The ongoing trade war between the United States and China has overshadowed the stock market for more than a year.
While not every company is sensitive to the Chinese-American trade relationship, there are many that rely on China for manufacturing or even its consumer market. The following businesses have all blamed trade tensions and uncertainty for their underperformance in the previous quarter.
Honeywell International (NYSE: HON)
Software and industrial company Honeywell has blamed the Chinese relationship and other global economic signals for its underperformance in the second quarter. While the company exceeded income results, revenue was below analyst expectations.
Total revenue was $9.24 billion, down around 15% when compared to the same period last year. Honeywell operates in every developed market, so the global economy can have a significant impact on its business. The company said that it would be taking a “cautious view on short-cycle growth as many macro signals, China GDP, U.S.-China trade tensions, and Brexit, just to name a few, are still clouding the economic outlook.”
Honeywell has gained 30.93% on the stock market in 2019.
Trade effects in Nike Inc. (NYSE: NKE)
Apparel and footwear manufacturer Nike also mentioned China when reviewing its performance.
The company reported earnings last month, with fourth quarter net income of $989 million from revenue of $10.18 billion. While revenue was up slightly from the $9.79 billion that was generated a year ago, the company still underperformed its targets. Executives cited a rising U.S. dollar, Brexit, and Chinese trade tensions as leading factors.
Nike has gained 16.74% on the stock market in 2019.
FedEx Corp. (NYSE: FDX)
As far as trade vulnerability goes, FexEx Corp. is near the top of the list. With a business that centers almost exclusively around the transportation of goods, FedEx needs strong international trade to maintain growth.
FedEx did not hold back when blaming the situation for its underperformance. The company lost almost $2 billion in the first quarter and told investors that “Global trade disputes and low global growth rates create significant uncertainty for the express business.”
FedEx has gained 3.60% on the stock market in 2019.
Trade tensions do have a very real impact on the U.S. economy and the stock market. These are just three businesses that have been damaged by ongoing tensions, and the list could get bigger if a long term deal is not reached in 2019.
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