The ongoing trade spat between the United States and the nations it buys from and sells to has caused enough damage to slash earnings estimates, according to analysts at Bank of America (BAC).
The bank cut its 2019 estimated earnings per share by 1.2% and its 2020 earnings estimates by 2.2%.
"We estimate a 1% earnings per share hit from increased China tariffs. From tariffs on Mexico, we estimate a 0.6% drag in 2019 and 1.5% in 2020."
On top of that, a stronger US dollar could also weigh on the company's earnings.
"Globalization has benefited S&P 500 margins for decades, and protectionism coupled with rising wages and input costs, pose risks to peak margins," the analysts said.
BofA has lowered its net margin assumption by 10 basis points to 12% this year and by 20 bps to 12.2% in 2020, compared with 12.5% last year.
https://www.cnn.com/business/live-news/stock-market-news-today-060319/index.html
2019-06-03 16:41:00Z
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