Fed rate cuts could spark a new stock bubble, SocGen says. Here's the level to watch in the S&P 500.
That's according to strategists at Société Générale, who said they saw the possibility that the S&P 500 becomes overheated sometime in the next year.
The level of the S&P 500 they're warning investors to look out for is 7,500. That implies a 19% gain for the benchmark index, and would signal that the speculative mania has reached bubble proportions.
Here's what they're eyeing.
1) Fed rate cuts. Investors are widely expecting the Fed to cut interest rates, with the odds of a September rate cut spiking after the July jobs report was unexpectedly weak last Friday.
According to the CME FedWatch tool, the market-priced probability of a 25-basis-point rate cut next month has jumped to 87%, up from 63% a week ago.
"Gradual rate cutting could add to the positive effect of cyclical data, while aggressive Fed rate cuts to the terminal rate could drive a market valuation bubble," strategists wrote.
2) Bullish runway. Fed rate cuts are also adding to an already-positive environment for stocks, strategists said, pointing to factors like higher growth, healthy debt-taking in the private sector, and corporate activities improving from lows earlier in the business cycle.
"Strong returns from the S&P 500 over the past three months have borne out our US outlook, crisis of confidence is short-term," strategists wrote.
The S&P 500 reaching 7,500 next year would imply valuations similar to levels seen during the peak of the dot-com bubble, according to SocGen's analysis.
The bank's base case is for the S&P 500 to land around 6,900 by the end of next year, implying a 9% gain from current levels.
Chatter about a potential stock market bubble has been percolating around Wall Street in recent months, given the S&P 500's record-breaking rally. Stocks have quickly rebounded since bottoming on April 8 following Trump's tariff announcements, with the S&P 500 up 28% since then.
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Stock market today: Dow, S&P 500, Nasdaq notch weekly wins as slew of data muddies rate-cut path
US stocks were mixed on Friday as Wall Street tempered its rate-cut hopes amid economic data this week that showed higher-than-expected wholesale inflation and a rise in July retail sales. A meeting between President Trump and Russian President Vladimir Putin was also in focus as traders looked for clues on how the outcome could steer markets. The Dow Jones Industrial Average (^DJI) rose about 0.8%, trimming earlier gains to fall short of a record close. The benchmark S&P 500 (^GSPC) fell 0.3% and the tech-heavy Nasdaq Composite (^IXIC) lost 0.4% after President Trump said he would soon announce tariffs on semiconductor imports. US Census Bureau data released Friday morning showed retail sales rose 0.5% in July from the prior month. That was less than the 0.6% gain expected by economists but still viewed as a solid advance after a sharp pullback in consumer spending this spring. Meanwhile, US consumer sentiment deteriorated in August, falling for the first time in four months as inflation expectations jumped in the longer term. Stocks wobbled on Thursday, ending a two-day rally sparked by investor confidence that an interest rate cut in September was nearly certain. Doubts about a significant cut at the Fed's next policy meeting crept in after July's Producer Price Index (PPI) came in hotter than expected. Major Dow component UnitedHealth (UNH) stock soared on Friday after a regulatory filing showed Warren Buffett's Berkshire Hathaway (BRK-B, BRK-A) bought 5 million shares in the company. Intel (INTC) shares jumped Friday after a Bloomberg report said the Trump administration is considering taking a stake in the chipmaker, using funds from the US CHIPS Act. President Trump met with Intel's CEO on Monday after calling on him to resign the previous week. And Applied Materials (AMAT) stock sank nearly 14% after the chip equipment maker issued weak fourth quarter forecasts due to sluggish demand in China, fueling concerns over tariff-related risks. Stocks notch second week of wins as economic data casts doubts on Fed's next move Stocks closed the session mixed on Friday, but the major averages managed to notch a second straight week of gains. The benchmark S&P 500 (^GSPC) fell 0.3%, retreating from its record, while the tech-heavy Nasdaq Composite (^IXIC) also closed the session down 0.4%. The Dow Jones Industrial Average (^DJI) gained slightly as shares of UnitedHealth Group (UNH) surged. Rate cut uncertainty permeated the market over the past two sessions following Thursday's hotter-than-expected monthly producer price index (PPI) print. US consumer sentiment deteriorated in August, falling for the first time in four months. Meanwhile, retail sales jumped 0.5% in July, showing consumer spending had steadied following a dramatic drop earlier in the year. Trump and Putin greet each other in Alaska for start of summit on Ukraine President Trump and Russian President Vladimir Putin greeted each other in Alaska as a summit centered around the Ukraine war began. Trump wants Russia and Ukraine to end the war. Earlier this week the president said their would be 'severe consequences' if Moscow did not end the conflict following the summit. Investors are eying the meeting for clues on how the outcome could steer markets. Dow on pace for record close, S&P and Nasdaq set to notch weekly wins Stock were poised to close the session mixed, but the Dow Jones Industrial Average (^DJI) could notch its first record high of the year. The benchmark S&P 500 (^GSPC) traded below its record close, while the tech-heavy Nasdaq Composite (^IXIC) also fell below the flatline. All three major averages were on pace to end the week with gains. Among the S&P 500 sectors, Healthcare (XLV) stocks outperformed, along with Communications Services (XLC), and Consumer Discretionary (XLY). UBS: Put excess cash to work amid higher inflation UBS strategists say the US hasn't seen the last of rising inflation, following this week's hotter-than-expected PPI print, but investors should put their money to work as a Fed cut in September is still the likely outcome. 