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CNBC
13-06-2025
- Business
- CNBC
Israel-Iran conflict will hang over markets next week, with Fed meeting at hand
The Israel-Iran conflict will continue to hang over the stock market next week, as investors wait and see whether there will be an escalation in the region. Traders will also be awaiting the latest Federal Reserve meeting. Though the initial stock response to the attack was subdued, equity losses deepened on Friday afternoon. The Dow Jones Industrial Average lost more than 800 points as Iran launched missiles at Israel, according to Tehran and Israel Defense Forces. The worsening tensions spurred a return to risk-off sentiment in the market, just as the S & P 500 was nearing its all-time record. Oil prices surged, while defense stocks rallied. Volatility is back up, with the CBOE Volatility index on Friday briefly climbing above 20. Semiconductor stocks , which enjoyed a big rally this week, are down. Nvidia is down. Gold , which stalled a bit from its historic rally this year, has perked up again. .VIX 1D mountain CBOE Volatility Index, over one day Investors are reacting by taking money off the table heading into the weekend, worried further retaliatory actions between the two countries will mark an escalation of conflict in the region. "Markets' reaction next week is really going to coalesce around what else we learn about the ongoing events between Israel and Iran, and if there's escalation by either side, retaliation and/or escalation by Israel, that will likely keep a bit of a cloud on risk assets," said Art Hogan, chief market strategist at B. Riley Wealth Management. "And only time will tell what that looks like." On Friday, the 30-stock Dow was on course for a losing week, down more than 1%. The S & P 500 was down 0.4% on the week, while the Nasdaq Composite was off 0.6%. Fed meeting The Fed is just about universally expected to hold rates steady next week. But, more important will be what Fed Chair Jerome Powell says in his post-meeting comments, as well as what surfaces in the latest Summary of Economic Projections, in regards to how policymakers are thinking through the path forward for monetary policy. According to the CME FedWatch Tool , markets are currently pricing in two quarter percentage point rate cuts, starting in September. For the most part, investors are expecting the same consistent message from Powell, who they're sure will reiterate that the central bank remains data dependent. This week's cooler inflation data , for example, could give policymakers flexibility to continue watching for the impact of tariffs on the economy in upcoming reports. But, some wonder if there could be a slight dovish tilt to the Fed chair's messaging, especially with the labor market, while still resilient, starting to show some cracks. "The market is going to be curious to hear how the Fed is assessing these dynamics of more benign inflation data, plus a slight deterioration in labor market data, and basically, does that allow them to strike more dovish tone at this meeting," said John Belton, portfolio manager at Gabelli Funds. "I do think that the recent data supports at least a couple cuts by year end," Belton continued. "The question is, are these going to be reactive, or is it coming from a place of confidence?" Recent Fed speak has investors more confident that central bank policymakers could start to cut as well. In late May, Fed Governor Christopher Waller told Fox Business that he sees a path for the central bank to cut interest rates in the second half of 2025, if Trump's tariffs are down to around 10%. However, others expect the Fed may not cut as much as the market is pricing in. David Kelly, chief global strategist at J.P. Morgan Asset Management, said he anticipates just one rate cut this year, worried that the reconciliation bill, pushed through when the consumer remains robust, will be inflationary for the economy. "That, I think, is something the Federal Reserve is very focused on," Kelly said. "Whatever they pretend about cutting the deficit in the long run, in fact, what they're going to do is expand the deficit quite a lot in 2026 relative to where it was in fiscal 2025 and the Fed doesn't want to be stimulating, or be further stimulating, in an already over stimulated economy." Next week will also be a shortened trading week, with markets closed Thursday for the Juneteenth national holiday. Week ahead calendar All times ET. Monday, June 16 8:30 a.m. Empire State Index (June) Bond market: Auction 20-year bond Earnings: Lennar Tuesday, June 17 8:30 a.m. Export Price Index (May) 8:30 a.m. Import Price Index (May) 8:30 a.m. Retail Sales (May) 8:30 a.m. Capacity Utilization (May) 9:15 a.m. Industrial Production (May) 9:15 a.m. Manufacturing Production (May) 10 a.m. Business Inventories (April) 10 a.m. NAHB Housing Market Index (June) Bond market: Auction 5-year TIPS Earnings: Jabil Wednesday, June 18 8:30 a.m. Building Permits preliminary (May) 8:30 a.m. Continuing Jobless Claims (06/07) 8:30 a.m. Housing Starts (May) 8:30 a.m. Initial Claims (06/14) 2 p.m. FOMC Decision 2 p.m. Fed Funds Target Upper Bound Thursday, June 19 Markets closed for Juneteenth National Independence Day Friday, June 20 8:30 a.m. Philadelphia Fed Index (June) 10 a.m. Leading Indicators (May) Earnings: Darden Restaurants, CarMax , Kroger
CBC
03-04-2025
- Business
- CBC
U.S. dollar slides, Wall Street losses expected as global markets react to tariffs
