Trade crime is soaring, US firms say, as Trump's tariffs incentivize fraud
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AVIATION
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Southwest Airlines sets baggage fees
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A Southwest Airlines traveler checked a bag at Midway International Airport in Chicago.
Erin Hooley/Associated Press
Southwest Airline's longtime free luggage policy on basic economy fares will end on Wednesday when the airline begins charging a $35 fee for one checked bag and $45 for the second, according to a spokesperson for Southwest. Until now, Southwest was the only major US airline that allowed passengers to check two bags at no extra cost, but in March, the airline announced that it would start applying baggage fees to boost revenues and cut costs. The airline reported a net loss of $149 million in the first quarter. Under the new policy, customers flying Business Select or those with high loyalty status will be spared the additional fees; passengers with a Southwest Airlines co-branded credit card will be able to check one standard bag at no additional cost. Checked bag fees will apply to tickets booked on or after May 28 for Basic, Wanna Get Away Plus, and Anytime fares. The baggage fees are in line with other major US airlines, which typically charge between $35 and $45 for a first checked bag. — NEW YORK TIMES
CRYPTO
Trump Media raises money to buy $2.5 billion in bitcoin
President Trump spoke to reporters at Palm Beach International Airport in West Palm Beach, Fla., on Feb. 16.
AL DRAGO/NYT
Trump Media & Technology Group, the parent company of Truth Social, said Tuesday that it would raise $2.5 billion from institutional investors to invest in bitcoin, continuing its transformation from a social media company into a financial services and cryptocurrency play. Trump Media, whose largest shareholder is President Trump, said it would raise $1.5 billion from about 50 institutional investors by selling roughly 58 million shares. The company is planning to raise an additional $1 billion from the sale of bonds that can also be converted into shares at a later date. The announcement came as the president and his family have become more involved in a number of crypto companies. Trump owns a little more than 50 percent of Trump Media's stock, making his roughly $2.7 billion stake one of his most valuable investments. The sale of the new shares will potentially dilute the value of Trump Media's stock, including the 115 million shares that Trump owns. The president's shares are held in a trust managed by his eldest son, Donald Trump Jr., who also is a Trump Media board member. As part of the deal, which could close as soon as Thursday, the shares will be sold at $25.72. Trump Media, which has a market value of just over $5 billion, said with the cash raised from the stock and bond sale it would create one of the largest corporate reserves to invest in bitcoin. The company did not immediately disclose the investors in the deal. Trump Media went public a little more than a year ago, after completing a merger with a cash-rich shell company. But the company has been losing money ever since, and Truth Social has generated just a few million dollars in advertising revenue, even as the social media platform serves as Donald Trump's primary online megaphone for communicating to the public. — NEW YORK TIMES
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ECONOMY
US consumer confidence jumps most in four years on trade truce
Shoppers walked past napkins and paper plates at the Walmart Supercenter store in Teterboro, N.J.
KARSTEN MORAN/NYT
US consumer confidence rebounded sharply in May from a near five-year low as the outlook for the economy and labor market improved amid a truce on tariffs. The Conference Board's gauge of confidence increased by 12.3 points to 98, marking the biggest monthly gain in four years. The figure exceeded all estimates in a Bloomberg survey of economists. A gauge of consumer expectations for the next six months surged by the most since 2011, while a measure of present conditions climbed as well, data released Tuesday showed. The improvement in confidence was broad across age and income groups as well as political affiliations, with the strongest gains among Republicans. The cutoff for the survey was May 19, after the United States and China agreed to temporarily reduce high levies on each other's goods while they negotiate a trade deal. About half the responses were collected after the agreement was reached on May 12, according to a statement. 'The rebound was already visible before the May 12 US-China trade deal but gained momentum afterwards,' Stephanie Guichard, senior economist at The Conference Board, said in the statement. The gauge's improvement may be an indication that worries about tariffs — a key source of anxiety in the previous surveys — abated in recent weeks. However, President Trump has since renewed threats to increase levies on other countries and products. — BLOOMBERG NEWS
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ACQUISITIONS
Salesforce is buying Informatica in deal worth approximately $8 billion
The Salesforce Tower in New York.
Ted Shaffrey/Associated Press
Salesforce is buying AI-powered cloud data management company Informatica in an approximately $8 billion deal. Informatica's shareholders will receive $25 per share, a premium of about 11 percent from Friday's closing price of $22.55. The transaction will give Salesforce access to Informatica's data management capabilities. Informatica was taken private in 2015 by private equity firm Permira and the Canada Pension Plan Investment Board for about $5.3 billion. It went public again in 2021. Both companies' boards have approved the deal, which is expected to close early in Salesforce's fiscal 2027. — ASSOCIATED PRESS
TRANSIT
NY wins order against US funding freeze in congestion fight
Signs advising drivers of congestion pricing tolls are displayed near the exit of the Lincoln Tunnel in New York on Feb. 19.
