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Yahoo
3 hours ago
- Business
- Yahoo
Stocks to watch next week: Nike, BlackBerry, Micron, Babcock and Bunzl
While market focus is likely to remain on geopolitical tensions and economic data in the coming week, investors will also be keeping an eye on earnings releases from companies across a range of sectors. Investors will be looking at Nike's (NKE) latest results for any commentary on how tariff uncertainty is impacting the sportswear giant. In the tech space, BlackBerry (BB) is due to report, with the company having warned of uncertainty going into the current financial year. Chipmaker Micron (MU) is also set to release its latest earnings off the back of recently announcing increased investment in its US operations. On the London market, the focus will be on Babcock International's (BAB.L) full-year results, with the company's shares having rallied this year on expectations of more government spending on defence. Another FTSE 100 (^FTSE) stock in the spotlight will be distribution company Bunzl, which is due to update on trading, following a challenging start to its financial year. Here's more on what to look out for: Shares in Nike (NKE) are down 21% year-to-date, with the stock coming under pressure amid uncertainty over US president Donald Trump's tariffs. The stock fell sharply following Trump's unveiling of sweeping duties on "Liberation Day" on 2 April, which included a 46% tariff rate on Vietnam, where approximately half of Nike's footwear was manufactured last year. While Trump later announced a 90-day pause on many of these higher tariff rates, the US and Vietnam are still negotiating over a deal, with the delay on imposing "reciprocal" duties set to end on 9 July. There are concerns that companies making products in countries impacted by higher tariffs will be forced to pass on cost increases to the consumer by raising prices. Read more: Why the UK's AIM is struggling 30 years on In May, Nike announced plans to raise prices on selected products from 1 June, but did not make reference to tariffs as the reason for increases. 'We regularly evaluate our business and make pricing adjustments as part of our seasonal planning,' Nike said in a statement. The uncertainty over tariffs comes as the company seeks to improve performance, as it faces increased competition from newer rivals On (ONON) and Deckers' (DECK) Hoka. Nike's revenue in the third quarter fell 9% year-to-year to $11.27bn (£8.34bn), though this was ahead of estimates of $11.03bn. Net income declined 32% to $794m and diluted earnings per share of $0.54 were down 30%. Elliott Hill, who took over as Nike CEO in October, said that the progress the company had made against its "Win Now" turnaround plan in its first 90 days had reinforced his confidence that it was "on the right path". "What's encouraging is Nike made an impact this quarter leading with sport — through athlete storytelling, performance products and big sport moments," he said. Shares in BlackBerry tumbled after the release of its full-year results in early April, in which the Ontario-based technology company forecast a decline in revenue in the coming year. BlackBerry said it expected total revenue for the 2026 fiscal year to be between $504m and $534m. That would be slightly weaker than the $534.9m in total revenue the company reported for the 2025 fiscal year. 'We see an uncertain backdrop within automotive, given the recent tariff changes, and particularly automotive tariffs,' BlackBerry chief financial officer Tim Foote told analysts on a post-earnings conference call. Read more: UK borrowing rises in May, making tax hikes 'increasingly likely' 'We are currently uncertain of the impact this could have on our business," he said. "While we don't see that tariffs will directly impact our products and services, we do expect some indirect effects on BlackBerry due to impacts on our customers, including supply chains." The company was once a major player in the smartphone market but transitioned to making software for vehicles and devices, and selling cybersecurity solutions to governments and corporate clients. For the first quarter, BlackBerry guided to revenue of $107m to $115m, which would be down on the $144m the company reported for the same period last year. Chipmaker Micron recently announced plans with the Trump administration to boost its investment in the US to $200bn, amid a broader drive of encouraging companies to onshore operations in America. Of this amount, $150bn is set to be invested in domestic memory manufacturing, while $50bn will go towards research and development, which Micron said would create an estimated 90,000 jobs. In the announcement, US secretary of commerce Howard Lutnick said: "President Trump has made it clear that the time to build in America is now." Read more: Stocks that are trending today "Micron's planned investment will ensure the US advances its lead across critical industries like AI, automotive, and aerospace & defense." Micron CEO Sanjay Mehrotra said that the plans underscored the company's commitment to "driving innovation and strengthening the domestic semiconductor industry". In terms of company performance, Micron (MU) beat expectations in the second quarter, with revenue of $8.05bn besting estimates of $7.91bn. Adjusted earnings of $1.56 per share also came in ahead