Tariffs are hitting European firms hard. Here are the sectors to watch as earnings kick off
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The Hill
43 minutes ago
- The Hill
Lutnick: US ‘going to love the deals that President Trump and I are doing'
Commerce Secretary Howard Lutnick said on Sunday that the public is 'going to love the deals that President Trump and I are doing' as the administration promises forthcoming breakthroughs on tariffs. 'Well, you heard in our polling some of the perceptions of the economy,' CBS News' Margaret Brennan told Lutnick on 'Face the Nation.' 'Sixty-one percent of Americans believe the administration is putting too much focus on tariffs, 70 percent say the administration is not doing enough to lower prices and 60 percent oppose new tariffs on imported goods.' 'This is a centerpiece to your policy plan. How do you reverse public opposition?' she asked. 'Oh, they're going to love the deals that President Trump and I are doing. I mean, they're just going to love them. You know, the president figured out the right answer, and sent letters to these countries, said this is going to fix the trade deficit,' Lutnick responded. 'This will go a long way to fixing the trade deficit, and that's gotten these countries to the table and they're going to open their markets or they're going to pay the tariff,' he added. Trump's whiplash approach to threatening and imposing tariffs has at times rattled the markets. The president has sent letters to dozens of countries warning of tariffs ranging from 20 to 50 percent to be imposed beginning Aug. 1 unless new deals are reached. 'For 80 years, America's leaders let countries put tariffs on our products and we did nothing,' Lutnick said Tuesday in a post on the social platform X. 'Now under President Trump's leadership, American consumers and businesses are going to be competing on a level playing field. America will come out ahead,' he added.
Business Insider
43 minutes ago
- Business Insider
5 reasons Wall Street is in chill mode
Stock markets are shrugging off major risks and smashing records — so much so that even seasoned investors are scratching their heads. On Friday, the S&P 500 and Nasdaq 100 closed little changed after notching record highs on Thursday. Both indexes are hovering near the all-time highs they reached earlier this month, continuing a rebound after the post-"Liberation Day" sell-off. That rebound has stunned analysts, given the pile-up of macro risks, particularly President Donald Trump's ongoing threats to impose steep tariffs on key trading partners. Yet investors keep piling in — even if many are doing so with one eye on the exit. "In many ways, this is a rally that really no one's had much conviction in it," Andrew Pease, the Asia Pacific head of investments for Russell Investments, told Business Insider. He said the firm's analysis shows investors are neutral, not euphoric. "Everyone's very wary about this particular rally," Pease said. Wall Street veterans have spent months warning that investors may be underestimating the risks. "Unfortunately, I think there is complacency in the markets," JPMorgan Chase's CEO, Jamie Dimon, said earlier in July, referring to tariffs. Those concerns may soon be put to the test. Trump's proposed levies on trading partners — ranging from 10% to 70% — threaten to disrupt supply chains, fuel inflation, and slow global growth. "I think the market is too complacent about the damage of such high tariffs on both the US and the global economy," said Zhiwei Zhang, chief economist at Pinpoint Asset Management. It's not just tariffs that suggest trouble could be brewing. China's economic slowdown, Middle East tensions, and softening US data all suggest trouble could be brewing. So why are stocks still surging? 1. The US economy still looks resilient Despite inflationary concerns tied to Trump's tariff threats, the US economy remains on solid footing. As BI's Jennifer Sor recently reported, recession fears are fading. Big banks kicked off earnings season on a strong note last week. The consumer "basically seems to be fine," JPMorgan's chief financial officer, Jeremy Barnum, said on an earnings call on July 15. That's despite some cracks in the data. US GDP contracted 0.5% in the third quarter, and consumer spending growth slowed to 0.5% in Q1 — down sharply from 4% in Q4 2024. But retail sales rose 0.6% in June from May and the job market remains robust. The US added 147,000 jobs in June, well above expectations, while unemployment dipped to 4.1% from 4.2%. American consumers are, as top CEOs said recently, "a little numb" to tariffs and "very resilient," even as inflation ticks up. 2. Betting on the TACO trade Some investors are leaning on the "TACO trade" — short for "Trump Always Chickens Out." Markets are increasingly assuming that Trump's tariff threats are more talk than action. "Finally, the market is not wrong in pricing in a good chance that Trump will not follow through with his latest tariff threats, instead settling for some deal by 1 August," wrote Davide Oneglia, the