Bond Traders' Rate-Cut Optimism Flattened by Powell Tough Talk
Bond investors are coming to terms with Jerome Powell's message that the Federal Reserve is in no-rush to start cutting interest rates.
After Powell reiterated the central bank's wait-and-see approach to easing monetary policy last week, traders aggressively boosted bets that the benchmark lending rate will be cut by less than a three-quarter point in 2025, with the first move starting only in July.
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PINEWOOD.AI ANNOUNCES AGREEMENT TO ACQUIRE LITHIA'S MAJORITY STAKE IN NORTH AMERICAN JOINT VENTURE
to Acquire Lithia's 51% Stake; New Contract Secures Deployment Across Lithia's Dealerships in US and Canada by 2028 LONDON and MEDFORD, Ore., June 6, 2025 /PRNewswire/ -- Pinewood Technologies Group plc ( a leading cloud-based software provider for the automotive retail industry, and Lithia UK Holdings Limited, a wholly-owned subsidiary of Lithia & Driveway (NYSE: LAD), today announced an agreement in which will acquire Lithia's 51% interest in their North American joint venture for $76.5 million. The acquisition will be satisfied through the issue of 14,560,691 new ordinary shares in and values the joint venture at $150 million. Full ownership of the joint venture gives complete control of its North American platform, removing potential barriers to its broader adoption and supporting its expansion across the region's $6.5 billion automotive retail software sector. The acquisition will also simplify structure and financial reporting, enabling full revenue consolidation and greater transparency. Alongside the proposed transaction, the two companies have signed a five-year contract committing to the rollout of the Pinewood Automotive Intelligence™ platform across all Lithia's current and future dealerships in the US and Canada projected by the end of 2028. The contract also includes an agreement on pricing for Lithia's use of expects to generate approximately $40 million in annual recurring revenue once the current rollout is complete. With additional North America-specific features planned for release by the end of 2028, projected annual revenue from Lithia is expected to reach approximately $60 million. The valuation attributed to the joint venture has been independently supported by Kroll LLC and is based on the deployment of DMS platform and layered applications across Lithia's North American footprint. "We are delighted to have reached an agreement with Lithia to acquire the majority stake of the North America joint venture. The US and Canada are central to our growth strategy, and through the joint venture, we have made significant progress towards commercializing the Pinewood Automotive Intelligence™ platform for the North American market. Assuming full control of the joint venture will strengthen our ability to fully capitalize on the opportunities available in a key strategic growth market," commented Bill Berman, Chief Executive Officer of Pinewood Technologies Group plc. "Today, we are also announcing that we have agreed the terms of a five-year contract with Lithia to implement the Pinewood Automotive Intelligence™ Platform across all its current and future sites by the end of 2028. This is a significant milestone on our journey to entering the North American market and we remain on track to pilot the platform in Lithia's US stores in the second half of 2025, with the full system rollout commencing in 2026. I would like to take this opportunity to thank Lithia for their partnership in the joint venture and we look forward to working with them as a key customer long into the future." "This agreement represents the next step in our strategic partnership with and supports our vision to modernize customer experiences across our ecosystem. As largest global customer, we are excited to partner in the rollout of their platform across our North American network and accelerate our transformation into a fully integrated, data-driven retailer. is now able to emerge as the leading automotive intelligence provider in the U.S. Each of our global stores are committed to the Pinewood Automotive Intelligence™ Platform, and we will continue partnering on best-in-class product development," said Bryan DeBoer, President and CEO of Lithia & Driveway. Following completion, Lithia will remain a committed minority shareholder and key long-term customer. About Pinewood Technologies Group PLC First established in 1981, Pinewood Technologies Group PLC (Pinewood) is a leading cloud based full-service technology provider to automotive retailers and OEMs. Pinewood's system is a market-leading automotive intelligence platform, which has been developed collaboratively with dealers and OEMs to provide secure cloud-based software across sales, aftersales, accounting and CRM. Headquartered in the UK, Pinewood has a team of over 200 people serving over 35,000 global users across 21 countries and long-standing partnerships with over 50 OEM brands. Previously part of Pendragon PLC, in 2024 Pinewood became an independent entity following the sale of Pendragon's UK Motor and Leasing divisions to Lithia Motors, Inc., one of the largest automotive retailers in North America. Pinewood simultaneously signed a strategic partnership with Lithia to roll out its software across Lithia's UK locations and form a joint venture to co-develop capabilities and accelerate Pinewood's entry into the North American market. LSE: PINE OTCQX: PINWF About Lithia & DrivewayLithia & Driveway (NYSE: LAD) is the largest global automotive retailer providing a wide array of products and services throughout the vehicle ownership lifecycle. Simple, convenient, and transparent experiences are offered through our comprehensive network of physical locations, e-commerce platforms, captive finance solutions, fleet management offerings, and other synergistic adjacencies. We deliver consistent, profitable growth in a massive and unconsolidated industry. Our highly diversified and competitively differentiated design provides us the flexibility and scale to pursue our vision to modernize personal transportation solutions wherever, whenever and however consumers desire. View original content to download multimedia: SOURCE Lithia Motors, Inc. 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
Yahoo
an hour ago
- Yahoo
Jobs data from May could show a mostly stable economy, but economists say Trump tariffs will soon bite
