'Bond vigilantes' are taking aim at Japan market ahead of critical election
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23 minutes ago
- Yahoo
Why Shake Shack, Sweetgreen and Cava are flashing warning lights for the US economy
As President Donald Trump's aggressive policies on international trade and immigration gradually begin to make their presence felt, the underwhelming recent earnings results reported by some key casual food businesses are serving as flashing warning lights for the U.S. economy. Shake Shack shares tumbled 7.7 percent in response to its second-quarter results, despite their being generally positive. In comparison, Sweetgreen shares dropped 23 percent after it cut its 2025 outlook for the second consecutive quarter, and Cava's quarterly revenue disappointed estimates because of weaker-than-expected sales growth. Bloomberg columnist Connor Sen has argued that the headwinds being faced by those brands are uniquely significant because their restaurants are more likely to be based in metropolitan centers along the west and east coasts of the United States, which are likely to bear the brunt of the president's policies first. Shake Shack, for instance, has 80 of its 610 U.S. locations in New York, while one-third of Sweetgreen's branches are in New York and California, and Cava is based in D.C., which, along with Maryland and Virginia, accounts for 17 percent of its business, according to Bloomberg. Their exposure to 'critical coastal metro areas that are immigration hubs and popular international tourism destinations' contrasts with rival eateries such as Olive Garden, Longhorn Steakhouse, and Texas Roadhouse, which more typically cater to middle American diners across a wider geographic spread and have not yet suffered an equivalent financial setback. Sen points out that New York, Los Angeles, and San Francisco – three of America's biggest cities, all coastal and Democrat-governed – suffered a combined 43,000 job losses in the first six months of the year, a period when the U.S. as a whole added 500,000. Over the same half-year stretch, those three locations plus Washington, D.C, saw a combined reduction in their workforces of 60,000 people, after experiencing a 160,000 increase in 2024, a phenomenon that might very reasonably be attributed to Trump's immigration crackdown. Meanwhile, New York City Tourism + Conventions has said it expects to see a 17 percent fall in international visitors this year, and Visit California is forecasting a 9.2 percent fall in arrivals, as travellers from overseas register their disapproval of Trump's administration by vacationing elsewhere. Those factors conspire to leave businesses dependent on America's coastal cities facing a smaller pool of potential customers. Furthermore, those who remain appear to be less likely to spend their disposable income, meaning a reduced likelihood of their treating themselves to a meal out. The latter point is made by a preliminary study of consumer sentiment carried out by the University of Michigan, which found left-leaning voters much less likely to spend freely in August than their Republican counterparts. While economists might traditionally look at the stock market or the unemployment rate to gauge the health of a nation's bank balance, the well-being of brands like Shake Shack, Sweetgreen, and Cava can be equally revealing, primarily by exposing regional disparities. Other surprisingly telling indicators of an economic downturn or coming recession might include declining sales of men's underwear, reduced sales of inessential goods like snacks and cigarettes in grocery stores, or, conversely, a rise in the sales of miniature bottles of alcohol, which might signal increased consumer stress. 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
23 minutes ago
- Yahoo
Home Depot becomes the latest company to raise their prices due to Trump's tariffs
Home Depot has become the latest U.S. company to warn customers it may have to raise its prices on the shelves in response to President Donald Trump's divisive tariff strategy. Until now, the home improvement retailer, which is based in Atlanta, Georgia, has been reticent about commenting on the Republican's aggressive trade tactics and their possible impact on its business. But announcing the company's quarterly results on Tuesday, CFO Richard McPhail admitted it may have to act to mitigate the impact of Trump's tax on imported materials from overseas. 'For some imported goods, tariff rates are significantly higher today than they were at this time last quarter,' McPhail told The Wall Street Journal. 'So as you would expect, there will be modest price movement in some categories, but it won't be broad-based.' Just under half of Home Depot's stock is bought in from retailers outside of the U.S., according to CNN, and the company has previously suggested that it will seek to diversify its supply base so that no one foreign country is responsible for more than 10 percent of its goods to shield itself from overexposure. The health of Home Depot is often seen as a good indicator of the state of the U.S. housing market in general, and its sales for the second quarter proved worse-than-expected, according to its latest earnings call, coming in at 1 percent rather than the 1.5 percent predicted by analysts. Its total customer transactions fell to 0.9 percent for the quarter, its executives said. Still, the average ticket size rose by 1.2 percent, and the company said its full-year forecasts remained on course despite the choppy headwinds likely to be forthcoming. Home Depot came into more direct conflict with the president's MAGA movement on Monday when it was forced to ask the Republican Party of Florida to pull a line of deportation-themed merchandise from its online store that parodied its corporate insignia without authorization. 'We don't allow any organization to use our branding or logo for their commercial purposes,' Sarah McDonald, its director of public affairs, told The Independent. The full impact of Trump's much-changed tariff policy has yet to be felt. However, businesses are beginning to feel the first ripples of the consequences of the administration's policies after eight months in power. Last week, AriZona Iced Tea's Don Vultaggio said he might reluctantly have to crank up the price of his $0.99 Big Can in response to Trump's 50 percent levies on imported steel and aluminum, which his business relies on for its receptacles. 'At some point, the consumer is going to have to pay the price,' Vultaggio said. 'I hate even the thought of it. It would be a hell of a shame after 30-plus years.' 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
24 minutes ago
- Yahoo
Sony raises the price of PS5 models citing ‘challenging economic environment' - including Trump's tariffs
Starting Thursday, all PlayStation 5 models sold in the United States will see a $50 price increase, Sony revealed, citing the mounting financial pressure from newly imposed tariffs under the Trump administration. 'Similar to many global businesses, we continue to navigate a challenging economic environment,' Sony said in a blog post on Wednesday, announcing the 'difficult decision.' Under the revised pricing, the standard PS5 will now retail for $549.99, up from $499.99. The Digital Edition will be priced at $499.99, and the PS5 Pro will cost $749.99 Sony, a Japanese company, confirmed that prices for accessories will remain unchanged. President Donald Trump's new tariffs, which went into effect on August 1, impose up to 25 percent duties on Japanese electronics. The tariffs are part of Trump's hopes to get companies to move manufacturing to the U.S., which experts say is unrealistic for complex tech. The tariffs will cost the company $685 million annually, according to IGN. The company's CFO, Lin Tao, warned in May that costs would likely reach consumers. PlayStation prices have increased across the world - including Europe and Australasia - but U.S. consumers were spared until now. VP Isabelle Tomatis also said the they could no longer absorb the burden, leading to the hike. Sony has moved to diversify its supply chain in recent months, transferring console manufacturing for the U.S. market outside of China to soften tariff impacts. This price hike aligns Sony with its competitors. Microsoft has already raised Xbox prices, and Nintendo followed suit, delaying Switch 2 pre-orders due to tariffs before later raising the price of its original console. Trump insisted in an April interview with ABC News that consumer costs are falling and claimed foreign countries, including China, would 'eat' tariffs despite economists' warning Americans will face higher prices. He defended a 145 percent tariff on Chinese goods, which only ended up lasting a month, while dismissing concerns that it would raise costs on essentials like electronics, clothing, and housing. "You don't know that," Trump told ABC News anchor and Senior National Correspondent Terry Moran when asked about potential price rises. "You don't know whether or not China's gonna to eat it." "That's mathematics," Moran responded. "China probably will eat those tariffs," Trump replied. "They were ripping us off like nobody's ever ripped us off… They're not doing that anymore." Sign in to access your portfolio
