A bad wrap
PRESIDENT Donald Trump made no pretense at hiding his irritation this week when he was asked by a reporter about 'TACO' – an acronym that has been gaining traction among Wall Street traders who believe that 'Trump Always Chickens Out.'
The so-called 'TACO Theory' was coined by Robert Armstrong, a Financial Times writer seeking to underline the US president's tendency to backtrack on policies when they start to roil the markets.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
New Straits Times
30 minutes ago
- New Straits Times
Trump and Xi will likely speak this week, says White House
WASHINGTON: President Donald Trump and Chinese leader Xi Jinping will likely speak this week, White House press secretary Karoline Leavitt said on Monday, days after Trump accused China of violating an agreement to roll back tariffs and trade restrictions. Leavitt is the third top Trump aide to forecast an imminent call between the two leaders to iron out differences on last month's tariff agreement in Geneva, among larger trade issues. It was not immediately clear when the two leaders will speak. US Treasury Secretary Scott Bessent told CBS' "Face the Nation" on Sunday that Trump and Xi would speak "very soon" to iron out trade issues including a dispute over critical minerals and China's restrictions on exports of certain minerals. Trump said on Friday he was sure that he would speak to Xi. China said in April that the two leaders had not had a conversation recently. On Saturday, the US Trade Representative's office announced it would continue to exclude certain solar manufacturing equipment and other products from existing tariffs on Chinese goods until August 31, offering a three-month extension while talks with Beijing continue. Bessent led negotiations with China in Geneva last month that resulted in a temporary truce in the trade war between the world's two biggest economies, but progress since then has been slow, the US Treasury chief told Fox News last week. The US-China agreement to dial back triple-digit tariffs for 90 days prompted a massive relief rally in global stocks. But it did nothing to address the underlying reasons for Trump's tariffs on Chinese goods, mainly longstanding US complaints about China's state-dominated, export-driven economic model, leaving those issues for future talks. A US trade court on Wednesday ruled that Trump overstepped his authority in imposing the bulk of his tariffs on imports from China and other countries under an emergency powers act. But less than 24 hours later, a federal appeals court reinstated the tariffs, saying it was pausing the trade court ruling to consider the government's appeal. The appeals court ordered the plaintiffs to respond by June 5 and the administration to respond by June 9.
The Star
39 minutes ago
- The Star
Oil gains on supply concerns as wildfires disrupt Canada supply, Opec+ keeps output plans unchanged
NEW YORK: Oil prices climbed nearly 3% on Monday on supply concerns as producer group OPEC+ decided not to accelerate plans to hike output and wildfires in Canada's oil-producing province disrupted production. Brent crude futures settled $1.85, or 2.95%, higher at $64.63 a barrel. U.S. West Texas Intermediate crude gained $1.73, or 2.85%, to $62.52. Wildfires burning in Canada's oil-producing province of Alberta have affected about 7% of the country's overall crude oil output as of Monday, according to Reuters calculations. At least two thermal oil sands operators south of the industry hub of Fort McMurray evacuated workers from their sites over the weekend and shut production as a precaution. "The wildfires in Alberta are now starting to seep in," said John Kilduff, partner at Again Capital in New York. Also supporting prices, the U.S. dollar slipped across the board on Monday on worries that Trump's fresh tariff threats might hurt growth and stoke inflation. A weaker U.S. currency makes dollar-priced commodities such as oil less expensive for buyers using other currencies. Prices were also supported by a perception of increased geopolitical risk after Ukrainian drone strikes against Russia over the weekend, said Rystad Energy's Jorge Leon. Meanwhile, mixed signals from Iran-U.S. talks kept market participants on edge. An Iranian diplomat said on Monday Iran was poised to reject a U.S. proposal to end a decades-old nuclear dispute. Delegations from the two countries made some progress after a fifth round of talks in Rome last month. The Organization of the Petroleum Exporting Countries and its allies, known collectively as OPEC+, decided on Saturday to raise output by 411,000 barrels per day in July, the third consecutive monthly increase of that amount, as it looks to wrestle back market share and punish members that have produced more than their quotas. Sources familiar with OPEC+ talks said on Friday that the group could discuss an even larger increase. Oil traders said the 411,000 bpd increase had already been priced into Brent and WTI futures. Phil Flynn, a senior analyst with Price Futures Group, said investors had expected the oil-producing group to increase production by more than it did. "I think they were caught the wrong way." Goldman Sachs analysts expect OPEC+ to implement a final 410,000 bpd production increase in August. "Relatively tight spot oil fundamentals, beats in hard global activity data and seasonal summer support to oil demand suggest that the expected demand slowdown is unlikely to be sharp enough to stop raising production when deciding on August production levels on July 6," the bank said in a note. Morgan Stanley analysts also said they expect 411,000 bpd to be added back each month up to a total of 2.2 million bpd by October. "With this latest announcement, there is little sign that the pace of quota increases is slowing," the bank's analysts said. - Reuters
