budget saga, both the UK and Italian stats are down all year, but even more notable is the fact German stats fell by almost a 10% drop in registrations.

Brexit deal or no deal, the Chinese declining market, tougher emissions tests are all aspects dragging the sentiment lower in this beaten sector.

 

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Every name in the European auto index, SXAP, is red today. The bloodbath in the sector continues.

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The SXAP index continues trading inside the perfect down trend. The index is down 35% from year highs. 450 is a huge level to watch. A close below risks sparking further stops.

 

Implied volatility for the SXAP (blue) continues moving higher, as well as the realized volatility (30/60 days).

 

Some names are still trading above recent lows, but there are beaten names that just keep on going down and down. Below is the chart of Continental, down 52% from year highs.

 

Another one, a popular but impossible fundamental short back in late 2017/early 2018, is flirting with breaking below recent lows, Renault. The stock, now with the recent Ghosn news is down 46% from year highs.

With France in full implosion mode as Macron’s new yellow vests headache continues, Renault, deriving some 21% of revenues from France, looks all but great.

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France’s PMI out this morning is not happy reading.

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Source: all charts by Bloomberg