IBD Stock Of The Day Defies Trump Tariff Warning, Trades Near Buy Point After Bullish Shakeout
On Holding is Tuesday's IBD Stock Of The Day, as the Swiss shoemaker continues to hold up. ONON stock trades just below a buy point despite rival Deckers triggering a sector sell-off late last week. The 11 stocks in the IBD-tracked Apparel-Shoes industry group have collectively fallen more than 25% in 2025.
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34 minutes ago
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Swiss Chocolate Stocks Diverge as Costly Cocoa Takes Toll
(Bloomberg) -- Shares in two of Switzerland's biggest chocolatiers are on markedly different courses this year as soaring cocoa prices prove a tougher obstacle for one than they do for the other. ICE Moves to DNA-Test Families Targeted for Deportation with New Contract The Global Struggle to Build Safer Cars NYC Residents Want Safer Streets, Cheaper Housing, Survey Says The Buffalo Architect Fighting for Women in Design Lindt & Spruengli AG has risen 28% to date as the Lindor maker has shown itself able to pass on higher costs to customers, helped by the launch of crowd-drawing products such as Dubai-style chocolate. By contrast, Barry Callebaut AG has fallen 30% as the world's leading manufacturer of bulk chocolate is weighed down by a lack of pricing power. The cost of cocoa is a challenge for both companies, with the price of the key commodity remaining stubbornly high after more than quadrupling in 2023 and 2024. Yet while Lindt plans double-digit price increases this year, Barry Callebaut's customers — which include Nestle SA and Hershey Co. — have been pausing orders as they wait for prices to come down. 'Barry Callebaut faces a perfect storm of subdued demand and limited pricing power,' said Bloomberg Intelligence analyst Ignacio Canals Polo. By contrast, 'Lindt stands out amid the current cocoa market turmoil, leveraging its premium positioning.' Lindt, which operates in the high-end segment of the market, has been able to gain market share from competitors such as Mondelez International Inc. The introduction of its Dubai-style chocolate at the end of last year has been touted as a 'blockbuster' by UBS Group AG analyst Joern Iffert, who noted that it's one of Lindt's 'best product launches in history.' Price increases will continue this year due to higher cocoa prices, said a spokesperson from Lindt, whose headquarters are located only about 10 kilometers (6.2 miles) from those of Barry Callebaut in the canton of Zurich. Still, the firm expects the trend from quantity to quality consumption of premium chocolates to continue. Meanwhile, customers of Barry Callebaut have been reducing the chocolate content in their products, hurting margins. In April, the company cut its sales outlook for the year, sending the stock lower. On Thursday, Barry Callebaut fell 0.9%, while Lindt was down 1.2%. For Barry Callebaut, another pressure point is the interest of short sellers as cocoa supplies continue to tighten and West African growers hold back next season's sales in anticipation of higher prices. Shares out on loan, an indication of short interest, were at 23% of the firm's free float as of June 3, according to data from S&P Global Market Intelligence. 'With every cocoa price increase you have a negative impact on free cash flow,' said Damian Burkhardt, Swiss equities lead portfolio manager at EFG Asset Management. 'That is the reason why short interest on the name is so high.' The firm's executives have struggled to navigate a difficult environment. Barry Callebaut shares have had a total negative annualized return of 30% under Chief Executive Officer Peter Feld, who took the helm in April 2023 following the sudden departure of Peter Boone. That compares with a positive return of about 14% for peers during the same period, according to data compiled by Bloomberg. Barry Callebaut didn't respond to a request for comment. To be sure, average analyst price targets suggest the fortunes of the two Swiss chocolate makers could reverse in the next 12 months. Their predictions show Barry Callebaut, which fell to a 2011 low last month, rallying 31% from current levels. Meanwhile Lindt, which is hovering near a record high, could drop 12%. BNP Paribas Exane analyst Mikheil Omanadze says Lindt shares are 'expensive.' But for Morgan Stanley's David Roux, Lindt has 'stood out during the ultimate test for chocolate brands.' Even with this year's share rally, he sees the chocolate maker's premium to European consumer staples peers being supported. --With assistance from Joe Easton. (Updates share prices.) Cavs Owner Dan Gilbert Wants to Donate His Billions—and Walk Again YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Millions of Americans Are Obsessed With This Japanese Barbecue Sauce Is Elon Musk's Political Capital Spent? Trump Considers Deporting Migrants to Rwanda After the UK Decides Not To ©2025 Bloomberg L.P. Sign in to access your portfolio
Yahoo
2 hours ago
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Trump calls Powell 'unbelievable!!!' as he renews call for lower rates
President Trump renewed his call for Federal Reserve Chair Jerome Powell to lower interest rates as a new report showed weakness in the job market. "'Too Late' Powell must now LOWER THE RATE," Trump posted Wednesday on Truth Social. "He is unbelievable!!!" Trump in his post referenced the new ADP National Employment Report out Wednesday showing private-sector hiring growth fell sharply last month. Just 37,000 jobs were created in May, according to the report, the smallest increase in private payrolls since March 2023. That's far fewer than the 114,000 expected by economists and below the 60,000 new jobs added in April. The new ADP weakness comes ahead of the Labor Department's jobs report due out Friday. Economists estimate that report will show that 130,000 jobs were created last month — down from 177,000 in April — with the unemployment rate holding steady at 4.2%. Powell this year has repeatedly urged caution and patience on rates, saying he expects Trump's tariffs to push inflation higher and drag down growth, putting the Fed in a challenging spot. Read more: How jobs, inflation, and the Fed are all related Last month, the central bank elected