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Bloomberg
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Grocery Stocks Fall on Amazon's Same Day Delivery
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Yahoo
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Why this week's inflation report could be a hit to the economy no matter what the data says
The July inflation report could bring bad news for markets and the economy, no matter what the data shows. Investors are worried about too-hot inflation, which could take a rate cut off the table for September. On the other hand, a sharp drop in inflation could stoke concerns about an imminent slowdown. A key inflation report is looming, but it's possible that the July data paints a dismal picture of the economy whether it shows prices rose or fell. The July consumer price index report is expected to show that prices rose 0.2% last month and 2.8% year-over-year. The consensus expectations reflect a slightly hotter pace of inflation from the prior month, with consumer prices rising 2.7% year-over-year in June. Rising inflation is bad, but there's a chance that falling inflation is taken as a dire warning, as well, sources told Business Insider. Here's the logic: If inflation comes in too hot, that will undermine the possibility that the Fed could cut interest rates in September. The Fed resuming rate cuts is a major bullish catalyst that the market has been looking forward to for months. Hotter-than-expected inflation could also be construed as a sign that President Donald Trump's tariffs are finally starting to raise prices for consumers, which will stoke concerns about the health of the US economy. If inflation comes in too cold, that would compound some of the evidence that suggests the US economy is slowing, something that markets have been fretting over since the July nonfarm payrolls report showed weak job growth in the month, as well as sharp downward revisions for the prior two months. In either case, stocks could see a negative reaction following tomorrow's CPI print, Michael Brown, a senior research strategist at Pepperstone, told Business Insider. Brown said he believed the larger downside risk to equities was if inflation came in too hot. If inflation comes in colder-than-expected, any following sell-off could be short-lasting, he said, as investors will quickly pivot their attention to Fed rate cuts on the horizon. "If we get a hot number, all of a sudden there's a lot of doubts around that September meeting, and we're suddenly looking at probably some headwinds to equities as we price in a slowdown in the economy," he told BI. Investors began to price in a September Fed rate cut with more certainty after the job market proved to be much weaker than expected in July. Markets see an 86.5% chance the Fed could cut rates a quarter-point in September, according to the CME FedWatch tool, down slightly from 90.4% last week. Justin Weidner, an economist at Deutsche Bank, also sees a potential negative reaction in the market no matter what CPI does tomorrow. If inflation comes in higher than expected, that makes the calculus for a Fed rate cut in September "more tricky," he told BI. But if prices are cooler than expected, it be enough cause for concern about the economy to prompt the Fed to issue a jumbo-sized 50 basis-point rate cut in September. "On the flip side, if it's kind of weaker, weaker than expected, you have some pullback," Weidner added of the potential reaction in stocks. Natalie Gallagher, principal economist at Board, also saw the risks to tomorrow's CPI report cutting both ways. Gallagher said she expected inflation to be 2.9%, hotter than consensus estimates. That will likely "mark the beginning of a longer trend," she said in a note, pointing to concerns that inflation could begin to lift off as tariffs work their way through the economy. "The real surprise would be if these pressures don't show - that would suggest demand is softening to a point that businesses can't raise prices, which is a troubling signal for US growth," she said. The outlook for Fed rate cuts will largely depend on the trajectory of inflation in the coming months, Brown said. Markets will also be paying close attention to Fed Chair Powell's comments, particularly at Jackson Hole, where the central bank hosts its annual summer symposium. There's a chance investors could be getting too complacent about expecting Fed rate cuts, Brown said, pointing to high odds markets see for a September cut. "I'm sort of 50-50 as to whether they pull the trigger in September," Brown said. "You'd say maybe they should, but then this is a Fed that has been bitten already relatively recently by inflation that ran away from them, frankly unexpectedly, and I think that memory is still going to be quite fresh in the mind." Read the original article on Business Insider
Yahoo
19 hours ago
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Small Fleets, Brokers Hold Steady Optimism Despite Freight Market Headwinds
