Bloomberg Daybreak: Europe 06/06/2025
Bloomberg Daybreak Europe is your essential morning viewing to stay ahead. Live from London, we set the agenda for your day, catching you up with overnight markets news from the US and Asia. And we'll tell you what matters for investors in Europe, giving you insight before trading begins. (Source: Bloomberg)
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36 minutes ago
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Starmer Faces Brewing Rebellion Over £5 Billion Benefit Cut
(Bloomberg) -- UK Prime Minister Keir Starmer is less than 10 days away from the biggest parliamentary challenge to his authority in his not-yet year-long tenure. Security Concerns Hit Some of the World's 'Most Livable Cities' One Architect's Quest to Save Mumbai's Heritage From Disappearing JFK AirTrain Cuts Fares 50% This Summer to Lure Riders Off Roads NYC Congestion Toll Cuts Manhattan Gridlock by 25%, RPA Reports Taser-Maker Axon Triggers a NIMBY Backlash in its Hometown Unpopular cuts to disability benefits unveiled earlier this year as part of Chancellor of the Exchequer Rachel Reeves' efforts to balance the country's books are due before the House of Commons for their first vote on July 1, with a large-scale rebellion brewing on the Labour back benches. So far, at least 150 of the governing party's Members of Parliament have indicated concerns about the cuts in two letters to the government. Other non-signatories have told Bloomberg they also intend to vote against the bill. While Starmer's attention this week was centered on the escalating tensions in the Middle East, the domestic threat was laid bare on Thursday when Vicky Foxcroft, a government whip who would have been tasked with helping quell the revolt, quit, citing her own objections. The rebellion threatens to bruise Starmer's and Reeves' credibility and further damage their stock with the left of their party. In order to avoid falling to what would be an unprecedented defeat for a government enjoying such a large majority so early in its tenure, ministers could at worst be forced into major concessions that reduce the bill's expected cost savings, forcing the Treasury to conjure up money from other cuts or tax rises at the budget in the fall. 'It's a test of Starmer's authority and the way he and Rachel Reeves are running the economy,' Tim Bale, professor of politics at Queen Mary University London, said in a phone interview. 'If the rebellion is too big, you start to run into questions about the loyalty of your backbenchers and even perhaps the future of your leadership.' The welfare reforms allowed Reeves to save about £5 billion ($6.5 billion) a year by 2030 by making it harder for disabled people to claim a benefit called the personal independence payment, or PIP. The chancellor factored them into a spring statement as part of spending cuts designed to help meet her self-imposed fiscal rules. Reeves says the changes are necessary because an extra thousand people a day have been signing on for PIP, creating an 'unsustainable' impact on the public finances. PIP payments had been projected to almost double to £41 billion by the end of the decade, within overall spending on disability and incapacity benefits that the Office for Budget Responsibility — the government's fiscal watchdog — sees rising to £100 billion from £65 billion last year. The government has also says there is a moral case for supporting people back into work. But Labour lawmakers are concerned the government announced changes in a rush to deliver savings, without thinking through the impact on vulnerable people. 'There are alternative and more compassionate ways to balance the books, rather than on the backs of disabled people,' one Labour backbencher, Debbie Abrahams, told the House of Commons. There are particular concerns about a new requirement for claimants to score four or above in one of the daily living components of the PIP assessment, meaning people who can't wash half their body or cook a meal will be denied the payments if they have no other impairments. One Labour MP describing the process as letting the OBR tail wag the government dog. Some 45 Labour MPs signed a public letter objecting to the measures, while another letter — arranged in secrecy so that even signatories couldn't see who they were joining — garnered 105 signatures and was sent to the chief whip. While some of the would-be rebels have indicated they could be swayed by the government whips, one of them told Bloomberg they are confident that more than 80 MPs will commit to voting against the government. Given Starmer's working majority is 165, if all opposition parties vote against the bill, it would take 83 Labour rebels to defeat the government. The main opposition Conservative Party is planning to vote against the changes, Danny Kruger, one of the party's work and pensions spokespeople, told parliament in May. Its