CNBC Daily Open: There's no return policy for jobs numbers
Government officials from both sides of the political aisle had plenty to say about that.
"Bottom line, Trump wants to cook the books," said Ron Wyden, the top Democrat on the Senate Finance Committee. Meanwhile, Republican Senator Rand Paul told NBC News that "you can't really make the numbers different or better by firing the people doing the counting."
The move, indeed, does have a whiff of the Chinese government, in August 2023, stopping the release of youth unemployment rates because they were spiking to record highs. (Beijing resumed disseminating the data in January 2024.)
A falling tree makes a sound, regardless of whether there's anyone around to hear it. Terminating the person who reports that noise won't suck sound waves back into a vacuum either.
Markets, too, were vocal in their response to Trump's firing of McEntarfer as well as the dismal jobs report. On Friday, the three major U.S. indexes had their worst day in months, a sharp turn from the week prior, which saw consecutive days of record highs for the S&P 500 and Nasdaq Composite.
This changes the calculus. With new tariffs due to take effect Aug. 7 — which could further slow hiring in the U.S. because of increased costs and uncertainties for companies — both the economy and markets might weaken further. Then it becomes a matter of whether the "TACO trade" — "Trump Always Chickens Out" — will, in the words of The Terminator, be back.Cracks appear in the U.S. jobs market. Nonfarm payrolls in July grew 73,000, lower than the Dow Jones estimate of a 100,000 gain. Unemployment edged up 10 basis points to 4.2%. June and May's jobs numbers were revised dramatically lower.
Trump fires commissioner of labor statistics after jobs report. In a Truth Social post, the U.S. president accused BLS Commissioner Erika McEntarfer of being a political appointee who "faked the Jobs Numbers before the Election" and providing inaccurate data.
Stocks suffer their worst day in months. On Friday, the S&P 500 lost 1.6%, its worst day since May 21, breaking a 26-day streak when the index's moves remained within a 1% range. The pan-European Stoxx 600 index fell 1.89%, its biggest drop since April.
Berkshire Hathaway's operating profit drops. Year over year, Warren Buffet's conglomerate experienced a 4% drop in second-quarter earnings to $11.16 billion. Berkshire warned of Trump's tariffs and their impact on its businesses.
[PRO] August is historically the second worst month for the S&P 500. That's according to the Stock Trader's Almanac, which tracks data back to 1988. Tariff developments and AI-related earnings during the week will give a sign of whether history will repeat itself.
Switzerland's tariff shock: The 39% U.S. hit no one saw coming
The U.S.' imposition of a 39% tariff rate on Switzerland's came as a shock to the Alpine nation. Indications in the Swiss press had been that the country was close to negotiating an outline deal similar to those struck by the European Union, the U.K. and Japan, which set baseline tariffs between 10% and 15%.
Instead, it has received one of the highest rates of any country. That is a significant blow, with the U.S. accounting for around a sixth of Switzerland's total exports.
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2 minutes ago
- CNBC
Singapore's stock market is soaring. And the bull run is just getting started, experts say
Once seen as a small, "unexciting" market for income-seeking investors, Singapore equities have taken a sharp turn upwards, surging to record highs, with major banks and market watchers signaling that the rally is just getting started. Building on its strong gains from last year, the benchmark Straits Times Index has advanced nearly 10% so far in 2025 , outperforming the U.S. benchmark S & P 500 and several regional peers. Singapore's stock market is drawing interest from institutional and retail investors alike, helped by a potent combination of equity market reforms, rising dividends, foreign fund inflows and country's enduring appeal as a geopolitical safe haven, said market watchers. "We are in a bull market. And I'm going to tell you today that this is still a baby bull," said Thilan Wickramasinghe, head of research at Maybank. "There's still a lot more to run." The STI is currently up more than 23% since its April 9 low, data from LSEG showed. What's driving the market? According to Aberdeen's investment director of Asian equities Xin-Yao Ng, Singapore's stock surge is rooted in its "safe-haven status," buoyed by a strong currency, ample fiscal reserves, and a shareholder yield that's better than several developed markets. High dividends are a major draw, said Ng. According to CLSA research, Singapore's average dividend payout ratio of 60% is second only to Australia's at 74% in Asia-Pacific according to CLSA Research. The Southeast Asian nation's market appeal is also lifted by how the Singapore dollar has been strengthening against the greenback, appreciating about 6% year to date, with Jefferies reportedly forecasting that the currency could reach parity with the dollar in the next five years. For foreign investors, an appreciating local currency like the Singapore dollar can significantly boost returns. When overseas funds buy Singaporean assets, their gains are eventually converted back into U.S. dollars, and a stronger Singapore dollar increases the dollar value of their returns. Beyond yield, their is also macroeconomic stability, Ng added. Singapore's second-quarter GDP rose 4.3% year on year, up from 4.1% in the first quarter, signaling resilience in services and domestic demand. While telecommunications and the utilities sectors have led the early stages of this rally, Maybank's Wickramasinghe noted that institutional money was just beginning to rotate into other segments including real estate investment trust or REIT offerings and consumer stocks. Singapore Telecommunications — known as Singtel — a dominant