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The Hill
8 minutes ago
- The Hill
Forget trade wars — the future isn't about physical goods, but data, ideas and services
Despite a U.S.-driven trade war with China, voters turning to populism across the globe and the risk of a recession, reports of globalization's demise are — at least for now — overblown. Washington's trade hawks would do well to read the signs. True, that may seem like pie in the sky. Messages from Washington are all about reshoring and decoupling of trade. As President Trump's reciprocal tariffs aims to reindustrialize the American economy, his vision is one of the manufacture of cars and smartphones moving away from Asia to assembly lines of obedient workers in America. But the chief engine of the U.S. economy is no longer found in physical factories. Instead, it lies in intangible investments, such as research and development, software, organizational structures and intellectual capital. These immaterial assets eclipse physical capital such as machinery and equipment, now accounting for over 60 percent of corporate capital investment and, by some estimates, 90 percent of the S&P 500's market value. This has led to new patterns of globalization, defined by invisible items — data, ideas, modern services and cross-border teams. As trade in physical goods began to sputter in the beginning of the 21st century, these invisible flows have soared over the past decade. They are largely immune to tariffs, decoupling and attacks of populist politicians. Even with chips nearshored, global U.S. companies like Qualcomm still earn a quarter of their profits by licensing ideas globally. Although the U.S. may start soon a full-blown trade war with the European Union, data flows between the two trade giants are set to soar in the next decade, according to the European Commission. And as U.S. multinationals exit China, they remain reliant on cross-border teams within these companies. Meanwhile, modern services trade has continued to grow by 10 percent well into 2024 without interruption. Contrary to common belief, intangible flows span both manufacturing and services. Take Coca-Cola. The multinational rarely produces any of its famous beverages anymore. Instead, it licenses its recipe to non-affiliated contract producers called bottlers, from whom it receives property income. Google runs on worldwide data flows to power its services globally. McKinsey predicts that by 2040, modern sectors such as cloud computing, shared autonomous vehicles, AI, space and biotechnology will account for 16 percent of global GDP, nearly double the share of today's leading sectors like industrial electronics and semiconductors, which currently make up 9 percent. These emerging sectors fuse manufacturing and services. These sectors are also rife with global intangible flows. Consider BioNTech's COVID-19 vaccine. The underlying mRNA technology was licensed from the biochemist Katalin Karikó. Cloud‑based trial data zipped across borders and Pfizer's partnership turbo‑charged the research and development and scale‑up. The same blueprint was later licensed to Moderna for its vaccine. Intangible flows like these are powering modern U.S. multinational production networks and their supply chains. Just as a quarter to half of the trade in U.S. goods in the 20th century occurred within multinationals, so too will U.S. intangible flows mostly take place within global firms this century. These new flows clash with Trump's trade narrative. For starters, the American economy is well positioned to benefit, as it holds strong comparative advantages in these emerging industries. Second, they don't fit with populist views on the evils of trade deficits. Data, for instance, transcends borders as a global commodity, contributing neither to a country's trade deficit nor surplus. U.S. cross-border research and development and global teams remain largely unnoticed as an international flow. But their output has surged by respectively 95 and 30 percent since 2009, boosting income at home. Meanwhile, the U.S. has held the world's largest trade surplus in modern services for years, backing both high- and low-skilled jobs at home. The overall U.S. trade deficit in goods is not the problem, but rather the byproduct of America's greatest modern globalization success. These new globalization flows are difficult to grasp, hard to monetize and challenging to rein in behind countries' borders. They do not rely on ships, airplanes and trucks, but instead on the internet, human minds and collaboration. The paradox is that they have continued to grow despite the ongoing global turmoil, and they could put the U.S. in the driver's seat this century. The outlook for globalization is more positive than the populist doomsayers in Washington are claiming. However, new intangible flows rely on attracting the world's top talent, without undermining universities; on maintaining a predictable environment for global business, without disregarding court rulings; and on avoiding questionable policy initiatives, without blindsiding allies. If the U.S. truly wants to capitalize on its strengths, policymakers should change their global engagement strategy and embrace the next wave of globalization before it's too late.
