Wall St Week Ahead: Inflation data to test stocks
NEW YORK: A fresh look at inflation trends will test the US stock market's rally in the coming week, with some investors saying equities are primed for a potential pullback after rocketing to records.
The benchmark S&P 500 was last up more than 7% on the year and within about 1% of its all-time closing high set in late July, as stocks largely rebounded from declines following a weak employment report earlier this month.
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The Star
44 minutes ago
- The Star
Investors pile into stocks as US rate cut hopes soar
KUALA LUMPUR: The FBM KLCI is forging ahead after a six-day rally as a tamer-than-expected US inflation print boosted the likelihood of a Federal Reserve interest rate cut next month. While the local benchmark index is showing signs of overheating, investors nevertheless bought up the blue chips by 1.17 points to 1,569.07 at the start of Wednesday trading. TA Securities said the market sentiment remains buoyant over expectations of the lower US lending rate in September. However, it cautioned that overbought momentum indicators suggest the local market may be due for a short-term consolidaiton or pause. "Immediate resistance is revised upwards to 1,610, the 76.4%FR, while next key hurdle lies at the December 2024 high of 1,644, followed by a stronger resistance at 1,684. Immediate support is also adjusted higher to the 50%FR (1,527) with stronger supports seen at the 38.2%FR (1,490) and the 23.6%FR (1,444)," it said in its review. Rakuten Trade posed a more bullish outlook on the local index given the relatively low valuations of the stocks. "Despite the 30 points gain over the past five days, we regard the local bourse's valuation remains reasonable hence expect more legs for the index towards the 1,600 level," it said in a note. Most Asian markets opened higher in Wednesday trading as stocks tracked what economists are calling a possible "Goldilocks" moment in the US market. The S&P500 and Nasdaq Composite indices closed at fresh record highs overnight with 1.13% and 1.39% increases respectively following the release of slower-than-expected July inflation data. The possibility of a 25 basis points rate cut in September was now raised to 94.3%, according to CME FedWatch Tool. On Bursa Malaysia, gainers included MPI up 38 sen to RM22.38, Carlsberg jumping 20 sen to RM17.48 and Hong Leong Industries rising 14 sen to RM12.74. Leading actives were Classita unchanged at 9.5 sen, NexG up one sen to 41 sen and TWL flat at 2.5 sen.
The Sun
44 minutes ago
- The Sun
Trump criticises Goldman Sachs CEO over tariff impact research
U.S. President Donald Trump hit out at Goldman Sachs CEO David Solomon on Tuesday, saying the bank had been wrong to predict tariffs would hurt the economy and questioning whether Solomon should lead the Wall Street institution. In a post on Truth Social, Trump said it was mostly foreign companies and governments absorbing the cost of his tariffs. 'But David Solomon and Goldman Sachs refuse to give credit where credit is due. They made a bad both the Market repercussion and the Tariffs themselves.' Trump said Solomon should maybe focus on being a DJ, a hobby Solomon abandoned some time ago, 'and not bother running a major Financial Institution.' The bank CEO is the latest corporate boss to become the target of Trump's ire. A Goldman Sachs spokesperson declined to comment. A spokesperson for the White House did not immediately respond to a request for comment. Since February 1, when Trump kicked off trade wars by slapping levies on imports from Mexico, Canada and China, at least 333 companies worldwide have reacted to the tariffs in some manner, as of August 12, according to a Reuters tracker. While Trump did not specify which Goldman research he was referring to, the Wall Street bank - like many of its peers - has taken a bearish stance on Trump's tariffs. In a note published on Sunday, Goldman Sachs analysts, led by chief economist Jan Hatzius, said U.S. consumers had absorbed 22% of tariff costs through June and that figure could rise to 67% if recent tariffs continue on the same trajectory. 'I think that David should go out and get himself a new economist,' Trump wrote. Hatzius declined to comment. In April, Goldman also warned sweeping U.S. tariffs would weigh on global growth and prompt the Federal Reserve to cut interest rates more aggressively than previously expected. Last week, the president demanded Intel CEO Lip Bu-Tan resign due to his ties to Chinese firms, and has repeatedly targeted Apple boss Tim Cook for making U.S.