This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Could machinery stocks be affected if the Ex-Im bank is dissolved?

By James Dennin for Kapitall.

The Export-Import bank is a small but important remnant of The New Deal, which was President Roosevelt's economic program to lift the country out of the Great Depression in the thirties

Basically, the way the program works is that it gives out cheap loans to foreign buyers who want to buy US goods. For instance, if a German automaker wanted to buy some of Tesla's (TSLA) batteries, they could secure cheap financing from Ex-Im Bank to do so. 

The idea is that by making it easy to faciliate these loans, you're also making it easier to for US firms to export more goods. The downside is that US firms don't have access to the same arrangement, meaning that they sometimes have to pay even more for goods produced in their own back-yard.

Soon-to-be former House Majority Leader Eric Cantor was a major supporter of the program among House Republicans.

Analysts are saying that without high-profile support from House leadership, the agency could be in danger from the Republican's Tea Party wing, who don't think the government should be in the business of granting loans. 

The charter for the agency expires in September, so Congress has a long time to debate whether or not it should be reinstated, reformed, or dissolved. However the largest industrial machinery companies—arguably the biggest beneficiaries of the system, are warily watching the debate. 

We built a list of the six largest industrial machinery stocks by market cap. Depending on how much of their business is conducted overseas, the desolution of the Ex-Im bank could make it much harder for them to find willing buyers.

Do you think Congress will act to save the Ex-Im bank, or will companies have to adapt to using the private market? Use the list below to begin your analysis, and let us know what you think in the comments. 

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 17,698.18 -77.94 -0.44%
S&P 500 2,059.69 -8.20 -0.40%
NASDAQ 4,880.2280 -20.6570 -0.42%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs