Latest news with #AlexandraWilson-Elizondo
Business Recorder
a day ago
- Business
- Business Recorder
Dollar falters as US inflation cools
NEW YORK: The US dollar slid against most major currencies after data showed underlying inflation in the world's largest economy rose less than expected last month, suggesting the Federal Reserve could cut interest rates sooner than later. It did trim losses after President Donald Trump said on Wednesday a US trade deal with China is done, with Beijing to supply magnets and rare earth minerals while the US will allow Chinese students in its colleges and universities. A White House official said the agreement allows the US to charge a 55% tariff on imported Chinese goods. This includes a 10% baseline 'reciprocal' tariff, a 20% tariff for fentanyl trafficking and a 25% tariff reflecting pre-existing tariffs. China would charge a 10% tariff on US imports, the official said. On the data front, the core consumer price index - a gauge of underlying inflation - rose just 0.1% in May after a 0.2% rise in April. 'Inflation in May was lower than anticipated, suggesting the tariffs aren't having a large immediate impact because companies have been using existing inventories or slowly adjusting prices due to uncertain demand,' wrote Alexandra Wilson-Elizondo, global co-chief investment officer of multi-asset solutions at Goldman Sachs Asset Management in emailed comments. 'If inflation stays under control or the job market weakens, the Federal Reserve will likely consider cutting interest rates down the road. We expect the Fed to remain on hold at next week's meeting, but we see a path to a rate cut later in the year,' Wilson-Elizondo said. In midmorning trading, the dollar was flat against the yen at 144.91, after trading lower earlier in the session, while the euro rose 0.3% to $1.1461, paring some gains, as sentiment for the US currency improved. Traders of short-term interest rate futures had priced in a 68% chance that the Fed would cut rates by a quarter of a percentage point by September, compared with 57% before the data. 'The worst-case scenario is probably behind us. There's a little bit of face-saving for both sides. From the US point of view, the rare earth thing was a big deal,' said John Praveen, managing director, at investment firm Paleo Leon in Princeton. 'They got an agreement. The question is whether it will be implemented. The fact they have some kind of agreement is probably at least a relief for the market. ... The fact that things that things are de-escalating is the important point,' Praveen said. Against the Swiss franc, the greenback was 0.3% lower at 0.8203 franc.
CNBC
2 days ago
- Business
- CNBC
The latest CPI report showed some softening in inflation. What investors are saying
Wall Street got a favorable inflation report on Wednesday, giving equities a boost. The consumer price index rose 0.1% in May , slightly less than the 0.2% increase economists polled by Dow Jones anticipated. So-called core CPI, which strips out volatile food and energy prices, increased by 0.1% — also less than expected. Stocks reacted positively, with S & P 500 futures erasing an earlier decline to trade about 0.2% higher. Some investors noted continued uncertainty around the Federal Reserve's interest rate outlook, despite the latest price report. Here's how some investors, economists and strategists reacted to the news: Chris Rupkey, chief economist at FWDBonds: "Net, net, the inflation shock wave from more costly imported goods has yet to arrive on American shores. Today's consumer inflation report is a real head-scratcher for economists as they ponder why the trade war hasn't set off another inflation outbreak yet with core goods prices sitting on store shelves seeing no change in May." Alexandra Wilson-Elizondo, global co-CIO of multi-asset Solutions at Goldman Sachs Asset Management: "Inflation in May was lower than anticipated, suggesting the tariffs aren't having a large immediate impact because companies have been using existing inventories or slowly adjusting prices due to uncertain demand. While we might see some price increases on goods later, service prices are expected to remain stable, suggesting any rise in inflation is likely to be temporary." Ian Lyngen, head of U.S. rates at BMO Capital Markets: "CPI surprised on the downside across the board. … The yield curve is bull steepening as the slower trajectory of inflation has firmed rate cut expectations for later this year. On the margin, it is also supportive of next week's [Federal Reserve Summary of Economic Projections] signaling 50 bp of cuts in 2025." Ryan Weldon, investor director and portfolio manager at IFM Investments: "The softer services inflation lends itself to a slowing economy in the face of continued tariff anxiety and will support the Fed to come out of their wait-and-hold approach sooner. However, the Fed will still want to see several months of consistent inflation and jobs data and have more clarity on the Trump administration's tariff policy before resuming cuts." Chris Zaccarelli, chief investment officer at Northlight Asset Management: "With lower-than-expected numbers across the board (with the exception of headline YoY, which stayed constant), and a trade deal with China that was agreed to in London, the narrative around tariff-induced inflation should subside. However, CPI remains above 2% and even though the tariff rates are going to be less than originally feared, after they are implemented they will further increase the cost of goods." Skyler Weinand, chief investment officer at Regan Capital: "Wednesday's weaker-than-expected CPI opens the door to a Fed rate cut in September, since it's clear that the inflation data continues to move in the right direction even as we deal with tariff uncertainty. While employment is strong and the economic effects from tariffs are yet to be determined, the Fed would like to start easing again in the not too distant future to get in front of a possible recession in 2026" Peter Boockvar, chief investment officer at Bleakley Financial Group: "Bottom line, a sigh of relief on the lower than expected inflation stats just as we search for where tariffs will work its way through the supply chain and end customer."
CNBC
16-05-2025
- Business
- CNBC
There's opportunity for bonds to test cyclical highs here: Goldman Sachs' Alexandra Wilson-Elizondo
Alexandra Wilson-Elizondo, Goldman Sachs Asset Management co-CIO of multi-asset management, joins 'Squawk Box' to discuss the latest market trends, state of the economy, impact of tariffs, where investors can find opportunities, state of the fixed income market, and more.
Los Angeles Times
13-05-2025
- Business
- Los Angeles Times
Wall Street rises again as the S&P 500 erases its loss for 2025
NEW YORK — Most U.S. stocks rose Tuesday following an encouraging report that showed inflation unexpectedly slowed across the country last month. The Standard and Poor's 500 climbed 0.7%, coming off an even bigger gain to start the week after the United States and China announced a 90-day pause in their trade war to allow for negotiations. The Dow Jones Industrial Average fell 269 points, or 0.6%, and the Nasdaq composite jumped 1.6% as AI and other tech stocks led the way. Stocks have been roaring back since the S&P 500 fell nearly 20% below its record last month on hopes that President Trump will ease his stiff tariffs on trading partners worldwide before they create a recession and send inflation spiking higher. The S&P 500, which sits at the center of many 401(k) accounts, is back within 4.2% of its all-time high set in February and positive again for the year so far. Tuesday's report said that even with all the uncertainty around trade, and even with many businesses rushing to import products from other countries before tariffs raise their prices, inflation slowed to 2.3% last month from 2.4% in March. It's encouraging because such data pulls the economy further from a worst-case scenario called 'stagflation,' one where the economy stagnates but inflation remains high. The Federal Reserve has no good way to fix that toxic combination. It could try to lower rates to help the economy, for example, but that would likely worsen inflation in the short term. Even with Tuesday's encouraging report, though, economists and analysts say inflation may still run higher in coming months because of Trump's tariffs. That will likely leave the Fed waiting for more data to guide their decision on whether and when to cut interest rates in order to help the economy. It's similar to the wait that investors in general are enduring. With the Fed set to make no moves on interest rates for the time being, markets will likely trade 'with negotiation and reconciliation headlines,' according to Alexandra Wilson-Elizondo, global co-head and co-chief investment officer of multi-asset solutions within Goldman Sachs Asset Management. 