How XPeng and Newmont avoided Friday’s stock market rout

Equity investors remain unconvinced that the recent regional banking crisis is over, and Friday’s market action showed the extent of their jitters. Many bank stocks fell again on fears that the measures taken by the country’s largest banks will not address the main challenges facing the sector.

It sent the Dow Jones Industrial Average (DJINDICES: ^DJI) And S&P500 (SNP INDEX: ^GSPC) down more than 1%, although Nasdaq Compound (NASDAQ INDEX: ^IXIC) held up a little better.

Data source: Yahoo! Finance.

With generally pessimistic sentiment among investors, it was nice to see some stocks managing to post gains. XPeng (NYSE: XPEV) rose after the Chinese electric vehicle (EV) specialist published its latest financial report. Newmont (NYSE:NEM) also recorded gains as the gold miner saw favorable market conditions in the precious metals sector. Below you will learn more about what affects these two companies.

XPeng faces sluggish conditions

Shares of XPeng ended the day up 6%, but EV stock was volatile. The stock had risen 14% earlier on Friday as investors digested the company’s fourth quarter financial report.

XPeng has struggled in a difficult environment in China for EV vendors. Quarterly revenue fell 40% year over year as vehicle deliveries fell 47% to just over 22,200. Margin performance was weaker leading to losses much more important for the automaker than those of XPeng in the fourth quarter of 2021.

Things don’t seem to have improved much to start 2023, as January and February shipments only totaled 11,228. XPeng forecasts it will end the first quarter with shipments between 18,000 and 19,000, down down 45% to 48% from the first quarter of 2022. Revenue will likely be down 44% to 46% year over year as well.

Considering all of this, it was a bit surprising to see XPeng’s stock increase. Still, investors seemed to like the idea that the company would shift its focus away from its vehicles themselves, to focus more on the technologies that drive them. Combining this factor with cost-cutting measures and attempts to improve efficiency, XPeng appeared to capture what shareholders wanted to see in an admittedly tough market for Chinese EV makers.

Image source: Getty Images.

Newmont looks golden

Elsewhere, Newmont shares rose 5%. It was a generally good day for gold miner stocks; the precious metal has received more favorable attention lately, as it is a traditional safe haven in times of financial difficulty.

Gold prices climbed more than $70 an ounce on Friday, or nearly 4%, on concerns about the global banking system. This took the price of the yellow metal to $1,994 per ounce, stopping just short of the psychologically critical (though basically insignificant) $2,000 level. Some market commentators have noted that with future Federal Reserve action now uncertain, the possibility of interest rates falling sooner than expected makes gold more attractive.

Investors can own physical gold directly, but owning shares of Newmont has certain advantages. The stock is exposed to gold prices, but it also pays dividends based on industry conditions. With a current yield of 3.6%, Newmont looks attractive as an income-generating investment as well as a precious metals bet. Additionally, Newmont has been pushing to grow its business, with a $17 billion takeover bid for its Australian counterpart Newcrest being just its latest strategic move.

If gold continues to do well, Newmont is likely to participate in its gains. And with the stock significantly lower than where it was this time in 2022, that strength could send Newmont’s stock price significantly higher.

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Dan Caplinger has no position in the stocks mentioned. The Motley Fool has no position in the stocks mentioned. The Motley Fool has a disclosure policy.

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