Outnumbered - Wednesday, June 4
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Trump's tariffs and the tax bill are splitting the stock market. Here's the playbook for investors, according to Morgan Stanley.
Trump's policies are splitting the stock market, Morgan Stanley says. The bank said it believes Trump's tariffs and tax bill are splitting parts of the market in half. It says there are a handful of things for investors to look for when deciding where to put their money. President Donald Trump's policies are splitting the market into distinct camps, Morgan Stanley says. Lisa Shalett, the chief investment officer of the bank's wealth management arm, pointed to the effects of Trump's tax bill and his sweeping tariffs in a recent podcast. "Now, as the impacts of the tax reform bill and global tariff implementation begin to roll through the economy, we sense that yet another series of great divides are opening up," Shalett said. Here are the splits that are emerging: 1. Consumer-facing businesses vs. B2B businesses Businesses that sell directly to consumers are more impacted by any potential weakening fo household balance sheets, a risk that business-to-business firms are less worried about. Market pros believe that tariffs could weaken consumers' spending power, as companie can pass along the cost of import duties by raising prices. Shalett added that those pressures are coming at an already critical time for consumers, pointing out that more Americans are falling behind on credit card and auto loan payments. The job market is also flashing signs of weakness, with payrolls in May and June seeing a large downward revision, while job growth for the month of July was below expectations. A weaker labor market often leads to a pullback in consumer spending. 2. Multinational exporters vs. importers Multinational exporters outside of the consumer space are facing "fewer external barriers" to sending products abroad, Shalett said, suggesting they were more shielded from the trade war. Those firms are also benefitting from a weaker US dollar, which is making their products more attractive to foreign customers, Shalett added. Multinational firms are also typically more capital- and research & development-intensive, she said. That also positions them to benefit more from the tax benefits outlined in the "One Big Beautiful Bill," which creates favorable tax treatment for domestic R&D costs. "So, with this new structural division emerging, global stock selection is more important now than ever," Shalett said. Here are some characteristics of the companies investors should be leaning toward, in Shalett's view: Multinational non-consumer exporters. Tailwinds for these companies should continue, Shalett said. Select tech, financials, industrials, energy, and healthcare stocks. Stocks in these areas could benefit from some of the policies included in Trump's tax bill, which could lead to upside surprises in earnings and cash flow. Stocks that aren't "overhyped." International stocks, commodities, and energy infrastructure. Companies in these areas could help an investor diversify their portfolio, she added. Sentiment has shifted slightly more bearish in the last week, with Trump doubling down on tariff threats and markets digesting weaker-than-expected economic data. Goldman Sachs, Evercore ISI, Stifel, Pimco, and HSBC are among the firms that have recently flagged the risk of a stock correction or advised investors to rethink their portfolio allocations. Read the original article on Business Insider Sign in to access your portfolio
Yahoo
9 minutes ago
- Yahoo
The president doubled down on his claim that the issue was a Democratic 'hoax' with an added expletive.
Vice President JD Vance has denied hosting a strategy dinner to discuss the Epstein crisis as Donald Trump dismissed the ongoing scandal as 'bulls--t.' Hours after reports emerged that Vance was expected to meet on Wednesday night with top Trump officials to coordinate a plan to deal with the ongoing firestorm over sex trafficker Jeffrey Epstein, the vice president rebuked the story as 'fake news.' The denial came during an Oval Office event with Apple chief executive Tim Cook, where Trump touted billions of dollars of new investment from the tech company.
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Men Shot Alongside Kodak Black Want $10.6 Million Default Judgment Against Rapper
The two bystanders wounded by gunfire outside a Justin Bieber-hosted party in 2022 are seeking millions in default damages from Kodak Black, claiming they saw the rapper 'initiate' the altercation that led to the gunfire that struck the 'No Flockin' singer as well. At a Wednesday hearing in Los Angeles, Judge Tiana J. Murillo vacated an Aug. 18 trial date for the men's lawsuit after their lawyer told the court that Black was the sole remaining defendant and should be found 'in default,' meaning he hadn't responded and should be held liable by the court. More from Rolling Stone Uber's Sexual Assault Problem 'More Pervasive' Than Disclosed, Report Says Soulja Boy Released from Custody as Gun Charge Rejected by Prosecutors Sean Combs Denied Bail for Second Time After rejecting prior requests to find the rapper in default, the judge said the plaintiffs had until Aug. 25 to submit an updated request for entry of default that would meet the court's standards. Reached by phone, an attorney for Black said the request should fail. 'Kodak has never been served with any lawsuit from California. He was never on notice of anything from California,' the rapper's longtime lawyer, Bradford Cohen, tells Rolling Stone. 'I find it unusual that they're attempting to sue the very person who was the most injured out of the individuals who got shot.' The plaintiffs in the lawsuit, Adam Rahman and Mark Schaefer, first asked for a $62 million default judgment against Black, born Dieuson Octave, last November. The court denied the request, citing deficiencies including 'inadequate' proof of damages. A follow-up request for $10.6 million was similarly denied last month, with the judge noting the men were required to substantiate their pain and suffering claims with proof of medical bills. On Wednesday, the men's lawyer said she would resubmit the damages request by the new deadline. 'I witnessed Kodak Black initiate the altercation with patrons outside of the subject location, which was the catalyst for the series of events that led to gun violence,' Rahman wrote in a sworn statement filed in April. Shaefer submitted a similar statement claiming he also saw Octave 'initiate the altercation.' The lawsuit initially named Bieber and the owners of the venue where the shooting happened as defendants alongside Octave. The judge later ruled that the shooting was not 'foreseeable' to the restaurant, so the corporate defendants were dismissed in June 2024. The plaintiffs voluntarily dismissed Bieber as a defendant a few months later. In court filings, Rahman and Schaefer said their private investigator gained access to a gated community and served the lawsuit to Octave's mom. They continued to look for the rapper himself and subsequently served him by mail, the paperwork states. According to Cohen, Octave doesn't live with his mom, and the mailing address the plaintiffs used is not in Octave's name. 'He does not own that house,' Cohen said. The Feb. 12, 2022, shooting outside The Nice Guy restaurant in West Hollywood generated a wave of headlines thanks to the long list of celebrities who attended the party inside. The event was an afterparty for Bieber's invite-only Super Bowl Weekend performance at the nearby Pacific Design Center. Rappers Lil Baby, Drake, and Gunna reportedly joined Bieber and his wife Hailey for the A-list gathering that also included Khloe Kardashian and actor Tobey Maguire. Octave, 28, was injured alongside the two men and transported to a nearby hospital. A police report obtained by Rolling Stone states he was shot in his 'upper leg.' Schaefer, an onlooker who had been collecting autographs, suffered a gunshot wound above his right ankle, requiring immediate surgery and physical therapy, his court filings say. Rahman was shot in his left shoulder, his filings state. No arrests were made. Best of Rolling Stone Sly and the Family Stone: 20 Essential Songs The 50 Greatest Eminem Songs All 274 of Taylor Swift's Songs, Ranked
