Companies listed on the S&P 500 Index saw their earnings decline by an average of 0.35 percent during the second quarter of the year in what's being called an "earnings recession," but the picture is far more bleak for specific industries.
More specifically, average losses were driven by two industries that Trump has 'helped' the most by imposing tariffs on their foreign competitors.
The metal and mining industries saw their earnings decline by over 75 percent.
Some of the worst-performing companies for the second quarter were in metals and mining, with earnings for that subsector down 76% on average amid falling prices and rising costs for companies like Freeport-McMoRan Inc. The materials sector overall saw a 17.88% decline, led by weakness in mining that’s projected to persist for another quarter.
Industrials were another negative area, though most of the sector’s 10.23% decline could be blamed on Boeing Co. which swung to a big loss after its 737 Max jets were grounded. Building products and construction companies were other big contributors to the sector’s decline.
The metal industry asked for Trump's tariffs while the mining industry asked for deregulation.
They both got what they want, but for related reasons things have not turned out the way they expected.
Trump's trade war has increases costs, cut demand, and reduced exports. This has contributed to weakness in manufacturing which reduces demand for metals and mining.
Who knows? Maybe the metal industry actually believed Trump would pass a $1 trillion dollar infrastructure package and that tariffs would position them to take advantage of it, but if that's the case they're even bigger fools than I thought.
Corporate America should be careful what they wish for. Trump might give it to you but that doesn't mean things are going to go the way you think with his reverse Midas touch.