Corporate News

(Detroit)

This article, which takes the form of an economic overview of the US economy, includes an important comment from Goldman Sachs. Over the last few years the US auto industry has been surging, with great sales and strong profitability. However, Goldman Sachs says this is coming it an end as US auto sales have peaked and will be weaker in the years to come. This news couples with another chart in the piece which shows that the automotive industry comprises a big component of US exports to China, which means it could be one of the hardest hit if the US enters a trade war with the Asian nation.


FINSUM: Bad news for auto investors as not only do sales look likely to fall, but import tariffs may surge, sending costs higher.

Source: Wall Street Journal

(New York)

AT&T, the telecoms giant, is coming off a strong fourth quarter. The biggest hurdle for the company remains its acquisition of Time Warner, and despite rhetoric to the contrary, investors and the company seem confident Trump will approve the deal. The big upside for AT&T appears to be an improved operating environment under Trump. In particular, the net neutrality rule could be abolished, opening the door for more profits for the company. The company’s CEO is also optimistic Trump will succeed in lowering corporate taxes.


FINSUM: If net neutrality gets cancelled, AT&T could be one of the big gainers.

Source: Barron’s

(Tokyo)

If there is one truth in the car industry, it is that US cars do terribly in Japan. Despite the fact that the country imposes no tariffs on US cars, American automobiles hold no interest for Japanese consumers. Trump accuses the country of sabotaging American cars, and it is true that only 6% of cars in Japan are imported. Ford announced it was pulling out of the country and highlighted the many hurdles Japan puts in place for automakers, such as strange parts standards that don’t exist anywhere else. However, Japan points out that German cars like BMW do well, with German automobiles accounting for two-thirds of all imports.


FINSUM: This is one of the elements the withdrawal of the TPP will help, as if the US had joined it would have given Japan an even bigger advantage over US automakers.

Source: Wall Street Journal

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