La vendita allo scoperto per First Trust S-Network Electric & Future Vehicle Ecosystem ETF dà agli investitori un'idea del grado in cui gli investitori stanno scommettendo sul declino delle azioni di First Trust S-Network Electric & Future Vehicle Ecosystem ETF. I dati relativi alle vendite allo scoperto vengono aggiornati ogni due settimane.

First Trust S-Network Electric & Future Vehicle Ecosystem ETF (NASDAQ:CARZ), Report sulle vendite allo scoperto

First Trust S-Network Electric & Future Vehicle Ecosystem ETF

First Trust S-Network Future Vehicles & Technology ETF

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The fund will normally invest at least 90% of its net assets (including investment borrowings) in the common stocks and depositary receipts that comprise the index. The index is designed to track the performance of the largest and most liquid companies engaged in the manufacturing of automobiles. The fund is non-diversified.

Apple Inc

Microsoft Corp

Alphabet Inc., Class A

Tesla, Inc.

Samsung Electronics Company Ltd

Taiwan Semiconductor - Adr

Qualcomm Inc.

Nvidia Corp.

Advanced Micro Devices Inc.

Texas Instruments Inc

President Donald Trump&#39;s decision to impose an additional 10% tariff on Chinese imports is expected to have a limited impact on U.S. vehicle imports but could significantly affect auto parts, potentially raising vehicle prices for consumers.
According to the U.S. International Trade Commission, the U.S. imports between $15.4 billion and $17.5 billion worth of transportation goods from China annually, <a href="https://www.cnbc.com/2025/02/05/trump-china-tariffs-ford-gm-vehicles.html" target="_blank">as quoted on CNBC</a>. This includes approximately $9 billion to $10 billion in auto parts and accessories for vehicles, tractors, and other special-purpose vehicles.
<h2>Impact on U.S. Automakers</h2>
The biggest impact will be on two major U.S. automakers &mdash; Ford (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/f#NYSE">F</a>) and General Motors GM &mdash; whose China-made models account for most of the affected vehicle imports. The Ford Lincoln Nautilus and GM Buick Envision comprised 95% of the 88,515 China-made vehicles sold in the U.S. last year.
Other carmakers such as Volvo, which is owned by China&#39;s Geely and its electric vehicle spin-off Polestar, import far fewer vehicles to the U.S. They&#39;ve also adjusted production plans to reduce the number of vehicles being imported from China. This shift has been influenced by the Biden administration&#39;s 100% tariff on China-made electric vehicles imposed last year.
China-made vehicles represent only 0.6% of the 16 million new cars sold in the U.S. in 2024 &mdash; comparable to imports from the UK, Sweden, and Slovakia. In contrast, Canada and Mexico accounted for 23.4% of U.S. vehicle sales, making tariffs on these countries a much larger potential concern for the industry.
<h2>Effect on the Auto Parts and EV Supply Chain</h2>
While vehicle imports from China are minimal, auto parts imports are substantial, ranging from $15 billion to $20 billion per year, according to the U.S. International Trade Commission. China also plays a crucial role in the battery and energy storage supply chain, particularly in lithium iron phosphate (LFP) batteries, which are widely used in utility-scale energy storage.
It remains unclear how much the new tariffs will impact EV batteries and raw materials. However, many electrified vehicles in the United States rely on Chinese components. According to the National Highway Traffic Safety Administration, some models incorporating significant Chinese parts.
They include the Genesis G80 EV (25%); Hyundai Kona EV (50%) and Hyundai Ioniq 5 N (30%); Kia EV9 (35%) and Niro Electric (25%); Nissan Ariya EV (40%); Toyota bZ4x EV (20%) and RAV4 PHEV (20%); and Volkswagen ID Buzz EV (25%).
<h2>Impact on Vehicle Pricing and Sales</h2>
Automakers need to decide whether to pass the increased costs onto consumers, change their supply chains, or absorb the expenses. If companies raise prices, it could negatively impact sales, as new vehicle prices remain historically high at around $50,000, according to Cox Automotive, as quoted on CNBC.
If vehicle prices rise further, it could hurt U.S. new car sales, which S&amp;P Global Mobility had previously forecasted to reach 16.2 million units in 2024 before the new tariffs were announced, as quoted on CNBC.
<h2>Auto ETFs in Focus</h2>
The above-mentioned scenario puts focus on exchange-traded funds like First Trust S-Network Future Vehicles &amp; Technology ETF CARZ and First Trust Nasdaq Transportation ETF FTXR.
CARZ in Focus 
The underlying S-Network Electric &amp; Future Vehicle Ecosystem Index constituents are chosen by selecting the eligible Pure-Play companies in descending order of float-adjusted market capitalization until 100 constituents have been selected. The top three holdings include Tesla, Alphabet and Apple. The likes of Toyota, Ferrari, Rivian, Volvo, Honda, Ford, Nissan, Geely, Hyundai also have exposure to this fund. The CARZ ETF charges 70 bps in fees.
FTXR in Focus 
The underlying Nasdaq US Smart Transportation Index is a modified factor weighted index, designed to provide exposure to US companies within the transportation industry. Tesla (13.32%), General Motors (7.56%) and Ford (6.25%) are some of the fund&#39;s biggest holdings. The ETF charges 60 bps in fees.
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<a href="https://www.zacks.com/registration/pfp/?ALERT=ETF225&amp;adid=SYND_BENZ_TCK_ETFNEWSANDCOMMENTARY_2412251_CARZ&amp;d_alert=rd_final_rank&amp;t=CARZ&amp;split=1&amp;cid=CS-BENZ-FT-etf_news_and_commentary-2412251">First Trust S-Network Future Vehicles &amp; Technology ETF (NASDAQ: </a><a class="ticker" href="https://www.benzinga.com/stock/carz#NASDAQ">CARZ</a>): ETF Research Reports 
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<a href="https://www.zacks.com/registration/pfp/?ALERT=ETF225&amp;adid=SYND_BENZ_TCK_ETFNEWSANDCOMMENTARY_2412251_FTXR&amp;d_alert=rd_final_rank&amp;t=FTXR&amp;split=1&amp;cid=CS-BENZ-FT-etf_news_and_commentary-2412251">First Trust NASDAQ Transportation ETF (FTXR): ETF Research Reports</a>
<a href="https://www.zacks.com/stock/news/2412251/trump-s-tariffs-and-their-impact-on-auto-etfs?cid=CS-BENZ-FT-etf_news_and_commentary-2412251">To read this article on Zacks.com click here.</a>
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Trump's Tariffs And Their Impact On Auto ETFs

