Lululemon downgraded to Equal Weight from Overweight at Morgan Stanley
Morgan Stanley downgraded Lululemon (LULU) to Equal Weight from Overweight with a price target of $280, down from $346. Even should profitability-driven EPS outperformance occur this year, the analyst thinks focus will remain on the North American comp trajectory and has lesser confidence in a positive Americas comp inflection, the analyst tells investors. The firm lowered its medium-term estimates post the Q1 print and views consensus forecasts as 'fair-to-high,' the analyst added.
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CNN
24 minutes ago
- CNN
US and China set to kick off fresh round of trade talks in London over intractable issues
A new round of trade negotiations between the United States and China is set to begin Monday in London as both sides try to preserve a fragile truce brokered last month. The fresh talks were announced last week after a long-anticipated phone call between US President Donald Trump and Chinese leader Xi Jinping, which appeared to ease tensions that erupted over the past month following a surprise agreement in Geneva. In May, the two sides agreed to drastically roll back tariffs on each other's goods for an initial 90-day period. The mood was upbeat. However, sentiment soured quickly over two major sticking points: China's control over so-called rare earths minerals and its access to semiconductor technology originating from the US. Beijing's exports of rare earths and their related magnets are expected to take center stage at the London meeting. But experts say Beijing is unlikely to give up its strategic grip over the essential minerals, which are needed in a wide range of electronics, vehicles and defense systems. 'China's control over rare earth supply has become a calibrated yet assertive tool for strategic influence,' Robin Xing, Morgan Stanley's chief China economist, wrote in a Monday research note. 'Its near-monopoly of the supply chain means rare earths will remain a significant bargaining chip in trade negotiations.' Since the talks in Geneva, Trump has accused Beijing of effectively blocking the export of rare earths, announcing additional chip curbs and threatening to revoke the US visas of Chinese students. The moves have provoked backlash from China, which views Washington's decisions as reneging on its trade promises. All eyes will be on whether both sides can come to a consensus in London on issues of fundamental importance. US Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer will meet a Chinese delegation led by Vice Premier He Lifeng. On Saturday, Beijing appeared to send conciliatory signals. A spokesperson for China's Commerce Ministry, which oversees the export controls, said it had 'approved a certain number of compliant applications.' 'China is willing to further enhance communication and dialogue with relevant countries regarding export controls to facilitate compliant trade,' the spokesperson said. Kevin Hassett, head of the National Economic Council at the White House, told CBS's Face the Nation on Sunday that the US side would be looking to restore the flow of rare earth minerals. 'Those exports of critical minerals have been getting released at a rate that is higher than it was, but not as high as we believe we agreed to in Geneva,' he said, adding that he is 'very comfortable' with a trade deal being made after the talks. In April, as tit-for-tat trade tension between the two countries escalated, China imposed a new licensing regime on seven rare earth minerals and several magnets, requiring exporters to seek approvals for each shipment and submit documentation to verify the intended end use of these materials. Following the trade truce negotiated in Geneva, the Trump administration expected China to lift restrictions on those minerals. But Beijing's apparent slow-walking of approvals triggered deep frustration within the White House, CNN reported last month. Rare earths are a group of 17 elements that are more abundant than gold and can be found in many countries, including the United States. But they're difficult, costly and environmentally polluting to extract and process. China controls 90% of global rare earth processing. Experts say it's possible that Beijing may seek to use its leverage over rare earths to get Washington to ease its own export controls aimed at blocking China's access to advanced US semiconductors and related technologies. The American Chamber of Commerce in China said on Friday that some Chinese suppliers of American companies have received six-month export licenses. Reuters also reported that suppliers of major American carmakers – including General Motors, Ford and Jeep-maker Stellantis – were granted temporary export licenses for a period of up to six months. While China may step up the pace of license approvals to cool the diplomatic temperature, global access to Chinese rare earth minerals will likely remain more restricted than it was before April, according to a Friday research note by Leah Fahy, a China economist and other experts at Capital Economics, a London-based consultancy. 