Fiscal Deficit Fears Give a Surprising Boost to Asian EM Bonds
While long-dated bonds in developed markets have come under pressure this year as investors grow wary about government spending, emerging-market bonds in Asia have become a hot pick. Yields have tumbled, foreign funds have flowed in and recent debt auctions have enjoyed strong demand, unlike a number of prominent developed-market sales from the US to Japan.
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US markets are acting like a developing nation: Mohamed El-Erian
Mohamed El-Erian, the president of Queens' College, Cambridge, argues that the US markets are starting to behave like those of developing countries, with common correlations starting to break down. Hear more of what he has to say in the video above. Be sure to check out the full interview with Mohamed El-Erian. To watch more expert insights and analysis on the latest market action, check out more Morning Brief here. And I thought the other thing that that was very interesting that you wrote in your piece is that the US is almost behaving like a developing nation rather than it sort of um global dominant status. What do you mean by that and what are the implications of that? So we're seeing core market correlations that normally are more common to developing countries than the US. For example, the currency weakens even though yields are going up. That shouldn't happen. Um the negative correlations between bonds and equities has broken down. So you're starting to see things and you're starting to hear narratives that are more common in developing countries than in the US. And I think that that's partially because the US is trying to remake its domestic system. There's a real question mark as to whether this is a Reagan moment in which the US changes things with a view to a better outcome or is this a Jimmy Carter moment in which the US ends up in stagflation and ultimately recession? Which do you think it is, Muhammad, or if you if we don't yet know, how will we start to know? So first, let me tell you the market is all over the place on this. We started the year with an 80% probability that this was a Reagan moment. By the beginning of April, we were below 50% and now we're somewhere around 70%. So we have fluctuated a lot. And that is unusual for the US with its mature institutions and big diversified economy. I think it's a 50/50. I don't think we know. I think it will depend on how other countries react as well. So it's a 50/50, but the marketplace right now seems more comfortable than I would be with where we're going. Sign in to access your portfolio
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27 minutes ago
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Why Wall Street keeps shaking off tariff headlines
US stocks (^DJI, ^GSPC, ^IXIC) are little changed despite looming uncertainty about President Trump's tariff policies. Yahoo Finance Markets Reporter Josh Schafer outlines what analysts are saying about the market's resiliency. To watch more expert insights and analysis on the latest market action, check out more Market Catalysts here. US stocks keeping losses in check this morning, even after President Trump threatened higher tariffs on Mexico and the EU over the weekend. What is driving investors' resilience toward trade policy? Morgan Stanley's Mike Wilson has one theory and joining me now to explain that theory is markets reporter Josh Shafer. So, uh, Wilson always provocative. So, what does he thinks going on here? Yes. Yeah, so, so this was an interesting analysis from Mike because he he sort of gave the caveat that perhaps there's some element of the quote-unquote taco trade, right? That Trump always chickens out, and that's sort of the prevailing take right now would be, "Well, Trump keeps escalating these tariffs and then dialing them back down." Maybe markets just doesn't believe that we're going to be at these tariff rates, right? But he also sort of took a closer look, truly. And he had a really interesting chart in here that had a little bit too much going on for me to pull up. So I'm going to give you the the TLDR on it. But he looked at different sectors that are exposed to different countries. And what his takeaway was, was really the tariff story should probably be all about China. So he looked at sub-sectors. Eight sub-sectors, including large ones like technology and semiconductors, would be heavily exposed to tariffs on China, where they would not be nearly as exposed is tariffs on Mexico, tariffs on the European Union, and a lot of the other tariffs we've been hearing about over the last week. So Wilson sort of arguing that for the market and the broad market, what would matter most is simply what the ultimate result is of the trade war with China, because those are going to be what impacts the big tech companies the most. And as we talk about seemingly all the time on this show, what matters to the market the most is likely what happens to Big Tech, right? And sort of what happens to those companies, and how tariffs could impact them. So maybe it's just a little bit more about China and not as much. Yeah. Mexico. That's interesting. So, so that implies then if we get more negative