Seth Wenig/Associated Press
New York won a court order temporarily barring the Trump administration from withholding federal approvals or funds for the state's transportation projects, as the president tries to end Manhattan's congestion pricing program. The administration has threatened to hold back the funds and permissions unless New York stops charging tolls to drive into the borough's tolled zone. US District Judge Lewis Liman on Tuesday granted a request by the Metropolitan Transportation Authority to block such efforts by the federal government through June 9 while he considers whether the United States has the legal right to terminate the toll. Liman's ruling means the program — meant to reduce gridlock and pollution and raise money to modernize the city's transit system — will almost certainly continue as the legal battle proceeds. It helps reduce uncertainty over how the nation's largest public transportation system will pay to modernize a more than 100-year-old network. The judge ordered the two sides to meet to decide how to speed up the process, saying there is a 'public interest in moving the case along.' — BLOOMBERG NEWS
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29 minutes ago
- Yahoo
Europe Frets About US Retreating From Region Ahead of NATO
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The stakes got significantly higher overnight after US struck nuclear sites in Iran with the risk that Trump will get sucked into a spiraling conflict in the Middle East after being a vocal critic of US military involvement overseas. His foreign policy U-turn will be a topic that will be hard to avoid at the gathering, especially with NATO ally Turkey present and a key stakeholder in the region. Europeans have been kept in the dark on the Trump administration's plans. But officials in the region are bracing potentially for a far bigger withdrawal that could present a dangerous security risk, according to officials familiar with the discussions who declined to be identified as closed-door talks take place before the review. Up until early June, no official from the US had come to NATO to talk about the US force posture review, spurring concern among allies that this could be done at very short notice, according to a person familiar with the matter. 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'I'm not worried about that, but I'm absolutely convinced we will do that in a step-by-step approach,' Rutte said then. 'There will be no capability gaps in Europe because of this.' The White House referred questions to the Pentagon. 'The U.S. constantly evaluates force posture to ensure it aligns with America's strategic interests,' a defense official responded. The geopolitical shift is likely to have enormous consequences for the 32-member alliance, which is weathering its greatest challenge since it became the bulwark against Soviet power in the decades after World War II. European militaries long reliant on American hard power will have to fill the gap as Washington scales back. If a troop reduction focuses on efficiency, it would be far less problematic for Europeans than one that hits critical assets and personnel that Europe couldn't replace immediately, according to one European diplomat. The nature of a withdrawal would be more important than the troop numbers, the person said. A dramatic pullout announcement is likely to trigger an instant reaction from eastern member states, with those closer to Russia immediately requesting deployments from Western European allies. The holistic review of the US military, which Defense Secretary Pete Hegseth says should focus on threats facing the US, is meant to reflect the tilt in the global power dynamic, bringing potentially large-scale redeployment of weapons and troops. But European diplomats have bristled at the timing of the review, taking place only after NATO signs off on its most ambitious new weapons targets since the Cold War — with member states agreeing to foot the bill. A withdrawal that is more dramatic than anticipated will mean that, after acceding to Trump's ramp-up in defense spending, they still may be left with a heavy burden to respond to a rapidly growing Russian military. 'We would be remiss in not reviewing force posture everywhere, but it would be the wrong planning assumption to say, 'America is abandoning'' or leaving Europe, Hegseth said in Stuttgart in February. 'No, America is smart to observe, plan, prioritize and project power to deter conflict.' After the Trump administration balked at providing a backstop to European security guarantees to Ukraine, a pullout of more US troops could embolden Russia's Vladimir Putin, according to people familiar with the matter. 'The question is when pressure is on for a greater focus on the Indo-Pacific, what capabilities do they need to think about moving,' said Matthew Savill, director of military sciences at RUSI, a defense think tank. 'I don't get an impression that they have yet decided what that means for force levels in specific terms.' Germany, Europe's richest and most populous nation, is positioning itself to take on the largest share of the redistribution. 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Yahoo
an hour ago
- Yahoo
Are Investors Undervaluing Tapestry, Inc. (NYSE:TPR) By 31%?