Hedge funds have always been closely watched for cues on investment opportunities. Although their strategies can be complex, understanding the trends they're bullish on can offer important insights for retail investors. 
Siddharth Singhai, CIO of value-based global hedge fund IronHold Capital, recently shared his perspective on sectors worth watching, and how <a href="https://www.benzinga.com/etfs">ETFs can help investors</a> capitalize on these themes. 
From automobiles and homebuilding to mining and AI, here are some ETFs based on his insights:
<h1 class="wp-block-heading">Automobile Industry On Third Gear</h1>
One area drawing attention is the U.S. auto industry. With protectionist policies likely to intensify under the Trump administration, automakers such as General Motors Co (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GM#NYSE">GM</a>), Ford Motor Co (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/F#NYSE">F</a>), and Stellantis NV (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/STLA#NYSE">STLA</a>) stand to benefit significantly, according to Singhai. 
Possible tariffs on Chinese electric vehicles could set the playing field for these companies, making the U.S. auto sector one to keep a close eye on. 
&#8220;We do anticipate a clear protectionism policy in place for U.S. auto, specifically the big three: General Motors, Ford and Stellantis. Simply because if the tariffs were not put in place against Chinese EVs, U.S. automakers would be at about a 30% to 40% cost disadvantage, which would essentially mean the end of U.S. auto as we know it,&#8221; said Singhai.
However, as a word of caution, he said that one should be wary of auto companies that might face trouble in the face of EV revolution. 
&#8220;We believe U.S. autos and U.S. auto parts suppliers, who have been hit badly due to the excess inventories prevailing in the U.S. auto industry in general, could be a good hunting ground, potentially. Although investors should be focused on auto suppliers that are probably not going to get disrupted by the EV transition,&#8221; Singhai said.
For investors, ETFs like the First Trust S-Network Future Vehicles &amp; Tech (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/CARZ#NASDAQ">CARZ</a>) offer exposure to the expected surge in domestic automotive manufacturing. The ETF has an expense ratio of 0.7% and among its holdings are Tesla, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TSLA#NASDAQ">TSLA</a>), Ford, General Motors and Stellantis.
See Also: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/25/01/43236579/chinas-deepseek-ai-rattles-tech-stocks">China&#8217;s DeepSeek AI Rattles Tech Stocks, Analyst Ives Says Market Plunge &#8216;Golden Buying Opportunity&#8217;</a>
<h1 class="wp-block-heading">Home Building Industry In Focus</h1>
Homebuilders are another promising area, according to Singhai. Despite overvaluation concerns in the equity market, the housing sector continues to experience a significant supply-demand imbalance. Years of undersupply following the 2008 financial crisis created the opportunity for select homebuilding companies to thrive.
&#8220;U.S. market is extremely overvalued at the moment, and there are not that many sectors that could be happy hunting grounds for hedge funds or value investors like us. In general, homebuilders, some of them, seem to be still attractively positioned given the great imbalance between supply and demand, mainly because of years of undersupply post-Great Recession in 2008-&#8217;09. So we believe homebuilders, some of them, present very compelling opportunities,&#8221; Singhai noted.
Investors interested in this space might consider ETFs such as the iShares U.S. Home Construction ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/ITB#BATS">ITB</a>), which focuses on leading players in the sector, such as Builders Firstsource, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BLDR#NYSE">BLDR</a>) and Lowes Companies, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LOW#NYSE">LOW</a>). The expense ratio that this ETF carries is 0.39%.
<h1 class="wp-block-heading">Mining — Hidden Gems To Look For</h1>
Mining is another area that stands out. Many companies in this space, especially low-cost producers, are undervalued and largely overlooked by the market. These firms could see strong performance with a rebound in global demand for raw materials.
&#8220;Mining companies also seem to be hit badly and ignored by investors. You could find some really good mining companies that are the lowest cost producers in their respective industries that could prove to be high performers over the next two to three years,&#8221; Singhai noted from his expertise.
ETFs such as the SPDR S&amp;P Metals and Mining ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XME#NYSE">XME</a>) invest in a range of mining companies and could be a good fit for investors looking to capture growth in this area. The ETF carries an expense ratio of 0.35% and holdings in Hecla Mining Co (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HL#NYSE">HL</a>) and Reliance Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RS#NYSE">RS</a>), among others.
<h1 class="wp-block-heading">AI Trends To Watch</h1>
Singhai also touched upon the continued interest in semiconductors and AI. While these industries are undeniably buzzing, he warns against impulsive investing. Many companies in this space are trading at lofty valuations that may not be sustainable. 
&#8220;I do foresee a lot of hedge funds diving right into semiconductors and AI stocks. I also believe more retail investors will seriously consider allocating capital to this particular sector moving forward as well. However, it is ripe with extreme bubble-like valuations. The marquee names in the AI industry are trading for as high as 20 to 50 times revenue, which to us seems excessive even given the promise of AI,&#8221; he said.
Singhai also added, &#8220;Not all AI companies can capture 50% of the market or even 30% of the market, and if they fail to do so, they cannot foreseeably justify their current valuations. This leads us to the ultimate conclusion that there will be a few big winners and many, many losers within the industry. As such, most AI companies do not deserve their expensive, hefty valuations.&#8221;
For those interested in exploring the AI-driven growth story, a diversified ETF like the VanEck Semiconductor ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SMH#NASDAQ">SMH</a>) offers exposure to leading players like NVDIA Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>) and Broadcom Inc&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AVGO#NASDAQ">AVGO</a>) while mitigating the risks of betting on individual stocks. And the cost of investing in this ETF is also reasonable at 0.35%.
All that said, Singhai emphasized the route of ETFs should be seen as tools for diversification and steady returns — not as a shortcut to mimicking hedge fund performance. It will be wise for retail investors to focus on sectors with solid fundamentals rather than on speculative trends.
See Next: 
<ul>
<li><a href="https://www.benzinga.com/etfs/new-etfs/25/01/43198940/how-foliobeyonds-innovative-fixed-income-etf-can-provide-low-risk-income-generation-in-volatile-tim">How FolioBeyond&#8217;s Innovative Fixed Income ETF Can Provide Low-Risk Income Generation In Volatile Times</a></li>
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Broad U.S. Equity ETFs

Hedge Funds

AVGO

BLDR

iShares Dow Jones US Homenstruction Index Fund

NVDA

STLA

TSLA

IronHold Capital CIO Reveals Trends Hedge Funds Track: 4 ETFs To Watch

Saudi Arabia has unveiled a joint venture between the state oil company Aramco and the state mining company Ma'aden. The collaboration focuses on extracting <a target="_blank" href="https://www.benzinga.com/topic/lithium" rel="noreferrer noopener">lithium</a>, a vital component in batteries for electric vehicles (EVs), renewable energy storage, and electronics. Commercial production is expected by 2027.
"We expect that this partnership will leverage the world's leading upstream enterprise to apply significant low-cost advantages, industry experience, technological innovation, and an integrated supply chain ecosystem," <a target="_blank" href="https://www.aramco.com/en/news-media/news/2025/aramco-plans-transition-minerals-jv-with-maaden" rel="noreferrer noopener">said</a> Nasir K. Al-Naimi, Aramco's upstream president.
The venture aligns with Saudi Arabia's Vision 2030, an ambitious economic transformation plan designed to reduce dependency on oil by developing sectors like mining, technology, and renewable energy.
Vision 2030 targets unlocking $2.5 trillion of mineral resources, including lithium, copper, and gold, while increasing mining's GDP contribution from $17 billion to $64 billion.
Demand for lithium has surged due to the global shift toward green energy. According to Aramco, domestic lithium needs could increase twenty-fold by 2030, supporting the production of 500,000 EV batteries and 110 gigawatts of renewable energy capacity.
The new joint venture aims to explore direct lithium extraction (DLE) technologies and tap into high-concentration deposits within the region. In contrast to traditional evaporation methods, DLE bypasses the need for lithium ponds, allowing faster extraction rates, minimized environmental impact, and reduced water consumption, which are crucial factors in arid climates.
The project also builds on Saudi Arabia's first successful lithium extraction from oilfield brine last December, which was conducted in collaboration with a local startup, Lihytec. Ma'aden is making strides in other commodities, unveiling promising gold and copper deposits at Wadi Al Jaww and Jabal Shayban.
Ma'aden CEO Bob Wilt <a target="_blank" href="https://www.maaden.com.sa/en/news/details/602" rel="noreferrer noopener">noted</a> that these findings are part of one of the world's largest single-jurisdiction exploration programs. "We are committed to establishing mining as the third pillar of the Saudi economy, in line with Vision 2030," he stated.
Strengthening domestic copper production is a priority since the country imports most of its copper—365,000 tons annually. While this demand could double by 2035, the country might secure some of this increasingly important metal from Pakistan as it <a target="_blank" href="https://www.benzinga.com/m-a/24/04/38336936/saudi-arabia-near-deal-for-stake-in-gold-copper-mine-project-in-pakistans-troubled-province" rel="noreferrer noopener">evaluates a stake</a> in Barrick Gold's Reko Diq project.
Price Watch: Global X Lithium &amp; Battery Tech ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LIT#NYSE">LIT</a>) is up 0.79% year-to-date.
Read Next:
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<li><a href="https://www.benzinga.com/analyst-ratings/price-target/25/01/43013685/research-firms-and-industry-insiders-clash-copper-agree-on-trumps-risk" target="_blank" rel="noreferrer noopener">Research Firms And Industry Insiders Clash On Copper, Agree On Trump's Risk</a></li>
</ul>
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Saudi Arabia Advances Lithium Plans, Looks Beyond Oil For Commodity Diversification

The global lithium market is set to remain oversupplied, keeping the prices depressed, but this challenging situation for commodity producers could help battery makers ease the transition to <a target="_blank" href="https://www.benzinga.com/electric-vehicles" rel="noreferrer noopener">electric vehicles(EVs)</a>.
Lithium prices have plummeted after soaring to $80,000 per ton in 2022, now trading below $10,000 per ton. The surplus stems from weaker-than-expected EV sales, aggressive production expansions, and strategic commitments by Chinese operators to maintain dominance in the global battery supply chain.
"There are some assets in production that shouldn't really be, but for their own reasons, they're ploughing on," said Martin Jackson, head of battery raw materials at CRU. Reuters <a target="_blank" href="https://www.reuters.com/markets/commodities/lithium-supply-surplus-set-stay-with-battery-makers-help-2024-12-10/" rel="noreferrer noopener">reported</a> his estimate that about 10% of global lithium production is currently unprofitable.
According to the Reuters report, UBS forecasts a 25% increase in global lithium supply this year, with the surplus expected to persist until 2027. Meanwhile, S&amp;P Global projects prices to stabilize between $9,900 and $11,600 per ton until 2026.
Driven by Beijing's ambition to dominate the market, Chinese companies remain a <a target="_blank" href="https://www.benzinga.com/markets/commodities/24/06/39477524/exclusive-china-linked-lithium-volatility-a-headache-for-producers-but-a-win-for-retail-inves" rel="noreferrer noopener">key factor in lithium production</a>. Production persists in Australia, Africa, and South America even at high operational costs, as China has to ensure a steady supply to support its rising EV industry.
In the U.S., lithium producers are also adapting to market pressures. ExxonMobil (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOM#NYSE">XOM</a>) <a target="_blank" href="https://www.benzinga.com/news/contracts/24/11/42087743/exxon-mobils-lithium-leap-100000-metric-tons-to-fuel-lg-chems-us-plant" rel="noreferrer noopener">has partnered with</a> LG Chem to secure lithium for a cathode production facility in Tennessee, aiming to become the largest of its kind in the country. Yet, despite the tailwind from the Inflation Reduction Act (IRA), Donald Trump's second mandate could bring potential rollbacks. On top of <a target="_blank" href="https://www.benzinga.com/news/24/07/39870803/us-mine-development-delays-among-worlds-longest-second-only-to-zambia" rel="noreferrer noopener">permitting delays</a>, his policy shift could slow domestic progress.
Major producers like SQM (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SQM#NYSE">SQM</a>) have <a target="_blank" href="https://www.benzinga.com/insights/earnings/24/11/42036495/a-peek-at-sociedad-quimica-y-mineras-future-earnings" rel="noreferrer noopener">suffered significantly</a>, with the company reporting a 73% decline in quarterly profits despite record sales volumes. Yet, the industry remains optimistic about long-term prospects. If the EV adoption accelerates, analysts see prices recovering above $14,500 per ton.
Still, some lithium operators are set to prosper even at current prices. Volt Lithium, a Canadian firm focusing on direct lithium extraction (DLE), has agreed with Wellspring Hydro to deploy a field unit in North Dakota.
With a worst-case-scenario extraction price of <a target="_blank" href="https://www.benzinga.com/markets/commodities/24/06/39480795/exclusive-volt-lithium-ceo-touts-6b-cash-flow-opportunity" rel="noreferrer noopener">$2,900 per ton of lithium</a>, Volt will test its technology at the <a target="_blank" href="https://voltlithium.com/wp-content/uploads/2024/12/12-10-2024-North-Dakota-Field-Study-Agreement-Final-.pdf" rel="noreferrer noopener">second-largest domestic brine production</a>. The firm already has DLE operations in the Permian basin in Texas and the Keg River formation in its native Alberta.
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<li><a href="https://www.benzinga.com/24/12/42409098/newmont-lays-off-senior-employees-pursuing-further-cost-controls" target="_blank" rel="noreferrer noopener">Newmont Lays Off Senior Employees Pursuing More Cost Controls</a></li>
</ul>
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IDRV

Lithium Producers Brace For Prolonged Oversupply, Stalled Prices

Editor&#8217;s Note: The first paragraph has been amended to correct TSMC&#8217;s stance
Monday, Taiwan Semiconductor Manufacturing Co (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TSM#NYSE">TSM</a>) snubbed the Wall Street journal report that claims its plans for <a href="https://www.benzinga.com/markets/equities/24/09/40973148/tsmc-and-samsung-explore-100b-chip-megafactories-in-uae-amid-ai-boom-and-global-expansion-plans-" target="_blank" rel="noreferrer noopener">new foreign investments</a> are backed by United Arab Emirates (UAE) subsidies.
Recent reports indicated the Taiwanese contract chipmaker intends to collaborate with Samsung Electronics (OTC:<a class="ticker" href="https://www.benzinga.com/stock/SSNLF#OTC">SSNLF</a>) for a project in the UAE. The initiative entails investments exceeding $100 billion, the Taipei Times <a href="https://www.taipeitimes.com/News/biz/archives/2024/09/23/2003824231" target="_blank" rel="noreferrer noopener">reports</a>.
Taiwan Semiconductor executives reportedly visited the UAE and discussed a plant with advanced facilities akin to Taiwan.
Taiwan Semiconductor remains focused on its <a href="https://www.benzinga.com/government/24/09/40940463/whats-going-on-with-taiwan-semiconductor-stock-on-thursday" target="_blank" rel="noreferrer noopener">U.S. expansion</a>. It promoted Rose Castanares, executive vice president of the Arizona unit, as president last week. The company is a key supplier to Nvidia Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>) and Apple Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>). The company also inked at least two smartphone chip deals. One agreement is with Apple for the iPhone and the other is with Alphabet Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GOOG#NASDAQ">GOOG</a>) (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GOOGL#NASDAQ">GOOGL</a>) for the Google Pixel 10 and Pixel 11.
Taiwan Semiconductor is building two fabs in Arizona involving the 4nm, 3nm, and 2nm processes. It also targets a third fab in Arizona, leveraging the 2nm process.&nbsp;
The U.S. offered the chipmaker a $6.6 billion federal grant and $5 billion in loans. Last week, the U.S. Federal Reserve slashed its benchmark interest rate by 50 basis points. Setting the interest rate at 4.75%-5% to spur growth can be a tailwind for capital-intensive semiconductor companies.
Taiwan Semiconductor stock has been up 102% in the last 12 months, being the critical contract chipmaker for AI chips. Investors can gain exposure to Taiwan Semiconductor through ProShares Nanotechnology ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TINY#NYSE">TINY</a>) and First Trust S-Network Electric &amp; Future Vehicle Ecosystem ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/CARZ#NASDAQ">CARZ</a>).
Price Action: Taiwan Semiconductor stock is up 0.35% at $174.69 premarket at last check Monday.
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Taiwan Semiconductor Denies UAE Investment Rumors: Report (UPDATED)

A possible strike by thousands of dockworkers at <a href="https://www.benzinga.com/government/24/09/40713418/retailers-plea-for-deal-us-ports-union-start-two-day-talk-in-effort-to-prevent-disruptive-strike">East and Gulf coast ports</a> in October could result in major disruptions in the supply chain of goods coming in and out of the U.S., according to an export on container trade.
The International Longshoremen's Association (ILA), representing more than 85,000 dockworkers, may go on strike on Oct. 1 as the union&#8217;s contract expires on Sept. 30 and negotiations between the ILA and U.S. Maritime Alliance of terminal operators show signs of breaking down, said Christian Roeloffs, CEO of online container leasing platform Container xChange.
&#8220;A strike now appears increasingly likely, threatening to disrupt nearly half of the nation&#8217;s ocean trade,&#8221; he said on Tuesday.
&#8220;The uncertainty is compounded by the fact that the duration of these strikes is unclear — it could be resolved within weeks or drag on for months, as seen with the West Coast strike last year.
&#8220;September is traditionally one of the busiest months for U.S. containerized imports, driven by the peak shipping season as businesses prepare for the holiday rush.&#8221;
Read Also: <a href="https://www.benzinga.com/news/global/24/08/40451543/transatlantic-container-shipping-volumes-rise-as-possible-strike-at-u-s-ports-hovers">Transatlantic Container Shipping Volumes Rise As Possible Strike At U.S. Ports Hovers</a>
But it isn&#8217;t just a strike that threatens to disrupt the shipment of goods for the retail, automotive and other sectors, he said.
&#8220;This year presents an unprecedented combination of challenges that could heavily impact supply chains. Potential labor strikes, natural disasters, and tariff uncertainties are converging, creating a highly volatile environment for global trade,&#8221; he said. 
&#8220;This also led to the pulling forward of orders by retailers, which led to strong inventories in the U.S.&#8221;
A strike could also cause havoc for container leasing and trading companies by causing major delays, port congestion and rerouted cargo, Roeloffs said.
"Companies should anticipate short-term spikes in demand for leased containers as retailers rush to secure goods ahead of potential disruptions, particularly for seasonal inventory and industrial shipments," he said.
&#8220;While the threat of strikes looms large, it's important to note that U.S. inventories are currently strong due to the pulling forward of orders earlier this year to avoid existing disruptions. 
The retail, automotive and semiconductor industries, all of which could be impacted by a port strike, saw gains and losses into Tuesday&#8217;s mid-day trading.
<h1 class="wp-block-heading">Retail</h1>
<ul>
<li>Walmart Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/WMT#NYSE">WMT</a>) fell 1.18% to $79.61</li>
<li>Target Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TGT#NYSE">TGT</a>) slipped 0.26% to $152.45</li>
<li>Home Depot, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HD#NYSE">HD</a>) gained 0.89% to $385.42</li>
</ul>
<h1 class="wp-block-heading">Automotive</h1>
<ul>
<li>Ford Motor Co (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/F#NYSE">F</a>) gained 1.30% to $10.94</li>
<li>General Motors Co (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GM#NYSE">GM</a>) picked up 1.59% to $47.62</li>
<li>Stellantis N.V. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/STLA#NYSE">STLA</a>) slipped 0.18% to $15.16</li>
</ul>
<h1 class="wp-block-heading">Semiconductor</h1>
<ul>
<li>Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TSM#NYSE">TSM</a>) fell 0.43% to $168.35</li>
<li>Broadcom Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AVGO#NASDAQ">AVGO</a>) declined 0.87% to $162.59</li>
<li>Qualcomm Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QCOM#NASDAQ">QCOM</a>) rose 1.13% to $68.50</li>
</ul>
<h1 class="wp-block-heading">Indexes that follow the retail and automotive sectors trended upward</h1>
<ul>
<li>Dow Jones Transportation Average, which is tracked by the iShares Transportation Average ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/IYT#BATS">IYT</a>), rose 1.2% to 16,032.91 points</li>
<li>S&amp;P Retail Select Industry Index, which is tracked by the SPDR S&amp;P Retail ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XRT#NYSE">XRT</a>), gained 1.4% to 10,375.45 points</li>
<li>S&amp;P 500 Automobiles &amp; Components Index&nbsp;rose 2.7% to 130.02 points. There is no exchanmge-traded fund that closely follows this index, but First Trust S-Network Future Vehicles &amp; Tech ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/CARZ#NASDAQ">CARZ</a>) provides broad exposure to global automobile manufacturers and related companies, including those in the S&amp;P 500 Automobiles &amp; Components Index.</li>
</ul>
Read Now:
<ul>
<li><a href="https://www.benzinga.com/news/global/24/08/40497103/strikes-at-us-ports-canadas-railways-may-cause-container-freight-rate-volatility">Strikes At US Ports, Canada&#8217;s Railways May Cause Container Freight Rate Volatility</a></li>
</ul>
Photo: Shutterstock

Trading Ideas

iShares Dow Jones Transportation Average Index Fund

QCOM

US Port Strike In October Could Lead To Major Supply-Chain Disruptions, Says Container Trade Expert

