The hottest topic during earnings season has not been Donald Trump

Fourth quarter earnings season is a bit more than halfway done.

And so far, the biggest topic of discussion among S&P 500 executives hasn’t been President Donald Trump. Or at least, not directly.

“The macro backdrop continued to be a major focus during [fourth quarter] earnings calls,” writes Lori Calvasina, an analyst at Credit Suisse.

“Similar to prior quarters, FX/currency has been the most popular macro topic among S&P 500 companies. Not surprisingly, both the US election/politics and interest rates have seen a large increase in the number of companies mentioning these topics, while Brexit and commodity prices have seen a decline.” (Emphasis added.)

Source: Credit Suisse
Source: Credit Suisse

Of course, the currency markets are not unrelated to Trump, particularly given his views on trade and the various possibilities on tariffs or border adjustment taxes pursued by the administration to favor US-made goods over imports.

But currency fluctuations are going to be of concern to most any company that does business overseas, and the US dollar’s rise (and the drop in commodity prices) over the last couple years has been behind much of the hit we’ve seen to corporate profits in recent years.

“Foreign exchange is a bit of a problem for Apple and any U.S. company that has any business overseas,” Apple CFO Luca Maestri said. “The dollar is very strong.”

Additionally, mentions of the US election and politics coming from 53% of S&P 500 companies is almost double the 28% rate we saw during third quarter earnings calls and up from about 5% a year ago.

Source: Credit Suisse
Source: Credit Suisse

But that Trump isn’t completely dominating the conversations shows that while any new administration brings to markets considerable unknowns and risks, with the Trump administration stoking particularly acute anxieties about the future of trade, companies are still mostly focused on what impacts their bottom lines in the here and now.

Last month, we saw US multinational giant Caterpillar temper enthusiasm on how Trump’s plans for corporate taxes and infrastructure spending could boost the company’s prospects.

“Prospects for tax reform and an infrastructure spending bill in the United States are encouraging,” the company said in its fourth quarter earnings.

“While these initiatives would likely be a solid positive for many of our businesses, we would not expect to begin to see meaningful effects of these changes until sometime in 2018.”

Additionally, some recent analysis has sought to temper the enthusiasm around how Trump’s plans to cut corporate taxes would benefit US corporations over the long term.

The math on why lower corporate taxes will aid bottom lines in the year after they are enacted is simple. The longer-run benefit, however, is less clear.

Which brings us back to why, despite all of the talk about Trump on the news, on the streets, and certainly in the boardroom, US corporations are still focused, primarily, on currency moves. Or, more clearly, US corporations are focused on what will help or hurt their profits now, not down the road.

Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland

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