Signs are growing that President Donald Trump's unprecedented tariffs strategy is starting to take a bigger bite out of the U.S. economy. Still, the latest jobs data from the Bureau of Labor Statistics is likely to show some economic stability persisted into May. Forecasts were for 120,000 new payrolls added in the last month; most economists consider anything above 100,000 a healthy figure — though it would still represent the fewest monthly jobs created since February and fall below the recent 12-month average of about 150,000. Even if the job numbers beat forecasts, other data are already pointing to signs of a softening economy. On Wednesday, private payroll processor ADP reported the weakest monthly jobs total since March 2023. While economists say ADP's data often align with the official BLS data, the trend is clear, with ADP reporting fewer jobs added in five of the past seven months. A separate report from the Institute for Supply Management showed that activity at U.S. service firms unexpectedly contracted last month for the first time in nearly a year, while hiring decelerated. On Thursday, the Department of Labor reported weekly jobless claims came in higher than expected, reaching their highest level since October — while continuing unemployment claims remained elevated, an indication that it is taking longer for out-of-work people to find a job. 'We're throttling back — and the damage from the trade war is still coming,' Mark Zandi, chief economist at Moody's Analytics, told NBC News. Zandi said forthcoming inflation readings are likely to reflect firms raising prices due to Trump's import taxes. Indeed, a Federal Reserve survey released Wednesday indicated 'widespread reports' of companies 'expecting costs and prices to rise at a faster rate going forward,' with higher tariffs 'putting upward pressure on costs and prices.' Separately, a Congressional Budget Office study now estimates inflation will increase by an average of 0.4 percentage points in 2025 and 2026 as a result of Trump's tariffs. As prices begin to rise, consumer dollars won't go as far, Zandi said. That will likely lead to a feedback loop of reduced economic activity and reduced hiring. 'The job market already feels fragile,' he added. As demand softens 'more palpably,' Zandi said, 'we'll start to see layoffs' — with BLS jobs data likely falling consistently below 100,000 in the coming months. Already, firms are showing signs of holding back on investment and bringing on new workers. Earlier in the week, the BLS reported that the hiring rate remains stuck at levels last seen in 2014, when the U.S. economy was still emerging from the Great Recession. Trump has claimed that thanks to his tariffs, the U.S. economy is 'booming.' Yet he continues to pressure the Federal Reserve to lower interest rates, which would make it easier for businesses and consumers to borrow money. In a post on Truth Social Wednesday, he pointed to the weak ADP payrolls numbers as evidence that the economy needs support. Analysts say that despite the gathering signs of economic deterioration, the bar remains high for the Federal Reserve to lower rates. Instead, the central bank will likely continue to err on the side of keeping interest rates elevated to ensure the pace of price growth remains under control, said Andrew Husby, senior U.S. economist at BNP Paribas financial group. For consumers, that means relief is still not in sight. 'It's going to take something obviously cracking in a sustained way' for the Fed to reduce borrowing costs, Husby said. This article was originally published on
Yahoo
an hour ago
- Yahoo
A Fed rate cut would be a 'happy pill' for markets: Strategist
Wall Street will be watching for the latest labor data in Friday's jobs report for the month of May as investors speculate on what could be the next economic catalyst to encourage the Federal Reserve to begin cutting interest rates in 2025. LPL Financial Chief Economist Jeffrey Roach and Siebert Financial CIO Mark Malek sit down with Madison Mills to discuss what a rate cut would mean for markets (^DJI, ^IXIC, ^GSPC, ^TYX, ^TNX, ^FVX) and the inflation pressures the Fed is navigating while waiting for fresh data. To watch more expert insights and analysis on the latest market action, check out more Catalysts here. How big of a catalyst might a Fed cut coming sooner rather than later be for this market? Well, it would certainly be a happy pill for the market. Uh, a lot of the challenges that we're all looking at for the markets right now, unfortunately lower Fed funds rates are not going to necessarily help any of those challenges. However, markets ultimately always like lower rates and clearly if the Fed did do something, it would certainly send a positive signal to the market and maybe improve sentiment in the market. Jeffrey, I want to bring you back in on exactly what Mark was just saying, what would it take for the Fed to cut sooner rather than later? How bad would the economic data have to look? Well, you know, I think the Fed is really focusing on these nagging inflation pressures. You know, I referenced just a little bit ago the ISM surveys report as it relates to employment. You know, from the most recent ISM report on business that we just got two days ago, input costs are still rising pretty significantly. So that's a real concern. So the Fed is in the wait and see mode. Interestingly enough, it's it's possible that firms are in the wait and see mode too as well. Going back to labor market numbers, it seems as if firms are not interested in necessarily adding strongly to payrolls, but they're also conversely not really interested in shedding payrolls. You don't really see uh, the firings increase as well, right? The hirings and the firings, they're they're kind of static at this point. Wait and see. I think back to the original question here on when and if the Fed will act, they're certainly not going to act uh, in this upcoming meeting. Uh, it's there's a chance that they actually hold in July as well if the inflation numbers are still elevated and payrolls continue to show some stability. Mark, do you agree with that path forward for the Fed? Yeah, I I think so. I think, you know, our base case is still about two cuts for later on this year, although there was a little bit of a bump the other day in Fed funds futures. We saw that as a result of the numbers that we got, the ADP numbers. Uh, but I think at this point, they can afford to wait and I think that's the mode that they're in. Um, it's interesting though, if we look at some of the behind the scenes commentary from the Fed, such as the Beige Book, and also we saw the meeting minutes earlier in the month, there are concerns amongst the Fed. Although, whether they act on them now or later, it's more likely going to be later. And we're still focusing on two even though the market's starting to inch into possibly three when we look at futures at least. 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