telecoms player, is up more than 28% year to date. Utilities firms Sembcorp Industries and Union Gas Holding have gained 38% and 18%, respectively, so far this year. "For the institutions, it's been a very, very early stage of getting into this market," he said. "That's why I'm saying there is still a lot more for this market to run," Wickramasinghe said. He also flagged the impact of government firepower and infrastructure investment. "We haven't seen a construction boom like this in 10–15 years … that's going to help so many companies, not just the big caps, but the small- and the mid-caps as well." In real terms, 2025 construction demand — value of construction contracts to be awarded — is forecast between 35 billion and $39 billion Singapore dollars, 0.3% to 11.7% higher than pre-COVID levels in 2019, according to the Building and Construction Authority . A more recent driver is also the Monetary Authority of Singapore's equity market development program or EMDP, which aims to inject $5 billion Singapore dollars into local small- and mid-cap stocks to revitalize market liquidity. The first tranche of $1.1 billion Singapore dollars has already been allocated to three institutional fund managers, who are required to co-invest their own capital and adopt active trading strategies — a move designed to lift market liquidity and trading activity. Re-rating prospects JPMorgan now expects the STI to hit 4,500 under its base case — and 5,000 in a bullish scenario — upgrading its outlook on the back of falling interest rates, SGD strength, and capital inflows. Hitting 5,000 would mean a more than 20% jump from current levels. "Singapore equities still offer one of the best combinations of yield, currency strength, and potential inflows among ASEAN markets," the bank wrote, upgrading the real estate sector and tipping small- and mid-caps as likely beneficiaries in the second half of the year. Morgan Stanley shares the optimism, calling 2025 a turning point for the Singapore market. "Singapore embarked on an unprecedented campaign of equity market reforms … this could ignite significant interest and confidence in the Singapore stock market globally," the bank said. It forecasts a re-rating in valuations, with price-to-book ratios potentially rising from the current 1.7 to 2.3 by 2030 — comparable to Australian and Taiwanese markets. Higher P/B valuation multiples imply investors expect the market to generate stronger returns. The investment bank's bull case sees the MSCI Singapore index doubling within five years, fueled by IPO inflows, digital infrastructure expansion, and AI-led productivity gains. "Now is the time to build exposure to this dynamic and enterprising market," Morgan Stanley said. Liquidity trap warnings Not all investors are leaning into the rally. Citibank warned of a potential "liquidity trap" as money piles into small-cap stocks in anticipation of EMDP deployment. "Retail investors are selling large-cap index stocks and are skewed towards less liquid SMIDs [ small and mid-size companies] ," Citi said. Even though the MAS initiative may allow for further liquidity injections through 2025, the bank cautioned investors against chasing lower quality small- and mid-caps at the risk of "being left holding the proverbial bag if or when the liquidity party ends." Morgan Stanley also noted structural risks including tariff-induced slowdowns, U.S.-China rivalry, and the possibility of Singapore losing market share to rival hubs such as Hong Kong, Tokyo, or the United Arab Emirates, if reforms stall or new listings remain elusive.
24 minutes ago
Texas Democrats arrive in Illinois to block vote back home on redrawn House maps sought by Trump
A standoff in Texas over redrawn U.S. House maps sought by President Donald Trump sharply escalated Sunday when dozens of Democratic legislators left the state to block a vote, followed by Republican Gov. Greg Abbott warning them that he will seek their removal from office if they don't return. The revolt by Democrats, and Abbott giving them until Monday to come home or face efforts to strip them of their elected positions, pushed a widening fight over congressional maps ahead of the 2026 midterm elections into new territory. At the center of the deepening impasse is Trump's pursuit of five more winnable congressional seats that will help bolster the GOP's chances of preserving their slim U.S. House majority. In response to Texas' rare mid-decade political gerrymander, Democratic governors have floated the possibility of redrawing their own state's maps in retaliation, but their options are limited. Many of the Texas Democrats were bound for Illinois and a welcoming from Gov. JB Pritzker, a potential 2028 presidential contender, who in recent weeks has offered them support. House Democratic Caucus Chair Rep. Gene Wu declined to say how long lawmakers were prepared to stay out of Texas, and it was unclear whether the gambit would succeed. Four years ago, House Democrats left Texas for 38 days in protest of new voting restrictions that still wound up passing once the holdout ended. 'We will do whatever it takes. What that looks like, we don't know,' Wu said at a Sunday night news conference. Lawmakers can't pass bills in the 150-member Texas House without at least two-thirds of them present. Democrats hold 62 of the seats in the majority-Republican chamber and at least 51 left the state, said Josh Rush Nisenson, spokesperson for the House Democratic Caucus. In addition to those in Illinois, delegations of Democratic lawmakers left Texas for Boston and Albany, New York, among other places, Rep. Trey Martinez Fischer said. Abbott threatened to seek the lawmakers' removal, saying they were not meeting under the state's constitution. 'This truancy ends now,' Abbott said in a statement released by his office Sunday night. Abbott also suggested the lawmakers may have committed felonies by raising money to help pay for fines they'd face. Republican House Speaker Dustin Burrows said the chamber would still meet as planned on Monday afternoon. 'If a quorum is not present then, to borrow the recent talking points from some of my Democrat colleagues, all options will be on the table. . .,' he posted on X. Republican Attorney General Ken Paxton, who is running for U.S. Senate, said on X that Democrats who 'try and run away like cowards should be found, arrested, and brought back to the Capitol immediately.' A refusal by Texas lawmakers to show up is a civil violation of legislative rules. The Texas Supreme Court held in 2021 that House leaders had the authority to 'physically compel the attendance' of missing members, but no Democrats were forcibly brought back to the state after warrants were served that year. Two years later, Republicans pushed through new rules that allow daily fines of $500 for lawmakers who don't show up for work as punishment. In calling for the lawmakers' removal, Abbott cited a non-binding legal opinion that was issued by Paxton's office after the 2021 revolt by Democratic lawmakers. The quorum break will also delay votes on flood relief and new warning systems in the wake of last month's catastrophic floods in Texas that killed at least 136 people. Democrats had called for votes on the flooding response before taking up redistricting and have criticized Republicans for not doing so. Texas Republicans last week unveiled their planned new U.S. House map that would create five new Republican-leaning seats. Republicans currently hold 25 of the state's 38 seats. Pritzker, who has been one of Trump's most outspoken critics during his second term, had been in quiet talks with Texas Democrats for weeks about offering support if they chose to leave the state to break quorum. Last week, the governor hosted several Texas Democrats in Illinois to publicly oppose the redistricting effort, and California Gov. Gavin Newsom held a similar event in his own state. Pritzker also met privately with Texas Democratic Chair Kendall Scudder in June to begin planning for the possibility that lawmakers would depart for Illinois if they did decide to break quorum to block the map, according to a source with direct knowledge who requested anonymity to discuss private conversations. 'This is not just rigging the system in Texas, it's about rigging the system against the rights of all Americans for years to come,' Pritzker said Sunday night. Now, with Texas Democrats holed up in Illinois and blocking the Trump-backed congressional map, the stage may be set for a high-profile showdown between Pritzker and the president. Trump is looking to avoid a repeat of his first term, when Democrats flipped the House just two years into his presidency, and hopes the new Texas map will aid that effort. Trump officials have also looked at redrawing lines in other states, such as Missouri, according to a person familiar with conversations but unauthorized to speak publicly about them.
CNBC
31 minutes ago
- CNBC
China's BYD breaks growth streak with July slump as EV price war reshapes competition
China's largest EV maker BYD posted its first monthly decline this year, amid stiff competition from a price war that has attracted attention from policymakers in Beijing. While other major Chinese electric vehicle makers, including Li Auto and Nio, also reported a drop in July deliveries, Xpeng shipped a record number of EVs in July. There were also bright spots in Xiaomi, Leapmotor and Aito, which recorded month-over-month growth. BYD shipped 341,030 units in July — down from 377,628 in June — marking its first monthly decline this year. While the dip comes after months of steady growth since the initial 296,446 deliveries in January, it was up 0.07% from the same period last year. The behemoth discounted several of its lower-end battery-only and hybrid models by around 30% in May, prompting other automakers to follow suit. As the price war intensified, China's top leaders issued warnings to halt the excessive competition. Li Auto reported 30,731 units in July, down from 36,279 in June and a decline of 39.7% year over year. This was its second consecutive monthly decline and among the steepest across Chinese EV makers. Nio also recorded a sharp drop in July deliveries, with 21,017 units — down from 24,925 in June, which had marked a year-high. On a year-over-year basis, it was down 2.7%, with drops across all of its three main product lines. Both Li Auto and Nio launched new models on July 31. Li Auto's first pure electric sport utility vehicle, the Li i8, comes in three variations, priced between 321,800 and 369,800 yuan ($44,700 and $51,400). It is scheduled to begin deliveries on Aug 20. Nio's new SUV model, the L90, is priced at 265,800 yuan or 179,800 yuan with battery subscription. Deliveries for the six-seater began on August 1, with the seven-seater version scheduled for late September. Meanwhile, Xiaomi reported more than 30,000 electric vehicle deliveries this month, up from 25,000 in June -- its strongest growth since March. This growth followed the launch of its YU7 SUV in early July. Xpeng, continuing its winning streak, delivered a record 36,717 units in July — a modest increase from June and its ninth consecutive month of shipments exceeding 30,000 vehicles. On July 30, the company announced that its second-generation Xiaopeng P7 sedan would debut in China on Aug 6. The Harmony Intelligent Mobility Alliance, which is backed by Chinese technology giant Huawei and includes brands such as Aito, Chery and Maextro, also announced a delivery record of 47,752 units in July. A majority of its combined EV sales were attributed to Aito's Wenjie series, which delivered 40,753 cars. Leapmotor, backed by European auto giant Stellantis, delivered 50,129 units in July. This is its highest monthly sales to date, continuing a steady growth trajectory. In contrast, deliveries of Zeekr were flat in July. The Geely-owned company shipped 16,977 vehicles, nearly mirroring its performance in June.
