Carmakers Face Uncertainty as Tariffs and Earnings Collide
Investors in auto firms, which sit squarely in the bullseye of US President Donald Trump's trade war, are about to find out if earnings back up the sector's scorching rebound from this year's lows.
A gauge of stocks of US carmakers and suppliers has soared more than 40% from its tariff-fueled April depths, handily beating the S&P 500 Index's 26% gain. Meanwhile, the MSCI World Auto and Components Index has climbed 30% in that period, outpacing the MSCI World Index's 25% advance.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
11 minutes ago
- Yahoo
Starmer to raise Gaza ceasefire and UK steel tariffs in Trump meeting
Sir Keir Starmer is expected to raise the prospect of reviving ceasefire talks between Israel and Hamas and the future of tariffs on British steel as he meets Donald Trump in Scotland. The Prime Minister will travel to Ayrshire, where the US president is staying at his Turnberry golf resort, for wide-ranging discussions on trade and the Middle East as international alarm grows over starvation in Gaza. The two leaders have built a rapport on the world stage despite their differing political backgrounds, with Mr Trump praising Sir Keir for doing a 'very good job' in office ahead of their talks on Monday. But humanitarian conditions in Gaza and uncertainty over US import taxes on key British goods in America threaten to complicate their bilateral meeting. Peace talks in the Middle East came to a standstill last week after Washington and Israel recalled negotiating teams from Qatar, with White House special envoy Steve Witkoff blaming Hamas for a 'lack of desire' to reach an agreement. Since then, Israel has promised military pauses in three populated areas of Gaza to allow designated UN convoys of aid to reach desperate Palestinians. But the UK, which is joining efforts to airdrop aid into the enclave and evacuate children in need of medical assistance, has said that access to supplies must be 'urgently' widened. In his talks with Mr Trump, Sir Keir will 'welcome the President's administration working with partners in Qatar and Egypt to bring about a ceasefire in Gaza', Number 10 said. 'He will discuss further with him what more can be done to secure the ceasefire urgently, bring an end to the unspeakable suffering and starvation in Gaza and free the hostages who have been held so cruelly for so long.' The leaders will also talk 'one-on-one about advancing implementation of the landmark Economic Prosperity Deal so that Brits and Americans can benefit from boosted trade links between their two countries', it said. The agreement signed at the G7 summit last month slashed trade barriers on goods from both countries. But tariffs for the steel industry, which is of key economic importance to the UK, were left to stand at 25% rather than falling to zero as originally agreed. Concerns had previously been raised that the sector could face a levy of up to 50% – the US's global rate – unless a further agreement was made by July 9, when Mr Trump said he would start implementing import taxes on America's trading partners. But that deadline has been and gone without any concrete update on the status of UK steel. Downing Street said that both sides are working 'at pace' to 'go further to deliver benefits to working people on both sides of the Atlantic' and to give UK industry 'the security it needs'. The two leaders are also expected to discuss the war in Ukraine, which Number 10 said would include 'applying pressure' on Vladimir Putin to end the invasion, before travelling on together for a private engagement in Aberdeen. It comes after Mr Trump announced he had agreed 'the biggest deal ever made' between the US and the European Union after meeting Ursula von der Leyen for high-stakes talks at Turnberry on Sunday. After a day playing golf, the US leader met the President of the EU Commission to hammer out the broad terms of an agreement that will subject the bloc to 15% tariffs on most of its goods entering America. This is lower than a 30% levy previously threatened by the US president. The agreement will include 'zero for zero' tariffs on a number of products including aircraft, some agricultural goods and certain chemicals, as well as EU purchases of US energy worth 750 billion dollars (£558 billion) over three years. Speaking to journalists on Sunday about his meeting with Sir Keir, Mr Trump said: 'We're meeting about a lot of things. We have our trade deal and it's been a great deal. 'It's good for us. It's good for them and good for us. I think the UK is very happy, they've been trying for 12 years to get it and they got it, and it's a great trade deal for both, works out very well. 'We'll be discussing that. I think we're going to be discussing a lot about Israel. 'They're very much involved in terms of wanting something to happen. 'He's doing a very good job, by the way.' Mr Trump's private trip to the UK comes ahead of a planned state visit in September.
