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Prediction! Federal Reserve Chairman Jerome Powell's Next Move Will Be an Interest Rate Cut

Prediction! Federal Reserve Chairman Jerome Powell's Next Move Will Be an Interest Rate Cut

Globe and Mail4 hours ago

The Federal Reserve must balance the risks of higher inflation with the risks of higher unemployment when making decisions on interest rates.
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Nike says U.S. tariffs will add US$1 billion to costs, plans to reduce China production
Nike says U.S. tariffs will add US$1 billion to costs, plans to reduce China production

CTV News

time40 minutes ago

  • CTV News

Nike says U.S. tariffs will add US$1 billion to costs, plans to reduce China production

In this file photo dated Tuesday, Sept. 4, 2018, a Nike company logo is displayed outside a Nike store in Charlotte, N.C. (AP Photo/Chuck Burton, FILE) Nike expects U.S. tariffs on imports to add around US$1 billion to its costs, the sportswear giant said on Thursday, detailing how it aims to reduce its reliance on production in China and mitigate the impact. U.S. President Donald Trump's sweeping tariffs on key trading partners have forced many retailers, including Hoka owner Deckers Brands to withdraw their forecasts as they brace for a slowdown in non-essential spending from consumers. China, subject to the biggest tariff increases imposed by Trump, accounts for about 16 per cent of the shoes Nike imports into the United States, chief financial officer Matthew Friend said. But the company aims to cut the figure to a 'high single-digit percentage range' by end-May 2026 by shifting production to other countries. 'We are partnering with our suppliers and our retail partners to mitigate this structural cost increase in order to minimize the overall impact to the consumer,' Friend added in a call with analysts. Nike has also already announced price increases to partly mitigate the impact of tariffs. Nike's shares gained 11 per cent in extended trading after the company forecast first-quarter revenue to fall in the mid-single digits, slightly better than estimates of a 7.3 per cent drop. The company also reported a smaller-than-expected drop in fourth-quarter revenue and beat profit estimates as CEO Elliott Hill's strategy to focus product innovation and marketing around sports begins to pay off. Having lost share in the fast-growing running market, Nike has scaled back production of sneakers such as the Air Force 1 and invested heavily in running shoes such as Pegasus and Vomero. Friend said the running category returned to growth in the fourth quarter. Under Hill, who joined in October last year, Nike is investing more into sport-focused marketing to regain its edge as a sports brand. On Thursday, it hosted an attempt by sponsored athlete Faith Kipyegon to run a mile in under four minutes. Paced by other star athletes in the glitzy, live-streamed event in a Paris stadium, Kipyegon fell short of the goal but set a new unofficial record. Nike's fourth-quarter sales fell 12 per cent to US$11.10 billion, compared with analysts' expectation of a 14.9 per cent drop to US$10.72 billion, according to data compiled by LSEG. China continued to be a pain point, with executives saying a turnaround in the country will take time as Nike contends with tougher economic conditions and competition. The company's inventory was flat as of May 31, compared with a year ago, at US$7.5 billion. 'Nike's inventories are still too high considering the sales declines. It was a tough quarter, but this was widely anticipated,' said David Swartz, analyst at Morningstar Research. (Reporting by Juveria Tabassum in Bengaluru and Helen Reid; Editing by Shinjini Ganguli)

NHL, NHLPA are reportedly close to new collective bargaining agreement
NHL, NHLPA are reportedly close to new collective bargaining agreement

Globe and Mail

timean hour ago

  • Globe and Mail

NHL, NHLPA are reportedly close to new collective bargaining agreement

The NHL and NHL Players' Association are on the verge of extending the collective bargaining agreement more than a year before it expires and expanding the regular season to 84 games. The league and union have been in talks since April and are closing in on a memorandum of understanding addressing a number of high-profile topics long before the current agreement runs out in September 2026. The extension that could be announced as soon as Friday at the draft in Los Angeles would provide extended labour peace in a sport that has had multiple work stoppages, including the 2004-05 lockout that wiped out an entire season. The league and union closing in on a deal was confirmed Thursday by three people familiar with the negotiations who spoke with The Associated Press on condition on anonymity because the deal had not yet been finalized. It was first reported by Daily Faceoff. Two of the people said the new CBA will increase the regular season to 84 games from 82, shorten the maximum length of contracts and add a playoff salary cap for the first time. Extending the regular season from a total of 1,312 games to 1,344 would also come with curtailing exhibition play. Since 2013, players have been able to re-sign with their own team for up to eight years and sign with another for up to seven years. Under the new CBA terms, each would be reduced by a year, to seven for re-signing and six for changing teams. A salary cap in the postseason would prevent teams from using long-term injured reserve rules to load up their rosters. Currently, teams with players on LTIR can exceed the cap by roughly the amount of the players' salaries until the playoffs begin. The option has been used, for example, by Chicago (Patrick Kane in 2015), Tampa Bay (Nikita Kucherov in 2021) and the Vegas Golden Knights (Mark Stone in multiple seasons) during their playoff runs. NHL Commissioner Gary Bettman and NHLPA executive director Marty Walsh foreshadowed a quick conclusion to labour talks speaking at the Stanley Cup Final earlier in June. Bettman said the sides were 'in really good shape, having really good discussions,' and Walsh added that talks were 'moving forward, and I feel good with where we are.' A full, new CBA would be the first since 2013. The league and the union have been working on the memorandum negotiated in 2020 to finish that season during the pandemic and would meld that agreement with the framework from 12 years ago.

