What Happened?
Shares of trucking company PACCAR (NASDAQ: PCAR) jumped 4.9% in the morning session after the U.S. administration announced it would impose a 25% tariff on imported heavy-duty trucks.
The move was aimed at protecting domestic producers, such as PACCAR's Peterbilt and Kenworth brands, from foreign competition. The company was seen as a major beneficiary because it assembles most of its trucks sold in the U.S. domestically. According to analysts, 95% of PACCAR's Class 8 trucks sold in the country were manufactured there. In contrast, competitors like Daimler Truck and Volkswagen-owned Traton produced most of their U.S.-sold trucks in Mexico. The policy was expected to help PACCAR increase its market share and potentially secure higher prices. While PACCAR's stock rose, shares of its European competitors fell on the news.
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What Is The Market Telling Us
PACCAR’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 11 months ago when the stock gained 7.8% on the news that stocks rallied as Republican party candidate Donald Trump was declared the winner of the 2024 US presidential election.
For industrials stocks, President-elect Trump is considered more pro-business and a defender of American industrial interests. This could generally lead to a more robust capital expenditures and investment environment.
PACCAR is down 3% since the beginning of the year, and at $100.35 per share, it is trading 15.3% below its 52-week high of $118.41 from December 2024. Investors who bought $1,000 worth of PACCAR’s shares 5 years ago would now be looking at an investment worth $1,739.
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