CNBC
43 minutes ago
- CNBC
Why a great company's beat and raise was sold, and what I plan to do with the stock
When is a beat and raise not a beat and raise? That's a question that has frustrated us this earnings season. Case in point: How about Honeywell 's beat and raise last week? Here's a conglomerate splitting into three different companies, which also has a quantum computing business that's probably more advanced than any of the publicly traded quantum entities. Honeywell has an amazing aerospace business that handles the cockpit for most commercial airlines and a host of other accoutrements, including propulsion. It will very much participate in the aerospace boom and is only being held back by how many planes Boeing is allowed to make each month. That number will be going up soon. The automation business is about, among other things, industrial cybersecurity, smart grid, and regulated energy. There are underperforming divisions that if they are not fixed will be sold. The chemicals and materials businesses, including sustainable refrigerants, chemicals needed to make semiconductors and materials for carbon capture. Boring stuff but stuff that tends to be No. 1 in its category. The advanced materials business seems to be the legacy of Allied Chemical, which became Allied Signal, before merging with Honeywell. On last week's earnings call , management updated the timing on the breakup, saying the spinoff of advanced materials will happen in the fourth quarter. The other two are slated for the second half of 2026. At no point will these divisions be static. When there is something that can be done to make each better, it will be done, like the acquisition of Carrier 's global security business for $4.9 billion last year, a great price because Carrier needed to get to investment grade and did so by selling the division to Honeywell. Vimal Kapur, who became Honeywell's CEO in June 2023, takes after Dave Cote, the CEO before Darius Adamczyk. Cote is a legendary figure when it comes to creating value. I give you that history because Honeywell's stock, as of Friday's close, was down 0.7% year to date versus the S & P 500 's gain of 8.6% in 2025. Shares of Honeywell are trading nowhere near where they will trade as the split comes to fruition. Oddly, if it weren't breaking up, I think, at this point, it would trade higher than it does right now after that astonishing collapse last week based on, well, nothing. There was a margin issue in one division that will be fixed. There were two underperforming segments that will most likely go. There will be three companies that will either stand on their own or be bought by private equity, although the scarcity in aerospace company coupled with a pro-merger Federal Trade Commission will probably make that company a takeover target almost immediately. HON 1M mountain Honeywell 1-month performance While I have no idea why Honeywell's stock really collapsed, I can take the conspiratorial view, that some of the hedge funds who were short Kohl's decided to blow me up using a complex method of call buying and shorting. I know it seems phantasmagorical. But, when I started my Charitable Trust, whose holdings make up the CNBC Investing Club portfolio, I played open-handed and took fire quite often — even dealing with some who hinted that's exactly what they were doing. That's a dangerous game. I know what I am doing. I make mistakes, but a company like Honeywell — and Dover and DuPont , for that matter — are not among them. The Club owns all three. Another possible reason: Honeywell's structure could be too hard to understand. There are a huge number of divisions within divisions. You could ChatGPT these all day long and not figure out how they come together. But that's OK. That's what is being rectified by the planned split. But all of them are part of the reshoring and the reindustrialization of America. When you hear President Donald Trump getting $550 billion from the Japanese, Honeywell will get its share, whether it is from plane orders, or industrial buildings, or the myriad chemicals it takes to make things safely. Honeywell's split could be too far off. We call it spin purgatory , a period where nothing happens other than the back off separation of the divisions. Like with Honeywell, we're seeing that happen in DuPont, too, which trades like death. So, did Kenvue , when Johnson & Johnson spun it off. There's all of this red tape about new boards and new procedures that aren't everyday occurrences. No one can explain the length of time it takes. But it takes time and people aren't patient. They really want to wait until they see the whites of their separation eyes. It could also be the lack of real data center exposure. The only industrials that are working are the ones with data center exposure. While building automation within Honeywell has some, it is obviously not enough. What's my conviction based on then? How can I believe in Honeywell's stock, which does a beat and raise and it gets clobbered anyway; or that it has had a previous ones that were also poorly received, too? I give you a few reasons. First, discouragement is not a good quality to base an investment decision on. That's what I did with Emerson . It had two shortfalls, and I decided that its reorganization based around electrification wasn't going to work. I bolted after the second one. My total bad. They got it together even after a hostile bid that they won, and this very difficult to understand ugly duckling became a swan. I felt the same way with Oracle . The company had made a somewhat dispiriting acquisition of medical records company Cerner, and I had no idea what the hell that was about. Then it decided to get into data centers. Not once, but twice, they disappointed in their data center goal. I was livid. So, I kicked it out. It then ran higher. I had isolated two fantastic stock ideas. And, just when they got hammered a second time, I fled, right before they were recognized as great situations by everyone. I can't let that happen again. Curiously, the pain was the greatest after that second miss, when people were truly fed up. This one is the worst and, yet, I would argue it wasn't as bad a miss, if it were a miss at all. Second, people don't believe that Kapur can actually improve each of the three companies that are developing. They fear lost focus. They fear economic cycles. They fear that he is in the "wrong" industries even as private equity firms are routinely in the wrong industries, yet they are fine. Kapur knows how to multitask. Three, there is tremendous fright here in the way Honeywell stock trades, The moves are particularly vicious. They are from peak to trough, tremendously ugly, devoid of any support whatsoever. I wish I had an answer to this one. All I can say is that the decline has to be bought because the overreaction is ridiculous. I know when a stock is down nearly 14 points on a given day, as it was after Thursday's earnings print, it is typically not done going down. The selling from the previous day tends not to be finished. Too many sellers. And, that's what happened. Friday's opening hours were hideous as the sellers from Thursday finished. The stock market typically gives you clues about what a stock will do. When I find a stock breaking down as much as Honeywell, I know the queue to get out is a deep one and the process, if heavy institutional selling, means that a broker usually buys stock to work it by finding clients. If they can't be found you get what you got Thursday and Friday, the brokers just throw out what's left. Hence the Day 2 ugliness. Barring some craziness from the president, Honeywell is recharged and ready to go because, you see, it was a beat and raise. It was real — as will the next move. Bottom line So, what am I doing? Standing pat initially, waiting for my restrictions to run out. Remember, when I mention a stock on television, the Club must wait three days to trade it. Then, I am going to buy some because I am being given a chance to do so, like I did with Oracle and Emerson, and I didn't take them. Were they unique? Who knows? I do know this. I had done the work. I had conviction. Out of pique and frustration, I gave up. I am doing the opposite this time. (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Bloomberg
43 minutes ago
- Bloomberg
US Futures Climb After Trump Agrees EU Tariff Deal: Markets Wrap
US equity futures climbed after the US and European Union struck a deal that will see the bloc face 15% tariffs on most exports, averting a potentially damaging trade war. S&P 500 contracts rose 0.4% after the index notched its fifth-straight all-time high on Friday. Asian equity futures were muted as investors braced for a busy week of data including a Federal Reserve meeting and the Aug. 1 deadline for American trade pacts. The euro was slightly higher against the dollar.
