Jefferies' David Zervos on Fed chair candidacy: I feel very blessed and excited to serve my country
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNBC
3 hours ago
- CNBC
CNBC Daily Open: The Trump administration's mixing business with politics to build a chip empire
Don't mix business with pleasure — or the music of the spheres might eject you from the skies even if you are an astronomer — but it seems, in the current milieu, there are no such restrictions between business and politics. U.S. President Donald Trump's administration is eyeing a stake in struggling chipmaker Intel, according to a Bloomberg report on Thursday. That consideration is primarily attributable to Intel's status as the only born-and-bred American company that can manufacture the fastest chips on U.S. soil. While some firms such as Taiwan Semiconductor Manufacturing Company and Samsung, both of which can produce 3-nanometer chips — the most advanced semiconductors so far — have factories in the U.S., they are Taiwanese and South Korean companies, respectively, and probably do not enjoy apple pies on the Fourth of July. In combination with the news that Nvidia and AMD will pay the U.S. government a 15% share of their revenue from chip sales in China, as well as Apple committing to make more chips in America, the Trump administration seems to be consolidating a chip empire with the White House as its capital. To modify a song last heard by the Astronomer CEO before he was cast down to Earth: "I used to rule the world / Chips would rise when I gave the word."The Trump administration is reportedly considering a stake in Intel. The chipmaker is the only U.S. company that can manufacture the most advanced semiconductors in America. Intel's shares soared 7.4% after Bloomberg reported the news. Wholesale prices in the U.S. heat up. The producer price index for July shot up 0.9% on the month, higher than the Dow Jones estimate of a 0.2% gain. It was the biggest monthly rise since 2022. The annual figure came in at 3.3%, the highest since February. Potential Fed chair David Zervos backs an aggressive rate cut. The Jefferies chief market strategist told CNBC that reaccelerating wholesale prices in July should not deter the central bank from cutting its "restrictive" monetary policy by 50 basis points. U.S. stocks flirt with the flatline. The S&P 500's barest 0.03% gain, however, means it closed at another high on Thursday. The pan-European Stoxx 600 index added 0.55%. Meanwhile, the U.K. economy expanded by a better-than-expected 0.3% in the second quarter. [PRO] European defense stocks will benefit from Trump-Putin meeting. Regardless of whether the talks result in any breakthroughs on the war in Ukraine, analysts think it's a "win-win" situation for defense stocks. Putin vs. Trump? Ukraine talks could be a test of statecraft Russian President Vladimir Putin's standing in the West may be pretty low, but he's a skilled and seasoned statesman who shouldn't be underestimated, analysts say — and he's likely to be looking to outmaneuver his less experienced U.S. counterpart when the leaders meet in Alaska on Friday. "Let's be clear, Putin does not take Trump seriously," Tina Fordham, founder of Fordham Global Foresight, told CNBC ahead of the talks.
Forbes
3 hours ago
- Forbes
Where Is The Inflation We Feared From Tariffs?
Analysts predicted that the tariffs imposed by the Trump administration on imported goods would trigger a surge in inflation. Given the U.S. imports a lot of goods from coffee to cars, this seemed a reasonable assumption. This week's CPI report showed a modest uptick in the Core number, which excludes volatile food and energy categories. On one hand, at 3.1%, it's the highest reading since February and above any level seen in the 25 pre-pandemic years between 1995 and 2021, and it's still not close to the Fed's 2% target. But this is hardly runaway inflation. The subsequent PPI report sparked slightly more concern coming higher than expected, but it was growing at even higher annual percentage changes last December through February, well before the tariffs. So, are tariffs as bad as analysts first feared? The answer: not quite, and not yet. But this may be because tariffs are nowhere close to the very high levels that make headlines. The Effective Tariff Rate Tells The Story Tariffs actually paid by U.S. importers are far lower than the headline rates set by the administration. In June, U.S. Customs collected $23.6 billion in duties on $258 billion in imports for consumption (which excludes imported goods still in warehouses). This works out to an effective tariff rate of about 9%. This is higher than the 2.3% rate from a year ago but still well below the official rates set for any country. Goods from China, for example, have a current rate of 30%, Mexico 25% and Canada 35% - the nominal rates at the time of this writing for the U.S. main trading partners. This may reflect the fact that some goods are exempt, such as USMCA-compliant goods and certain steel products and auto parts. Timing and Inventory Strategies More importantly, many importers are absorbing the costs of tariffs rather than passing them on to consumers—at least for now. That may not last long, and ultimately the public will bear the cost. In addition, some importers stockpiled goods ahead of tariff implementation, leading to a visible spike and