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While the United States and China finally formalize import tariffs, Wall Street is preparing to dissect the profits of US companies in the coming weeks to detect the effects of a trade war and determine if this will affect spending plans. Investors fear that the trade dispute with China, the largest trading partner of the United States, will push companies to postpone their capital expenditure plans, which jumped in the first quarter after the end-December tax review. China imposed a $ 34 billion import duty on Friday, which only worsened the dispute and hinted that the dispute would soon end.
Machinery, aerospace and other industrial names were the most affected. The S & P 500 industrials have fallen more than 5% since March 1, when US President Donald Trump announced that he would impose high tariffs on steel and aluminum, then that the S & P 500 has risen by more than 1%. According to Quincy Krosby, Chief Market Strategist at Prudential Financial, [traduction] "What we hear from a number of CFOs is that if the issue continues to dominate the headlines and to create even more uncertainty, these plans may be unresolved, "she said.
"Headaches"
In the first quarter, S & P According to data from S & P Dow Jones, the growth in capital expenditures was the highest since 2011. The strategists of DataTrek Research said in a recent note that the "main puzzle of planning" for business executives during the second half of the year will come from trade-related uncertainty and rates.
"The main concern is the supply chain, so small parts for almost everything are made in China, and there may be a real hold-up in manufacturing because of these tariffs. is a balance, "said Tim Ghriskey, investment strategist at Inverness Counsel." For every injured business, there is a business that is helped. So, this is not negative for everyone by all means.
Second quarter reports come into effect this week with results from JPMorgan Chase, Wells Fargo and Citigroup More than 200 S & P 500 reports are expected in the next two weeks, including some companies that could be caught in the middle of a US trade war with China.
They should include results from Honeywell, Boeing, Whirlpool and Western Profit forecasts that include a potential tariff impact could even overshadow growth second-quarter earnings, which badysts say could equal or surpbad the 26.6% gain from year to year in the first quarter. "According to Thomson Reuters data, this was the more important since the fourth quarter of 2010.
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