In online stock trading, it is important to remember that stock performances often depend on governmental policies towards their respective industries. The automobile industry is a case in point.
While President Trump’s kneejerk and chaos-inducing decisions have left Americans, immigrants to America, and Silicon Valley fuming, automakers in the United States could look to benefit in the long term from Trump’s policies, according to analysts.
This is also the view of America’s Big Three Detroit-based auto manufacturers Ford Motor Co. ($F), General Motors ($GM) and Fiat Chrysler Automobiles ($FCAU). Major automobile executives had a positive meeting with Trump on the 24th of January. There were many aspects discussed that are part and parcel of the industry such as deregulation, tax cuts, favorable business environment and quicker permitting.
The discussions eventually led to Trump’s favorite topics of increasing domestic production and greater job creation. It was discussed that shifting production facilities to the US and thereby generating more jobs would increase costs for the car makers. However, the rising costs could be compensated through tax cuts by the Trump administration though such policies have not formally been laid out.
Let’s not underestimate the importance of tax cuts in really improving automakers’ bottom line. Auto manufacturers could save significantly. It would be worth remembering that Ford’s corporate taxes in 2016 ran up to nearly $2.2 billion! Its effective tax rate amounted to 31%.
Investors need to watch out for February 7, when $GM will be reporting earnings. The company also paid taxes worth $2.2 billion in 2016, in its first nine months. This gave it an effective tax rate amounting to around 23%.
With favorable policies at work, auto stocks could rise. In online stock trading, it is important to have the right trading software that will help you keep tabs on developments such as this. TradeZero gives you the power with its advanced trading platforms. Contact us at +1 954-944-3885 or email email@example.com.
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