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Yahoo
6 minutes ago
- Yahoo
Morning Bid: Tariff day hits as Amazon stumbles
By Mike Dolan LONDON (Reuters) - What matters in U.S. and global markets today By Mike Dolan, Editor-At-Large, Finance and Markets A tariff day blitz, pharma hit and Amazon stumble all left a cloud over Friday's stock markets as the U.S. monthly employment report is set to test faded Federal Reserve easing bets. The bombardment of tariff developments, economic data and earnings news this week has left macro markets slightly nonplussed, but Wall Street futures and global bourses took a dimmer view of the whole picture heading into the final day. * As U.S. President Donald Trump detailed his August 1 tariff list, Canada failed to escape 35% levies - unlike the reduced 15% rates Japan and Europe had negotiated - and the Canadian dollar plumbed two-month lows. Mexico got another 90 day reprieve. Brazil faces 50%, though for a more limited series of goods than feared. Switzerland faces 39%. * Amazon blotted the otherwise impressive megacap earnings copybook, with a poorly received earnings outlook that sent its shares down 7% overnight. Apple's beat lifted its stock 1%. But pharmaceutical stocks in the U.S. and abroad were knocked back. Trump sent letters to 17 major pharma firms outlining how they should slash U.S. prescription drug prices. U.S. index futures and European bourses were down more than 1% ahead of Friday's bell. * Markets now await the July payrolls report, with a slowdown in jobs growth to 110,000 last month expected even though immigration curbs have also cut the available workforce. A wary Fed is absorbing a week of relatively hot growth and inflation numbers, with futures seeing less than a 50% chance of rate cuts resuming at its next meeting in September. U.S. economic surprise indexes are at their most positive since February, while euro zone equivalents are the highest in more than a year. The rejuvenated dollar continues to probe higher, with its DXY index at two-month highs as dollar/yen shrugged off mixed Bank of Japan signals by hitting its highest since March. Today's Market Minute * President Trump slapped steep tariffs on exports from dozens of trading partners including Canada, Brazil, India and Taiwan, pressing ahead with his plans to reorder the global economy ahead of a Friday trade deal deadline. * As Trump's new tariff regime clicks into gear on Friday, producers around Europe are feeling the impact, some holding back shipments, others hiking sticker prices or taking a hit to margins. Some fear they won't survive at all. * Asia's factory activity deteriorated in July as soft global demand and lingering uncertainty over U.S. tariffs weighed on business morale, private sector surveys showed on Friday, clouding the outlook for the region's fragile recovery. * Europe and Asia could leverage Trump's "America First" strategy for their own benefit, writes TPW Advisory Founder Jay Pelosky, eventually spurring the development of regional tripolar FX blocs that could erode the dominance of the U.S. dollar and reshape global markets. Weekend Reads POPULATION GROWTH RESET: Compounded by halted immigration and aging, U.S. population growth has halved to an annualized rate of just 0.5% since late 2023 and the 'breakeven rate' of monthly payroll growth that would keep pace up with the labor force has almost halved over the past year to 86,000 in June 2025. So concludes Peterson Institute fellow Jed Kolko, adding: "any given level of monthly payroll growth, consumption growth or output growth reflects a stronger economy than it did a year ago." MONETARY CONDITIONS INDEX: A Bank for International Settlements working paper introduces a new monetary policy conditions index (MCI) that combines the impact of both interest rate settings and the size of central bank balance sheets to help policymakers coordinate both aspects. "At the current juncture, the MCI highlights the persistence of large central bank balance sheets - either considering the U.S. or at the global level - loosens the stances of monetary policy." EUROPE ROLLS OVER?: In a stinging critique of the European Union's decision to accept higher U.S. tariffs without retaliation and pledge hundreds of billions in spending to boot, Alberto Alemanno, Professor of European Union Law at HEC Paris, writes of "Europe's Economic Surrender". In a column on Project Syndicate, Alemanno said the EU deal highlights the bloc's inability to present a united front and cements its dependence on the United States - rendering it a "prosperous yet powerless appendage" of America. INDEPENDENCE AND SPACE: Greater central bank independence from politics actually offers governments more fiscal space by reducing the costs of borrowing over time and allowing higher debt-to-GDP ratios, according to a World Bank working paper that examines the experience of 155 countries over 50 years. POWELL AND CREDIBILITY: Using data from online betting platform Polymarket, University of California, Berkeley Professor Barry Eichengreen and co-authors look at how Donald Trump's relentless pressure on Fed Chair Jerome Powell affects ideas of central bank independence and market outcomes. In a column on CEPR's VoxEU, they show that rising criticism of the Fed boss matches expectations of lower short-term interest rates - along with higher long-term borrowing rates and higher recession fears. 'ASLEEP AT THE WHEEL'?: In a critique of the latest benign world economic forecasts from the International Monetary Fund, former IMF official Desmond Lachman accuses the Fund of failing to warn of outsize global macro risks from rising U.S. deficits and protectionism. In a piece published by the American Enterprise Institute think tank, Lachman lambasts the IMF's record on crisis warnings and said it's "difficult to see how (the U.S.) economy too will not come to a sorry end as a result of its public finance excesses." LESS RAIN, MORE WHEAT: A revolution in farm management has enabled Australia to produce 15 million metric tons more wheat annually than in the 1980s - despite hotter, drier conditions. The increase is equivalent to 7% of all wheat shipped around the planet each year. In a Reuters Special Report, Peter Hobson shows how the ability of Australia's farmers to produce more owes largely to innovations that changed the seeds they plant, how they plant them and how they cultivate the soil. Chart of the day The United States imposed steep import tariffs on goods from dozens of