While both careful not to specifically cite the politically unwise 'tariffs', Boeing, GM, and Fiat Chrysler stocks are plunging in the pre-market after trade war-related impacts caused missed earnings or lowered outlooks.
General Motors Co. cut its forecast for profit this year as surging prices for steel and aluminum combine with swings in South American currencies to burden the largest U.S. automaker. Specifically, Bloomberg reports that raw material costs probably will be a $1 billion headwind to GM’s profit this year - roughly double its previous expectation - while the Argentine peso and Brazilian real are likely to drag on results through the remainder of 2018.
Fiat Chrysler Automobiles NV cut its financial targets after disappointing sales in China took a toll on second-quarter results (and the sad news of the death of former CEO Sergio Marchionne). Specifically, as Bloomberg reports, the Italian-American automaker lowered its guidance for revenue and profit this year, and said higher competition and slumping sport utility vehicles sales in China had hurt revenue.
It's a bloodbath - GM is down around 5% and Fiat Chrysler around 11%...
The rest of the auto space is also under pressure with Daimler -3%, Ferrari -2.9%, Volkswagen -2.5%.
It's not just autos, however, as Boeing reported a $418 million blow from additional costs as it prepares to deliver the first of its delay-plagued aerial tankers to the U.S. Air Force, rattling investors accustomed to smooth sailing from the world’s largest planemaker. Boeing's core EPS guidance missed its midpoint and the stock is reeling.
As Bloomberg notes, Boeing's recent the ascent has slowed in recent months as tariffs imposed by President Donald Trump have fueled trade tensions and threatened to dent Boeing’s order book. “Trade and tariff risks have kept sentiment on BA stock recently in check,” Canaccord Genuity analyst Ken Herbert said in a report Tuesday, referring to Boeing by its stock ticker.
And as Boeing falls, it is weighing on The Dow...
Time for another bailout from Washington?