Thursday’s sell-off in auto stocks may look tempting to investors who are used to buying the dip. However, Josh Brown warns the worst isn’t over for the sector — and to avoid exposure. Major carmakers declined Thursday after President Donald Trump announced his plans to impose a 25% tariff on “all cars that are not made in the United States,” effective April 2. General Motors dropped around 6%, while Ford and Stellantis pulled back 2% and 1% each. Within the 14 publicly traded companies in the auto manufacturer industry trading on the NASDAQ and the New York Stock Exchange, five companies are trading significantly below “every moving average — and that list is growing,” Brown told CNBC’s “Halftime Report” on Thursday. He highlighted Rivian, Tesla, Lucid, Ford and General Motors as the struggling names. Traders often look at moving averages on charts to determine long term trends. “Usually when you have stock sell off like this, you can lean back on the fundamentals; You could say. …I think this is overdone. You can’t say that here,” said Brown. “Out of those 14 auto manufacturer names, five of them are not even profitable on a net income basis,” Brown added. “So I think the pain continues.” Brown advised investors who currently have exposure to auto stocks to reduce their exposure in the case of a short-term relief rally. “If you get an opportunity because Trump speaks out of the other side of his mouth, and these stocks catch a 6% plus, 7% relief rally, I would use it,” Brown said. —CNBC’s Michael Bloom contributed to this report. Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange! Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange. In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12. Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles, and Dan Ives, with a special edition of Pro Talks with Tom Lee. You’ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!
