Sellers in the electric vehicle and Chinese technology sector overwhelmed markets again yesterday. Tesla (TSLA) is among the most active stocks on Wednesday. Hertz’s (HTZ) shocking reversal from embracing Tesla EVs to shunning it, selling 20,000 units, shook up the industry. Lucid Group (LCID), NIO Inc., and Rivian Automotive (RIVN) shares fell.
Instead of betting these stocks bottom out, watch out for more downside ahead and avoid the EV sector.
China’s economic data releases shook up its technology stocks in Wednesday’s trading. The country opted not to cut interest rates, accelerating a sell-off not seen in over a year. Alibaba (BABA), Tencent (TCEHY), JD, Bilibi (BILI), and Weibo (WB) are among the Chinese tech firms trading at or near fresh 52-week lows.
Markets took a top-down view of China’s headwinds. The country posted GDP growth of 5.2% compared to 5.3% expected and the jobless rate rose to 5.1%. Its population dropped in 2023 by 2.08 million to 1.049 billion, according to the National Bureau of Statistics.
U.S. economic data contrasts with that of China. Strong retail sales weakened stocks because it lowered the likelihood of The Fed cutting interest rates. Watch the strongest and biggest retail firms today, including Costco (COST), Amazon (AMZN), and Walmart (WMT). Conversely, avoid companies that are sensitive to inflation and a slowing economy. This includes Home Depot (HD) and Lowe’s (LOW).