Friday, December 2, 2016

US Companies Conflicted

Here's what companies are saying about Trump by Matt Krantz, USA Today 12/1/16

After eyeing Donald Trump with caution leading up to the Presidential election, investors quickly hoped for the best after his win. Now companies are starting to speak up cautiously about what they see.

Trump has been discussed at recent earnings conference calls or at presentations with investors at 29 companies in the Standard & Poor's 500, including Dow Chemical (DOW), Medtronic (MDT) and Deere (DE), according to a USA TODAY analysis of data from S&P Global Market Intelligence. Wall Street might have boldly embraced Trump's more bullish platforms such as lowering corporate taxes, but most companies talking about the incoming president remain optimistic, but also more tentative as specifics are yet to be seen.

"Far be it for me to prognosticate on the elections," said Howard Ungerleider, chief financial officer at Dow Chemical during a company presentation on Nov. 29. "But I mean, if you think about a Republican House, Senate, and Republican-elect presidency as well ... I think the stock market has spoken at least in a view of lower taxes, potential for repatriation of cash overseas and potential growth."

While Trump's inauguration is still weeks away, company managements are looking at how new policies could affect their operations going forward. A few themes emerging so far include the need to be:

* Flexible in planning for the future. Given that investors are still in the dark about what Trump's specific proposals will be, some companies are looking at several what ifs. "Internally, we're evaluating different scenarios ... we're looking at what that impact may or may not be. But we're looking at all kinds of scenarios, because at the end of the day, we want to be prepared for whatever does become reality," Tony Huegel, director of investor relations at Deere told investors Nov. 23.

* Observant of the impact on U.S. economySeveral companies are focused on what the moves could mean for their own investments in America. The "U.S. economy is the bright spot in the world right now and continues to be. I mean, we're investing in the U.S. with our U.S. Gulf Coast assets," says Dow's Ungerleider. Vincent Roche, CEO of electronic chip maker Analog Devices (ADI), stated the company is in a "wait and see" mode until specifics are known, "but maybe on the margins, it'll be good, at least for the American business environment." And Robert Shanks, CFO at Ford, said in a special call to investors on Nov. 17, "They're (Trump Administration) focused on bringing manufacturing jobs back to the U.S. They're focused on building a stronger, more competitive infrastructure, which I think is - that's great for the country as well."

* Positioned to profit regardless of what happensIt's widely believed infrastructure spending will rise under Trump. That's expected to be a boon for construction planning companies, like Jacobs Engineering (JEC).  Jacobs' CEO Steven Demetriou said Nov. 22 the company was already bullish about construction, especially transportation projects in Texas, Florida and California, even before the election and had already invested there. "We were bullish on our capabilities to grow in transportation regardless of the election outcome. And so we're pleased to see a lot of the positive hype around what's going on with the Trump expectations," he says.

* Aware policy changes in motion don't necessarily stop. CEO of medical device maker Medtronic, Omar Ishrak, was careful to not speculate about the future, but was asked if a repeal of the Affordable Care Act would hurt business on Nov. 22. Ishrak reiterated moves in health care toward better outcomes and lower costs were already underway "and it doesn't really matter which administration or in which country you're in." The same goes for new rules on asset managers pushed by the Department of Justice, which Trump has spoken out against. "I'm not sure if a lot changes. So these are trends, as I said, that have been in place for years now, a lot of the things that we've been looking at," says Loren Michael Starr, chief financial officer at investment firm Invesco (IVZ). "I kind of think that once the train's out, it's just a little hard to stop the train."

Most the companies indicated they will find opportunity, no matter who is in the White House. "We're getting into our 52nd year now as a company. So we've gone through many regime changes across the world and many, many ... American presidents. So I think let's just wait and see," says Roche. "We've been around for 119 years. We've been through many world wars and many elections and many economic cycles, and so we're fully prepared to go forward the next four years as well," Ungerleider says.

S&P 500 COMPANIES THAT HAVE DISCUSSED TRUMP SINCE NOV.15 Company, symbol, date of mention
United Rentals (URI), 12/1
Republic Services (RSG), 12/1
CBRE, CBG, 12/1
Parker-Hannifin (PH), 12/1
Jacobs Engineering, JEC, 12/1
Northrop Grumman, NOC, 12/1
Cognizant Technology, CTSH, 11/30
Global Payments, GPN, 11/30
L-3 Communications, LLL, 11/30
Norfolk Southern, NSC, 11/30
Union Pacific, UNP, 11/30
Lockheed Martin, LMT, 11/30
Navient, NAVI, 11/30
Raytheon, RTN, 11/30
CME Group, CME, 11/30
CSX, CSX, 11/30
Kansas City Southern, KSU, 11/29
Baxter, BAX, 11/29
JP Morgan Chase, JPM, 11/29
Dow Chemical, DOW, 11/29
Tiffany, TIF, 11/29
Deere, DE, 11/23
Analog Devices, ADI, 11/22
Medtronic, MDT, 11/22
Cabot Oil & Gas, COG, 11/17
BorgWarner, BWA, 11/17
Ford Motor, F, 11/17
Becton, Dickinson, BDX, 11/17
Anadarko Petroleum, APC, 11/17
Source: S&P Global Market Intelligence, USA TODAY


Comments

The S&P gave $millions to Hillary to protect themselves from her retaliation.  It was like paying protection money the week before the Mafia went to jail and dissolved. 

The only companies I trust are the oil and coal guys. Most of these weasels were in bed with the Marxist Globalist cronies and have whiplash over the election. We can blame them for the Obama era because they knew everything and said nothing.

Now they are pounding on their calculators to see what their profit prospects are under a Trump regime. Hopefully, they will put their manufacturing plants in rural counties through the Midwest and restore the US economy.

Those companies who were knee deep into Globalism need replace their current Liberal executives with Constitutional Free Enterprisers.


Norb Leahy, Dunwoody GA Tea Party Leader

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