Intelligence midyear survey reveals industry resilience as carriers and brokers navigate challenging conditions. The freight industry's grassroots operators aren't throwing in the towel just yet. Despite revenue challenges and tariff concerns, 85% of carriers and 83% of brokers expect volumes to rise or stay flat over the next six months. A challenging first half of 2025 left many carriers and brokers scrambling to maintain margins or recover from what seems like a year-long, never-ending bloodbath. A new midyear survey from and Bloomberg Intelligence shows the small fleet and brokerage community remains cautiously optimistic about the months ahead. The survey, which captured responses from 204 carrier firms and 185 brokerages, paints a picture of an industry that's been battered but not broken. While revenue growth has been elusive for most, only 16% of carriers and 36% of brokers reported year-over-year gains; the majority still believe better days are coming. 'Many carriers and brokers remained optimistic through the first half of 2025 despite facing difficulties,' said Todd Markusic, customer insights manager at 'While the freight market underperformed in the second quarter, with no clear resolution for how tariffs will impact the economy, many in the industry are expecting a recovery in the next six months.' That optimism translates into concrete expectations: 85% of carriers and 83% of brokers believe freight volumes will either increase or remain flat over the next six months. Rates remain the wild card For carriers, the rate environment continues to be a mixed bag with heavy doses of uncertainty. Only 17% said rates have improved since the second quarter of 2024, though 42% expect rates to climb in the third quarter. That's down 13 percentage points from first-quarter expectations, suggesting the reality of a prolonged soft market is setting in. Nearly half of carriers, 48%, admitted they're unsure when rates will finally bottom out, a seven-point increase from the first quarter. Yet 84% still believe rates will either rise or hold steady over the next six months. The load volume picture is slightly more encouraging. Among carriers, 56% said volumes during the second quarter were up or flat compared to the same period last year, and 79% expect their revenues to remain stable or increase over the next six months. Brokers, meanwhile, are painting a more positive picture of their market conditions. Comparing the first half of 2025 to the same period last year, 39% of brokers said spot rates increased, while 78% reported contract rate improvements. Revenue performance was similarly strong, with 72% seeing flat or positive revenue growth during the first half. Most brokerages are operating on 15% gross margins, and 69% believe their current margins are higher than both halves of 2024. Looking ahead, 82% expect gross margins to increase or stay flat over the next six months. Demand divergence The survey revealed a notable gap between how carriers and brokers view demand trends. While 19% of carriers reported year-over-year load volume increases, 37% of brokers reported higher volumes. That disparity extends to forward-looking expectations: 52% of carriers expect demand to grow over the next three to six months, while 83% of brokers believe demand will be up or flat over the next six months. The difference likely reflects brokers' broader market visibility and their ability to shift between different carrier relationships as conditions change. Tariff trouble weighs heavy The specter of trade policy continues to cast a shadow over industry sentiment. Carriers are increasingly concerned about tariffs delaying any meaningful freight recovery. Thirty-eight percent now believe tariffs will significantly hurt the industry, up from 30% in the previous quarter. Overall, 55% say tariffs will have at least some negative impact. Brokers have also soured on the current administration's policies. In December, 74% thought the administration would benefit trucking. Six months later, only 44% maintain that view. Cautious capital allocation Despite the generally optimistic outlook, financial pressures are forcing many operators to pump the brakes on growth investments. Only 21% of carriers plan to purchase new equipment, down sharply from 38% in the first quarter. Similarly, just 40% of brokerage firms expect to hire additional brokers in 2025, compared to 52% in December 2024. The pullback reflects the reality of operating in a margin-compressed environment where cash preservation often trumps expansion plans. Workforce holding steady Job satisfaction metrics suggest the industry's human capital challenges aren't getting dramatically worse, even if they're not improving either. Among brokers, job satisfaction dipped modestly to 78% from 83% in December. For carriers, satisfaction dropped more notably to 54% from 65% in the first quarter. Still, only 10% of carriers are considering leaving the industry, a change of only 1 percentage point from 9% in the first quarter. Among brokers, just 6% expressed job dissatisfaction compared to 18% of carriers. Small fleet focus The survey targeted the industry's grassroots operators, with 75% of carrier respondents operating five or fewer trucks. Flatbed carriers comprised the largest segment at 49% of responses. On the brokerage side, firms with 1-50 employees accounted for 68% of respondents, representing the small to mid-sized brokerages that handle much of the industry's spot market activity. The persistence of optimism among these smaller operators, who typically feel market pressures first and most acutely, suggests the freight community's belief in an eventual turnaround remains intact despite the challenging operating environment. Whether that optimism proves justified will largely depend on how quickly broader economic conditions improve and trade policy uncertainties resolve. For now, the industry's grassroots operators are hunkering down and betting that better times are ahead. The post Small Fleets, Brokers Hold Steady Optimism Despite Freight Market Headwinds appeared first on FreightWaves. 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