director of European and global macro at Global Lombard, on July 16, referring to the trade deadline. Daniela Sabin Hathorn, senior market analyst at agreed: "The prevailing view among investors seems to be that these tariff threats are more bark than bite — a negotiating tactic rather than a firm policy stance." That's created what analysts call "asymmetry:" Markets could keep rising if talks go well, but they are vulnerable to sharp corrections if discussions break down. 3. FOMO + MOMO = a runaway rally Even as risks loom, traders don't want to miss out. That's fueling what analysts describe as a combination of FOMO, or fear of missing out, and MOMO, or momentum-based trading. Retail traders have been jumping back in, chasing gains as indexes push higher, even if they missed the earlier run-up. "MOMO and FOMO" are likely to dominate until proven otherwise," wrote Steve Sosnick, the chief strategist at Interactive Brokers, in a June 30 note. "Newton's First Law applies: A body (market) that is in motion will stay in motion until acted upon by an external source," he added. Sosnick said that implied volatility remains low, even as risks mount, suggesting investors are choosing to look past potential trouble. Pease at Russell Investments agreed that momentum could unravel quickly — but only if there's a clear macro shock. 4. Fed cuts are back on the table The Federal Reserve has signaled it could cut rates another two times this year — a boon for stocks. Lower rates reduce bond yields, making equities more attractive. They also encourage borrowing and investment. But rising inflation could complicate that path. In June, US inflation climbed 2.7% from a year ago, up from 2.4% in May. Dimon warned that the Fed might still hike if inflation proves sticky. He sees a 40% to 50% chance of another increase this cycle. 5. AI continues to power tech gains AI hype continues to drive the market, especially Big Tech. "AI is still the dominant theme, particularly as the Big Tech companies are giving solid earnings guidance and other companies are joining in as well, then that's the world in which you could see that this rally has further to go," Pease said, while cautioning that gains could become overdone. Bank of America's latest global fund manager survey, published July 15, shows 40% of respondents already see productivity gains from AI adoption. Another 21% expect gains within the next year. Caution still lingers Despite the optimism, there's unease under the surface. Summer trading is thinner, meaning volatility can spike quickly. Last year's yen carry trade unwind is a fresh reminder that things can turn fast. Trump's tariff threats are still on the table, but Oneglia thinks markets are right to be relatively unfazed. "Negotiations have not broken down and the market is acting rationally — at least on this," Oneglia wrote. Still, others are more cautious. "Ultimately, markets are at a crossroads," wrote Hathorn. "The rally, particularly in US equities, has been driven by optimism and underpinned by assumptions about political behavior." Until August, market asymmetry remains, so there's "room to rise on good news, but the potential for a swift and severe correction if trade tensions escalate," Hathorn added.
Yahoo
an hour ago
- Yahoo
Shareholders in Metis Energy (SGX:L02) are in the red if they invested three years ago
Metis Energy Limited (SGX:L02) shareholders should be happy to see the share price up 23% in the last month. But that doesn't change the fact that the returns over the last three years have been less than pleasing. In fact, the share price is down 44% in the last three years, falling well short of the market return. With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. Because Metis Energy made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually desire strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size. Over the last three years, Metis Energy's revenue dropped 33% per year. That means its revenue trend is very weak compared to other loss making companies. On the face of it we'd posit the share price fall of 13% compound, over three years is well justified by the fundamental deterioration. It would probably be worth asking whether the company can fund itself to profitability. The company will need to return to revenue growth as quickly as possible, if it wants to see some enthusiasm from investors. The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail). You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic. A Different Perspective Investors in Metis Energy had a tough year, with a total loss of 23%, against a market gain of about 27%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 1.6% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that Metis Energy is showing 4 warning signs in our investment analysis , and 2 of those are a bit unpleasant... But note: Metis Energy may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast). Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Singaporean exchanges. 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