reasons are different: the Tories argue the measures don't go far enough. One Labour MP told Bloomberg that concerned lawmakers plan to put forward a procedural challenge to the bill. While they don't expect the speaker to select that amendment for debate, the aim is to force further changes from the government, and organize would-be Labour rebels into a coherent group which could eventually vote down the bill. Many in Labour had been waiting to see the bill before making up their minds. When the text was published on Wednesday, the concessions to their concerns were minimal, largely amounting to a 13-week transition period for those losing their PIP. Foxcroft — the whip who had previously served for four years as Starmer's shadow disability minister in opposition — quit within hours of the publication, saying she didn't believe cutting the disability benefits should be part of the solution to tackling ballooning welfare costs. Culture Secretary Lisa Nandy said Friday that Foxcroft's resignation wasn't a sign of a major rebellion, while conceding that 'of course' there are dissenting voices on such a big reform. 'Vicky is the only front-bencher that I've had a conversation with about resigning,' she said. Nevertheless, many so-called 'red wall' Labour MPs in northern and central England face a tough decision. Health Equity North, a public health institute, found that all the places most affected financially by the PIP reforms are Labour constituencies in northern England. In several areas, the number of people affected by the welfare changes exceeds the Labour majority, meaning those MPs could see a crucial drop in support. The government is gearing up for a fight, indicating it will make no further concessions. On Wednesday, Deputy Prime Minister Angela Rayner failed to rule out stripping the whip from Labour rebels, while government enforcers are warning MPs that their political career prospects will be ruined if they oppose the bill. Whips and wannabe rebels alike expect the potential revolt to be whittled down as July 1 approaches. Some opponents are weighing whether to abstain at the second reading and wait until the third reading to take a more decisive vote, as whips are encouraging them to do. 'I'd be amazed if he were defeated here,' Anand Menon, director of the UK in a Changing Europe think-tank, said. 'If the whips got a whiff they were going to get defeated, they'd give some concessions. The worst of all outcomes is to lose this.' Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros Is Mark Cuban the Loudmouth Billionaire that Democrats Need for 2028? The US Has More Copper Than China But No Way to Refine All of It Can 'MAMUWT' Be to Musk What 'TACO' Is to Trump? ©2025 Bloomberg L.P. 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
Yahoo
36 minutes ago
- Yahoo
‘Stick to the Bullish Trend': Truist Sees Breakout Ahead for S&P 500 — 2 Stocks That Could Ride the Momentum
Markets roared into the new year on a wave of tech and AI optimism, climbing to record highs in February. That rally briefly lost steam when Trump's erratic tariff rollout injected a dose of uncertainty into the market. But with those concerns now receding, investors are shifting back into risk-on mode, and the S&P 500 is trading less than 3% below its peak. Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter On a 12-month basis, Keith Lerner, chief market strategist at Truist, sees this stretch as a period of quiet consolidation — one that could pave the way for further upside. 'If you look at the big picture for the overall market – the S&P – we've been flat for seven months, and the technology sector has been flat for almost a year. As we test these technical levels, I think we'll eventually break above them,' Lerner opined. 'That said, there's likely to be some pain trade… but I think in general, the underlying trend is still positive and we want to stick with that underlying trend.' Taking that outlook to heart, Truist's stock analysts have pinpointed two stocks they believe are primed to benefit from renewed market strength. We've used the TipRanks database to find out what the rest of the Street has to say about both of their recent picks. TAT Technologies (TATT) The first company we'll look at is TAT Technologies, an aerospace tech firm that provides a set of specialized services for the commercial and military aviation industries. These services include thermal solutions, including environmental controls as well as engine and fluid coolant systems; APU support, including service and maintenance of aircraft APUs (auxiliary power units); and landing gear services, to support this key system. At its core, TAT, a global firm, gives its customers a wide-ranging set of technical skills vital to keep aircraft fleets in efficient operating order. TAT was founded in 1969, and brings its decades of experience to bear on aviation problem solving. The company