Tapestry's estimated fair value is US$122 based on 2 Stage Free Cash Flow to Equity Tapestry is estimated to be 31% undervalued based on current share price of US$84.33 Our fair value estimate is 37% higher than Tapestry's analyst price target of US$89.08 Today we will run through one way of estimating the intrinsic value of Tapestry, Inc. (NYSE:TPR) by taking the expected future cash flows and discounting them to today's value. This will be done using the Discounted Cash Flow (DCF) model. Don't get put off by the jargon, the math behind it is actually quite straightforward. We would caution that there are many ways of valuing a company and, like the DCF, each technique has advantages and disadvantages in certain scenarios. If you still have some burning questions about this type of valuation, take a look at the Simply Wall St analysis model. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. To begin with, we have to get estimates of the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, and so the sum of these future cash flows is then discounted to today's value: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF ($, Millions) US$1.15b US$1.20b US$1.33b US$1.43b US$1.52b US$1.60b US$1.68b US$1.74b US$1.81b US$1.87b Growth Rate Estimate Source Analyst x4 Analyst x4 Analyst x2 Est @ 7.68% Est @ 6.26% Est @ 5.26% Est @ 4.56% Est @ 4.08% Est @ 3.74% Est @ 3.50% Present Value ($, Millions) Discounted @ 8.4% US$1.1k US$1.0k US$1.0k US$1.0k US$1.0k US$985 US$950 US$912 US$872 US$832 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = US$9.7b We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 2.9%. We discount the terminal cash flows to today's value at a cost of equity of 8.4%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = US$1.9b× (1 + 2.9%) ÷ (8.4%– 2.9%) = US$35b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= US$35b÷ ( 1 + 8.4%)10= US$16b The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is US$25b. In the final step we divide the equity value by the number of shares outstanding. Relative to the current share price of US$84.3, the company appears quite good value at a 31% discount to where the stock price trades currently. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent. The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Tapestry as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 8.4%, which is based on a levered beta of 1.272. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. See our latest analysis for Tapestry Strength Debt is well covered by earnings and cashflows. Dividends are covered by earnings and cash flows. Weakness Earnings declined over the past year. Dividend is low compared to the top 25% of dividend payers in the Luxury market. Opportunity Annual earnings are forecast to grow for the next 3 years. Good value based on P/E ratio and estimated fair value. Threat Annual earnings are forecast to grow slower than the American market. Valuation is only one side of the coin in terms of building your investment thesis, and it shouldn't be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. What is the reason for the share price sitting below the intrinsic value? For Tapestry, there are three additional factors you should further research: Risks: To that end, you should be aware of the 3 warning signs we've spotted with Tapestry . Management:Have insiders been ramping up their shares to take advantage of the market's sentiment for TPR's future outlook? Check out our management and board analysis with insights on CEO compensation and governance factors. Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the NYSE every day. If you want to find the calculation for other stocks just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Yahoo
an hour ago
- Yahoo
Declining Stock and Decent Financials: Is The Market Wrong About Dayforce Inc. (NYSE:DAY)?
Dayforce (NYSE:DAY) has had a rough three months with its share price down 6.0%. But if you pay close attention, you might find that its key financial indicators look quite decent, which could mean that the stock could potentially rise in the long-term given how markets usually reward more resilient long-term fundamentals. Specifically, we decided to study Dayforce's ROE in this article. Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors' money. In short, ROE shows the profit each dollar generates with respect to its shareholder investments. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. The formula for return on equity is: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Dayforce is: 1.0% = US$26m ÷ US$2.6b (Based on the trailing twelve months to March 2025). The 'return' refers to a company's earnings over the last year. Another way to think of that is that for every $1 worth of equity, the company was able to earn $0.01 in profit. View our latest analysis for Dayforce Thus far, we have learned that ROE measures how efficiently a company is generating its profits. Based on how much of its profits the company chooses to reinvest or "retain", we are then able to evaluate a company's future ability to generate profits. Assuming everything else remains unchanged, the higher the ROE and profit retention, the higher the growth rate of a company compared to companies that don't necessarily bear these characteristics. It is quite clear that Dayforce's ROE is rather low. Even compared to the average industry ROE of 20%, the company's ROE is quite dismal. Dayforce was still able to see a decent net income growth of 15% over the past five years. We reckon that there could be other factors at play here. For example, it is possible that the company's management has made some good strategic decisions, or that the company has a low payout ratio. As a next step, we compared Dayforce's net income growth with the industry, and pleasingly, we found that the growth seen by the company is higher than the average industry growth of 11%. Earnings growth is an important metric to consider when valuing a stock. It's important for an investor to know whether the market has priced in the company's expected earnings growth (or decline). Doing so will help them establish if the stock's future looks promising or ominous. Is DAY fairly valued? This infographic on the company's intrinsic value has everything you need to know. Dayforce doesn't pay any regular dividends currently which essentially means that it has been reinvesting all of its profits into the business. This definitely contributes to the decent earnings growth number that we discussed above. In total, it does look like Dayforce has some positive aspects to its business. With a high rate of reinvestment, albeit at a low ROE, the company has managed to see a considerable growth in its earnings. Having said that, looking at the current analyst estimates, we found that the company's earnings are expected to gain momentum. To know more about the latest analysts predictions for the company, check out this visualization of analyst forecasts for the company. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