trading partners, including Canada, Brazil, India and Taiwan, as Friday's deadline hit, pressing ahead with plans to reorder the global economy. The order listed higher import duty rates of 10% to 41% starting in seven days for 69 trading partners. The seven-day lead time offered some hope that last-minute deals may yet emerge. In the meantime, U.S. federal appeals court judges questioned Trump's use of emergency powers to justify his tariffs as hearings began on Thursday and a final decision is expected later in the month. Today's events to watch * U.S. July employment report (8:30 AM EDT), July manufacturing surveys from ISM (10:00 AM EDT) and S&P Global (9:45 AM EDT), University of Michigan final July consumer sentiment reading (10:00 AM EDT) * U.S. corporate earnings: Exxon Mobil, Chevron, Moderna, Regeneron, Colgate Palmolive, T Rowe Price, Kimberly-Clark, WW Grainger, LyondellBasell, Dominion Energy, Franklin Resources, Linde, Church & Dwight Want to receive the Morning Bid in your inbox every weekday morning? Sign up for the newsletter here. You can find ROI on the Reuters website, and you can follow us on LinkedIn and X. Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. (by Mike Dolan; editing by Peter Graff)
New York Times
7 minutes ago
- New York Times
Stocks Tumble as Investors Grapple With the Rising Cost of Trade
Stock markets dropped around the world on Friday as investors confronted a new barrage of tariffs announced by President Trump, significantly raising the cost of trade with the United States. At the same time, traders were parsing the earnings of some of America's biggest companies, including Amazon, Apple and Exxon, and awaiting the latest monthly jobs report later on Friday morning, a key economic release that will inform the Federal Reserve's next interest rate move. The declines started in Asia and gathered momentum in Europe. Japan's Nikkei closed down 0.7 percent, and the Shanghai Stock Exchange shed 0.4 percent. The Stoxx Europe 600 index, which includes the continent's largest companies, dropped 1.4 percent. In New York, futures for the S&P 500 index were 1 percent lower, reflecting anxiety about tariffs as well as company news. In premarket trading, Amazon fell nearly 8 percent after it projected lower-than-expected profits for this year, as it spends heavily on artificial intelligence. U.S. Treasuries were broadly flat, as traders waited for the latest monthly jobs report. Economists expect a slowdown in the number of jobs added in July, which could put pressure on the Fed to cut rates. Mr. Trump continued his attacks on the central bank on Friday morning, posting on social media that Fed Chair Jerome H. Powell should 'substantially' lower rates. If he doesn't, the Fed board should 'assume control,' Mr. Trump said. Many major currencies fell against the U.S. dollar, including the South Korean won, South African rand, the British pound and Canadian dollar. Notably, the Swiss franc dropped 0.4 percent against the dollar and the euro. Normally, traders seek out the franc as a haven in times of economic turmoil, but that wasn't the case after Mr. Trump said that he'd impose a 39 percent tariff on Swiss imports, among the highest rates announced on Thursday. Analysts at the bank ING said the relatively 'muted' response in markets on Friday suggested that there were lingering expectations that the Trump administration would reach more trade deals with countries before the revised tariff rates took effect next week, and that traders were more focused on today's economic data. The latest tariffs rates are set to come into effect on Aug. 7 but 'markets continue to treat this with some diffidence,' they wrote.
Tom's Guide
8 minutes ago
- Tom's Guide
Apple says it's ready to spend big on AI — that Perplexity acquisition rumor is a good place to start
Apple exceeded Wall Street expectations in its latest earnings call, but perhaps the Achilles' heel for the tech giant so far has been its approach to AI. Apple has been seen by many — including Tom's Guide — as trailing the likes of Google, OpenAI and even Microsoft when it comes to implementing useful AI solutions into its products. Well, that could be about to change. We're open to M&A that accelerates our roadmap. According to CNBC, Tim Cook told investors the company plans to "significantly grow our investments" when it comes to AI. Considering Apple posted a total revenue of $94 billion last quarter, that remark carries about the same weight as a silverback gorilla casually eyeing up a few neighboring patches of rainforest. 'We're open to M&A [mergers and acquisitions] that accelerate our roadmap,' Cook said, noting that Apple had acquired around seven companies so far this year. He qualified that by saying none had been "huge in terms of dollar amount." The bullish comments come at a time when other companies are spending huge amounts on AI acquisitions. For instance, Meta has paid $14.3 billion — its largest ever investment — to acquire a 49% stake in Scale AI, a San Francisco data annotation company. Meanwhile, Microsoft has become only the second company after Nvidia hitting hit a $4 trillion valuation. Largely thanks to Azure and AI. Forrester's VP principal analyst Dipanjan Chatterjee said that Apple getting serious on AI spend is an admission that it's fallen behind the tech pack. And he suggests that Perplexity could be in the company's sights. This is something we've heard before, specifically from a Bloomberg report claiming Apple's head of M&A, Adrian Perica, is interested in the AI company. 'Apple's AI urgency is palpable, and there is a quiet admission of its sluggishness in the acknowledgement that it may have to lean heavily on acquisition to compress timelines," Chatterjee said. Get instant access to breaking news, the hottest reviews, great deals and helpful tips. "Rumors swirl about a Perplexity deal, and if that were to happen, it may greatly accelerate the elusive promise of a more effective Siri." Acquiring or partnering with Perplexity would make sense for Apple as it could integrate Perplexity's tech into making Siri smarter now that Apple's planned AI revamp for its assistant has been pushed into 2026. If the deal came, it'd be Apple's biggest ever acquisition. Perplexity is valued at around $14 billion, which towers above Apple's biggest deal to date: buying Beats for $3 billion back in 2014. Follow Tom's Guide on Google News to get our up-to-date news, how-tos, and reviews in your feeds. Make sure to click the Follow button.