of forecasts of $1.43. For the third quarter, Micron has guided to revenue of $8.8bn, plus or minus $200m, while diluted earnings per share are expected to come in at $1.57, plus or minus $0.10. Shares in FTSE 100 (^FTSE) company Babcock International (BAB.L) have surged 114% so far this year, buoyed by European politicians' pledges to spend more on defence. The engineering company provides equipment and systems to the defence and energy industries, and is the second-biggest supplier to the UK's ministry of defence behind BAE Systems (BA.L), as well as holding contracts with NATO and countries worldwide. "Given the UK's and NATO's plans to increase defence spending, and greater emphasis in many countries on nuclear power — where Babcock's Cavendish operation is a leader in support, maintenance and decommissioning — shareholders are latching on to the shares, which trade at a 10-year high," said AJ Bell's (AJB.L) investment experts Russ Mould, Danni Hewson and Dan Coatsworth. Stocks: Create your watchlist and portfolio A trading update in April set the scene as to what to expect in the final full-year results, with Babcock having guided to revenue of £4.83bn ($6.51bn), which would be up 11% on an organic constant currency basis. The company expects to report an underlying operating profit of £363m, which would be up 17% year-on-year. In addition, Babcock said it had a contracted backlog of £10.1bn as of 31 March, up from $9.5bn at the half-year point. "Babcock rejoined the dividend list last year, with a distribution of 5p a share, and analysts are looking for 7.2p this time around," said AJ Bell's investment experts. For the coming year, they said that analysts expect 5% sales growth to £5bn, £383m in underlying operating profit for a 7.7% margin and broadly flat free cash flow, with an increase in the dividend to 9.1p a share. Shares in Bunzl (BNZL.L) plunged in April after the distribution and services giant cut its guidance for the year, citing challenges in its North America business. In a first quarter trading statement, Bunzl reported 2.6% revenue growth for the period but said adjusted operating profit was down "significantly" year-on-year. The company, which distributes products to companies ranging from paper towels to personal protective equipment (PPE), said it was reducing its 2025 guidance "reflect the operational challenges faced by our largest business in North America, and the implications on the remainder of the year from a more challenging start for the group." Read more: Why bitcoin and gold are rallying as bond yields hit 30-year highs Bunzl said it now expects moderate revenue growth for the year, "driven by announced acquisitions and broadly flat underlying revenue". The company's group operating margin for the year is expected to be moderately below 8%, compared to 8.3% in 2024. Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: "Bunzl's reputation as a steady ship is under some serious pressure after a disappointing first quarter that was as much self-inflicted as due to a weakening market." "North America, Bunzl's largest and most profitable market, is facing headwinds due to missteps in pricing strategy and broader market pressures," he said. "Markets are expecting to hear more in next week's trading statement about how Bunzl has resolved some of the pricing issues and the ongoing impact of tariffs." "Bunzl has historically been able to benefit in times of rising prices, and investors are still cautiously optimistic that some more positive commentary is around the corner," added Britzman. Monday 23 June CML Microsystems (CML.L) Naspers ( Prosus ( Tuesday 24 June Accsys Technologies ( Telecom Plus (TEP.L) Intercede (IGP.L) SThree (STEM.L) FedEx (FDX) Carnival (CCL.L) Wednesday 25 June ProCook (PROC.L) Alimentation Couche-Tard ( General Mills (GIS) Thursday 26 June Volex (VLX.L) CakeBox (CBOX.L) James Latham (LTHM.L) Serco (SRP.L) Inchcape (INCH.L) Moonpig (MOON.L) Friday 27 June Various Eateries (VARE.L) You can read Yahoo Finance's full calendar here. Read more: Looming petrol price increase could hit fragile consumer confidence Bank of England holds interest rates at 4.25% amid inflation fears Eurozone inflation falls below ECB target to 1.9%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
ABC News
a day ago
- Business
- ABC News
US Federal Reserve chair Jerome Powell leaves interest rates on hold
BlackRock chief investment strategist for the Middle East and APAC, Ben Powell, says the US Federal Reserve chair Jerome Powell will be steadfast and only move on interest rates when the data warrants a move. #ABCBusiness
Bloomberg
2 days ago
- Business
- Bloomberg
The Fed Is Waiting Until the Whites of Recession's Eyes
This was one of the more challenging Federal Reserve decisions to anticipate. US macro data has deteriorated so much that, normally, you'd expect policymakers to cut interest rates. However, they've already said tariffs are keeping them on hold for a while, unless things really fall apart. Military conflict between Iran and Israel can only make that hold longer. Therefore, it was anyone's guess what the Fed's dot plot of interest rate projections would show. So I'm going to take a slightly different tack by mostly ignoring those forecasts and, instead, tell you what I'm seeing in the data, how I think the Fed will act and what that means for asset prices.
