Photo: hjhipster via Flickr
Adam Jonas, Morgan Stanley’s auto analyst is out with a new note titled “The Sound of Silence.”We thought one line stood out:
In my 15 years covering the auto sector at Morgan Stanley I’ve seen both good times and bad, but we’ve never seen the phones go this quiet. Interest in the sector is really low right now, and we are sympathetic to the reasons why. Auto stocks are instruments of volatility and speculation. The risk of doing great bottom-up fundamental work that gets splayed by the blunt anvil of macro is extremely high. Many of our clients want to buy stocks with low exposure to sovereign risks in Europe, limited risk to slowing GDP in China and Brazil and little exposure to political and fiscal tail risk in the US. Well, that basically eliminates 100% of our auto coverage universe.
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