On Tuesday, Ally Financial (ALLY) crashed by 17.62% to close at $32.67. It erased 2024’s rally and traded at prices not seen since January 18, 2024.
Ally’s Chief Financial Officer said that credit conditions among auto lenders worsened. Over the quarter, the firm’s credit challenges intensified. The CFO said that its borrowers are struggling with high inflation and cost of living. He also blamed the weakening employment picture.
Ally is the only firm to face macro-based headwinds. Other firms do not have customers with poor-performing loans. Still, if the economy recovers, so too would Ally’s stock.
Root (ROOT), which provides drivers with car insurance, is another stock on sale. Shares spiked to over $80 on three occasions this year. However, since mid-August, buying volumes evaporated. The stock broke below its 200-day moving average to close at $35.83.
In the retail sector, Under Armour (UA) stock is on sale. Shares lost 17.74% in the last week after the firm cut its outlook. It expects its restructuring costs to double to between $140 million and $160 million. UA stock is performing poorly. Its peers like Nike (NKE) and Lululemon (LULU) are also disappointments for shareholders.
In the automotive sector, General Motors (GM) risks breaking below its $44 support price. Investors also dumped Aptiv (APTV) stock. The firm priced its $550 million notes, whose interest rate payment is between 4.65% and 6.875%.
Investors are also avoiding car part firms like Advance Auto Parts (AAP) and Magna (MGA).