Reuters
13-06-2025
- Business
- Reuters
Is the Fed still in a 'good place'?
ORLANDO, Florida, June 12 (Reuters) - At the Federal Open Market Committee meeting next week, investors will scrutinize all communications for any sign that the recent softening in U.S. inflation could be enough to nudge policymakers closer to cutting interest rates. Current economic data might be leaning in that direction, but policy out of Washington could well keep Chair Jerome Powell and colleagues in 'wait and see' mode. No one expects the Fed to cut rates next week, but businesses, households and investors should get a better sense of policymakers' future plans from the revised quarterly Staff Economic Projections and Powell's press conference. Powell was very clear in his post-meeting press conference last month that the Fed is prepared to take its time assessing the incoming economic data, particularly the impact of tariffs, before deciding on its next step. He told reporters no less than eight times that policy is in a "good place" and said four times that the Fed is "well positioned" to face the challenges ahead. Will he change his tune next Wednesday? Annual PCE inflation in April was 2.1%, the lowest in four years and virtually at the Fed's 2% target, while CPI inflation in May was also lower than expected. The labor market is softening, economic activity is slowing, and recent red-hot consumer inflation expectations are now starting to come down. In that light, it may be surprising that markets are not fully pricing in a quarter-point rate cut until October. "The upcoming meeting offers an opportunity (for Fed officials) to signal that the recent mix of tamer inflation and softer consumption growth warrant a careful 'recalibration' of rates lower, while remaining very cautious about what comes next," economist Phil Suttle wrote on Wednesday. But there are two well-known barriers that could keep the Fed from quickly re-joining the ranks of rate-cutting central banks: tariffs and the U.S. fiscal outlook. Tariffs have yet to show up in consumer prices, especially in goods, and no one knows how inflationary they will be. They could simply result in a one-off price hit, they could trigger longer-lasting price spikes, or the inflationary impact could end up being limited if companies absorb a lot of the price increases. In other words, everything is on the table. Equity investors appear to be pretty sanguine about it all, hauling the S&P 500 back near its all-time high. But Powell and colleagues may be slower to lower their guard, and for good reason. Although import duties on goods from China will be lower than feared a few months ago and Washington is expected to seal more trade deals in the coming weeks, overall tariffs will still end up being significantly higher than they were at the end of last year, probably the highest since the 1930s. Economists at Goldman Sachs reckon U.S. inflation will rise to near 4% later this year, with tariffs accounting for around half of that. This makes the U.S. an "important exception" among industrialized economies, the OECD said last week. The other major concern is the U.S. public finances. President Trump's 'big beautiful bill' being debated in congress is expected to add $2.4 trillion to the federal debt over the next decade, and many economists expect the budget deficit will hover around 7% of GDP for years. With fiscal policy so loose, Fed officials may be reluctant to signal a readiness to loosen monetary policy, especially if there is no pressing need to do so. FOMC members in December last changed their median forecasts for the central bank's policy rate, hiking it this year and next year by a hefty 50 basis points to 3.9% and 3.4%, respectively. They left projections unchanged in March amid the tariff fog. That implies 50 basis points of rate cuts this year and another 50 bps next year, which is pretty much in line with rates futures markets right now. So perhaps Fed policy is still in a "good place", but with economic expectations changing quickly, it's unclear how long that will be the case. (The opinions expressed here are those of the author, a columnist for Reuters) Enjoying this column? Check out Reuters Open Interest (ROI), your essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis. Markets are moving faster than ever. ROI can help you keep up. Follow ROI on LinkedIn and X.