President Donald Trump's new tariffs sent shockwaves through markets on Thursday, with the U.S. dollar and American stocks among the hardest hit on fears a broadening trade war will spur recession in a fragile world economy. Trump said he would impose a 10 per cent baseline tariff on all imports to the United States and higher duties on some of the country's biggest trading partners. The new levies ratchet up a trade war that Trump kicked off on his return to the White House, rattling markets as fears grow that these moves could trigger a sharp global economic slowdown and fuel inflation. Stock markets tumbled and investors dashed to the relative safety of bonds, gold and the yen. S&P 500 futures dropped three per cent, suggesting investors expect deep losses when Wall Street opens later in the day. U.S. Treasury yields slid, China's yuan dropped to a seven-week low, and the dollar came under heavy selling pressure. The dollar index, which measures the U.S. currency against six others, fell 1.6 per cent to 102.03, its lowest since early October. The dollar index is down more than 5.7 per cent this year. The euro, the largest component in the index, gained 1.5 per cent to a six-month high of $1.1021 US. The yen strengthened to a three-week high against the dollar and was last up 1.7 per cent at 146.76 per dollar, while the Swiss franc touched its strongest level in five months at 0.86555 per dollar. "It's very difficult actually to see how other countries make concessions that would encourage the U.S. to lift these tariffs. And I think that's a big underpriced risk," said Nicholas Rees, head of macro research at Monex Europe. Big tech, retailers feel early pain Apple sank 6.5 per cent, hit by an aggregate 54 per cent tariff on China — the base for much of Apple's manufacturing. Microsoft dropped 1.8 per cent, Nvidia slipped 3.5 per cent and fell 5.1 per cent. "Eye-watering tariffs on a country-by-country basis scream 'negotiation tactic,' which will keep markets on edge for the foreseeable future," said Adam Hetts, global head of multi-asset and a portfolio manager at Janus Henderson Investors. WATCH | Prices for new cars, auto parts expected to rise: Auto sector braces for 25% tariffs, other industries already feeling pain 9 hours ago Duration 5:20 Retailers were hit hard on Thursday, with Lulemon falling 10.3 per cent, Nike dropping 8.3 per cent and Walmart 6.2 per cent after Trump imposed some of the most punitive tariff rates on major production hubs including Vietnam, Cambodia, Indonesia and China. Auto industry heavyweights were also also down — General Motors by two per cent and Tesla falling about five per cent. Wall Street's fear gauge, the CBOE Volatility index, touched a three-week high at 25.64 points. EU plots response EU chief Ursula von der Leyen described the tariffs as a major blow to the world economy and said the 27-member bloc was prepared to respond with countermeasures if talks with Washington failed. Von der Leyen said the EU was already finalizing a first package of tariffs on up to 26 billion euros ($28.4 billion US) of U.S. goods for mid-April in response to American steel and aluminum tariffs that took effect on March 12. "And we're now preparing for further countermeasures to protect our interests and our businesses if negotiations fail," von der Leyen said in a statement she read out in the Uzbek city of Samarkand on Thursday, ahead of an EU-Central Asia partnership summit. The EU also faces 25 per cent U.S. tariffs on steel and aluminum tariffs, on cars from Thursday and on car parts within a month, with pharmaceuticals possibly to come.
The Guardian
07-03-2025
- Business
- The Guardian
China imports hammered by trade war fears, as market selloff continues
Show key events only Please turn on JavaScript to use this feature Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. The markets continue to be buffeted by fears of a global trade war, as Donald Trump vacillates over the imposition of tariffs on major US trading partners. Last night in New York, the S&P 500 index fell 1.8% to its lowest level since early November – the post-election Trump bump has well-and-truly vanished. Tech stock slid, pushing the Nasdaq index into a correction (more than 10% below its record high). Wall Street's fear index, the CBOE Volatility index, closed at its highest level since 18 December, showing investors are jittery. They may also be flummoxed, after Trump temporarily delayed tariffs on many goods from Canada and Mexico yesterday. Trump delays tariffs on many products from Mexico and Canada Despite that u-turn, 'the great unwind of US equity evolves and gathers momentum', says Chris Weston, analyst at brokerage Pepperstone. Weston explains: Confusion reigns around the Trump Administration policy agenda, and while we've seen yet another pause on Canadian and Mexican tariffs until 2 April, the lack of consistency to hold policy firm further limits the visibility US businesses have to position margins and to make strategic planning decisions. Trump detailed that he's 'not even looking at the stock market' … it's easy to be sceptical on that call, but Trump needs to portray control when putting through the hard policies. It's never a great sign when politicians start blaming malignant forces when the financial markets give their policies the thumbs down. But that was Trump's message yesterday; asked if his tariffs were scaring the markets, Trump replied: 'Well, a lot of them are globalist countries and companies that won't be doing as well. Because we're taking back things that have been taken from us many years ago.' European stock markets are