headlines on China, maybe that would have a larger… I guess that would be the test of his theory. If we get more negative uh headlines on China, would that have a more negative um impact on the market? You know, we've also been hearing a lot of strategists talk about a couple of other threads. One is the reaction to the tax and spending bill which um, on balance, actually the positive reaction to it has been a little bit surprising to me given that it's mostly just an extension of existing tax, uh tax cuts. But there's also been talk about the depreciation. In other words, there is a measure in there that could lead to more spending on the part of companies. It makes it more tax advantageous for them to do so. So there is does also seem to be this view among strategists that there it is more stimulative than had been expected and helps offset some of the cost of the tariffs. For, for sure. You have A, the tax bill. And then B, I mean, we'll get more info on this over the next three weeks, right? But largely, strategists still feel pretty good about earnings too, right? You, you haven't seen clear enough impacts from tariffs for a lot of these strategists to just simply mark down their earnings estimates at this point. Again, we will certainly know a lot more over the next four weeks of whether they've been right to sort of be steadfast, but earnings revisions have, after coming down significantly in April, have been coming up and sort of backing that part of the rally. And so when you add that into it, it's like, well, why do we talk about tariffs? We talk about tariffs because we're curious if they're eventually going to hurt corporate profits, right? And so right now if our thesis is the current tariffs are not going to significantly impact, broadly, broadly speaking, corporate profits, then why would I be selling stocks? And so that's what the market believes, at least today. But maybe the data gets worse, and everything spirals, right? Right. Right. And it would pay to pay attention to those stocks where it would have more of a direct effect, which have seen more of a, of a hit. Yeah. Retail stocks still aren't doing well. Right. Exactly. Right. All right. Thanks, Josh. 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
28 minutes ago
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Arrow Electronics, Inc. (ARW): A Bull Case Theory
We came across a bullish thesis on Arrow Electronics, Inc. on Stock Analysis Compilation's Substack. In this article, we will summarize the bulls' thesis on ARW. Arrow Electronics, Inc.'s share was trading at $131.94 as of July 2nd. ARW's trailing was 18.15 and respectively according to Yahoo Finance. A technician soldering components for frequency control products in a modern electronics lab. Arrow Electronics (ARW) is a global leader in electronic component distribution and design support, strategically embedded in critical supply chains across sectors like industrial automation, smart mobility, and cloud computing. The company's global footprint and technical expertise make it a key partner for enterprises navigating geopolitical tensions and trade volatility, positioning Arrow as an 'anti-fragility' play amid tariff risks. Beyond simple distribution, Arrow drives recurring, fee-based revenue through logistics, procurement services, and technical support, which has contributed to a recent positive market re-rating. The business benefits from rising demand for edge-to-cloud integration and embedded systems, offering both resilience and growth in a structurally complex environment. Arrow's ability to optimise supply chains and provide high-value system design solutions reinforces its critical role in clients' operations, helping mitigate global disruptions and component shortages. Recent earnings reports have demonstrated this resilience, with revenue outpacing expectations and validating the company's long-term investment case. Despite being relatively under-the-radar, Arrow is a core enabler of the modern electronics ecosystem, well positioned to capitalize on cyclical upswings and supply chain realignments. Its operational scale and strong execution make it a durable compounder in a sector where resilience and optionality are increasingly valued. For investors, Arrow represents a high-quality industrial tech name, benefiting from both secular growth and defensive characteristics. The company remains a core holding for its strategic role in mission-critical supply chains, strong recurring revenue streams, and consistent execution through global macro headwinds. Previously we covered a bullish thesis on TD SYNNEX Corporation by Waterboy Investing in September 2024, which highlighted the company's leadership in IT distribution, strong vendor partnerships, and growth in advanced technologies. The company's stock price has appreciated approximately by 17.2% since our coverage. This is because the thesis played out as expected. Stock Analysis Compilation shares a similar view but emphasizes Arrow Electronics' resilience in global supply chains. ARW isn't on our list of the 30 Most Popular Stocks Among Hedge Funds. While we acknowledge the risk and potential of ARW as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey.