'We expect overall inflation to continue on a gradual upward trend as businesses pass along their higher costs, but we also believe slowing shelter inflation and pushback from increasingly stretched consumers should help offset some of the tariff impact on price pressures," Ulrike Hoffmann-Burchardi, global head of equities at UBS Global Wealth Management said in a note on Friday. Monthly retail sales jumped 0.5% in July, marking the second monthly gain in a row, as consumer spending steadied following a dramatic drop earlier in the year. Hoffmann-Burchardi noted the downside risks in the labor market are likely to outweigh inflation concerns, as economic activity slows further in the second half of the year. "We expect the Fed to bring its policy rate 100 basis points lower in the months to come, reducing returns on cash," she added. Why Goldman Sach says the 'Goldilocks' stock market may get hit Yahoo Finance's Francisco Velasquez reports: Read more here. UnitedHealth stock pops on Buffett's Berkshire share purchase UnitedHealth Group's (UNH) stock rallied on Friday following the revelation that Warren Buffett's Berkshire Hathaway (BRK-A, BRK-B) purchased 5 million shares last quarter. The more than 10% jump in shares of the healthcare insurance giant helped lift the Dow Jones Industrial Average (^DJI) into green territory, as the rest of the major averages dropped. UnitedHealth has suffered multiple setbacks in the past couple of years. With earnings misses piling on top of that, the stock has been under constant pressure and is down more than 45% year to date. Read more here. IPO market surges in August with companies 'striking while the iron is hot' The IPO market is on fire this summer, Yahoo Finance's Jake Conley reports. Conley writes: Read the full story here. Opendoor shares pops in wake of CEO exit amid meme-fueled stock surge Opendoor Technologies (OPEN) shares spiked as much as 10% in morning trading after the company announced the departure of its CEO Carrie Wheeler effective immediately. Opendoor said it is searching for a new CEO to lead the ibuyer in its next growth phase, just weeks after the stock skyrocketed in a meme-fueled rally. 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"It was basically all of us retailers who saw the value in this platform, supported it. We got not a word from management over these last few weeks. So I think she's got to go." Chip stocks fall as Trump says semiconductor tariffs coming as soon as next week Chip stocks dropped Friday after President Trump said he will set tariffs on semiconductors as soon as next week. "I'll be setting tariffs next week and the week after on steel and on, I would say, chips," Trump told reporters Friday while aboard Air Force One while traveling to Alaska to meet Russian President Vladimir Putin, Reuters reported. Nvidia (NVDA), AMD (AMD), and Broadcom (AVGO) fell more than 1%, while Micron (MU) dropped more than 3%. Trump said earlier this month that semiconductor companies building out their domestic manufacturing footprint — this includes the world's leading contract chip manufacturer, Taiwanese firm TSMC (TSM) — would be exempt from his planned 100% tariffs on chips. 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In May, the index showed sentiment at its second-lowest level on record as consumers expressed concerns over long-term inflation, fueled by uncertainty surrounding Trump's trade policies. Sentiment improved in June as Trump dialed back some of his aggressive stances on tariffs. 'Overall, consumers are no longer bracing for the worst-case scenario for the economy feared in April when reciprocal tariffs were announced and then paused,' Hsu said. 'However, consumers continue to expect both inflation and unemployment to deteriorate in the future.' Read more here. US stocks mixed at the open US stocks were mixed on Friday at the open as Wall Street tempered its hopes for the Fed to cut interest rates in September, as economic data this week showed higher than expected wholesale inflation and a rise in July retail sales. The Dow Jones Industrial Average (^DJI) rose around 0.5%, putting the index on track for its first record since December. The benchmark S&P 500 (^GSPC) rose less than 0.1%, and the tech-heavy Nasdaq Composite (^IXIC) fell below the flatline. Intel stock continues rise as Trump administration reportedly mulls taking stake in chipmaker Intel (INTC) stock spiked more than 7% Thursday and continued to climb 3% before the market open on Friday, following a report that the US government is considering taking a stake in the troubled chipmaker. Bloomberg reported that the Trump administration is in talks with Intel about the deal, which would help the company complete its Ohio factory expansion that had been put on hold. The report follows a meeting between President Trump and Intel CEO Lip-Bu Tan earlier this week, which came after the president called for the CEO's resignation due to his ties with China. "As Intel's prospects have dimmed, the idea of support (governmental or otherwise) has gained traction, understandable given the company, for better or worse, remains the only US-headquartered prospect for leading edge semiconductor chips and processes; it seems like Trump may have been persuaded to see the light," Bernstein analyst Stacy Rasgon wrote in a note to investors Friday. It's not the first time the Trump administration has allegedly floated ideas to prop up Intel. In February, a news report said the US was pitching proposals to its rival TSMC to help support its turnaround by establishing a joint venture with Intel. Read more here. Retail sales climb less than expected in July Retail sales rose 0.5% in July from the prior month, according to data from the US Census Bureau released Friday — marking the second monthly gain in a row, as consumer spending steadies following a dramatic drop in earlier in the year. 