expected to drop today, with the FTSE 100 index forecast to fall 0.55% or 48 points. Japan's Nikkei has fallen over 2% today, to its lowest level since last September. Investors are poised for the latest US jobs report. The consensus is that hiring picked up in February, lifting non-farm payrolls by around 160,000 last month. But yesterday, Larry Kudlow – former Director of the US National Economic Council turned Fox News host – suggested the NFP report could be flat, or even negative…. Kudlow: "Some very smart people are telling me that the February jobs number coming out Friday could be flat, even negative. The GDP tracker from the Atlanta Fed is showing for the first quarter a -2.5 or -2.8%. And we've had lousy numbers on things like housing and business… — Jeffrey Jonah (@JeffreyJonah5) March 6, 2025 The agenda 7am GMT: Halifax index of UK house prices in February 10am GMT: Eurozone GDP Q4 2024 (3rd estimate) 1.30pm GMT: US non-farm payroll for February Share Show key events only Please turn on JavaScript to use this feature China imports have fallen sharply at the start of this year, as the prospect of a trade war with the US hits its economy. Imports fell 8.4% year-on-year in January and February, new customs data shows, weaker than the 1% growth expected by economists. That suggests that China's manufacturing base could be cutting back on buying raw materials and parts, concerned that demand for their wares would fall due to new tariffs at the US border. Lynn Song, chief economist for Greater China at ING, says: China's economy got off to a weak start in 2025 as exports grew just 2.3% in the first two months of the year. A sharp slump in imports, meanwhile, resulted in a bigger-than-expected trade surplus. Looking into the detail of the import data, Song explains: We still saw strong imports in tech-related imports, with a 54.4% YoY ytd surge in automatic data processing equipment imports. And an overall 6.4% YoY ytd growth in hi-tech product imports. However, most other categories came in weak. Commodities imports generally contracted over the first two months of the year, with crude oil (-10.5%), natural gas (-13.8%), and steel (-7.9%) all still soft. We're already seeing a slump in soybean imports, which fell by -14.8% YoY ytd. This was even before the impacts of China's retaliatory tariffs on US agricultural products. China's exports rose, though, in the first two months of 2025 – up 2.3%. Exports to the US rose to almost $76bn, Bloomberg reports, the highest total for January and February since 2022 when the Covid-19 pandemic was upending global trade. US data yesterday showed that America's trade deficit swelled to a record high in January, as firms tried to front-run tariffs by importing more goods. Share Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. The markets continue to be buffeted by fears of a global trade war, as Donald Trump vacillates over the imposition of tariffs on major US trading partners. Last night in New York, the S&P 500 index fell 1.8% to its lowest level since early November – the post-election Trump bump has well-and-truly vanished. Tech stock slid, pushing the Nasdaq index into a correction (more than 10% below its record high). Wall Street's fear index, the CBOE Volatility index, closed at its highest level since 18 December, showing investors are jittery. They may also be flummoxed, after Trump temporarily delayed tariffs on many goods from Canada and Mexico yesterday. Trump delays tariffs on many products from Mexico and Canada Despite that u-turn, 'the great unwind of US equity evolves and gathers momentum', says Chris Weston, analyst at brokerage Pepperstone. Weston explains: Confusion reigns around the Trump Administration policy agenda, and while we've seen yet another pause on Canadian and Mexican tariffs until 2 April, the lack of consistency to hold policy firm further limits the visibility US businesses have to position margins and to make strategic planning decisions. Trump detailed that he's 'not even looking at the stock market' … it's easy to be sceptical on that call, but Trump needs to portray control when putting through the hard policies. It's never a great sign when politicians start blaming malignant forces when the financial markets give their policies the thumbs down. But that was Trump's message yesterday; asked if his tariffs were scaring the markets, Trump replied: 'Well, a lot of them are globalist countries and companies that won't be doing as well. Because we're taking back things that have been taken from us many years ago.' European stock markets are expected to drop today, with the FTSE 100 index forecast to fall 0.55% or 48 points. Japan's Nikkei has fallen over 2% today, to its lowest level since last September. Investors are poised for the latest US jobs report. The consensus is that hiring picked up in February, lifting non-farm payrolls by around 160,000 last month. But yesterday, Larry Kudlow – former Director of the US National Economic Council turned Fox News host – suggested the NFP report could be flat, or even negative…. Kudlow: "Some very smart people are telling me that the February jobs number coming out Friday could be flat, even negative. The GDP tracker from the Atlanta Fed is showing for the first quarter a -2.5 or -2.8%. And we've had lousy numbers on things like housing and business… — Jeffrey Jonah (@JeffreyJonah5) March 6, 2025 The agenda 7am GMT: Halifax index of UK house prices in February 10am GMT: Eurozone GDP Q4 2024 (3rd estimate) 1.30pm GMT: US non-farm payroll for February Share
