Wall Street’s three main indexes ended sharply higher on Friday and advanced to record closing highs as better than expected second-quarter earnings, and signs of economic revival fueled investor risk appetite. The optimism around stock markets is also boosted by the fact that the Federal Reserve reported that it is still waiting for improvements before changing a monetary policy.  The stimulus program would remain in place until the economy, and the labor market makes a full recovery.

“The U.S. still looks like the best house on the block when you look around the world, even though there are concerns about inflation and labor. We’ve seen some increase in cases in COVID, it hasn’t been enough to give people too much pause in the market,” said Joseph Sroka, chief investment officer at NovaPoint in Atlanta.

On the other side, the battle against the coronavirus is still not over, and the global recovery could be hit by the fast-spreading Delta variant of the coronavirus, which could trigger new lockdowns. This is very dangerous for the automotive industry because this industry has been affected significantly by the pandemic, and many automobile companies have seen revenues drop by double digits.

General Motors (NYSE: GM), Ford (NYSE: F), and Toyota (NYSE: TM) continue to perform well in the current market environment; still,  if the U.S. stock market enters a more significant correction phase, the share prices of these companies could be at lower levels.

General Motors shares continue to trade above $50 supportData source: tradingview.com

When we look at the chart above, we can see that this stock price has advanced more than 30% since the beginning of 2021 year. The critical support levels are $50 and $40; $60 and $70 represent the resistance levels.

If the price falls below the $50 support level, it would be a firm “sell” signal and maybe a trend reversal sign. On the other side, if the price jumps above $60, the next target could be around $65.

Ford shares have found strong support above $13

Ford shares have weakened from their recent highs above $16 registered in June 2021, and the current price stands around $13.8. Ford continues to expand its business, but the Delta variant of the coronavirus still poses a risk for the upcoming quarters.

Data source: tradingview.com

If the price jumps again above $15, it would confirm a bullish trend, but if the price falls below $13, it would be a firm “sell” signal and an open way to $12 support.

Toyota shares are still not able to advance above $190 resistance

Toyota shares have been moving in an uptrend last several months, but the price can still not advance above $190 resistance.

Data source: tradingview.com

If the price jumps above $190, the next target could be around $200, but if the price falls below $160, it would be a strong “sell” signal.

Summary

Wall Street’s three main indexes advanced to record closing highs on Friday as better than expected second-quarter earnings together with FED comments boosted investor’s optimism. General Motors, Ford, and Toyota continue to perform well in the current market environment; still, the Delta variant of the coronavirus still poses a risk for the upcoming quarters.

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