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Here are some of the biggest stories you may have missed overnight and early this morning: 'Striking while the iron is hot' Investors want rate cut 'validation,' but the Fed's dilemma remains Applied Materials' shares sink on weak China demand, tariff risks UnitedHealth jumps as Buffett's Berkshire buys 5M shares BofA's Hartnett sees profit-taking in stocks after Jackson Hole AI exacerbates tech divide with smaller stocks languishing A trader's guide to the Alaska talks between Trump and Putin China's economy slows in July on tariffs, weak property market Applied Materials' shares sink on weak China demand, tariff risks Shares in Applied Materials (AMAT) sank 14% before the bell on Friday after the chip equipment maker issued weak fourth-quarter forecasts on sluggish China demand, fueling concerns over tariff-related risks. Reuters reports: Read more here. UnitedHealth stock soars as Buffett's Berkshire buys 5M shares UnitedHealth Group stock rose 12% before the bell on Friday after Warren Buffett's Berkshire Hathaway (BRK-B, BRK-A) acquired 5 million shares in the company. A regulatory filing showed the purchase on Thursday. Reuters reports: Read more here. Stocks notch second week of wins as economic data casts doubts on Fed's next move Stocks closed the session mixed on Friday, but the major averages managed to notch a second straight week of gains. The benchmark S&P 500 (^GSPC) fell 0.3%, retreating from its record, while the tech-heavy Nasdaq Composite (^IXIC) also closed the session down 0.4%. The Dow Jones Industrial Average (^DJI) gained slightly as shares of UnitedHealth Group (UNH) surged. Rate cut uncertainty permeated the market over the past two sessions following Thursday's hotter-than-expected monthly producer price index (PPI) print. US consumer sentiment deteriorated in August, falling for the first time in four months. Meanwhile, retail sales jumped 0.5% in July, showing consumer spending had steadied following a dramatic drop earlier in the year. Stocks closed the session mixed on Friday, but the major averages managed to notch a second straight week of gains. The benchmark S&P 500 (^GSPC) fell 0.3%, retreating from its record, while the tech-heavy Nasdaq Composite (^IXIC) also closed the session down 0.4%. The Dow Jones Industrial Average (^DJI) gained slightly as shares of UnitedHealth Group (UNH) surged. Rate cut uncertainty permeated the market over the past two sessions following Thursday's hotter-than-expected monthly producer price index (PPI) print. US consumer sentiment deteriorated in August, falling for the first time in four months. Meanwhile, retail sales jumped 0.5% in July, showing consumer spending had steadied following a dramatic drop earlier in the year. Trump and Putin greet each other in Alaska for start of summit on Ukraine President Trump and Russian President Vladimir Putin greeted each other in Alaska as a summit centered around the Ukraine war began. Trump wants Russia and Ukraine to end the war. Earlier this week the president said their would be 'severe consequences' if Moscow did not end the conflict following the summit. Investors are eying the meeting for clues on how the outcome could steer markets. President Trump and Russian President Vladimir Putin greeted each other in Alaska as a summit centered around the Ukraine war began. Trump wants Russia and Ukraine to end the war. Earlier this week the president said their would be 'severe consequences' if Moscow did not end the conflict following the summit. Investors are eying the meeting for clues on how the outcome could steer markets. 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Among the S&P 500 sectors, Healthcare (XLV) stocks outperformed, along with Communications Services (XLC), and Consumer Discretionary (XLY). UBS: Put excess cash to work amid higher inflation UBS strategists say the US hasn't seen the last of rising inflation, following this week's hotter-than-expected PPI print, but investors should put their money to work as a Fed cut in September is still the likely outcome. 'We expect overall inflation to continue on a gradual upward trend as businesses pass along their higher costs, but we also believe slowing shelter inflation and pushback from increasingly stretched consumers should help offset some of the tariff impact on price pressures," Ulrike Hoffmann-Burchardi, global head of equities at UBS Global Wealth Management said in a note on Friday. Monthly retail sales jumped 0.5% in July, marking the second monthly gain in a row, as consumer spending steadied following a dramatic drop earlier in the year. Hoffmann-Burchardi noted the downside risks in the labor market are likely to outweigh inflation concerns, as economic activity slows further in the second half of the year. "We expect the Fed to bring its policy rate 100 basis points lower in the months to come, reducing returns on cash," she added. UBS strategists say the US hasn't seen the last of rising inflation, following this week's hotter-than-expected PPI print, but investors should put their money to work as a Fed cut in September is still the likely outcome. 