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New Straits Times
12-06-2025
- Business
- New Straits Times
Dollar hits 2025 low, Middle East tensions fuel risk-off mood
LONDON: The US dollar hit a new 2025 low on Thursday, while stocks eased from record highs, as a cocktail of rising Middle East tensions and concern over the fragility of a trade truce between Washington and Beijing drew investors into safe-haven assets. Separately, a report on US consumer inflation on Wednesday showed overall price pressures remained contained in May, largely due to declines in the cost of gasoline, cars and housing. But most economists expect inflation to pick up as the impact of US tariffs begins to bite. The dollar, which has lost around 10 per cent in value against a basket of currencies this year, fell to its lowest since April 2022 in European trading. Global stocks took a breather from the almost-unbroken rally that has run since early April, leaving the MSCI All-Country World Index flat, just below Wednesday's all-time high. In Europe, the STOXX 600 fell 0.8 per cent, led mostly by airlines, given brewing tensions in the Middle East and a deadly crash of an Air India flight bound for London that killed at least 30 people near the Indian city of Ahmedabad. Futures on the S&P 500 and Nasdaq fell 0.5–0.6 per cent. The US administration on Wednesday said US personnel were being moved out of the Middle East due to heightened security risks in the region, which briefly drove oil prices up by four per cent before they receded. "(A flare-up in tensions) is a significant tail risk, but I don't think it is anybody's baseline forecasts. So it's something to watch — if there is a real escalation there, then markets will take fright and that would have ramifications for the oil price," Daiwa Capital economist Chris Scicluna said. Iran, for its part, said it will not abandon its right to uranium enrichment, a senior Iranian official told Reuters on Thursday, adding that a "friendly" regional country had alerted Tehran over a potential military strike by Israel. Classic safe-haven assets got a lift. The Swiss franc and the Japanese yen strengthened, pushing the dollar down by one per cent against the franc and down 0.7 per cent against the yen, while gold rose nearly one per cent to US$3,385 an ounce. The sense of relief stemming from a positive conclusion to US-China trade talks earlier this week, which President Donald Trump said was a "great deal with China", evaporated by Thursday. RED, WHITE AND BLUE LETTERS Adding yet another dose of uncertainty in the markets, Trump said the US would send out letters in one to two weeks outlining the terms of trade deals to dozens of other countries, which they could embrace or reject. "Markets may have no choice but to respond to Trump's tariff threat — even if it's just posturing to bring others to the table. The gap between 'risk-on' positioning and real-world risks has stretched too far," said Charu Chanana, chief investment strategist at Saxobank. Trump's erratic tariff policies have roiled global markets this year, prompting hordes of investors to exit US assets, especially the dollar, as they worried about rising prices and slowing economic growth. The euro rose by as much as 1.07 per cent to US$1.16, its highest since October 2021. US Treasuries also rallied in price, pushing yields down 3.5 basis points to below 4.38 per cent, while two-year yields, which are more sensitive to inflation and interest-rate expectations, eased 2.7 bps to 3.92 per cent. Later in the day, the focus will be on a producer inflation report as some of the components feed into the Fed's preferred inflation gauge — the Personal Consumption Expenditure Index. Wednesday's consumer inflation index kept alive the prospect of the Federal Reserve cutting rates by a quarter point, but only in September, as policymakers assess how tariffs work their way through the real economy. "I suspect it's probably going to be a combination of the two. Therefore it makes sense for the Fed to wait and see what happens rather than rushing into a rate cut," AMP Capital's head of investment strategy and chief economist Shane Oliver said. Oil, which has fallen by 20 per cent in the last year, eased by 1.6 per cent to US$68.63 a barrel, but was still pinned near two-month highs, adding another moving part to the outlook for interest rates.
Yahoo
05-06-2025
- Business
- Yahoo
What's Powering Global ETFs to New Record Highs?