'Beijing had become more assertive in its use of export controls as tools to protect and cement its global position in strategic sectors, even before Trump hiked China tariffs this year,' the note said. As China tackles a tariff war with the US head on, it's clear that it is continuing to cause economic pain at home. Trade data released Monday painted a gloomy picture for the country's export-reliant economy. Its overall overseas shipments rose by just 4.8% in May compared to the same month a year earlier, according to data released by China's General Administration of Customs. It was a sharp slowdown from the 8.1% recorded in April, and lower than the estimate of 5.0% export growth from a Reuters poll of economists. Its exports to the US suffered a steep decline of 34.5%. The sharp monthly fall widened from a 21% drop in April and came despite the trade truce announced on May 12 that brought American tariffs on Chinese goods down from 145% to 30%. Still, Lü Daliang, a spokesperson for the customs department, talked up China's economic strength, telling the state-run media Xinhua that China's goods trade has demonstrated 'resilience in the face of external challenges.' Meanwhile, deflationary pressures continue to stalk the world's second-largest economy, according to data released separately on Monday by the National Bureau of Statistics (NBS). In May, China's Consumer Price Index (CPI), a benchmark for measuring inflation, dropped 0.1% compared to the same month last year. Factory-gate deflation, measured by the Producer Price Index (PPI), worsened with a 3.3% decrease in May from a year earlier. Last month's drop marks the sharpest year-on-year contraction in 22 months, according to NBS data. Dong Lijuan, chief statistician at the NBS, attributed the decline in producer prices, which measures the average change in prices received by producers of goods and services, to a drop in global oil and gas prices, as well as the decrease in prices for coal and other raw materials due to low cyclical demand. The high base of last year was cited as another reason for the decline, Dong said in a statement. CNN's Hassan Tayir, Simone McCarthy, Fred He contributed reporting.
Yahoo
an hour ago
- Yahoo
Opening of new Alstom plant in Hornell puts city at center of worldwide rail industry
Hornell was at the epicenter of the global rail car industry on June 2 with the official opening of Alstom's state-of-the-art, 135,000 square foot car shell manufacturing plant on Shawmut Drive State, federal, county and city officials were on hand for a ribbon cutting for Plant 4 and the building's dedication to the late James Griffin, the pioneering long-time leader of the Hornell Industrial Development Agency. It was a day clearly set aside for celebrating. Alstom employees and managers, local and state officials and regional economic development leaders basked in the completion of Plant 4 under bright sunshine. "This is a proud day for Hornell and just the beginning of what we can accomplish when we work together," Hornell Mayor John Buckley said. Alstom Hornell Site Manager Victor Ionescu said he was "privileged" to be involved with the Plant 4 project since its inception, calling it a new milestone in the city's long connection to rail travel. 'Hornell has been a rail town for 170 years and we are very proud of that history. That history has been built with the cooperation and the partnership of everybody here today," Ionescu said. "We thank you for everything you have done to make this moment possible." Alstom spent $75 million and worked with 40 unique contractors to build and outfit the facility, one of the few advanced manufacturing facilities in the United States capable of producing stainless steel car body shells for passenger rail vehicles. Buckley said Plant 4 marks a "landmark investment" in the future of the city. He said the plant's completion helps place Hornell at the "epicenter" of the global rail car industry. "This facility represents not just steel and concrete, but opportunity, growth and a bright path forward for Alstom and the City of Hornell," Buckley said. "With the creation of an estimated 250 new jobs, Plant 4 is game changer for our community." Buckley said the high-quality new jobs "will support families, strengthen the workforce and drive new economic vitality throughout Hornell and the surrounding region." Hope Knight, president, CEO and commissioner of Empire State Development, praised Alstom's growth in New York state and its support for "good paying union jobs" in the Southern Tier. In a statement, Sen. Charles Schumer said, 'Today, Alstom solidifies the Southern Tier and New York state as the beating heart for its North American operations. I've