The Star
39 minutes ago
- The Star
Wall Street closes with modest gains, dollar weakens as trade tensions flare
NEW YORK: Wall Street ended a choppy session higher on Monday and the dollar softened as trade tensions between Washington and Beijing heated up and investors showed caution ahead of U.S. employment data and a widely expected policy rate cut from the European Central Bank. The S&P 500 notched a modest advance, while tech boosted the Nasdaq to a more substantial gain. The blue-chip Dow ended the session barely in positive territory. The greenback, under pressure amid revived trade strife, weakened as benchmark U.S. Treasury yields ticked higher. Souring risk appetite boosted gold to more than a three-week high against the weakening greenback. On Sunday, U.S. Treasury Secretary Scott Bessent said President Donald Trump would speak soon with Chinese President Xi Jinping to iron out tensions over a mutually agreed-upon rollback of tariffs on critical minerals after Trump accused Beijing of violating that agreement. Beijing called Trump's accusation "groundless," and vowed to take forceful measures to protect its interests. "Investors and businesses continue to face a lot of uncertainty related to rate tariffs and fiscal policy, and how monetary policy will respond," said Bill Merz, head of capital market research at U.S. Bank Wealth Management, Minneapolis. "Today's market is about expectations and uncertainties and the degree to which these uncertainties become self-fulfilling," Merz added. "We haven't seen that yet, but that's what we need to watch for." A report from the Institute for Supply Management showed the U.S. manufacturing sector contracted at a steeper-than-expected pace in May, while construction expenditures defied consensus by falling in April. The Dow Jones Industrial Average rose 35.41 points, or 0.08%, to 42,305.48, the S&P 500 rose 24.25 points, or 0.41%, to 5,935.94 and the Nasdaq Composite rose 128.85 points, or 0.67%, to 19,242.61. European stocks closed lower amid rekindled trade tensions after Trump's announcement late on Friday that he intends to double tariffs on imported steel and aluminum to 50%, starting Wednesday. The move drew promises of retaliation from the European Union and sent shares of steel exporters lower. Geopolitical tensions flared as the Ukraine-Russia conflict intensified over the weekend. Polish stocks fell 0.6% in the wake of nationalist opposition candidate Karol Nawrocki's election victory. MSCI's gauge of stocks across the globe rose 3.38 points, or 0.38%, to 882.88. The pan-European STOXX 600 index fell 0.14%, while Europe's broad FTSEurofirst 300 index fell 3.06 points, or 0.14% Emerging market stocks fell 3.70 points, or 0.32%, to 1,153.64. MSCI's broadest index of Asia-Pacific shares outside Japan closed lower by 0.26%, to 607.38, while Japan's Nikkei fell 494.43 points, or 1.30%, to 37,470.67. The dollar lost ground against other major currencies, backing down from the previous week's gains as markets assessed the outlook for Trump's unpredictable trade policy and its potential for dampening growth and fuelling inflation. The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.69% to 98.67, with the euro up 0.85% at $1.1444. Against the Japanese yen, the dollar weakened 0.93% to142.7. Longer-dated U.S. Treasury yields were mostly higher in the wake of Trump's tariff announcement, but yields slightly pared gains after the manufacturing data. The yield on benchmark U.S. 10-year notes rose 3.2 basis points to 4.45%, from 4.418% late on Friday. The 30-year bond yield rose 4.6 basis points to 4.9779% from 4.932% late on Friday. The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 2.5 basis points to 3.939%, from 3.914% late on Friday. Crude oil prices surged after OPEC+ held July output increases at the same level as the previous two months, while wildfires in Canada's oil-producing province threatened supply. U.S. crude rose 2.85% to settle at $62.52 per barrel, while Brent settled at $64.63 per barrel, up 2.95% on the day. Gold prices touched a one-week high as elevated caution attracted investors to the safe-haven metal. Spot gold rose 2.77% to $3,380.41 an ounce. U.S. gold futures rose 2.74% to $3,379.00 an ounce. Copper rose 1.23% to $9,615.00 a tonne. Three-month aluminum on the London Metal Exchange rose 1.23% to $2,474.15 a tonne. - Reuters