takes a proactive approach, delivering cutting-edge solutions designed to promote customer confidence along with operational efficiency. Aviation is big business, and TAT has leveraged its supporting role to build up a business that generated $152.1 million in revenues last year. In its most recent earnings report, covering 1Q25, TAT showed solid year-over-year growth in both revenue and earnings. The company had a top line of $42.1 million, up almost 24% from 1Q24, and the bottom line of 34 cents per share was up from 19 cents in the prior-year period. We should note that the company's revenue total just missed the forecast, coming in $450,000 below the estimates. On a more positive note, EPS trumped Street expectations by $0.04. For Truist's Michael Ciarmoli, an analyst ranked amongst the top 1% of Wall Street stock pros, the key points for investors here are TAT's solid potential for expansion and growth, and its favorable risk/reward profile. He writes, 'We view TATT as an under the radar small cap comm'l aero aftermarket component repair player poised to drive above market/peer avg growth through share gains and an improved go-to-market strategy. In the coming years as revenues grow and the company scales its operations we believe gross and EBITDA margin expansion will be a key driver of the stock. In the near-term mgmt's execution on its recent APU repair wins and corresponding share gains will be a major focus point. With the stock trading at a 20% discount to its closest peers on an EV/EBITDA basis we believe the risk/reward profile is favorably skewed.' The 5-star analyst goes on to put a Buy rating on this stock, complemented by a $35 price target that suggests a potential one-year upside of 32%. (To watch Ciarmoli's track record, click here) There are only two recent analyst reviews on file for TATT shares, but both are positive – giving the stock its Moderate Buy consensus rating. The shares are priced at $26.44 and their $35.50 average price target implies that the stock will gain 34% in the coming year. (See TATT stock forecast) Peloton Interactive (PTON) Next on our list is Peloton, the well-known home workout company that brought interactive social media to the world of home-based fitness. Peloton has updated an old stand-by – the stationary bicycle – with modern technology, including digital video connections. This forms the base for a connected, online exercise community, allowing Peloton's customers to find the advantages of group exercise classes in their own homes. Peloton leveraged its connectivity to great advantage several years ago, during the COVID pandemic, and has continued to use it as an important selling point that differentiates it from its competition. Peloton has built a community of 6 million members, making it one of the world's largest interactive fitness platforms, however its recent financial results weren't a particularly strong affair. In the last reported quarter, for fiscal 3Q25, the company saw a 13% year-over-year decline in sales. The revenue hit was strongest in the connected fitness segment, at 27%, but also included a 4% decline in subscription revenue. In total, Peloton's revenue came to $624 million. As noted, that was down 13% YoY – although the figure did beat the forecast by $2.67 million. The company's bottom line came to a net loss; the EPS of ($0.12) missed expectations – by 6 cents per share. The company has recognized the weaknesses and is actively working to address them. In January, Peloton launched its Personalized Plans programs and had enrolled 500,000 members by the end of its fiscal Q3 on March 31. Looking ahead to the end of fiscal year 2025, on June 30, Peloton expects to realize an adjusted EBITDA in the range of $330 million to $350 million and to bring in approximately $250 million in free cash flow. This stock has caught the attention of Truist analyst Youssef Squali, who believes that the headwinds have been priced in and that management will likely succeed in its plans to restart revenue and earnings growth. Squali says of Peloton, 'With the BS cleaned up and Opex materially cut to ensure sustainable FCF profitability, the new leadership is now squarely focused on improving the customer experience to drive revenue growth. Mgmt will guide to FY26 in early August, which is likely to be flattish, implying positive Y/Y revenue growth in 2H26, the first time since 2021. For F4Q25 (ending 6/30), our tracking of the Truist Card Data shows that revenue is tracking virtually in line with consensus (thru 6/9). With subscriptions accounting for ~2/3s of revenue, improving profitability and a valuation at 1.6x & 11.4x sales and AEBITDA, we believe that PTON is virtually de-risked with compelling upside.' Quantifying this stance, Squali rates PTON as a Buy, and his $11 price target points toward a hefty gain of 77% on the one-year horizon. (To watch Squali's track record, click here) Overall, Peloton holds a Moderate Buy consensus rating from Wall Street's analysts, based on 13 recent reviews that break down to 5 Buys and 8 Holds. The stock is currently trading for $6.22 and its $7.86 average price target suggests that the shares will gain 26% in the next 12 months. (See PTON stock forecast) To find good ideas for stocks trading at attractive valuations, visit TipRanks' Best Stocks to Buy, a tool that unites all of TipRanks' equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment. Disclaimer & DisclosureReport an Issue
