Nokia (NOK) is this week’s hot stock. Shares added 8.57% last week after the company posted Q3 results. Despite weak performance in the Networks division, shareholders are optimistic.
Last Friday, Reuters reported that Nokia would cut 2,000 jobs in China. That accounts for one-fifth of its staff in the country. In addition, it plans to cut 350 jobs in Europe.
Cold Stocks to Avoid
When markets trade at all-time highs, underperforming stocks will continue to underperform. Stellantis (STLA) trades at less than half price from this year’s peak. The firm needed to cut costs and add to its cash levels. It will sell its testing grounds in Arizona. This speculation is disturbing news for Jeep, Chrysler, and Dodge brands. Product quality worsens when companies spend less on testing.
Lucid Motors (LCID) lost 21.4% of its value last week. The company shocked its investors by filing plans to sell over 262 million new shares. Its majority shareholder, Ayar Third Investment Company, based in Saudi Arabia, will buy over 374 million shares in a private placement.
In general, the automotive sector is in a downtrend. Consumers are unwilling to buy high-priced items. Expect companies to keep car prices the same for at least the next 12 – 24 months. This will deter consumers from buying them, increasing inventory. Eventually, automotive firms will face significant losses from selling their inventory at a discount.