Zawya
13-06-2025
- Business
- Zawya
Is the Fed still in a 'good place'?: McGeever
ORLANDO, Florida: At the Federal Open Market Committee meeting next week, investors will scrutinize all communications for any sign that the recent softening in U.S. inflation could be enough to nudge policymakers closer to cutting interest rates. Current economic data might be leaning in that direction, but policy out of Washington could well keep Chair Jerome Powell and colleagues in 'wait and see' mode. No one expects the Fed to cut rates next week, but businesses, households and investors should get a better sense of policymakers' future plans from the revised quarterly Staff Economic Projections and Powell's press conference. Powell was very clear in his post-meeting press conference last month that the Fed is prepared to take its time assessing the incoming economic data, particularly the impact of tariffs, before deciding on its next step. He told reporters no less than eight times that policy is in a "good place" and said four times that the Fed is "well positioned" to face the challenges ahead. Will he change his tune next Wednesday? Annual PCE inflation in April was 2.1%, the lowest in four years and virtually at the Fed's 2% target, while CPI inflation in May was also lower than expected. The labor market is softening, economic activity is slowing, and recent red-hot consumer inflation expectations are now starting to come down. In that light, it may be surprising that markets are not fully pricing in a quarter-point rate cut until October. "The upcoming meeting offers an opportunity (for Fed officials) to signal that the recent mix of tamer inflation and softer consumption growth warrant a careful 'recalibration' of rates lower, while remaining very cautious about what comes next," economist Phil Suttle wrote on Wednesday. But there are two well-known barriers that could keep the Fed from quickly re-joining the ranks of rate-cutting central banks: tariffs and the U.S. fiscal outlook. WASHINGTON WILD CARD Tariffs have yet to show up in consumer prices, especially in goods, and no one knows how inflationary they will be. They could simply result in a one-off price hit, they could trigger longer-lasting price spikes, or the inflationary impact could end up being limited if companies absorb a lot of the price increases. In other words, everything is on the table. Equity investors appear to be pretty sanguine about it all, hauling the S&P 500 back near its all-time high. But Powell and colleagues may be slower to lower their guard, and for good reason. Although import duties on goods from China will be lower than feared a few months ago and Washington is expected to seal more trade deals in the coming weeks, overall tariffs will still end up being significantly higher than they were at the end of last year, probably the highest since the 1930s. Economists at Goldman Sachs reckon U.S. inflation will rise to near 4% later this year, with tariffs accounting for around half of that. This makes the U.S. an "important exception" among industrialized economies, the OECD said last week. The other major concern is the U.S. public finances. President Trump's 'big beautiful bill' being debated in congress is expected to add $2.4 trillion to the federal debt over the next decade, and many economists expect the budget deficit will hover around 7% of GDP for years. With fiscal policy so loose, Fed officials may be reluctant to signal a readiness to loosen monetary policy, especially if there is no pressing need to do so. FOMC members in December last changed their median forecasts for the central bank's policy rate, hiking it this year and next year by a hefty 50 basis points to 3.9% and 3.4%, respectively. They left projections unchanged in March amid the tariff fog. That implies 50 basis points of rate cuts this year and another 50 bps next year, which is pretty much in line with rates futures markets right now. So perhaps Fed policy is still in a "good place", but with economic expectations changing quickly, it's unclear how long that will be the case. (The opinions expressed here are those of the author, a columnist for Reuters) Enjoying this column? Check out Reuters Open Interest (ROI), your essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis. Markets are moving faster than ever. ROI can help you keep up. Follow ROI on LinkedIn and X. (Editing by Andrew Heavens)