Yahoo
36 minutes ago
- Yahoo
Advantages of Social Security Privatization, According to Experts
Social Security privatization would shift retirement funding from the government to individual Americans. Proponents of privatization believe it can lead to higher investment returns, thus providing retirees with more money in retirement. For some, the focus on personal responsibility is key. The $23,760 Social Security bonus most retirees completely overlook › If you want to get people worked up, ask a small group of friends what they think of Social Security privatization. Privatization refers to the idea of shifting the management and funding of retirement from the government to individuals. In other words, rather than paying Social Security taxes as part of FICA, you would keep the money and invest for retirement on your own. Experts have dramatically different opinions on privatization, with some fearing that it will lead to more people entering retirement with little to no financial resources. Those arguing in favor of privatizing the program take a completely different view. Here's how they believe the change would benefit the average American worker. Imagine that a portion of your Social Security taxes were invested in a personal account rather than used to fund current retirees' benefits. You could invest in stocks and bonds to your heart's content. In fact, you could invest in any vehicle you believe will provide a strong return. One of the beauties of investing is the way compound interest can significantly increase your retirement savings over time. As long as you begin investing early and are consistent, proponents of privatization believe you're in a position to build up more money than you could ever collect through Social Security payments. Proponents believe that Americans will appreciate the ability to invest their retirement savings where they want. Rather than paying it into a program supporting current retirees, they can choose where their money will go. However, the open question becomes: What happens to the millions of current retirees when workers stop paying into the system? Read any message board, and you're likely to find plenty of people with an opinion about Social Security privatization. It's been a hot-button topic since President George W. Bush first suggested it in his 1978 Congressional race, then pushed for it again following his successful 2004 presidential campaign. Since that time, the subject has been supported by a rotating cast of politicians, who claim it will put the responsibility for saving on individuals rather than allowing them to depend on the government to provide a safety net. While this reasoning overlooks the fact that Americans spend decades contributing to the system and Social Security has never been a public assistance program, it does appeal to the "pull yourself up by your bootstraps" crowd. Proponents believe that pushing Americans to invest on their own means greater financial literacy among the masses. It's also believed that it will foster a culture of savings and investment. While this may be true for some, it's fair to imagine that wealthier Americans can afford to pay financial planners to help them make the most of their investments, while workers living paycheck to paycheck may have trouble saving the funds at all. It's likely that most people would like to save for retirement, but not everyone can afford to do so. The good news is that plenty of people are actively involved in seeking a solution to potential Social Security shortages. It may turn out that some form of Social Security privatization -- such as a hybrid system that allows you to continue paying into the current system while setting aside some money to make your own investments -- will be the answer. Or, it may be something entirely different. While proponents of Social Security privatization offer numerous potential advantages, it's yet to be seen if anyone will come up with a better solution. If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known could help ensure a boost in your retirement income. One easy trick could pay you as much as $23,760 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these Motley Fool has a disclosure policy. Advantages of Social Security Privatization, According to Experts was originally published by The Motley Fool Sign in to access your portfolio