long fought to support Alstom's growth in Steuben County and will continue to fight to ensure Hornell has the resources it needs to be one of the nation's main hubs for rolling stock manufacturing.' In 2021, Schumer secured a $3.4 million federal grant from the Economic Development Administration to the Hornell IDA to make improvements to the Shawmut Park site, paving the way for the expansion. Michael Keroullé, President, Alstom Americas, said it was a 'beautiful day' for the City of Hornell. Keroullé expressed his gratitude to leaders and officials at all levels of government for what he said was their "unwavering support and commitment" to rail manufacturing expansion in the Southern Tier. More: Alstom's $75M Hornell facility now operational. Why it marks new era in rail manufacturing And Keroullé said Plant 4 'reinforces (Alstom's) strong commitment to American manufacturing" and job creation. "Good jobs are the foundation for thriving communities," he added. In January 2021, Alstom was awarded an up-to $1.8 billion contract by Metra, the commuter rail system that serves the Chicago metropolitan area Plant 4 is expected to be a key component in building rail cars for Metra, as well as other company projects. Alstom provided tours of the facility following the formal inauguration of Plant 4. Email Neal Simon at nsimon@ To get unlimited access to the latest news, please subscribe or activate your digital account today. This article originally appeared on The Evening Tribune: Hornell, Alstom celebrate opening of new Shawmut Park car shell plant
Yahoo
an hour ago
- Yahoo
Oil dips as OPEC+ hikes yet to translate into output increase
Oil (CL=F, BZ=F) prices dipped on Monday, heading lower as concerns around supply and the state of geopolitics continues to move markets. By 9am in London, West Texas Intermediate had dipped to around $64.20, before bouncing back up to trade around 0.2% lower than the previous session. Brent crude (BZ=F) also dipped around 0.2% to trade near the $66.33 mark. The end of last week saw a rally for the viscose commodity, as US non-farm payroll data came in hotter than expected. Investors are, this week, eyeing OPEC+ output decisions as well as ongoing trade discussions between the US and China. OPEC+ production hikes are yet to translate into actual output gains, analysts at Morgan Stanley said. 'Notwithstanding the around one million-barrel-a-day increase in production quotas between March and June, an actual increase in production is hard to detect,' analysts including Martijn Rats said in a June 9 note, according to a Bloomberg report. 'Notably, it does not appear that production in Saudi Arabia has ramped up significantly.' US-China trade discussions will be on traders minds going into this week, with both economies having a large baring on oil consumption. Sterling headed higher against the dollar, up around 0.3% to trade around $1.356 on Monday morning. Gains recoup losses at the end of last week, where the pound retreated from its highest point since 2022. For the year-to-date the pound has rallied 8.1% against the world's reserve currency, as investor confidence in the US and its leadership has been shaken by wide-ranging tariff policy. The dollar index ( which tracks against a basket of currencies, was 0.3% lower. For the year-to-date that index is down 8.8% so far. Delegations from the US and China are meeting in London today to discuss the future of the pair's so-far fractious trading relationship. The delegation, including commerce secretary Howard Lutnick, is meeting Chinese representatives such as vice premier He Lifeng. Chinese exports of rare earths, which are crucial for modern technology, as well as Beijing's access to US products, including computer chips, are on the laundry list of expected topics. The pound also rallied 0.1% against the euro to 1.187. Gold (GC=F) prices hovered on a flatline in Monday's trading session, following a dip at the end of last week. The heat has come out of gold's rally as the US irons out its trading relationships with key partners and volatility softens. "It is a short-term gold tug-of-war," said Nadir Belbarka, analyst at XMarabia. "Firm economic news has moderated some of the need for a hawkish tone, but has not eliminated dovish desires. Lacking a top-line economic release today, gold's trend is more dictated on sentiment than on concrete facts." Any escalation in hostility with trade discussions between the US and China could push the price up again, added Belbarka. "Conversely, a strong Fed tone in forthcoming speeches would keep prices on a consolidating stance above levels of $3,300/oz, prior to mid-week CPI releases," he said. Gold futures were trading around $3,344.30 per ounce by mid-morning. Spot gold's price was slightly higher, up 0.4% to trade around $3,320. For the year-to-date, the yellow metal has gained 28.3%. 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