to keep its benchmark interest rate unchanged at a range of 4.25% to 4.5%. Its next policy meeting is June 17-18, and investors don't expect any change at that gathering. Powell met with Trump in person last Thursday. The White House said the president told the central bank boss that he is making a mistake by not lowering rates. The face-to-face encounter follows months of criticism of Powell from Trump, who has called Powell a "major loser" and a "fool" who "doesn't have a clue." Read more: How much control does the president have over the Fed and interest rates? A divide is emerging among Powell's fellow policymakers about whether to hold rates steady for some time or get more comfortable about cuts later this year as officials try to determine whether any inflation coming from President Trump's tariffs will prove to be longer-lasting. Some policymakers are arguing for "looking through" the impact of the duties as temporary, a stance that would leave the door open for cuts. Many on the rate-setting committee, however, believe there is a risk that inflation from tariffs could become more persistent. The patient approach by the US central bank contrasts with foreign central banks like the European Central Bank, which has cut rates seven times in a little more than a year and is set to cut rates again on Thursday. Investors expect Thursday's cut to be among the last in this string unless the eurozone economy faces recession. "Europe has lowered nine times," Trump posted Wednesday. While tariffs are thought to have an inflationary impact in the US, in Europe they are expected to be more deflationary. Swiss consumer prices were in deflationary territory in May, raising the prospect that the Swiss National Bank will cut interest rates further later this month. Click here for in-depth analysis of the latest stock market news and events moving stock prices 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
2 hours ago
- Yahoo
Swiss Chocolate Stocks Diverge as High Cocoa Prices Take Toll
(Bloomberg) -- Shares in two of Switzerland's biggest chocolatiers are on markedly different courses this year as soaring cocoa prices prove a tougher obstacle for one than they do for the other. ICE Moves to DNA-Test Families Targeted for Deportation with New Contract The Global Struggle to Build Safer Cars NYC Residents Want Safer Streets, Cheaper Housing, Survey Says The Buffalo Architect Fighting for Women in Design Lindt & Spruengli AG has risen 29% to date as the Lindor maker has shown itself able to pass on higher costs to customers, helped by the launch of crowd-drawing products such as Dubai-style chocolate. By contrast, Barry Callebaut AG has fallen 29% as the world's leading manufacturer of bulk chocolate is weighed down by a lack of pricing power. The cost of cocoa is a challenge for both companies, with the price of the key commodity remaining stubbornly high after more than quadrupling in 2023 and 2024. Yet while Lindt plans double-digit price increases this year, Barry Callebaut's customers — which include Nestle SA and Hershey Co. — have been pausing orders as they wait for prices to come down. 'Barry Callebaut faces a perfect storm of subdued demand and limited pricing power,' said Bloomberg Intelligence analyst Ignacio Canals Polo. By contrast, 'Lindt stands out amid the current cocoa market turmoil, leveraging its premium positioning.' Lindt, which operates in the high-end segment of the market, has been able to gain market share from competitors such as Mondelez International Inc. The introduction of its Dubai-style chocolate at the end of last year has been touted as a 'blockbuster' by UBS Group AG analyst Joern Iffert, who noted that it's one of Lindt's 'best product launches in history.' Price increases will continue this year due to higher cocoa prices, said a spokesperson from Lindt. Still, the firm expects the trend from quantity to quality consumption of premium chocolates to continue. Meanwhile, customers of Barry Callebaut have been reducing the chocolate content in their products, hurting margins. In April, the company cut its sales outlook for the year, sending the stock lower. For Barry Callebaut, another pressure point is the interest of short sellers as cocoa supplies continue to tighten and West African growers hold back next season's sales in anticipation of higher prices. Shares out on loan, an indication of short interest, were at 23% of the firm's free float as of June 3, according to data from S&P Global Market Intelligence. 'With every cocoa price increase you have a negative impact on free cash flow,' said Damian Burkhardt, Swiss equities lead portfolio manager at EFG Asset Management. 'That is the reason why short interest on the name is so high.' The firm's executives have struggled to navigate a difficult environment. Barry Callebaut shares have had a total negative annualized return of 30% under Chief Executive Officer Peter Feld, who took the helm in April 2023 following the sudden departure of Peter Boone. That compares with a positive return of about 14% for peers during the same period, according to data compiled by Bloomberg. Barry Callebaut didn't respond to a request for comment. To be sure, average analyst price targets suggest the fortunes of the two Swiss chocolate makers, which are based about 10 kilometers apart from each other in the canton of Zurich, could reverse in the next 12 months. Their predictions show Barry Callebaut, which fell to a 2011 low last month, rallying 31% from current levels. Meanwhile Lindt, which is hovering near a record high, could drop 12%. BNP Paribas Exane analyst Mikheil Omanadze says Lindt shares are 'expensive.' But for Morgan Stanley's David Roux, Lindt has 'stood out during the ultimate test for chocolate brands.' Even with this year's share rally, he sees the chocolate maker's premium to European consumer staples peers being supported. --With assistance from Joe Easton. Cavs Owner Dan Gilbert Wants to Donate His Billions—and Walk Again YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Millions of Americans Are Obsessed With This Japanese Barbecue Sauce Is Elon Musk's Political Capital Spent? Trump Considers Deporting Migrants to Rwanda After the UK Decides Not To ©2025 Bloomberg L.P. Sign in to access your portfolio