'We expect overall inflation to continue on a gradual upward trend as businesses pass along their higher costs, but we also believe slowing shelter inflation and pushback from increasingly stretched consumers should help offset some of the tariff impact on price pressures," Ulrike Hoffmann-Burchardi, global head of equities at UBS Global Wealth Management said in a note on Friday. Monthly retail sales jumped 0.5% in July, marking the second monthly gain in a row, as consumer spending steadied following a dramatic drop earlier in the year. Hoffmann-Burchardi noted the downside risks in the labor market are likely to outweigh inflation concerns, as economic activity slows further in the second half of the year. "We expect the Fed to bring its policy rate 100 basis points lower in the months to come, reducing returns on cash," she added. Why Goldman Sach says the 'Goldilocks' stock market may get hit Yahoo Finance's Francisco Velasquez reports: Read more here. Yahoo Finance's Francisco Velasquez reports: Read more here. UnitedHealth stock pops on Buffett's Berkshire share purchase UnitedHealth Group's (UNH) stock rallied on Friday following the revelation that Warren Buffett's Berkshire Hathaway (BRK-A, BRK-B) purchased 5 million shares last quarter. The more than 10% jump in shares of the healthcare insurance giant helped lift the Dow Jones Industrial Average (^DJI) into green territory, as the rest of the major averages dropped. UnitedHealth has suffered multiple setbacks in the past couple of years. With earnings misses piling on top of that, the stock has been under constant pressure and is down more than 45% year to date. Read more here. UnitedHealth Group's (UNH) stock rallied on Friday following the revelation that Warren Buffett's Berkshire Hathaway (BRK-A, BRK-B) purchased 5 million shares last quarter. The more than 10% jump in shares of the healthcare insurance giant helped lift the Dow Jones Industrial Average (^DJI) into green territory, as the rest of the major averages dropped. UnitedHealth has suffered multiple setbacks in the past couple of years. With earnings misses piling on top of that, the stock has been under constant pressure and is down more than 45% year to date. Read more here. IPO market surges in August with companies 'striking while the iron is hot' The IPO market is on fire this summer, Yahoo Finance's Jake Conley reports. Conley writes: Read the full story here. The IPO market is on fire this summer, Yahoo Finance's Jake Conley reports. Conley writes: Read the full story here. Opendoor shares pops in wake of CEO exit amid meme-fueled stock surge Opendoor Technologies (OPEN) shares spiked as much as 10% in morning trading after the company announced the departure of its CEO Carrie Wheeler effective immediately. Opendoor said it is searching for a new CEO to lead the ibuyer in its next growth phase, just weeks after the stock skyrocketed in a meme-fueled rally. The board appointed Shrisha Radhakrishna, Opendoor's chief technology and product officer, as president and interim leader of the company. Shares of Opendoor have been on a wild ride over the past month, powered in part by Carvana (CVNA) turnaround spotter EMJ Capital and speculative investors on Reddit's wallstreetbets. EMJ Capital founder and president Eric Jackson wrote in mid-July that his firm was taking a long position in Opendoor, which was then trading under $1 per share. Jackson has been critical of Opendoor's top leadership, most recently following the company's latest quarterly results in early August, when the stock sank 20% following a disappointing earnings forecast. "The communication on the earnings call from the CEO and the CFO was really awful," Jackson told Yahoo Finance last week. "The management team didn't do anything to get this thing up from 51 cents to almost five bucks," he said. "It was basically all of us retailers who saw the value in this platform, supported it. We got not a word from management over these last few weeks. So I think she's got to go." Opendoor Technologies (OPEN) shares spiked as much as 10% in morning trading after the company announced the departure of its CEO Carrie Wheeler effective immediately. Opendoor said it is searching for a new CEO to lead the ibuyer in its next growth phase, just weeks after the stock skyrocketed in a meme-fueled rally. The board appointed Shrisha Radhakrishna, Opendoor's chief technology and product officer, as president and interim leader of the company. Shares of Opendoor have been on a wild ride over the past month, powered in part by Carvana (CVNA) turnaround spotter EMJ Capital and speculative investors on Reddit's wallstreetbets. EMJ Capital founder and president Eric Jackson wrote in mid-July that his firm was taking a long position in Opendoor, which was then trading under $1 per share. Jackson has been critical of Opendoor's top leadership, most recently following the company's latest quarterly results in early August, when the stock sank 20% following a disappointing earnings forecast. "The communication on the earnings call from the CEO and the CFO was really awful," Jackson told Yahoo Finance last week. "The management team didn't do anything to get this thing up from 51 cents to almost five bucks," he said. "It was basically all of us retailers who saw the value in this platform, supported it. We got not a word from management over these last few weeks. So I think she's got to go." Chip stocks fall as Trump says semiconductor tariffs coming as soon as next week Chip stocks dropped Friday after President Trump said he will set tariffs on semiconductors as soon as next week. "I'll be setting tariffs next week and the week after on steel and on, I would say, chips," Trump told reporters Friday while aboard Air Force One while traveling to Alaska to meet Russian President Vladimir Putin, Reuters reported. Nvidia (NVDA), AMD (AMD), and Broadcom (AVGO) fell more than 1%, while Micron (MU) dropped more than 3%. Trump said earlier this month that semiconductor companies building out their domestic manufacturing footprint — this includes the world's leading contract chip manufacturer, Taiwanese firm TSMC (TSM) — would be exempt from his planned 100% tariffs on chips. That commentary sent chip stocks up. But on Friday, he implied that the exemption may only be temporary. "I'm going to have a rate that is going to be lower at the beginning — that gives them a chance to come in and build — and very