Global equities have been on a surge fueled by a combination of softening rhetoric from President Trump on tariffs, fading recession fears, strong first-quarter earnings across major economies and renewed enthusiasm for artificial intelligence. Additionally, the surge in tech stocks and a weaker dollar have helped lift broader MSCI All-Country World Index, which tracks equities across 47 countries, has climbed to its highest level ever, underscoring renewed investor confidence despite trade tensions and political uncertainty. This marks the first time the index has reached a new high since fact, many global ETFs touched a new 52-week high in the latest sessions. These are iShares MSCI ACWI ETF ACWI, Vanguard Total World Stock ETF VT, iShares MSCI World ETF URTH, iShares Global Equity Factor ETF GLOF and SPDR Global Dow ETF DGT. We have highlighted several reasons for the strong performance: Despite geopolitical headwinds, economic data from the United States, Europe, and parts of Asia continue to show surprising strength. U.S. job growth remains solid, inflation is cooling gradually, and consumer spending has remained resilient. China's latest stimulus measures have also started to buoy manufacturing and real estate activity. Europe is gaining investors' favor, driven by lower valuations and clearer monetary policy signals. Meanwhile, Wall Street recorded a historically strong May with the S&P 500 posting its best May performance since 1990 (read: 6 Factors to Play Europe ETFs Now). After the initial shock of the tariffs, there were signs of de-escalation. Last month, the United States temporarily slashed tariffs on Chinese goods from 145% to 30%, while China will lower its retaliatory duties on U.S. goods from 125% to 10%. The temporary reduction in rates will run for 90 days. Meanwhile, Trump also postponed the implementation of a 50% tariff increase on all EU products, from June 1 to July 9. With this, the trade negotiations between the two countries have accelerated (read: EU-US Trade Deal Hopes to Boost These ETFs). Additionally, the U.S. Court of International Trade (CIT) blocked much of Trump's existing tariff policy, citing legal concerns. The ruling provided a short-lived boost to equities as the rally faded after a federal appeals court paused the CIT's decision, prolonging uncertainty over the legal future of the administration's 'Liberation Day' tariffs. The AI boom remains a dominant investment theme. With NVIDIA (NVDA) reclaiming the title of the world's most valuable company and enterprise adoption of generative AI accelerating, technology stocks are leading the charge. The 'Magnificent Seven' - Apple (AAPL), Microsoft (MSFT), Alphabet (GOOG, GOOGL), Amazon (AMZN), NVIDIA, Tesla (TSLA) and Meta Platforms (META) – roared in the recent weeks, pulling indices higher (read: ETFs to Bet On as NVIDIA Reclaims Market Cap Crown). A weakening U.S. dollar has further boosted the value of international equities, making them more attractive to global investors. This has particularly benefited emerging market stocks and multinational corporations, improving earnings translation and trade competitiveness. iShares MSCI ACWI ETF (ACWI) – 52-week High: $125.54iShares MSCI ACWI ETF offers exposure to a broad range of international developed and emerging market companies by tracking the MSCI ACWI Index. It holds a broad basket of 2,258 stocks with American firms accounting for 64% share, while Japan, the United Kingdom and China occupy the next spots. iShares MSCI ACWI ETF has AUM of $21.6 billion and charges 32 bps in annual fees. It has a Zacks ETF Rank #3 (Hold).Vanguard Total World Stock ETF (VT) - 52-week High: $125.54Vanguard Total World Stock ETF invests in both foreign and U.S. stocks and tracks the FTSE Global All Cap Index, which covers both well-established and still-developing markets. It holds a broad basket of 3,141 stocks with American firms accounting for 64.6% share, followed by Europe (15.4%). With AUM of $46 billion, Vanguard Total World Stock ETF charges 6 MSCI World ETF (URTH) - 52-week High: $165.61iShares MSCI World ETF offers exposure to a broad range of developed market companies around the world by tracking the MSCI World Index. It holds a broad basket of 1,330 stocks with American firms accounting for 71.2%, followed by Japan (5.5%). iShares MSCI World ETF has amassed $4.8 billion in its asset base and charges 24 bps in annual fees. iShares Global Equity Factor ETF (GLOF) - 52-week High: $46.91 iShares Global Equity Factor ETF offers exposure to a portfolio of 613 global developed market and emerging market large- and mid-cap stocks based on an index that focuses on five well-known investment factors: value, quality, momentum, low size, and low volatility. It follows the STOXX Global Equity Factor Index, charging investors 20 bps in annual fees. American firms take the largest share at 59.4%, while Japan, China and the United Kingdom round off the next three. iShares Global Equity Factor ETF has amassed $127.9 million in its asset Global Dow ETF (DGT) - 52-week High: $147.95 SPDR Global Dow ETF follows the Global Dow Index, which offers exposure to companies based on size and reputation as well as their importance in the global economy. It holds 154 stocks in its basket, with American firms accounting for 51.1%, followed by Japan (10%). SPDR Global Dow ETF charges 50 bps in annual fees and has accumulated $356 million in its asset base. As long as economic fundamentals remain solid and central banks stay accommodative, equities could continue their upward march. However, trade policies continue to remain an overhang. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report iShares MSCI ACWI ETF (ACWI): ETF Research Reports iShares MSCI World ETF (URTH): ETF Research Reports Vanguard Total World Stock ETF (VT): ETF Research Reports SPDR Global Dow ETF (DGT): ETF Research Reports iShares Global Equity Factor ETF (GLOF): ETF Research Reports This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
