Now that most S&P 500 companies have released their latest earnings reports, there are four key trends which have emerged, according to Goldman Sachs analysts. Unsurprisingly, China is having a significant impact on internationally-exposed companies. Also inflation, the stronger U.S. dollar, and the general economic climate in the U.S. have weighed on earnings, as have wage pressures due to inflation.

China, U.S. Economies Weigh On Earnings: Beige Book

China slowdown impacts earnings

Analyst David Kostin and his team at Goldman Sachs said companies in most sectors mentioned the slowdown in China as a risk for them in the near term. Industrial companies and those linked to commodities were especially focused on China. In the medium term though, companies remain positive on China, suggesting that the recent slowdown may not last long.

Among the companies which commented on China were Johnson & Johnson, which noted changing consumer behavior as a result of the slowdown, and automakers Ford and General Motors. Ford mentioned negative pricing which it has been witnessing in China for some time, while GM management said they expect the Chinese market to grow more volatile as growth “moderates.”

The state of the U.S. economy?

The Goldman Sachs team noted mixed commentary among S&P 500 companies regarding the U.S. economy. Commodities were a key topic, as was the expected increase in interest rates. On the other hand though, some companies noted that the U.S. economy continues to expand steadily.

Visa management mentioned that they were “hopeful but not counting on” economic improvement in the U.S. Bank of America noted continuing improvement in the U.S. and Wells Fargo pointed out that the U.S. is now in its seventh year of economic expansion, something it has only accomplished at four other times in history.

Comments on inflation mixed

Another area where company comments during earnings calls were mixed was inflation. Some companies saw signs of inflation and greater pricing power, although others suggested that inflation was more subdued as a result of lower commodity prices. Companies with a mostly U.S.-focused business reported wage pressures and, in some cases, an ability to raise their prices, while multi-national companies saw the pricing environment as more subdued.

Chipotle Mexican Grill recorded a 4.2% increase in hourly labor rates, which was the fastest growth rate the fast casual chain has seen in “many years.” Yahoo noted a 10% increase in price per ad compared to last year, marking the first increase in this metric that the company has had in “some time.”

Chevron management noted on their earnings call that cost reductions in the U.S. have come more quickly than they have in the U.S. as a result of greater competition in the U.S. market. Wells Fargo didn’t see any signs of pricing getting any better during the second quarter.

Commodities, strong USD weigh on earnings

And finally, the Goldman Sachs team noted that some companies made comments about falling prices for commodities and the continued strength of the U.S. dollar. The Energy, Industrials and Materials sectors were especially impacted by tumbling oil and metal prices, and consumer-focused companies didn’t see much of an increase in consumer spending despite the lower gas prices. Also the strong U.S. dollar remained a headwind to companies that do large portions of their business outside the country.

Caterpillar management noted a major negative impact on its sales from falling commodity prices, particularly in mining. For example, sales of its Resource Industries business declined 11% year over year as a result. Philips 66 expects crude oil prices will remain “lower for longer.”

IBM management reported major impacts from currency translation which weighed heavily on the company’s profitability. Microsoft management expects this trend to continue, and Facebook mentioned about a $330 million negative impact on its quarterly revenue due to currency headwinds.