The popular arbitrage trade involving Taiwan Semiconductor Manufacturing Co. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TSM#NYSE">TSM</a>) is causing unexpected pain as the U.S. stock premium over its Taiwanese counterpart reaches a 15-year high.
What Happened: The premium of TSMC&#8217;s American depositary receipts over its Taiwan stock has surged to 22% this quarter, the highest average since 2009, Bloomberg <a href="https://www.bloomberg.com/news/articles/2024-06-17/a-popular-arbitrage-trade-backfires-as-tsmc-frenzy-grows-in-us">reported</a> on Monday. This surge is attributed to the U.S.&#8217;s growing enthusiasm for artificial intelligence.
Despite a 66% increase in ADRs and a 53% rise in Taipei shares this year, both are still trading below their 2021 valuation highs. The ADRs&#8217; accessibility to foreign investors and their inclusion in various indices and exchange-traded products have contributed to their outperformance.
Arbitrage involves simultaneously buying and selling the same or similar asset in different markets to profit from minor price differences. It exploits short-term variations in the price of identical or similar financial instruments across different markets or forms.
"It's supply/demand dynamics," said Brian Freitas, founder of research firm Periscope Analytics. "Not all foreign investors can hold the Taiwan stock so they just prefer owning the ADRs. Plus there are some indices which only reference the ADR, so ETFs then basically buy up the U.S. shares."
ADRs have historically traded at a premium due to their fungibility, unlike the Taiwan shares, which require special regulatory approval for conversion into the U.S. equivalent. The ADRs are also heavily owned by fund managers, making it challenging for them to increase their position further.
Jon Withaar, head of Asia special situations at Pictet Asset Management, noted that the AI sector remains strong, with NVIDIA Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>) alone valued at over $3 trillion. The ADRs&#8217; premium over the local stock has risen to an average of almost 17% this quarter, indicating a continued AI boom.
"The AI boom is not over," Withaar said. "I'm happy to wait for a crescendo widening and perhaps even panic unwinding."
See Also: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/06/39345194/apple-nvidia-are-the-most-overbought-stocks-on-wall-street-amid-ai-frenzy-here-are-?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Apple, Nvidia Are The Most Overbought Stocks On Wall Street Amid AI Frenzy: Here Are Other Stocks With Potential For Pullback</a>
Why It Matters: TSMC&#8217;s ADRs have been in high demand due to the global AI frenzy. Companies like Apple Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>), Qualcomm Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QCOM#NASDAQ">QCOM</a>), Nvidia, and Advanced Micro Devices, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMD#NASDAQ">AMD</a>) have almost fully booked TSMC&#8217;s 3nm <a href="https://www.benzinga.com/news/24/06/39310821/apple-nvidia-secure-future-with-taiwan-semis-advanced-chips-as-ai-demand-soars">chip production process until 2026</a>, reflecting the rapid evolution of AI technology.
Meanwhile, TSMC&#8217;s European subsidiary, European Semiconductor Manufacturing Co, plans to <a href="https://www.benzinga.com/news/24/06/39288408/taiwan-semiconductors-european-subsidiary-to-hire-2k-employees-in-semiconductor-push">hire nearly 2,000 employees</a> from Germany and other European countries. This move comes amid a trend of job cuts in the tech sector, as companies reallocate resources to meet the demands of advancing AI technology.
Taiwan Semiconductor stock gained over 64% in the last 12 months. Investors can gain exposure to the semiconductor sector via First Trust Exchange-Traded Fund VIII First Trust Active Global Quality Income ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AGQI#NYSE">AGQI</a>) and First Trust S-Network Electric &amp; Future Vehicle Ecosystem ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/CARZ#NASDAQ">CARZ</a>)
Price Action: Taiwan Semiconductor Manufacturing Co. Ltd.&#8217;s U.S.-listed stock closed at $172.51 on Friday, down 0.23%. Year to date, it has increased by 69.91%, and over the past year, it has risen by 64.97%. Over the past five years, the U.S.-listed stock has surged by 355.89%. 
In comparison, TSMC&#8217;s Taipei-listed stock has increased by 55.31% year to date, 57.98% over the past year, and 270.22% over the past five years, according to the <a href="https://pro.benzinga.com/dashboard">data from Benzinga Pro</a>.
Read Next: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/06/39328409/hedge-fund-manager-says-trumps-radical-tax-plan-is-hyperbole-useful-to-kick-the-hor?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Hedge Fund Manager Says Trump&#8217;s Radical Tax Plan Is &#8216;Hyperbole…Useful To Kick The Hornet&#8217;s Nest&#8217;: &#8216;Not Going To Be A Plan That Works&#8217;</a>
Image Via Shutterstock 
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Asia

Equities

Global

Markets

First Trust Exchange-Traded Fund VIII First Trust Active Global Quality Income ETF

AGQI

Taiwan Semiconductor Arbitrage Trade Faces Challenges As US Stock Premium Hits 15-Year High: 'AI Boom Is Not Over'

Apple Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>), Qualcomm Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QCOM#NASDAQ">QCOM</a>), Nvidia Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>), and Advanced Micro Devices, Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMD#NASDAQ">AMD</a>) have almost fully booked Taiwan Semiconductor Manufacturing Company Ltd's (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TSM#NYSE">TSM</a>) 3nm chip production process until 2026, reflecting the artificial intelligence frenzy.
This demand spike reflects the rapid evolution of AI technology, pushing TSMC to innovate further in advanced manufacturing, TechNode <a target="_blank" href="https://technode.com/2024/06/12/apple-qualcomm-nvidia-amd-fully-book-tsmcs-3nm-capacity-until-2026/" rel="noreferrer noopener">reports</a>.
N3E, which started mass production last quarter, targets AI accelerators, high-end smartphones, and data centers. N3P, scheduled for mass production later this year, will cater to mobile devices and consumer electronics. It will likely be the standard by 2026.
To accommodate the growing demand, TSMC plans to convert some 5nm equipment to enhance 3nm production capacity, potentially increasing 3nm wafer production to between 120,000 and 180,000 units monthly. TSMC stock is trading higher on Thursday.
The contract chipmaker remains engaged in expanding its <a target="_blank" href="https://www.benzinga.com/news/24/06/39293929/whats-going-on-with-nvidia-amd-stocks-on-wednesday" rel="noreferrer noopener">geographical presence beyond</a> Taiwan. Recent reports indicated that TSMC is looking to recruit 2,000 employees in Europe, coinciding with its plans to construct a Dresden wafer fab.
Also, TSMC has significantly <a target="_blank" href="https://www.benzinga.com/government/24/06/39267332/taiwan-semi-outperforms-chinas-top-chipmaker-amid-tech-challenges" rel="noreferrer noopener">beaten leading Chinese</a> chipmaker&nbsp;Semiconductor Manufacturing International Corp (SMIC), bagging a market share of 62% in the first quarter. It clocked a 30% sales growth in May, reaching $7.1 billion, as the intense demand for AI refuses to fizzle out anytime soon.
<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="750" height="650" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/06/13044941/newplot-25.png" alt="" class="wp-image-386123" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/06/13044941/newplot-25.png 750w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/06/13044941/newplot-25-300x260.png 300w" sizes="(max-width: 750px) 100vw, 750px" /></figure>
Taiwan Semiconductor stock gained 62% in the last 12 months. Investors can gain exposure to the semiconductor sector via First Trust Exchange-Traded Fund VIII First Trust Active Global Quality Income ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AGQI#NYSE">AGQI</a>) and First Trust S-Network Electric &amp; Future Vehicle Ecosystem ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/CARZ#NASDAQ">CARZ</a>).
Price Action: TSM shares were trading higher by 0.99% to $174.70 premarket at the last check on Thursday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo by Ivan Marc via Shutterstock

AMZN

Apple, Nvidia Secure Future with Taiwan Semi's Advanced Chips as AI Demand Soars

Politics

General

Automakers Commit To Spend $250B On Electric Cars In U.S.