high after a certain period of time," he said. Chip stocks dropped Friday after President Trump said he will set tariffs on semiconductors as soon as next week. "I'll be setting tariffs next week and the week after on steel and on, I would say, chips," Trump told reporters Friday while aboard Air Force One while traveling to Alaska to meet Russian President Vladimir Putin, Reuters reported. Nvidia (NVDA), AMD (AMD), and Broadcom (AVGO) fell more than 1%, while Micron (MU) dropped more than 3%. Trump said earlier this month that semiconductor companies building out their domestic manufacturing footprint — this includes the world's leading contract chip manufacturer, Taiwanese firm TSMC (TSM) — would be exempt from his planned 100% tariffs on chips. That commentary sent chip stocks up. But on Friday, he implied that the exemption may only be temporary. "I'm going to have a rate that is going to be lower at the beginning — that gives them a chance to come in and build — and very high after a certain period of time," he said. Consumer sentiment falls in August, marking first decline in 4 months US consumer sentiment deteriorated in August, falling for the first time in four months. The University of Michigan's Consumer Sentiment Index fell to 58.6 from a reading of 61.7 in July. It was also less than the 62 reading expected by economists surveyed by Bloomberg. 'This deterioration largely stems from rising worries about inflation,' wrote Joanne Hsu, the director of the university's Surveys of Consumers. Consumer sentiment had improved in June and July after plummeting in the spring as Americans worried about the impacts of Trump's tariffs. In May, the index showed sentiment at its second-lowest level on record as consumers expressed concerns over long-term inflation, fueled by uncertainty surrounding Trump's trade policies. Sentiment improved in June as Trump dialed back some of his aggressive stances on tariffs. 'Overall, consumers are no longer bracing for the worst-case scenario for the economy feared in April when reciprocal tariffs were announced and then paused,' Hsu said. 'However, consumers continue to expect both inflation and unemployment to deteriorate in the future.' Read more here. US consumer sentiment deteriorated in August, falling for the first time in four months. The University of Michigan's Consumer Sentiment Index fell to 58.6 from a reading of 61.7 in July. It was also less than the 62 reading expected by economists surveyed by Bloomberg. 'This deterioration largely stems from rising worries about inflation,' wrote Joanne Hsu, the director of the university's Surveys of Consumers. Consumer sentiment had improved in June and July after plummeting in the spring as Americans worried about the impacts of Trump's tariffs. In May, the index showed sentiment at its second-lowest level on record as consumers expressed concerns over long-term inflation, fueled by uncertainty surrounding Trump's trade policies. Sentiment improved in June as Trump dialed back some of his aggressive stances on tariffs. 'Overall, consumers are no longer bracing for the worst-case scenario for the economy feared in April when reciprocal tariffs were announced and then paused,' Hsu said. 'However, consumers continue to expect both inflation and unemployment to deteriorate in the future.' Read more here. US stocks mixed at the open US stocks were mixed on Friday at the open as Wall Street tempered its hopes for the Fed to cut interest rates in September, as economic data this week showed higher than expected wholesale inflation and a rise in July retail sales. The Dow Jones Industrial Average (^DJI) rose around 0.5%, putting the index on track for its first record since December. The benchmark S&P 500 (^GSPC) rose less than 0.1%, and the tech-heavy Nasdaq Composite (^IXIC) fell below the flatline. US stocks were mixed on Friday at the open as Wall Street tempered its hopes for the Fed to cut interest rates in September, as economic data this week showed higher than expected wholesale inflation and a rise in July retail sales. The Dow Jones Industrial Average (^DJI) rose around 0.5%, putting the index on track for its first record since December. The benchmark S&P 500 (^GSPC) rose less than 0.1%, and the tech-heavy Nasdaq Composite (^IXIC) fell below the flatline. Intel stock continues rise as Trump administration reportedly mulls taking stake in chipmaker Intel (INTC) stock spiked more than 7% Thursday and continued to climb 3% before the market open on Friday, following a report that the US government is considering taking a stake in the troubled chipmaker. Bloomberg reported that the Trump administration is in talks with Intel about the deal, which would help the company complete its Ohio factory expansion that had been put on hold. The report follows a meeting between President Trump and Intel CEO Lip-Bu Tan earlier this week, which came after the president called for the CEO's resignation due to his ties with China. "As Intel's prospects have dimmed, the idea of support (governmental or otherwise) has gained traction, understandable given the company, for better or worse, remains the only US-headquartered prospect for leading edge semiconductor chips and processes; it seems like Trump may have been persuaded to see the light," Bernstein analyst Stacy Rasgon wrote in a note to investors Friday. It's not the first time the Trump administration has allegedly floated ideas to prop up Intel. In February, a news report said the US was pitching proposals to its rival TSMC to help support its turnaround by establishing a joint venture with Intel. Read more here. Intel (INTC) stock spiked more than 7% Thursday and continued to climb 3% before the market open on Friday, following a report that the US government is considering taking a stake in the troubled chipmaker. Bloomberg reported that the Trump administration is in talks with Intel about the deal, which would help