Tariff Quote Watch: Brexit Is The New Tariff As 1-in-4 Firms Talk About Trade — Panjiva
Más

Panjiva_research_logo

Tariff Quote Watch: Brexit Is The New Tariff As 1-in-4 Firms Talk About Trade

Brexit 68 China 1758 European Union 406 Industries 14 Tariff Quote Watch 91 Tariffs 1169 U.S. 3297 United Kingdom 194

With around 60.0% of companies having reported calendar 4Q earnings it appears that businesses worries are turning more to Brexit than to U.S. tariffs. Panjiva analysis of S&P Global Market Intelligence transcript data shows 1,158 companies out of 4,684 that have held conference calls since the start of the year – or 24.7% – have mentioned either Brexit or tariffs. That’s similar to the whole of the conference calls held in 4Q.

However, there’s been a shift with more concerned about Brexit than before with 11.5% mentioning it this quarter from 6.1% last quarter while mentions of tariffs have dropped to 16.9% from 20.8%.

SAME STRESS, DIFFERENT WORRIES

Chart shows proportion of earnings and other conference call transcripts where keywords “tariff” or “Brexit” are mentioned. Note some calls will mention both. Data based on S&P Global Market Intelligence data.   Source: Panjiva

At the industry level companies in the materials sector appear to have become less concerned – or at least see fewer issues – with 24.5% of calls so far in 1Q having mentioned tariff or Brexit from 30.7% in 4Q. That’s likely the result of section 232 steel and aluminum tariffs having been in place since March 2018 and now very much “business as usual”. Potential reductions of tariffs applied to Canada, Mexico and Europe may lead to a resurgence of interest.

That means the level of mentions in materials has dropped below those of both consumer discretionary (36.3%) and consumer staples (25.6%) where Brexit-related supply chain issues may be becoming more of a concern. The latter is also an issue for the healthcare sector – as outlined in Panjiva research of Feb. 12 – though concerns generally are lower than other sectors with just 8.3% of calls discussing the topics.

The most frequent level of mentions, however, has been the industrial sector with 47.6% calls discussing tariffs or Brexit, up from 45.3% in the fourth quarter. Given U.S.-China trade talks appear to be nearing a conclusion sentiment may turn more positive, or simply get fewer mentions later in the earnings reporting season.

CONCERNS ABOUT TRADE POLICY GROWING IN INDUSTRIALS AND DISCRETIONARY

Chart segments proportion of earnings and other conference call transcripts where keywords “tariff” or “Brexit” are mentioned by sector. Data based on S&P Global Market Intelligence data.   Source: Panjiva

PANJIVA RESEARCH is a service provided by Panjiva, Inc. ("Panjiva") to relevant global subscribers, and are deemed to be Panjiva "Services" subject to the Panjiva Terms & Conditions of Use. Information contained within or made available via the Services is for informational purposes only and nothing in the Services shall constitute or be construed as an offering of financial instruments, or as investment advice or recommendations by Panjiva, Inc. or its affiliates of an investment strategy or whether to "buy", "sell" or "hold" an investment. The Services may include views and commentary about customers of Panjiva. No aspect of the Services is based on consideration of your individual circumstances, and you should determine on your own whether you agree with the information contained within or made available via the Services. Employees involved in Panjiva Research may hold positions in securities analyzed or discussed in the Services. Panjiva does not make any express or implied warranties, representations, endorsements or conditions with respect to the Services and the information contained within or made available via the Services, including without limitation, warranties as to the usefulness, completeness, accuracy, currentness, reliability or sufficiency of any information (including, without limitation, conclusions, statements, opinions, estimates, forecasts or projections of any kind) and expressly disclaims any implied warranties. Neither this disclaimer nor any of its contents may be forwarded or redistributed without the prior written consent of Panjiva. © 2019 Panjiva, Inc. All Rights Reserved.