Watch These Bellwethers for Signs of Tariff Trouble

(Bloomberg) --

Most American companies will report second-quarter results in the coming weeks, giving us the first chance to hear directly from a wide variety of businesses since the U.S. and China agreed to resume trade talks.

The truce followed months of tension that has caused uncertainty and logistics headaches for manufacturers, which have born the brunt of the dispute so far. Many warned in April that the worst was yet to come.

Here are five bellwethers whose earnings will be closely watched for trade war trouble or triumph:

Apple

• Apple Inc., which reports on July 30, relies on a global supply chain and had a lot to lose if President Donald Trump had proceeded with his threat to impose stiff tariffs of on a new slate of imports from China. The renewed talks, which forestalled that prospect, should support the iPhone maker’s outlook, according to Bloomberg Intelligence.

Boeing

• Boeing Co. was also caught in the fray. The plane maker, which reports on July 24, has been negotiating one of the largest orders ever of wide-body jetliners with Chinese airlines even as tension escalated, according to people familiar with the matter.

Caterpillar

• Caterpillar Inc. took Wall Street by surprise twice this year with a downbeat outlook on China. Its results on July 24 may give insight on the world’s second-largest economy’s construction sector.

Ford

• Global automakers are among the biggest losers of tariffs and a  slowdown in the Chinese market. Look for Ford Motor Co.’s results on July 24 and General Motors Co.’s on Aug. 1. Harley-Davidson Inc. is another company to watch for fallout.

Intel

• China is a major market for the semiconductor industry. Intel Corp., which reports on July 25, said in April that a drop in orders had been more pronounced in the country. The chip industry was also hit by the Trump administration’s sanctions on Huawei Technologies Co., dealing a blow to suppliers like Micron Technology Inc.

Charting the Trade War

Today’s Must Reads

• Trade war bites | China’s economy showed signs of stabilizing at the end of the second quarter, which registered the weakest pace of expansion in records dating back to 1992.
• Few safe harbors | Asian suppliers to firms like Nike and Lululemon are finding they’re not geographically dispersed enough to succeed as tariffs fracture global production chains.
• Forex threats | Pimco warns that Trump’s complaints about the currency practices of key trading partners heightens the risk of U.S. intervention to weaken the dollar.
• Panama pinch | Cargo from the U.S. to China through the key waterway has slumped this year as the Asian giant reduces its imports of American products.
• Samsung lifeline | Korea’s largest company gets a temporary reprieve from a spat between Japan and South Korea that risks upending the global technology supply chain.

Economic Analysis

• FX vulnerability | An escalating trade war threatens to expose weaknesses in overvalued currencies. 
• China’s import slump | Another month of weak imports underscores weakness in domestic demand. 

Coming Up

• July 15: India trade data
• July 16: EU trade data
• July 16: WTO Deputy Director-General Alan Wolff, EU Trade Commissioner Cecilia Malmstrom among speakers at the Banque de France’s “Bretton Woods: 75 years later” conference in Paris.
• July 17: Singapore non-oil domestic exports 
• July 18: Japanese and Swiss trade data

To contact the editor responsible for this story: Brendan Murray at brmurray@bloomberg.net, Zoe SchneeweissSarah McGregor

©2019 Bloomberg L.P.