Stellantis stock may return to its October low in the short term

The return of economic fears is putting pressure on the auto sector

Stellantis (STLA) stock looks set to start another bearish reversal from major resistance as global economic fears return. As the auto industry is pro-cyclical, being highly dependent on financial conditions and the economic outlook, Stellantis shares have been falling since last week following statistics showing a gloomy economic outlook.

The S&P/Markit manufacturing PMIs for the three largest economic blocs fell for the first time since the start of the pandemic, while the Chicago PMI fell to a level consistently coinciding with a recession in the US economy. . Moreover, the yield curve has never been so inverted since the early 80s.

Nevertheless, a recession does not yet appear imminent, as industrial production continued to rise in October (factories continue to produce as middlemen and sellers restock their inventories), as did the services sector (which generally lags behind in the economic cycle).

With monetary tightening expected to continue worldwide in 2023, financial conditions are expected to continue to tighten in the coming months, which should accentuate the economic slowdown, especially for durable goods such as vehicles. The outlook for the entire automotive sector therefore remains negative in the short/medium term.

Stellantis (STLA) stock price daily chart – key levels

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