Ford Motor Company (F)

[Cassius Clay]

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FoMoCo is pretty heavily dependent on Europe and demand in that regard has plummeted. This drop was very predictable and when earnings hit I see it as likely to fall through this support, but I doubt we'll see anything below $9(in the near term) barring any surprises from European banks.



There is some minor good news for longs though:

Ford lost 60k sales in Europe and 25k in APA last quarter. This is consistent with losses by competitors in the same regions. Though Ford lost market share in APA as a result, it maintained market share in Europe, indicating demand for Ford vehicles is strong among general demand for automobiles in the region. I expect significantly larger scale drops in vehicle sales in these regions, but if Ford can maintain market share, it should comfort the longs.

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Like I said previously, Ford is heavily invested in the European auto market. European, and to a lesser extent American, consumer confidence is dwindling and it is hurting Ford financially, but all indicators point to Ford maintaining market share and coming out strong post-Euro-crisis. This could mean artificially cheap shares for a strong long-term outlook. Now the question becomes, when is Europe going to get it together and what direct and indirect impacts will their stimuli have on Ford, as well as whatever other stocks you are trading? What can we realistically expect from Europe in the near-term and beyond? What should we expect from the Fed in our own backyard?