With Much Bad News Priced In, Is Ford Stock Finally Poised To Rally?

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F: Ford Motor logo
F
Ford Motor

Ford stock (NYSE:F) has declined by around 17% over the last month, underperforming the S&P 500 which remains down by roughly 6% over the same period. There are a couple of factors weighing Ford’s stock down. Firstly, the semiconductor and component supply issues following the Covid-19 reopening have hurt Ford’s overall deliveries in recent quarters, while also putting pressure on its costs. For example, over the first quarter of this year, Ford’s revenues were about 15% below 2019 levels. Ford has also issued recalls for around 3 million vehicles in the U.S. and Canada recently and this could also be impacting the stock. Moreover, there are macroeconomic concerns as well. With inflation surging, the Federal Reserve has been raising interest rates at a more aggressive pace, with another 0.75% rate hike likely around the corner. Higher rates could hurt economic growth in the U.S. while impacting rate-sensitive, cyclical sectors such as the automotive industry.

However, now that F stock has seen a decline of about 15% over the last month, will it continue its downward trajectory in the near term, or is a rally imminent? Going by historical performance, there isn’t a very strong chance of a rise in F stock over the next monthOut of 100 instances in the last ten years that Ford stock saw a twenty-one-day decline of 15% or more, 46 of them resulted in F stock rising over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 46 out of 100, or a 46% chance of a rise in F stock over the coming month, implying a negative near-term outlook for the stock. See our analysis on  Ford Stock Chance of A Rise for more details.

Calculation of ‘Event Probability’ and ‘Chance of Rise’ using last ten years data

  • After moving 4.4% or more over five days, the stock rose in the next five days on 53% of the occasions.
  • After moving 0.5% or more over ten days, the stock rose in the next ten days on 49% of the occasions
  • After moving -15% or more over a twenty-one-day period, the stock rose in the next twenty-one days on 46% of the occasions.
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With inflation rising and the Fed raising interest rates, Ford has fallen 44% this year. Can it drop more? See how low can Ford stock go by comparing its decline in previous market crashes. Here is a performance summary of all stocks in previous market crashes.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

 Returns Jul 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 F Return 4% -44% -4%
 S&P 500 Return 3% -18% 74%
 Trefis Multi-Strategy Portfolio 6% -18% 221%

[1] Month-to-date and year-to-date as of 7/9/2022
[2] Cumulative total returns since the end of 2016

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