the company complete its Ohio factory expansion that had been put on hold. The report follows a meeting between President Trump and Intel CEO Lip-Bu Tan earlier this week, which came after the president called for the CEO's resignation due to his ties with China. "As Intel's prospects have dimmed, the idea of support (governmental or otherwise) has gained traction, understandable given the company, for better or worse, remains the only US-headquartered prospect for leading edge semiconductor chips and processes; it seems like Trump may have been persuaded to see the light," Bernstein analyst Stacy Rasgon wrote in a note to investors Friday. It's not the first time the Trump administration has allegedly floated ideas to prop up Intel. In February, a news report said the US was pitching proposals to its rival TSMC to help support its turnaround by establishing a joint venture with Intel. Read more here. Retail sales climb less than expected in July Retail sales rose 0.5% in July from the prior month, according to data from the US Census Bureau released Friday — marking the second monthly gain in a row, as consumer spending steadies following a dramatic drop in earlier in the year. Still, the jump was less than the 0.6% gain expected by economists surveyed by Bloomberg. Excluding auto and gas sales, retail sales were up 0.2%, also less than the 0.3% projected. An even narrower slice of retail sales called the 'control group' — a more precise measure of consumer spending that excludes certain sales such as those from office supply and tobacco stores — climbed 0.5%, ahead of the 0.4% expected. Retail sales rebounded in June, a sign that consumer spending habits were remaining resilient despite President Trump's tariffs. Read more here. Retail sales rose 0.5% in July from the prior month, according to data from the US Census Bureau released Friday — marking the second monthly gain in a row, as consumer spending steadies following a dramatic drop in earlier in the year. Still, the jump was less than the 0.6% gain expected by economists surveyed by Bloomberg. Excluding auto and gas sales, retail sales were up 0.2%, also less than the 0.3% projected. An even narrower slice of retail sales called the 'control group' — a more precise measure of consumer spending that excludes certain sales such as those from office supply and tobacco stores — climbed 0.5%, ahead of the 0.4% expected. Retail sales rebounded in June, a sign that consumer spending habits were remaining resilient despite President Trump's tariffs. Read more here. Investors want rate cut 'validation,' but the Fed's dilemma won't go away Yahoo Finance's Hamza Shaban writes in today's Morning Brief: Read more here. Yahoo Finance's Hamza Shaban writes in today's Morning Brief: Read more here. Good morning. Here's what's happening today. Economic data: Retail sales (July); Export prices (July); Industrial production (July); University of Michigan consumer sentiment (August preliminary) Earnings: No notable earnings. Here are some of the biggest stories you may have missed overnight and early this morning: 'Striking while the iron is hot' Investors want rate cut 'validation,' but the Fed's dilemma remains Applied Materials' shares sink on weak China demand, tariff risks UnitedHealth jumps as Buffett's Berkshire buys 5M shares BofA's Hartnett sees profit-taking in stocks after Jackson Hole AI exacerbates tech divide with smaller stocks languishing A trader's guide to the Alaska talks between Trump and Putin China's economy slows in July on tariffs, weak property market Economic data: Retail sales (July); Export prices (July); Industrial production (July); University of Michigan consumer sentiment (August preliminary) Earnings: No notable earnings. Here are some of the biggest stories you may have missed overnight and early this morning: 'Striking while the iron is hot' Investors want rate cut 'validation,' but the Fed's dilemma remains Applied Materials' shares sink on weak China demand, tariff risks UnitedHealth jumps as Buffett's Berkshire buys 5M shares BofA's Hartnett sees profit-taking in stocks after Jackson Hole AI exacerbates tech divide with smaller stocks languishing A trader's guide to the Alaska talks between Trump and Putin China's economy slows in July on tariffs, weak property market Applied Materials' shares sink on weak China demand, tariff risks Shares in Applied Materials (AMAT) sank 14% before the bell on Friday after the chip equipment maker issued weak fourth-quarter forecasts on sluggish China demand, fueling concerns over tariff-related risks. Reuters reports: Read more here. Shares in Applied Materials (AMAT) sank 14% before the bell on Friday after the chip equipment maker issued weak fourth-quarter forecasts on sluggish China demand, fueling concerns over tariff-related risks. Reuters reports: Read more here. UnitedHealth stock soars as Buffett's Berkshire buys 5M shares UnitedHealth Group stock rose 12% before the bell on Friday after Warren Buffett's Berkshire Hathaway (BRK-B, BRK-A) acquired 5 million shares in the company. A regulatory filing showed the purchase on Thursday. Reuters reports: Read more here. UnitedHealth Group stock rose 12% before the bell on Friday after Warren Buffett's Berkshire Hathaway (BRK-B, BRK-A) acquired 5 million shares in the company. A regulatory filing showed the purchase on Thursday. Reuters reports: Read more here. 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
12 minutes ago
- Yahoo
Dollar Falls on Weaker US Consumer Sentiment
