Jan 26, 2017

Poor Caterpillar earnings throw cold water on the Trump rally

Associated Press

Caterpillar released earnings Thursday, missing analysts' revenue expectations and reducing its outlook for profits in 2017. The firm's struggles call into question investor enthusiasm for the U.S. economy following the election.

During a call with analysts, CEO Jim Umpleby said that slow growth in places like Brazil and China cut into profits last year, and that he doesn't expect any returns from U.S. infrastructure spending until at least 2018. As a net exporter, the firm is optimistic about border adjusted tax reform, though a projected stronger dollar would mitigate the effects.

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Data: Money.net; Chart: Andrew Witherspoon / Axios

Ronnie Moas of Standpoint Research placed a sell rating on the stock, arguing its rise in recent months puts too much faith in the Trump Administration's ability to execute priorities, without factoring in a backlash from trading partners.

Economic risk abounds: A delay or watering down of infrastructure spending, a hastening of the decline in China's economy, or the escalation of trade could hit American profits and deflate investor optimism.

Go deeper

Trump says he will campaign against Lisa Murkowski after her support for Mattis

Trump with Barr and Meadows outside St. John's Episcopal church in Washington, D.C. on June 1. Photo: Brendan Smialowski/AFP via Getty Images

President Trump tweeted on Thursday that he would endorse "any candidate" with a pulse who runs against Sen. Lisa Murkowski (R-Alaska).

Driving the news: Murkowski said on Thursday that she supported former defense secretary James Mattis' condemnation of Trump over his response to protests in the wake of George Floyd's killing. She described Mattis' statement as "true, honest, necessary and overdue," Politico's Andrew Desiderio reports.

7 hours ago - World

The president vs. the Pentagon

Trump visits Mattis and the Pentagon in 2018. Photo: Brendan Smialowski/AFP via Getty

Over the course of just a few hours, President Trump was rebuffed by the Secretary of Defense over his call for troops in the streets and accused by James Mattis, his former Pentagon chief, of trampling the Constitution for political gain.

Why it matters: Current and former leaders of the U.S. military are drawing a line over Trump's demand for a militarized response to the protests and unrest that have swept the country over the killing of George Floyd by police.

New York Times says Tom Cotton op-ed did not meet standards

Photo: Avalon/Universal Images Group via Getty Images)

A New York Times spokesperson said in a statement Thursday that the paper will be changing its editorial board processes after a Wednesday op-ed by Sen. Tom Cotton (R-Ark.), which called for President Trump to "send in the troops" in order to quell violent protests, failed to meet its standards.

Why it matters: The shift comes after Times employees began a coordinated movement on social media on Wednesday and Thursday that argued that publishing the op-ed put black staff in danger. Cotton wrote that Trump should invoke the Insurrection Act in order to deploy the U.S. military against rioters that have overwhelmed police forces in cities across the country.