Electric vehicle producer Tesla (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/tsla#NASDAQ">TSLA</a>) reports first-quarter results Wednesday after the close, and while those numbers are expected to be weak because of the coronavirus, analysts remain mostly enthusiastic about the company&#39;s long-term prospects.
Wall Street is expecting Tesla to post a loss of $1.22 a share for the first three months of 2020, but some analysts believe that number will be beaten&nbsp;and that with an ensuing rally, Elon Musk&#39;s company could qualify for entry <a href="https://www.cnbc.com/2020/04/28/tesla-is-poised-to-beat-earnings-and-possibly-qualify-for-sp-500-inclusion-barclays-says.html">into the S&amp;P 500</a>.
Assuming that occurs, a rally could be further fueled by index funds, exchange traded funds and active managers that benchmark to that index.
Analysts are forecasting deliveries <a href="https://www.benzinga.com/analyst-ratings/analyst-color/20/04/15883850/tesla-q1-earnings-preview-analysts-convinced-of-long-term-potential-ahead-of-the-pr">of 400,000 this year</a> and that guidance could be weak, comparatively speaking, due to COVID-19. Still, with the recent batch of ratings on Tesla being mostly bullish, it could pay to consider the following ETFs.
ARK Autonomous Technology &amp; Robotics ETF (ARKQ)
One of the kings of the Tesla ETF fray, the ARK Autonomous Technology &amp; Robotics ETF (CBOE: ARKQ) allocates almost 13% of its weight to the stock. That&#39;s been enough to send ARKQ higher by 3.23% year-to-date, which sounds modest, but that showing is downright impressive relative to the Nasdaq-100 Index and the S&amp;P 500.
Few, if any, active management teams are as bullish on or sink with Tesla as ARK.&nbsp;The. team recently addressed total cost of ownership&nbsp;for electric vehicles, which is becoming a relevant point <a href="https://www.benzinga.com/analyst-ratings/analyst-color/20/04/15891645/an-oil-etf-for-the-daring">with oil prices slumping.</a>
&ldquo;According to ARK&rsquo;s research, over a three-year period the Long-Range Tesla Model 3 is already less expensive to own than a Toyota Camry, and the low-end Model 3 less expensive than a Ford Focus,&rdquo; <a href="https://ark-funds.com/arkq">according to ARK</a>.
&ldquo;The TCO is much more sensitive to a vehicle&rsquo;s residual value than to gas prices. In our view, the right question is how low the prices of used gas-powered cars will go as the market transitions first to electric vehicles, and then to autonomous electric vehicles.&rdquo;
First Trust NASDAQ Global Auto Index Fund (CARZ)
Somewhat quietly, the oft-overlooked First Trust NASDAQ Global Auto Index Fund (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/carz#NASDAQ">CARZ</a>) lays claim to having the largest Tesla exposure &mdash; and the competition isn&#39;t all that close. Tesla accounts for 23.53% of the CARZ, an advantage of roughly 400 basis points over the ETF with the second-largest weight to the stock.
CARZ tracks the NASDAQ OMX Global Auto Index. While the Tesla exposure is impressive, it hasn&#39;t been enough to prevent the ETF being burned by lagging&nbsp;traditional automotive holdings, as highlighted by the fund&#39;s 19.16% year-to-date decline.
Global X Lithium &amp; Battery Tech ETF (LIT)
The Global X Lithium &amp; Battery Tech ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/lit#NYSE">LIT</a>) allocates 14.35% of its weight to Tesla, a total surpassed by just three other ETFs, including the aforementioned ARKQ and CARZ. Interestingly, Tesla isn&#39;t LIT&#39;s largest holding. That title is occupied by Albermale (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/alb#NYSE">ALB</a>). Combined, those two stocks command about one-third of LIT&#39;s weight.
By the end of 2021, the lithium market will return to balance as demand growth resumes from increased electric vehicle adoption and other batteries and eats up new supply,&rdquo; <a href="https://www.morningstar.com/articles/979397/look-to-lithiums-bright-long-term-future">writes Morningstar analyst</a> Seth Goldstein.
Photo courtesy of Tesla.&nbsp;

Earnings

Long Ideas

ARKQ

3 ETFs For Tesla Earnings

Cox Automotive Forecasts March U.S. Auto Sales To Increase From February

Analyst Color

Analyst Ratings

FCAU

RACE

Morgan Stanley Would Avoid The Auto Sector For Now As Firm Sees 'ideal conditions for a high number of profit warnings by auto companies during the Detroit auto show on Jan 15th and 16th'

Economics

US Commerce Secretary Ross Says Section 232 Measures On Cars Will Be Ready When Needed

Rumors

President Trump on Call with Mexico's Nieto Says He Will Call Canadian Prime Minister Shortly, Says the Easiest Action Would be to Put Tariffs on Cars, According to Reuters

Major Auto Trade Group To Tell Trump Admin That A 25% Tariff On Imported Vehicles Would Cost U.S. Consumers $45B In Higher Vehicle Costs, U.S. Buyers Of Imported Vehicles Would Face An Avg. Price Increase Of $5,800

Each day, the Benzinga Pro news team highlights several stocks with Trading Idea potential. Be the first to see them by <a href="http://try.benzingapro.com/start-your-free-trial-tradefastertradesmarter">becoming a Benzinga Pro user</a>!
SenesTech Inc (NASDAQ: <a class="ticker" href="/stock/snes#NASDAQ">SNES</a>) stock was trading higher by more than 10 percent early Tuesday morning after trading higher at one point Monday by nearly 300 percent. The nano-cap developer of pest control said the California state government approved the company&#39;s ContraPest for user in the state.
Kohl&#39;s Corporation (NYSE: <a class="ticker" href="/stock/kss#NYSE">KSS</a>) gained more than 5 percent after the department store reported its <a href="https://www.benzinga.com/pressreleases/18/05/b11754599/kohls-corporation-reports-financial-results">first-quarter results.</a> The company said it earned 64 cents per share in the first quarter on revenue of $4.208 billion versus expectations of 50 cents per share and $3.95 billion. The company also narrowed its 2018 EPS guidance from a range of $4.95-$5.45 to a new range of $5.05-$5.45.
1st Trust NASDAQ Global Auto ETF (NASDAQ: <a class="ticker" href="/stock/carz#NASDAQ">CARZ</a>) could see increased volatility throughout Tuesday&#39;s trading session in reaction to potentially favorable trade relations. China&#39;s government <a href="https://www.bloomberg.com/news/articles/2018-05-22/china-is-said-to-cut-car-import-duty-in-boost-for-lexus-bmw">agreed to lower</a> the tariff rate on American cars and parts from 25 percent to 15 percent.
Precipio Inc (NASDAQ: <a class="ticker" href="/stock/prpo#NASDAQ">PRPO</a>) gained 50 percent early Tuesday morning after the nano-cap specialty diagnostics company said it&nbsp;<a href="https://www.benzinga.com/pressreleases/18/05/g11754876/potential-sequential-revenue-run-rate-growth-of-30-over-q1-based-on-pr">saw an acceleration of sales</a> in its Pathology services in April. The company now expects to see a sequential double digit quarterly sales growth.
Pure Storage Inc (NYSE: <a class="ticker" href="/stock/pstg#NYSE">PSTG</a>) was trading lower by more than 7 percent despite reporting a first-quarter earnings beat and an in-line guidance announcement. William Blair analysts commented in a report the company&#39;s solid print was unfortunately &quot;dwarfed by high expectations.&quot;
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Pre-Market Outlook

