With stocks at record highs and the economy shows signs of growth, autos—which typically do well in times of economic growth—are slumping.
China's stock market has been exceptionally volatile this year. While it is still up 22 percent year-to-date, the Shanghai Composite is down 23 percent from its June 12th high. The dramatic downturn has spilled over into other sectors of the economy, experts say, underscoring key areas of vulnerability to the economy.
This week Barclays released a bearish note downgrading autos to negative from neutral, citing several quarters of sluggish growth in China, where industry growth has stalled.
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The world's largest auto market saw auto sales tumble 2.3 percent in June year-over-year, according to China's Association of Automobile Manufacturers. It's the first year-over-year decline in monthly auto sales in more than two years.
That has left some analysts concerned, such as Barclays, which cut General Motors' price target to $36 from $44. The firm said the automaker will get hit the hardest by China headwinds, and that major risks stem from the deteriorating conditions in the Chinese auto market.
Barclays also wrote that there aren't enough catalysts to suggest any "meaningful upside" for the stock for the rest of the year.