The dollar index (DXY00) on Friday fell by -0.41%, undercut by Friday's weaker-than-expected US consumer sentiment report. The dollar also suffered from underlying foreign investor concern about the possibility of a politically-driven US monetary policy after US Treasury Secretary Bessent on Wednesday appeared to give the Fed marching orders on how much to cut interest rates. The dollar fell on Friday despite a +4 bp rise in the 10-year T-note yield, which supported the dollar's interest rate differentials. The markets on Friday were awaiting the outcome of the Trump-Putin summit on Friday afternoon. The outcome could have macroeconomic implications regarding tariffs and oil prices, and could, of course, have significant consequences for European security. More News from Barchart Dollar Sees Support from Strong US PPI Report Dollar Sees Support from Strong US PPI Report Dollar Undercut by Decline in US Consumer Sentiment Get exclusive insights with the FREE Barchart Brief newsletter. Subscribe now for quick, incisive midday market analysis you won't find anywhere else. Friday's headline US retail sales report was slightly weaker than market expectations, but there was an upward revision for June, leaving the report roughly neutral for the markets. The markets welcomed the report amidst worries about how US retail spending will hold up with a weaker labor market and consumer uncertainty about inflation and the economic outlook. July US retail sales rose +0.5% m/m, slightly weaker than market expectations of +0.6%, although June was revised higher to +0.9% from +0.6%. July retail sales ex-autos rose +0.3% m/m, in line with market expectations and down from June's revised +0.8% (preliminary +0.5%). The University of Michigan's preliminary-Aug US consumer sentiment index fell by -3.1 points to 58.6, which was weaker than expectations for a slight +0.3 point increase to 62.0. The survey showed that US consumer expectations for inflation rose to +4.9% over the next year and to an annual +3.9% for the next 5-10 years. The survey also found that 58% of consumers plan to cut spending due to inflation. July US import prices rose +0.4% m/m, which was stronger than expectations of +0.1%. On a year-on-year basis, July US import prices strengthened to -0.2% from a revised -0.5% y/y in June. July US import prices ex-petroleum rose +0.3% m/m versus June's revised -0.2% (preliminary unchanged). Friday's July US industrial production report of -0.1% m/m was slightly weaker than expectations of unchanged, although June was revised upward to +0.4% m/m from +0.3%. July manufacturing production was unchanged m/m, matching market expectations, while July was revised higher to +0.3% from +0.1%. The Aug Empire manufacturing index of 11.9 was substantially stronger than market expectations of zero and was up from July's 5.5. Chicago Fed President Austan Goolsbee on Friday delivered mildly hawkish remarks, stating that he would like to see at least one more inflation report to ensure that persistent inflation pressures aren't emerging. He expressed concern about the high service inflation data in the July CPI report, but noted the importance of not placing too much weight on a single month's data. The markets on Friday continued to adjust to the inflation outlook following Thursday's hawkish PPI report. The July final-demand PPI surged to +3.3% y/y (nominal) and +3.7% y/y (core). The PPI report suggested that the markets were overly optimistic about Tuesday's CPI report and that companies are passing through tariffs at the wholesale level at a higher pace than earlier thought. Following the report, the markets erased any hopes of a -50 bp rate cut at the Fed's September meeting and pulled back expectations for a -25 bp rate cut to the 93% area from 100% before the report. Weak Chinese economic reports on Thursday night were negative for the global economic growth outlook. China's economy is weakening due to US tariffs and the Chinese government's attempt to crack down on excessive competition that has driven prices to loss-making levels in some industries. China's July retail sales report of +3.7% y/y was weaker than expectations of +4.6% and down from June's +4.8%. China's July industrial production report of +5.7% y/y was weaker than expectations of +6.0% and was down from June's +6.8%. China's July jobless rate rose to 5.2% from June's +5.0% and was higher than expectations. China's July property investment fell -12.0% ytd y/y from -11.2% in June and was weaker than expectations of -11.4%. Regarding tariffs, President Trump on Friday said, "I'll be setting tariffs next week and the week after on steel and on, I would say chips – chips and semiconductors, we'll be setting sometime next week, week after." Mr. Trump last week said he planned a 100% tariff on semiconductors but would exempt companies that move chip manufacturing to the US. Mr. Trump also mentioned 200% or 300% tariffs on chips. In other recent tariff news, Mr. Trump on Tuesday extended the tariff truce with China for another 90 days until November. Mr. Trump announced last Wednesday that he will double tariffs on US imports from India to 50% from the current 25% tariff, due to India's purchases of Russian oil. Last Tuesday, Mr. Trump said that US tariffs on pharmaceutical imports would be announced "within the next week or so." According to Bloomberg Economics, the average US tariff will rise to 15.2% if rates are implemented as announced, up from 13.3% earlier, and significantly higher than the 2.3% in 2024 before the tariffs were announced. Federal funds futures prices are discounting the chances for a -25 bp rate cut at 85% at the September 16-17 FOMC meeting and at 40% for a second -25 bp rate cut at the following meeting on October 28-29. EUR/USD (^EURUSD) rose +0.47% on dollar weakness. The euro had some underlying support from hopes of some progress on ending the Russia-Ukraine war at Friday's Trump-Putin summit. Swaps are pricing in a 5% chance of a -25 bp rate cut by the ECB at the September 11 policy meeting. USD/JPY (^USDJPY) fell -0.56% due to weakness in the dollar. The yen saw some underlying support after US Treasury Secretary Bessent earlier this week said the Bank of Japan is falling behind the curve in addressing inflation and that he expects a rate hike. However, the yen continues to be undercut by concern that US tariff policies will harm the Japanese economy. December gold (GCZ25) on Friday closed down -0.60 (-0.02%), and September silver (SIU25) closed down -0.094 (-0.25%). Gold prices fell Friday as the market trimmed expectations for a -25 bp rate cut by the Fed in September to 85% from 93%. Silver saw weakness on concern about industrial metals demand after Friday's weaker-than-expected US consumer sentiment index and Chinese economic data. Gold continues to have safe-haven support related to US tariffs and geopolitical risks, including the conflicts in Ukraine and the Middle East. Fund buying of precious metals continues to support prices after gold holdings in ETFs rose to a 2-year high on Tuesday, and silver holdings in ETFs reached a 3-year high on Thursday. On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. 