PRPO

PSTG

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After registering the first annual sales decline since the financial crisis last year, the auto industry has been struggling with weak sales this year. This is especially true as car sales dropped 2% year over year to an annualized 17.08 million units in February, after rising 1.2% in January. The weak performance came on the heels of lower discounts.
	Of the six major American and Japanese automakers, Ford Motor F and General Motors GM posted the biggest sales decline of 7% each, followed by declines of 5% for Honda HMC, 4% for Nissan Motor NSANY and 1% for Fiat Chrysler FCAU. Toyota TM&nbsp;saw an increase of 4.5% in its sales last month. General Motors and Fiat Chrysler have a Zacks Rank #2 (Buy), while the other four automakers have a Zacks Rank #3 (Hold).
	The only pure play auto ETF is the First Trust NASDAQ Global Auto ETF CARZ. It offers global exposure to the 34 auto stocks by tracking the NASDAQ OMX Global Auto Index. It is a large-cap centric fund and is highly concentrated on the top five firms &ndash; Honda, Toyota, Daimler, General Motors and Ford &ndash; with a combined 38.6% share while other firms hold no more than 4.38% of assets. In terms of country exposure, Japan takes the top spot at 25.9% while the United States and Germany round off the next two spots with at least 19% share each. CARZ has a lower level of $20.8 million in AUM and trades in a small average daily trading volume of about 5,000 shares. The product charges 70 bps in fees per year and has a Zacks ETF Rank #3 with a High risk outlook, suggesting some room for upside.
	What Lies Ahead?
	The year 2018 seems to be a challenging one for automakers, with many market experts expecting auto sales to fall below $17 million. A strong economy, low unemployment, increasing consumer confidence, higher spending, fuel-efficient and technologically enriched vehicles, and low financing rates and gasoline prices will continue to fuel the industry.
	Strong earnings expectation is an added boost as the sector is expected to return to growth. For the full year, earnings for the sector is expected to growth 0.8% and revenues are expected to rise 2.7% versus a decline of 2.2% and 1.6%, respectively, last year.
	The tax reform will provide a lift to U.S. sales but at the same time also encourage rate hikes, which will make financing of new vehicles expensive. Trump&#39;s intention of imposing heavy tariffs on imported steel and aluminum would be a big blow to the industry as it would increase the cost of auto production. Notably, the auto sector accounted for 26% of demand for steel in the United States in 2017, behind the construction industry, at 40% of demand in 2017, according to data provider Statista.
	Further, the shift in consumers, preference from passenger cars to more profitable pickup trucks and SUVs, as well as longer usage of vehicles will continue to be a drag on sales. The average age of vehicles on the road has climbed to <a href="http://abcnews.go.com/Business/wireStory/us-auto-sales-expected-drop-2017-remain-strong-52112498">11.6 years</a> from 8.8 years in 1998.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. <a href="http://www.zacks.com/registration/pfp/?ALERT=RPT_7BST_LP194&amp;ADID=BENZ_CONTENT_ZER_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;cid=CS-BENZ-FT-294494" target="_blank">Click to get this free report</a>

NSANY

Should You Steer Clear Of Auto ETFs And Stocks?

From his campaign days, Trump has indicated that he wants to renegotiate the North American Free Trade Agreement (NAFTA) or totally remove it. The agreement had tied up the U.S., Canada and Mexico for more than two decades. The deal permitted manufacturers and farmers to do seamless business.
Now, this agreement may be threatened as Trump intends to bring jobs offshored to countries like Mexico back to America.
Against these circumstances, we highlight the ETF areas that should be closely watched.
<h3>
	Mexico and Canada</h3>
Analysts from Goldman Sachs noted that &quot;exports to Mexico account for just 1% of U.S. GDP. Similarly, revenues to Mexico and Latin America total just 3% of S&amp;P 500 sales.&quot; While it makes up just a fraction of the U.S. economy, <a href="https://finance.yahoo.com/news/happens-trump-pulls-us-nafta-212235421.html">NAFTA specifically represents</a> substantial portions of Mexico and Canada&#39;s GDP.
&quot;Trade has jumped sharply between the United States and Mexico since NAFTA&#39;s signing, from roughly $290 billion in 1993 to more than $1.1 trillion in 2016. That compares to the $650 billion in bilateral trade the U.S. did with China last year,&quot; as per a note issued by Deutsche Bank analysts.
So, the adverse impact on Canadian and Mexican currency is expected. Guggenheim CurrencyShares Canadian Dollar Trust ETF FXC may be hit hard. U.S. foreign direct investment in Mexico jumped from $15 billion to more than $100 billion from 1993 to 2016. Needless to say, these issues do not go well with country ETFs like&nbsp;iShares MSCI Mexico Capped&nbsp;EWW and&nbsp;iShares MSCI Canada&nbsp;ETF&nbsp;EWC.
<h3>
	Auto</h3>
A huge portion of U.S. trade deficit with Mexico is from the auto sector. Goldman Sachs also indicated that the S&amp;P 500 auto&nbsp;component companies have returned about 52% and electronic equipment firms&nbsp;have offered investors 51% returns compared with 36% provided by the S&amp;P 500 on average. Now, these auto stocks may fall flat if the United States walks out of NAFTA. So, First Trust NASDAQ Global Auto ETF CARZ will be in focus.
<h3>
	Timber</h3>
Already, U.S. President Trump announced plans to slam a tariff of up to 24% on imports from the Canadian softwood lumber industry. The Trump administration indicated that it would levy countervailing duties ranging from&nbsp;<a href="https://www.bloomberg.com/politics/articles/2017-04-24/trump-said-to-plan-20-tariff-on-canadian-softwood-lumber-j1wq4tyg">3% to 24.1%</a>&nbsp;on Canadian lumber producers, as reported by&nbsp;<a href="https://www.bloomberg.com/politics/articles/2017-04-24/trump-said-to-plan-20-tariff-on-canadian-softwood-lumber-j1wq4tyg">Bloomberg</a>.
Along with&nbsp;<a href="http://www.cnbc.com/2017/04/24/trumps-timber-tariff-will-have-a-big-impact-on-lumber-futures-market-housing-stocks.html">several traders</a>, we also believe the action, if it materializes, may lead lumber prices to scale up as lumber imports from Canada will now become costlier. And domestic lumber companies may also be able to charge some price premium in the face of lesser foreign competition. However, Canada has filed a wide-ranging case with the World Trade Organization -- over those and other tariffs that the United States has levied. iShares S&amp;P Global Timber &amp; Forestry Index Fund WOOD thus comes under focus.
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Futures