Business Insider
9 minutes ago
- Business Insider
ELD Asset Management Shares Insights on S&P 500 Rally and Sector Opportunities
Singapore, Singapore, July 24th, 2025, FinanceWire Record-breaking performance of the S&P 500 signals robust investor optimism driven by strong corporate earnings, positive economic indicators, and significant opportunities in technology and transportation sectors, underscoring strategic growth potential for investors in the current fiscal period. ELD Asset Management notes the S&P 500 has reached its highest level since February, marking its eighth record close of the year, achieving an all-time high of 6,304.69. This recent upward momentum demonstrates sustained investor confidence, supported by exceptional corporate earnings and positive economic data. The Dow Jones Industrial Average and Nasdaq Composite also registered substantial gains, reflecting widespread market optimism. The latest market analysis suggests current conditions offer substantial opportunities for investors. 'The sustained strength of the S&P 500 highlights significant underlying economic resilience, presenting attractive opportunities to enhance investment portfolios,' observes ELD Asset Management. Around 75% of companies listed in the index are trading above their 50-day moving averages, reinforcing broad market stability and potential for further growth. Technology and transportation sectors notably drove recent market gains. Nvidia shares increased by 3.2% last week, bolstered by investor anticipation of its upcoming AI chip announcement scheduled for August. Delta Air Lines' shares rose 4.7%, benefiting from better-than-expected quarterly earnings supported by strong summer bookings and improved profit margins. Investor sentiment largely remains bullish despite ongoing trade policy discussions. Market participants have effectively integrated trade uncertainties into their investment approaches, focusing predominantly on strong earnings reports and positive economic fundamentals rather than potential disruptions. The second-quarter earnings season further reinforces market confidence, with approximately 88% of reporting S&P 500 companies surpassing analysts' earnings forecasts. The index is currently experiencing year-over-year earnings growth exceeding 8%, supported by nearly 5% revenue growth. These results reflect robust corporate health and resilience, underscoring advantageous conditions for portfolio positioning. Economic indicators continue to support this positive outlook. Jobless claims fell to their lowest level in seven weeks, significantly outperforming forecasts. Retail sales rose notably in June, recovering from previous declines and surpassing economists' expectations. Consumer sentiment also experienced marked improvement, with inflation expectations easing from 6.6% in May to 5.0% in June. Federal Reserve policy and trade developments remain key determinants influencing market direction. The Federal Reserve indicated potential interest rate adjustments, with market forecasts increasingly anticipating rate cuts by September. A cautious and measured policy stance from the Federal Reserve encourages balanced investment strategies, combining growth-oriented equities with defensive assets. Given present market dynamics, a balanced portfolio strategy is recommended, strategically blending high-quality growth investments and defensive positions to navigate potential volatility. 'Maintaining exposure to quality growth stocks while selectively incorporating defensive positions remains the optimal approach for investors to capitalise on current opportunities,' advises ELD Asset Management. About ELD Asset Management Established in 2017, ELD Asset Management Pte. Ltd. (UEN: 201725839Z) advises clients on strategic investment decisions informed by comprehensive market analysis and global economic insights. The firm actively monitors shifts in international market conditions, enabling clients to anticipate opportunities and strategically align their investment portfolios. Location: Singapore Contact
Yahoo
21 minutes ago
- Yahoo
Salesforce.com (CRM) Outperforms Broader Market: What You Need to Know
In the latest trading session, (CRM) closed at $267.22, marking a +1.38% move from the previous day. This move outpaced the S&P 500's daily gain of 0.78%. Elsewhere, the Dow gained 1.14%, while the tech-heavy Nasdaq added 0.61%. The customer-management software developer's stock has dropped by 2.8% in the past month, falling short of the Computer and Technology sector's gain of 8.76% and the S&P 500's gain of 5.88%. Analysts and investors alike will be keeping a close eye on the performance of in its upcoming earnings disclosure. The company's earnings per share (EPS) are projected to be $2.77, reflecting a 8.2% increase from the same quarter last year. Meanwhile, the latest consensus estimate predicts the revenue to be $10.13 billion, indicating a 8.66% increase compared to the same quarter of the previous year. CRM's full-year Zacks Consensus Estimates are calling for earnings of $11.3 per share and revenue of $41.17 billion. These results would represent year-over-year changes of +10.78% and +8.64%, respectively. Investors might also notice recent changes to analyst estimates for Salesforcecom. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability. Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system. The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. is currently a Zacks Rank #3 (Hold). With respect to valuation, is currently being traded at a Forward P/E ratio of 23.33. This represents a discount compared to its industry average Forward P/E of 24.84. Meanwhile, CRM's PEG ratio is currently 1.81. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. As of the close of trade yesterday, the Computer - Software industry held an average PEG ratio of 2.3. The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 39, which puts it in the top 16% of all 250+ industries. The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1. Remember to apply to follow these and more stock-moving metrics during the upcoming trading sessions. 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 Salesforce Inc. (CRM) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