'I think investors are aware that the trade deal is not done yet,' said Louis Wong, director for Phillip Securities Group in Hong Kong. 'I would advise investors to remain cautious in the near term and to be prepared for unexpected news from the trade front,' he added. On Wall Street, Coinbase Global jumped 24% after the cryptocurrency exchange learned its stock will join the widely followed S&P 500 index next week. That means many investment funds will likewise add it before trading begins on Monday. Coinbase will replace Discover Financial Services, which is getting bought by Capital One Financial. Stocks in the artificial-intelligence industry were also strong. Nvidia rose 5.6% and was the biggest single force pushing upward on the S&P 500. It's partnering with Saudi Arabia's sovereign wealth fund-owned AI startup Humain to ship 18,000 chips to the Middle Eastern nation to help power a new data center project. Super Micro Computer, which builds servers used in AI, jumped 16%. GE Vernova, which is hoping to power vast AI data centers, rose 4%. Palantir Technologies gained 8.1%. They helped offset UnitedHealth Group, whose shares tumbled 17.8% after it suspended its full-year financial forecast due to higher-than-expected medical costs. The nation's largest health insurer also announced that CEO Andrew Witty was stepping down for personal reasons and that Chairman Stephen Hemsley will become CEO, effective immediately. UnitedHealth was the main reason the Dow lagged behind other U.S. stock indexes. All told, the S&P 500 rose 42.36 points to 5,886.55. The Dow Jones Industrial Average fell 269.67 to 42,140.43, and the Nasdaq composite climbed 301.74 to 19,010.08. In the bond market, Treasury yields ticked higher with hopes for the U.S. economy. The yield on the 10-year Treasury rose to 4.48% from 4.45% late Monday. The two-year Treasury yield, which moves more closely with expectations for Fed action, ticked up to 4.01% from 3.98%. In stock markets abroad, indexes rose across much of Europe and Asia. Stocks fell 1.9% in Hong Kong but rose 1.4% in Tokyo. Automakers were among the big gainers in Japan. Nissan Motor Co. added 3% ahead of an announcement that it plans to lay off 20,000 of its workers as part of its restructuring efforts. The automaker said Tuesday that it racked up a loss of 670.9 billion yen ($4.5 billion) in the last fiscal year. Choe writes for the Associated Press.
Yahoo
13-05-2025
- Business
- Yahoo
Inflation slowed more than expected in April, despite tariff-related price pressures building
US inflation slowed to its lowest rate in more than four years, an unexpected and welcome development at a time when President Donald Trump's dramatically escalated tariffs are expected to cause prices to rise. Consumer prices rose 0.2% last month, bringing the annual inflation rate to 2.3%, an unexpectedly cooler reading than the 2.4% increase seen in March, according to the latest Consumer Price Index data released Tuesday by the Bureau of Labor Statistics. It's the lowest annual rate since February 2021. However, what's been a yearslong unwinding of post-pandemic inflation isn't expected to last. 'The larger tariff-related price adjustments are likely to come over the next few months,' Alexandra Wilson-Elizondo, co-head and co-chief investment officer of multi-asset solutions at Goldman Sachs Asset Management, wrote Tuesday. 'Consequently, we still anticipate (the Federal Reserve) remaining on the sidelines in the near term and for markets to be trading with negotiation and reconciliation headlines.' Consumers got some relief at the grocery store, where prices fell 0.4% from March, and that brought down overall food prices by 0.1%. Egg prices sank 12.7% for the month, reflecting declines seen on the wholesale side as the industry starts to recover from a deadly bout of avian flu. The average price of a dozen Grade A eggs fell from $6.23 to $5.12, BLS data shows. Annually, egg prices are up 49.3%. Economists had expected inflation not to slow on an annual basis last month: Gas prices dropped off less last month than th ey did earlier this year, and higher costs associated with President Donald Trump hiking of import taxes on US trading partners was expected to start filtering through to the store shelves. However, prices didn't rise as much as economists thought they would. Economists expected that the CPI would rise 0.3% from March and hold steady at 2.4% for the 12 months ended in April, according to FactSet. