July 5, 2016 — The four day rally is over. Automotive retail stocks are getting slaughtered today along with the rest of the stock market today. A steep drop in crude oil prices along with Brexit fears which reignited as Great Britain’s Conservative party began the first round of selecting its new leader today are the culprits.
The stock prices of the seven public dealer groups rebounded last week following the two day selloff on Friday June 24 Monday and June 27 after Great Britain voted to leave the European Union. The rally was short-lived apparently. As of 3:05 ET today, the board was looking ugly. The two groups with dealerships in the U.K., Penske Automotive and Group 1 Automotive, both hit their 52-week lows today as the public groups neared their year-lows also.
It’s likely, the international markets will continue to have rough days as the Brexit saga plays out in the headlines. Don’t be surprised if this Thursday follows the same pattern today. The Conservative party’s next round of voting is Thursday July 7 as the Tories whittle down a list of five candidates to determine a replacement for Prime Minister David Cameron. The candidate with the lowest vote total in each round is eliminated from contention. Another vote was scheduled for next Tuesday, but with Liam Fox being eliminated today and Stephen Crabb’s pulling out just minutes ago, next Tuesday’s vote is unnecessary.
The two top vote getters on Thursday will square off in a vote by party members by September 2.