Nio Inc – ADR (NYSE: NIO) is having an incrediblys trong start to the trading session in the pre-market hours. However, if you’re looking for press releases or company-specific news, you’re not going to find any. Nonetheless, that doesn’t mean that the gains are here for no reason. Today, we’ll talk about:
- Why NIO stock is headed up;
- what we’re seeing from the stock; and
- what we’ll be watching for ahead.
Here’s Why NIO Is UP
As mentioned above, Nio is having a strong start to the trading session this morning. However, with no news out, many are wondering why the stock is making a run for the top. The answer is actually quite simple.
The gains in the value of the stock seem to be correlated to recent developments in the trade war between the United States and China. Essentially, the leaders of the two countries seem to be coming to an agreement that could end the tense financial standoff.
NIO and other Chinese stocks are rallying this morning as a result. After all, the trade war between the United States and China has led to economic pain for the Chinese region. However, should sanctions levied by the Chinese government be lifted, we could see a rebound in the economy within the region.
Of course, this is great news for NIO. After all, consumers are less likely to make a big purchase, like the purchase of a new car, in times when they think that their economy is unstable. With economic conditions likely to improve ahead, we could see stronger sales of vehicles in the Chinese economy.
It’s also worthwhile to mention that China offers subsdidies to consumers who purchase electric vehicles that knock more than $7,000 off the price of these cars. Considering this, if the economic conditions in the region improve and these subsdidies continue, we could see strong growth in sales of vehicles at NIO.
Another thing that we want to keep in mind is that it is expected that NIO will report its earnings tomorrow. This could also be adding to the gains that we’re seeing in the value of the stock as investors are ecited to see the results.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that the news leads to moves. When it comes to Nio, while the company hasn’t released any news of its own, recent news surrounding the trade war has been positive. This, combined with a coming earnings report, seems to be the catalyst for today’s upward movement.
As is just about always the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (7:28), NIO is trading at $10.43 per share after a gain of $0.37 per share or 3.68% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on NIO. In particular, we’re interested in following the story surrounding the company’s coming earnings report and how a potential end to the trade war and resulting improved economy may lift sales for the comapny. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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