subsequent drop in imports before and after 'Liberation Day.' And yet others may be holding off on imports until negotiations reach a definitive outcome, because the process has certainly been halting and confusing. These three factors don't affect the effective tariff rate, but they do influence when and how costs show up in consumer prices. The Debate: One-Time Shock or Persistent Inflation? Economists also disagree on whether tariffs fuel ongoing inflation or simply cause a one-time price jump. James Bullard, former St. Louis Fed president and another name in the growing list of possible candidates to succeed Fed chair Jerome Powell, favors the one-time shock view. If a $100 import now costs $120 due to tariffs, prices have jumped, but they're not rising continuously. But, if wages don't rise to match those jumps, consumer spending could fall and slow the economy. This, incidentally, could lead to more persistent inflation if demand for higher wages (to keep up with the higher costs) drives up the cost of labor. This is how wage-price spirals start and represent a big headache for the Fed. Bottom Line It's too soon to declare that tariffs won't cause inflation. The current effective tariff rate is still low, and that suggests that more price pressures lies ahead. Pre-tariff inventories will eventually run out, and companies absorbing costs are unlikely to keep doing so. And if tariffs only cause a one-time jump in prices, weaker purchasing power could slow the economy. For now, stock markets remain optimistic, buoyed by modest inflation and a still-strong economy. But history shows that such optimism can fade quickly. It would not be the first time that investors find themselves disappointed.
Yahoo
4 hours ago
- Yahoo
Sportsman's Warehouse, Lululemon, Williams-Sonoma, Bath and Body Works, and America's Car-Mart Shares Are Falling, What You Need To Know
What Happened? A number of stocks fell in the afternoon session after a hotter-than-expected wholesale inflation report fueled concerns about slowing consumer spending. The market was rattled by a Labor Department report showing the Producer Price Index (PPI), a measure of wholesale inflation, jumped 0.9% in July, significantly exceeding economists' expectations of a 0.2% rise. This was the largest monthly increase since March 2022, reigniting worries that businesses will be forced to pass higher costs on to consumers, who are already showing signs of price sensitivity. This inflation data has fanned concerns that U.S. tariffs on imported goods could start to translate into higher prices for shoppers. The inflation report landed amid growing evidence of consumer caution, with recent reports highlighting that shoppers are cutting back on non-essential spending, seeking out sales, and trading down to cheaper brands. The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Among others, the following stocks were impacted: Sports & Outdoor Equipment Retailer company Sportsman's Warehouse (NASDAQ:SPWH) fell 4.6%. Is now the time to buy Sportsman's Warehouse? Access our full analysis report here, it's free. Apparel Retailer company Lululemon (NASDAQ:LULU) fell 3%. Is now the time to buy Lululemon? Access our full analysis report here, it's free. Home Furniture Retailer company Williams-Sonoma (NYSE:WSM) fell 3.1%. Is now the time to buy Williams-Sonoma? Access our full analysis report here, it's free. Beauty and Cosmetics Retailer company Bath and Body Works (NYSE:BBWI) fell 3%. Is now the time to buy Bath and Body Works? Access our full analysis report here, it's free. Vehicle Retailer company America's Car-Mart (NASDAQ:CRMT) fell 3.1%. Is now the time to buy America's Car-Mart? Access our full analysis report here, it's free. Zooming In On Sportsman's Warehouse (SPWH) Sportsman's Warehouse's shares are extremely volatile and have had 78 moves greater than 5% over the last year. In that context, today's move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business. The previous big move we wrote about was 10 days ago when the stock gained 3.1% on the news that markets rebounded following a sharp sell-off in the previous trading session as a weaker-than-expected July jobs report fueled investor hopes for a potential interest rate cut. The U.S. economy added only 73,000 jobs in July, falling well short of the 110,000 expected by economists. This disappointing data has led to a dramatic shift in market sentiment regarding the Federal Reserve's next move. According to the CME FedWatch Tool, the probability of a September interest rate cut has surged from around 40% to over 80%. Lower interest rates generally stimulate the economy by making borrowing cheaper for consumers. This can lead to increased spending on discretionary items, such as apparel and home goods, which directly benefits consumer retail companies. The prospect of more accommodative monetary policy is therefore boosting investor confidence in the sector's outlook. Sportsman's Warehouse is up 12.8% since the beginning of the year, but at $2.90 per share, it is still trading 30.3% below its 52-week high of $4.16 from June 2025. Investors who bought $1,000 worth of Sportsman's Warehouse's shares 5 years ago would now be looking at an investment worth $174.91. Unless you've been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story. 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
