The latest Market Talks covering the Auto and Transport sector. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.

1542 GMT - Airlines have already responded to timid demand in recent months with capacity cuts, so their performances in the back half of the year will depend on consumers' travel behavior, Morgan Stanley analysts say in a research note. Management teams have already made it clear recently that domestic travel revenue is still challenging, the analysts say. Most of the industry would like to see more capacity come out, they say. While there could be some more rationalization in 4Q, 3Q is probably baked in, the analysts say. Tax cuts, interest-rate cuts and some inflation relief could get consumers traveling again and deliver a stronger demand-supply environment, the analysts say. (dean.seal@wsj.com)

1501 GMT - Stellantis' stock has fallen sharply in recent months but it's too early for "bottom-fishing," BofA Securities analysts say in a research note. They expect the US--where its automotive brands include Chrysler, Jeep and Ram--will return to strength driven by important model launches. "But we have some concerns over Europe, where we consider the company is badly positioned on [battery electric vehicles] against rising competition," say the analysts. They add that they expect a very weak 1H25 and see the year as one of transition as they consider struggles in Europe and tariffs as it relates to the U.S. market. The analysts downgrade Stellantis to neutral from buy. (denny.jacob@wsj.com; @pennedbyden)

1222 GMT - German industrial production exceeded expectations in May, a welcome sign of improving hard data for the sector, Deutsche Bank's Marc Schattenberg says in a note. The 1.2% rise comes after survey indicators had already brightened, he says. The increase was helped by the automotive and pharmaceutical sectors, though construction dragged. The German government's proposed increase in public investment should support growth in construction and elsewhere in the coming quarters, Schattenburg says. However, the trade conflict with the U.S. remains a significant risk for the export-oriented manufacturing sector for now. (edward.frankl@wsj.com)

1140 GMT - Poste Italiane's shares seem fairly valued given that there seems to be limited scope for a positive earnings surprise, JPMorgan says in a research note. The Italian financial-services group should keep delivering solid earnings and beating its targets thanks to stronger insurance and financial-service profits, analysts write. "We believe consensus is factoring this in, which leaves the risk/reward more balanced," they say. JPM lowers its rating on the stock to neutral from overweight and has a 20 euro price target. Shares, which have gained 33% year to date, edge up 0.5% to 18.1 euros. (elena.vardon@wsj.com)

0926 GMT - XPeng's G7 model is expected to sell around 8,000 to 10,000 units per month, Citi analysts write in a note. The company launched the mid-size SUV G7 last week, with prices ranging from CNY195,800 to CNY225,800. The model received over 10,000 non-refundable orders within nine minutes of its launch. Citi notes that investors should monitor the G7's order growth trend at a later stage, they say. The performance of the G7 model is likely to be middle-of-the-road, as its size is smaller than Xiaomi's YU7 and it comes only in a two-wheel drive with a maximum of 296 horsepower, significantly lower than Zeekr's 7X model. The G7's main selling point lies in its autonomous driving features and smart cockpit, Citi says, though these are unlikely to make it as popular as Xiaomi's YU7. (jiahui.huang@wsj.com; @ivy_jiahuihuang)

0838 GMT - Tesla shares are falling Monday premarket after Chief Executive Elon Musk said he created a new political party. Tesla stock closed 0.1% lower at $315.35 on Thursday ahead of the July 4 holiday. Shares are down 7.2% at $292.60 Monday premarket. Musk announced the America Party on Saturday, weeks after the billionaire said he had gone back to spending significant time at his companies. Investors were concerned that he had taken his eye off the ball during his time with the Trump administration. President Trump criticized Musk in a Truth Social post, saying a new party would bring chaos and disruption. (mauro.orru@wsj.com)

0722 GMT - BYD will likely see near-term market volatility given recent industry news around price competition, DBS analysts write in a note. The recent share price volatility would give investors some opportunity to buy on dips, they add. Aligning supply and demand is a decisive move taken by BYD to lower inventory pressure, allowing the market to consume the available inventory, after news about BYD adjusting production to a more realistic level, they say. The auto industry has been facing over-capacity issues in recent years, which has led to severe market competition, they add. BYD's production adjustment is likely to bring utilization rate down to the mid-70% level this year, DBS says. While BYD has suspended plans to venture into Mexico, its long-term overseas strategy remains intact, they say. (jiahui.huang@wsj.com; @ivy_jiahuihuang)

0618 GMT - Japan likely won't sign a trade deal with the U.S. unless it includes a big cut to the 25% tariffs on autos, say analysts at BMI, a unit of Fitch Solutions. Automobiles account for nearly 30% of Japan's U.S.-bound exports and are central to employment and industrial output. With parliamentary elections due mid-July, the government will want to avoid any deal that looks like a concession to the U.S. or erodes national security, BMI says. That said, a deal may not be as far off as news reports suggest, as the Trump administration seems more concerned with the optics of striking deals than narrowing trade deficits. Japan could offer token concessions--such as buying more U.S. rice--to avoid shocking its economy. BMI expects it to ask for an extension and continue negotiations. (fabiana.negrinochoa@wsj.com)

0418 GMT - Southeast Asia's oil and gas sector may remain steady in 2H, as oil prices face limited upside due to higher OPEC+ output and softening risk premiums, RHB IB analyst Sean Lim and team say in a note. Brent crude is projected at $70/bbl in 2025, while potential capital expenditure cuts by Petronas and uncertainties in Sarawak may weigh on activity levels, they add. They prefer floating production storage and offloading vessel and maintenance-related players for their earnings resilience. RHB maintains a neutral rating on Southeast Asia's oil and gas sector, pegging Bumi Armada, Yinson, MISC, AKR Corporindo and Elnusa as its top picks. (yingxian.wong@wsj.com)

0323 GMT - Grab's transaction volumes for mobility may retain solid momentum, driven by growing demand of two-wheels rides and an increased supply of GrabTaxi in Singapore, Citi analysts write in a note. The company's revenue is likely to continue an accelerated trend from 2Q, led by effective adoption of new products including GrabFood for One, Grab for Family, Citi says. Citi remains constructive on Grab, citing its solid execution track record, continued product innovation, relatively low user penetration ratio and a stable competitive landscape. The brokerage maintains a buy rating on the stock with a target price of US$6.20. Shares last traded at US$4.87. (jiahui.huang@wsj.com; @ivy_jiahuihuang)

(END) Dow Jones Newswires

July 07, 2025 12:20 ET (16:20 GMT)

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