U.S. Treasuries face stablecoin-driven demand surge as supply looms
U.S. Treasuries face stablecoin-driven demand surge as supply looms

Globe and Mail

timean hour ago

  • Globe and Mail

U.S. Treasuries face stablecoin-driven demand surge as supply looms

The potential for stablecoins to fuel demand for short-term U.S. Treasury securities was a hot topic at a money market fund conference in Boston this week, with investors expecting these digital tokens to absorb a huge supply of government debt later this year. Stablecoins are pegged to highly liquid assets such as the U.S. dollar and the tokens can drive demand for U.S. Treasuries by requiring issuers to hold large, liquid, and safe reserves to support a 1:1 peg to the greenback. 'Stablecoins are drawing for the Treasury market,' said Yie-Hsin Hung, CEO of State Street Global Advisors, in keynote remarks at the Money Fund Symposium on Monday. She said about 80 per cent of the stablecoin market is invested in either Treasury bills, known as T-bills, or repos, which are repurchase agreements. That represents about US$200-billion, roughly less than 2 per cent of the overall Treasury market. 'But stablecoins are growing fast, and most likely, will outpace the growth of Treasury supply,' Ms. Hung said. As more financial institutions and corporations adopt stablecoin for payments, remittances, or decentralized finance applications, issuers need to hold more reserves to back the growing supply. For instance, if the market capitalization of USDC, a stablecoin issued by Circle, increases by US$10-billion, the issuer might purchase US$10-billion in Treasuries to maintain the peg. Circle, a payments technology company, and Tether, a blockchain-enabled platform, are the two largest stablecoin issuers. Given expectations of looming Treasury supply of as much as US$1-trillion by the end of the year, the market is looking for an incremental buyer that would be a source of new demand for U.S. government debt. Stablecoin issuers fit the bill, market participants said. 'If they do indeed squeeze this supply balloon on Treasuries and rely on the front end of the curve for debt issuance, we think that one of the that all this demand that's coming from (U.S. Treasury Secretary Scott) Bessent cover in order to make that shift to the shorter end,' said Mark Cabana, head of U.S. rates strategy at BofA Securities, during one of sessions at the symposium. Mr. Cabana noted that stablecoin issuers tend to buy T-bills and shorter-dated Treasury coupons. In an emailed statement on Thursday after the story's initial publication on Wednesday, Tether said it already holds over US$120-billion in U.S. Treasuries and continues to act as a significant buyer of short-term government debt. It added that it is already the fifth largest purchaser of U.S. Treasuries. 'While we don't speculate on future Treasury issuance or allocations, we remain committed to maintaining highly liquid, dollar-based reserves,' Tether said. Circle echoed similar sentiments. The firm noted that the majority of USDC reserves are held in the Circle Reserve Fund, which contains cash, short-dated Treasuries, and overnight repos designed to make USDC redeemable 1:1 for U.S. dollars,' a Circle spokesperson said. 'This full-reserve composition makes Circle a natural buyer of short-dated U.S. Treasuries and lender in the U.S. Treasury repo market, however, market demand for USDC determines the overall size of our reserves.' Adam Ackermann, head of portfolio management at Paxos, a financial services and technology company, said he has had multiple conversations with the largest banks in the world wanting a stablecoin. 'They're calling us and saying: I need a stablecoin in eight weeks. How can we get one?' 'What's somewhat concerning is we're just at this fever pitch right now,' Mr. Ackermann said. 'It's great for the industry, but we need to start to put some guardrails on things.' Stablecoins' popularity further ramped up after the U.S. Senate passed last week a landmark bill to create a regulatory framework for the token called the GENIUS Act. The Republican-controlled House of Representatives still needs to pass its version of the bill before it heads to President Donald Trump's desk for approval, but the bill's passage bolstered hopes of wider adoption of a once-niche part of the crypto sector. The stablecoin market is worth about US$256-billion, according to crypto data provider CoinMarketCap, and is estimated by Standard Chartered to reach US$2=trillion by 2028 if the legislation is signed by Trump. 'I expect that there will be a proliferation of stablecoins,' Mr. Cabana said. 'It will be an incremental demand source (for Treasuries), I would guess, over the next three to five, certainly 10 years.' Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

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