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New York Post
13 minutes ago
- New York Post
American Eagle ‘almost paralyzed by body positivity' before it launched ‘sultry' Sydney Sweeney ads
American Eagle Outfitters has made a bold, divisive bet on its 'sultry' Sydney Sweeney ads — but only after its commitment to the 'body positivity' movement started to falter, experts told The Post. A decade ago, the mall-based chain's 20-year-old lingerie brand Aerie famously took off as millennials shunned Victoria's Secret and its leggy, angel-winged supermodels in favor of Aerie's ads featuring ordinary women and diverse body types. But recently, American Eagle's flagging sales show that 'inclusive fashion' has its limits — especially after the election of President Trump, experts say. Advertisement 7 Sydney Sweeney's provocative ad for American Eagle Outfitters has created a firestorm that's even drawn in President Trump. American Eagle 7 Sydney Sweeney's American Eagle was ratcheting up the provocative ads before the Sweeney campaign. American Eagle 'They were almost paralyzed by their body positivity movement and were cautious about coming across too sexy,' according to retail analyst Gabriella Santaniello, who heads up A-Line Partners. Advertisement In recent months, the retailer has been pivoting to more provocative looks — even before the Sweeney campaign rocked the internet late last month, Santaniello said. String bikinis and 'cheeky bottoms' that expose more of women's butts, for example, were previously only available on American Eagle's website, but started cropping up in its stores earlier this year, she noted. Susan Scafidi, director of the Fashion Law Institute, has likewise noticed 'edgier' looks and 'more sultry styling. 'This means featuring fewer boxy t-shirts and more cropped camisoles,' she said. 7 American Eagle has been edgier in its marketing even before the Sydney Sweeney campaign, experts told The Post. American Eagle Advertisement What's more — unlike competitors including Abercrombie & Fitch, Hollister, and the Gap — some pages on American Eagle's website have lately shown models going braless under various tops — and they aren't always subtle about it. 'All of the teen retailers shy away from the nipple,' Santaniello said. 'That's why it's so odd that they're going for it.' 7 Most teen retailers avoid the nipple look, according retail analyst Gabriella Santaniello. American Eagle Then, in late July, came the Sweeney spots. In one video, the 'White Lotus' and 'Euphoria' star tinkers under the hood of a vintage Mustang GT350 before slamming it shut, wiping her hands on the butt of her jeans — and peeling off in a cloud of burning rubber. Advertisement Days later, President Trump gushed that the ads were 'hot' and 'fantastic' after he learned Sweeney was a registered Republican. The company's shares surged 23% on Trump's comment, drawing comparisons to meme stocks. 7 American Eagle has been among the leading voices among retailers on body positivity messaging. Getty Images for Aerie 'They had to do something different,' said Hitha Herzog, a fashion management professor at Parsons School of Design. 'We have a conservative president in office and we are seeing conversations that skew away from body positivity, inclusion and diversity. 'American Eagle has always been good about knowing where the conversations are going,' Herzog added. Traffic to American Eagle's US website soared following the campaign's rollout on July 23, rising more than 60% on July 28 compared to the same day last year, according to data and insights company Consumer Edge. Meanwhile, however, left-wing critics seized upon the campaign's tagline 'Sydney Sweeney Has Great Jeans'. In one clip, Sweeney explains that genes 'often determin[e] traits like hair color, personality and even eye color,' before declaring, 'My jeans are blue.' 7 The Sydney Sweeney American Eagle campaign includes scenes of the star looking under a hood of Mustang. American Eagle An ensuing fracas claimed the ads were promoting Nazi ideology, calling for boycotts of the 48-year-old company. According to a survey this week by Axios and Generation Lab, 39% of young women and 42% of Democrats said the ads made them less likely to buy American Eagle jeans. Advertisement In the week of Aug. 3, foot traffic at American Eagle stores dropped 8.9% on top of a 3.9% decline the previous week — far steeper than drops at rival chains including Abercrombie and the Gap, according to Pass_by. 'When a brand sees momentum stall so sharply, it often reflects a reputational or cultural factor,' said James Ewen, vice president of marketing for Pass_by. 7 Aerie won market share from Victoria Secret's teen brand, Pink. Bloomberg via Getty Images Advertisement American Eagle posted its only message about the ad so far on Aug. 1 on its Instagram account. 'Sydney Sweeney Has Great Jeans is and always was about the jeans. Her jeans. Her story. We'll continue to celebrate how everyone wears their AE jeans with confidence, their way. Great jeans look good on everyone,' the company said.