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Forex

iShares S&P Global Timber & Forestry Index Fund

WOOD

ETFs To Watch If The U.S. Pulls Out Of NAFTA

The ETF industry comprises a flurry of innovative products. One such product is KraneShares Electric Vehicles and Future Mobility ETF KARS. Let&#39;s delve a little deeper:
Inside KARS
KARS looks to track the performance of Solactive Electric Vehicles and Future Mobility Index. The index takes care of global companies that are into the production of electric vehicles and/or their components, or are engaged in other initiatives that may promote the future of mobility.
The index &quot;includes issuers that are into the electric vehicle production, autonomous driving, shared mobility, lithium and/or copper production, lithium-ion/lead acid batteries, hydrogen fuel cell manufacturing and/or <a href="https://kraneshares.com/kars/">electric infrastructure businesses</a>&quot;, as per the issuer.
The index&#39;s constituents include NVIDIA, Baidu, Daimler, Tesla, Samsung SDI, BYD, and Galaxy Resource. No stock accounts for more than 3.88% of the fund with NVIDIA being the top holding. The fund charges 69 bps in fees.
How Does it Fit in a Portfolio?
&nbsp;Electric powered vehicles are gaining immense popularity, thanks to technological development, improving cost economics, government support and increasing acceptance of the powertrain by customers as well as automakers. &nbsp;Per Bloomberg New Energy Finance report issued in 2017, &quot;54% of new car sales and 33% of the global car fleet are projected to be electric by 2040,&quot; as quoted by the issuer.
Countries like China and United Kingdom are focusing on promoting electric cars. China is trying hard to foray into the electric car market as it is working to end sales of fossil-fuel-powered vehicles. Mainland China is currently the world&#39;s largest electric vehicle market, per KraneShares. This is why the index takes into accounts companies that are listed on the Shanghai and Shenzhen Stock Exchanges (A-shares).
KraneShares noted that Chinese companies like Baidu are developing artificial intelligence essential for autonomous &nbsp;driving, and BYD is a world leader in electric vehicles and electric battery manufacturing. KraneShares&#39; CEO went on to say &quot;global companies within the future mobility ecosystem such as Tesla, &nbsp;NVIDIA, and Albemarle Corporation are also capitalizing on strong demand from Chinese and global consumers.&quot;
Competition
The fund should see access ahead as it targets one of the fast-evolving areas of the global investment world. However, there are a few ETFs that can act as peers to this newly-launched product.
Of these, Global X Lithium &amp; Battery Tech ETF LIT comes first.With lithium batteries being used in the electric car making, the fund could pose a threat to KARS (read: <a href="https://www.zacks.com/stock/news/275694/inside-the-surge-in-lithium-etf">Inside The Surge in Lithium ETF</a>).
Then there is the traditional car ETF, First Trust NASDAQ Global Auto Index Fund CARZ. The underlying index of the fund &ndash; the NASDAQ OMX Global Auto Index &ndash; is designed to track the performance of the largest and most liquid companies engaged in manufacturing of automobiles (read: <a href="https://www.zacks.com/stock/news/287843/auto-sales-hit-the-brakes-in-2017-etfs-amp-stocks-in-focus">Auto Sales Hit the Brakes in 2017: ETFs &amp; Stocks in Focus</a>).
The fund charges 70 bps in fees. However, there is a difference between CARZ and KARS. While CARZ mainly focuses on automobile companies, KARS takes care of semiconductor stocks as well as the companies that are related to the future of mobility.
&nbsp;
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BIDU

An ETF For Early Exposure To The Electric Car Market

Auto sales have declined between 1 and 2 percent off 2016&rsquo;s all-time highs and market experts expect no recovery.
Although still considering autos a &ldquo;core&rdquo; business line, Morgan Stanley is cautious on U.S. companies and discourages heavy exposure to both manufacturers and suppliers.
<h3>
	The Rating</h3>
Analyst <a href="https://www.tipranks.com/analysts/adam-jonas">Adam Jonas</a> maintained Overweight ratings on Fiat Chrysler Automobiles NV (NYSE: <a class="ticker" href="/stock/fcau#NYSE">FCAU</a>) and Goodyear Tire &amp; Rubber Co (NASDAQ: <a class="ticker" href="/stock/gt#NASDAQ">GT</a>); Equal-weight ratings on General Motors Company (NYSE: <a class="ticker" href="/stock/gm#NYSE">GM</a>) and Tesla Inc (NASDAQ: <a class="ticker" href="/stock/tsla#NASDAQ">TSLA</a>); and Underweight ratings on Ford Motor Company (NYSE: <a class="ticker" href="/stock/f#NYSE">F</a>), Hertz Global Holdings, Inc (NYSE: <a class="ticker" href="/stock/htz#NYSE">HTZ</a>) and Avis Budget Group Inc. (NASDAQ: <a class="ticker" href="/stock/car#NASDAQ">CAR</a>).
<h3>
	The Thesis</h3>
&ldquo;We expect 2018 to feature an unprecedented extension of auto credit as well as unprecedented levels of strategic activity,&rdquo; Jonas said in a Tuesday note. &ldquo;We anticipate returns to be highly idiosyncratic in 2018.&rdquo; (See Jonas&#39; track record <a href="https://www.tipranks.com/analysts/adam-jonas">here</a>.)&nbsp;
Jonas gave six reasons for his take on the sector:&nbsp;&nbsp;
<ul>
<li>
		First, Jonas expects the <a href="https://www.benzinga.com/analyst-ratings/analyst-color/17/03/9198234/meet-the-companies-most-exposed-to-subprime-auto-risk">financing </a>and leasing momentum of 2017 to extend into 2018, buoying the industry to a 5-percent sales decline and, compounded with a potential increase in mix, supporting industry profitability.</li>
<li>
		Second, the accelerated <a href="https://www.benzinga.com/analyst-ratings/analyst-color/17/10/10144613/tesla-delays-gm-ramps-up-whats-the-new-timeline-for-aut">evolution </a>of vehicles places old and new models alike at risk of near-term devaluation and incentivizes consumers to lease rather than buy. The trend may stunt OEM sales and prompt a rise in product price.</li>
<li>
		Third, Jonas expects louder &ldquo;noise&rdquo; surrounding autonomous vehicles in 2018 as OEMs announce competitive strategies and update timelines.</li>
<li>
		Fourth, 2018 could see 2017&rsquo;s theme of spinoffs, buyouts, initial public offerings and general restructurings &ldquo;amplify materially&rdquo; and shake up asset portfolios.</li>
<li>
		&ldquo;We expect carve-outs to potentially have a bigger impact on stock prices than even the auto credit/cycle,&rdquo; Jonas said.&nbsp;</li>
<li>
		Fifth, Jonas anticipates a successful Model 3 ramp inspiring material change in auto investor theses and forming a chasm in the electric vehicle field between Tesla and its competitors.</li>
<li>
		Sixth, the transition toward electric and autonomous systems is seen to incentivize OEMs to return to vertical integration models, which shifts outsourcing business from suppliers and puts those exposed to the old auto industry at risk of obviation.</li>
</ul>
Considering these factors, Jonas named Goodyear his top pick for its exposure to the &ldquo;miles economy&rdquo; and replacement demand. He&rsquo;s &ldquo;warming up&rdquo; to Ford based on the potential for its strategy reveal, while he expects Tesla volatility based on destressing of its balance sheet.
Hertz and Avis are seen as having a 40- and 60-percent downside risk, respectively, amid rising competition from ride sharing services and vehicle cost inflation.
<h3>
	Price Action</h3>
At the time of publication, the auto-specific First Trust Exchange-Traded Fund II (NASDAQ: <a class="ticker" href="/stock/carz#NASDAQ">CARZ</a>) was trading at $42.15.
Related Links: 
	<a href="https://www.benzinga.com/news/17/12/10861597/truck-van-demand-drive-november-auto-sales">Truck, Van Demand Drive November Auto Sales</a> 
	<a href="https://www.benzinga.com/analyst-ratings/analyst-color/17/09/10040623/the-35-year-forecast-for-electric-vehicles">The 35-Year Forecast For Electric Vehicles</a>

Reiteration

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Short sellers targeting major auto stocks, growing their positions - S3 Partners

Watch these stocks at CES as electric vehicles and autonomous driving take center stage

Vehicle Sales: December 2024

Auto Inventories Depressed

Global Car Market In The Slow Lane: China Soars Ahead Of The West In Electrification

Used Car And Truck Prices Heading Higher On Tight Supply, Strong Demand, After U-Turn In Mid-2024 From Historic Plunge

Comments

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