The automotive industry is shaking up as it tries to catch up with Tesla’s (TSLA) lead in electric vehicles. Honda (HMC) jumped by 12.72% to start this week’s trade after announcing merger talks with Nissan (NSANY).
NSANY stock already last week on Dec. 17 in anticipation of the news. The merger would create the third-largest automaker as measured by sales. The two firms would be behind Toyota (TM) and Volkswagen (VLKAF). Honda said the merger creates a competitive edge that the current collaboration framework does not offer.
Be wary of HMC stock from here. The deal creates operational headwinds. Toyota will widen its lead in hybrid vehicles while Tesla continues to dominate the EV market.
Apple (AAPL) closed at a fresh all-time high on Monday. At 3.931 trillion dollars in market cap, the $4 trillion level is next. While the rise is inevitable, AAPL stock risks pulling back. The firm’s iPhone does not offer compelling features that would ignite an upgrade supercycle among its customers.
Energy stocks are in a downward trend that is due to end. Wait for WTI crude prices to stabilize. When it does, Occidental Petroleum (OXY) has the best risk-reward profile. The stock trades at a 13.11 times P/E multiple. Exxon Mobil (XOM) could also rebound after it fell from $122 last month to close recently at around $106.00.