05-06-2025
- Business
- Yahoo
Market Minute 6-4-25- Swticheroo in Play as Global Stocks Hit Highs, US Lags
Markets are relatively quiet so far, with stocks, gold, and crude oil all mostly flat. Treasuries are rallying modestly, though, while the dollar is dipping. We have a switcheroo in major markets. Led by strong performance in non-US equities, the MSCI All-Country World Index just tagged 888.24 – topping its previous February peak of 887.72. The Stoxx Europe 600 Index is beating the S&P 500 by the widest margin on record. In the Americas, all major indices are outperforming the S&P 500 handily, with benchmark indices in Canada up 6.8%, Brazil up 14.3%, and Mexico up 16.4%. To get a FREE copy of the complete MoneyShow 2025 Top Picks Report, click HERE.) This chart shows the performance of the iShares MSCI ACWI ex US ETF (ACWX) compared to the SPDR S&P 500 ETF Trust (SPY). The former holds more than 1,700 non-US stocks, with the highest weighting in names like Taiwan Semiconductor Manufacturing (TSM), Tencent Holdings Ltd. (TCEHY), and SAP SE (SAP). As you can see, ACWX has gained just under 15% so far in 2025, compared with only 1.7% for the SPY. This is a big week for job market data – and today's ADP number didn't exactly excite Wall Street. The private payroll company said the US economy added just 37,000 jobs in May. That was down from 60,000 a month prior and FAR below the average forecast of 115,000. Official Labor Department numbers are due out Friday morning. See also: CTRI: A Utility Play That Just Landed Large, New Contracts In other news, US-China trade disagreements keep festering. President Trump called Chinese President Xi Jinping 'extremely hard to make a deal with' in a social media post overnight. Hoped-for talks between the two leaders still haven't happened. Meanwhile, China's crackdown on exports of rare-earth metals is threatening manufacturers here in the US. Auto companies are particularly vulnerable, especially those who are titling more toward Electric Vehicle (EV) production. Those vehicles need rare-earth magnets to function and sourcing them from China has become much more difficult. More From SPX: Yes, We Could Finish 2025 at 6,600 Given Earnings, AI Growth Earnings, Jobs Data to Drive Next Market Moves Market Minute 6/3/25: Wet-Blanket Forecasts Weigh on Markets
Business Times
01-06-2025
- Business
- Business Times
How the US market fell from 4th to 41st for returns – and what it means for stocks in 2025
NEARLY two months after US President Donald Trump roiled markets with his on-again, off-again 'reciprocal' tariffs and universal 10 per cent levy, uncertainty remains. My last column showed the illogic underpinning this – and counselled patience. Here is an update – and how to profit. Trump says America 'wins' through his tariffs, reclaiming 'lost' manufacturing jobs and cutting the trade deficit. No. Tariffs always hammer most the one who imposes them. Don't take my word for it. Look to the markets. For any good capitalist, this is step one. Markets are a lie detector, weighing talk, forecasts and opinions – and rendering verdicts. Non-US stocks were up 8.8 per cent this year to May 22. The Straits Times Index gained 4.9 per cent, a hair's breadth from all-time highs. China? Up 10 per cent. European stocks rose 13.7 per cent. Mexico, up 20.7 per cent. US stocks? Down 5.5 per cent – a striking lag. If we look at it another way: Of the 47 MSCI All-Country World Index (ACWI) nations, America was 41st in the ranking of countries by their year-to-date returns as at May 22. In the same period last year, America was fourth – with its 28.8 per cent return fully seven percentage points ahead of the ACWI. Why did US stocks go from No 4 to 41? The answer is No 47; the 47th president, that is. Trump's vacillations make funds flee America. Markets know that attempts to reduce the trade deficit are senseless. A trade deficit means a capital account surplus by definition – that capital is foreign investment in the US. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Why would reversing that be desirable? Why would the government intervening to favour American firms, instead of letting free markets sort out the most efficient use of capital, be considered positive? Why would policy that seemingly changes on a whim be considered good? Stocks are seeing through the smoke and mirrors. America's lag tells you those things are bad, not good. My last column noted how Trump justified his 90-day reciprocal tariff pause on Apr 9 on the grounds that some 75 nations sought deals. Many claimed that this revealed Trump's true aim. The president's fans could say that tariffs, confusion and uncertainty are solely a leverage to strike a flurry of deals – delivering even freer trade. However, the markets are looking at reality, not armchair psychobabble. Deals to make more deals Since Apr 9, just two tariff 'deals' have emerged – one with Britain and one with China. Both are fluff. Britain's is a one-year, non-binding agreement to mitigate tariffs until a full trade deal happens. A deal to make a deal. It affects only a handful of industries. Crucially, the 10 per cent universal levy remains on most UK goods, just like for those from Singapore. America's China deal looks bigger, but only because the bar was incredibly low. Yes, it cut 145 per cent tariffs on Chinese goods to 30 per cent, while China dropped retaliatory levies from 125 per cent to 10 per cent. However, the 'deal' lasts only 90 days and effectively just buys time. Another deal to make a deal. Plus, tariffs on China remain 30 percentage points higher than in January. Both countries are worse off, but especially America. Who wins from this? Maybe Singapore, via re-exporting. On May 16, Trump flip-flopped again. Boasting that 150 nations now seek 'deals', he said that there isn't time to negotiate them all. His 'solution'? Telling nations what rates they will pay – and offering chances to appeal. Didn't he already do that on 'Liberation Day' on Apr 2? How will it work? Will rates be higher, lower or the same as those on Apr 2? He did not say, further fanning uncertainty. Then, days later, he threatened the European Union with new 50 per cent tariffs – and 25 per cent on Apple products. More uncertainty. Meanwhile, legal challenges to Trump's tariffs progress. Maybe real deals will come that will actually lower trade barriers and uncertainty – a huge potential upside. Then again, maybe not. But as my last column said, even if all tariffs return, the pain will be less than feared – which will be bullish for markets. Importers can readily skirt America's understaffed, overwhelmed tariff-collecting Customs and Border Protection staff via both illegal and legal means. The latter include 'tariff splitting' – stripping out services-related costs such as marketing to reduce goods' values – or storing imports in bonded warehouses. Or, shipping in goods that are valued to be under US$800. And myriad illegal ways such as misclassifying and undervaluing goods. Or, as mentioned, exporters can 'tranship' or re-export via lower-tariff nations – such as Singapore. This is why China's April exports didn't tank despite shipments to America tumbling 21 per cent. South-east Asia gobbled up the difference – and shipped them on. It drove Singapore's huge, 113 per cent year-on-year spike in April re-exports to America. Vietnam and Taiwan are seeing similar surges. Shippers could further tap Canada or Mexico, gaming the US-Mexico-Canada Agreement's tariff exemption. Hence, while April's total tariff collections rose, they missed administration forecasts by 75 per cent. That will persist. Happily, fear exceeds the negative effects, especially outside America. For investors, that is a recipe for a bull market – with non-US stocks continuing to lead. The writer is the founder, executive chairman and co-chief investment officer of Fisher Investments, an independent investment adviser serving both individual and institutional investors globally
Yahoo
28-05-2025
- Business
- Yahoo
Path of Least Resistance for Stocks Is Higher, Barclays Says
(Bloomberg) -- Investor exposure to equities is still low enough that the 'path of least resistance' for the market is higher, according to strategists at Barclays Plc. NY Wins Order Against US Funding Freeze in Congestion Fight The team led by Emmanuel Cau said institutional investors weren't a big part of the stock rebound in May, with positioning remaining broadly underweight. Absent a volatility shock, 'systematic buying could continue to help equities to grind higher,' Cau wrote in a note. The MSCI All-Country World Index has rallied 5.7% in May, tracking its best month since November 2023, as global trade tensions eased. Still, risk appetite was dented last week by investor concerns around the US fiscal deficit. All eyes are now on Nvidia Corp.'s earnings report, due later Wednesday, for clues on demand for artificial intelligence, which has powered much of the rally in tech megacap stocks. US-domiciled investors sold domestic stocks and bought international equities in May, Cau said, although the 'sell America' trade is largely concentrated in the dollar and bonds. Meanwhile, repatriation into Europe has paused with limited selling of US assets by European investors. Cau correctly predicted earlier this month that a de-escalation in the US-China trade war would boost stocks. Mark Zuckerberg Loves MAGA Now. Will MAGA Ever Love Him Back? Millions of Americans Are Obsessed With This Japanese Barbecue Sauce Why Apple Still Hasn't Cracked AI Inside the First Stargate AI Data Center How Coach Handbags Became a Gen Z Status Symbol ©2025 Bloomberg L.P. Sign in to access your portfolio