-sold iPhones outside the country. Trump has also taken aim at other Wall Street banks, alleging, without providing evidence, that JPMorgan Chase and Bank of America discriminated against him by refusing his deposits after his first term. Tariffs are taxes levied on imported goods to typically protect domestic industries or influence trade policies. Their cost can be distributed among manufacturers, retailers and consumers, depending on market conditions and supply-chain dynamics. As the second quarter earnings season progresses, companies have reported a combined financial hit of $13.6 billion to $15.2 billion between July 16 and August 8 for the full year from Trump's tariffs, according to Reuters' global tariff tracker. - Reuters
Malay Mail
44 minutes ago
- Malay Mail
US deficit widens to US$291b in July as spending outpaces tariff windfall
WASHINGTON, Aug 13 — The US government's budget deficit grew nearly 20 per cent in July to US$291 billion (RM1.23 trillion) despite a nearly US$21 billion jump in customs duty collections from President Donald Trump's tariffs, with outlays growing faster than receipts, the Treasury Department said on Tuesday. The deficit for July was up 19 per cent, or US$47 billion, from July 2024. Receipts for the month grew 2 per cent, or US$8 billion, to US$338 billion, while outlays jumped 10 per cent, or US$56 billion, to US$630 billion, a record high for the month. The month of July this year had fewer business days than last year, so the Treasury Department said that adjusting for the difference would have increased receipts by about US$20 billion, resulting in a deficit of about US$271 billion. Net customs receipts in July grew to about US$27.7 billion from about US$7.1 billion in the year-earlier period due to higher tariff rates imposed by Trump, a Treasury official said. These collections were largely in line with the increase in June customs receipts after steady growth since April. Trump has touted the billions of dollars flowing into US coffers from his tariffs, but the duties are paid by companies importing the goods, with some costs often passed on to consumers in the form of higher prices. Consumer price index data on Tuesday showed increases in prices for some tariff-sensitive goods like furniture, footwear and auto parts, but they were offset by lower gasoline prices in the overall index. For the first 10 months of the fiscal year, customs duties totalled US$135.7 billion, up US$73 billion, or 116 per cent, from the year-earlier period. US Treasury Secretary Scott Bessent told Fox Business Network's 'Kudlow' programme that the growing US tariff revenue will make it difficult for the Supreme Court to rule against Trump's import taxes if a legal challenge to them makes its way to the country's top court. Ken Matheny, director of macroeconomics Yale University's Budget Lab, said it is unclear how much further monthly tariff revenue will grow, but the applied tariff rate measured by customs duties divided by the value of goods imports is still around 10 per cent, lower than the current average tariff rate of about 18 per cent based on the latest announcements. Significant numbers of firms are likely holding goods in bonded customs warehouses in the hope that negotiations will bring tariff rates down, but at some point those goods will enter the country, triggering duty payments, he said. 'I suspect these numbers are showing us there is a sizable balance of imports where the duties haven't been recognised yet,' Matheny said, adding that this could lead to a 'temporary big surge in duties.' The overall year-to-date budget results showed a US$1.629 trillion deficit, up 7 per cent, or US$112 billion, from the same period a year earlier. Receipts were up 6 per cent, or US$262 billion, to US$4.347 trillion, a record high for the 10-month period, while outlays grew 7 per cent, or US$374 billion, to US$5.975 trillion, also a 10-month record. The year-to-date customs duties were more than eaten up by an increase of 10 per cent or US$141 billion in costs for government healthcare programs, including Medicare for seniors and Medicaid for the poor, to US$1.557 trillion. The Social Security pension programme, the largest single expense item, saw an increase of 9 per cent or US$108 billion over the first 10 months of fiscal 2025 to US$1.368 trillion. Interest on the public debt also continued to grow, topping US$1.01 trillion for the 10-month period, an increase of 6 per cent or US$57 billion over the prior year due to slightly higher interest rates and increased debt levels. — Reuters
