Mike Segar/Reuters
- Concerns around President Trump's trade war and slowing Chinese growth are continuing to pop up during earnings calls with corporate executives.
- A large concentration of negative mentions can be found among industrials and materials companies.
- The impact is also being felt in the numbers: Earnings results within the materials sector are coming in 5% below consensus targets, according to Bank of America Merrill Lynch data.
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The effects of President Trump's trade war with China are reverberating through industrials and materials companies.
Firms within the two sectors have mentioned the negative impacts of tariffs and a slowing Chinese economy more frequently throughout the most recent earnings season, compared to the first quarter of 2019, according to a report from Bank of America Merrill Lynch.
"Industrials and materials continued to cite weakness in their end markets on slowing business spending and tariffs," BAML said of second-quarter earnings reports.
About three-fourths of industrial stocks in the S&P 500 have reported second financial results, and so far earnings are coming in just 2% above the consensus estimates, the firm said. Materials companies are faring worse, with earnings tracking 5% below consensus expectations.
Bank of America Merrill Lynch
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BAML also said Trump's 25% tariff increase in May could be driving the increased frequency of negative tones around China within earnings calls.
Out of the 45 companies that mentioned China trends, almost 50% were negative comments, compared to 28% in the first quarter.
Here are four of the companies that mentioned concerns about the trade war and slowing growth in China during their second-quarter earnings calls: