Wall St Week Ahead-Union Pacific, other freight co earnings eyed for tariff effects

NEW YORK — Results from two major U.S.

railroads next week are likely to attract more scrutiny than

usual as investors look for signs of how deeply U.S. President

Donald Trump’s multi-front trade war is affecting freight

companies and the wider economy.

Among those reporting as the second quarter earnings season

kicks off next week are Union Pacific Corp on Thursday

and Kansas City Southern on Friday, amid worries that

new U.S. import tariffs threatened by the Trump administration

could also herald weakening demand for goods movers, including

truckers, container companies and package carriers.

There is even talk of a “freight recession” and investors

look to the transportation sector as a barometer of U.S.

economic health.

The S&P 500, which crossed the 3,000 mark for the

first time this week, has seesawed between record highs and

selloffs in recent months on increasing U.S.-China trade

acrimony and concerns about a U.S. economic slowdown.

“If these companies come out with reports that confirm

people’s concerns about tariffs and inventory build-up, that

won’t be good for the market,” said Chuck Carlson, chief

executive officer at Horizon Investment Services in Hammond,

Indiana.

Omaha, Nebraska-based Union Pacific operates a

32,000-route-mile rail network that includes the Los

Angeles/Long Beach complex, a port responsible for most of the

U.S.-China cargo flow.

Tariffs have already affected the company’s bottom line. In

the first quarter, overall freight volume fell, hurt by a 7%

reduction in grain carloads driven by reduced exports to China.

In June, CEO Lance Fritz told Reuters the trade war is “a

significant threat” to Union Pacific’s outlook.

Kansas City Southern is expected to report year-on-year

earnings and revenue growth in the mid-single-digits, according

to Refinitiv data.

The company’s U.S.-Mexico cross-border traffic contributes a

large share of its revenue, and investors will be listening

closely

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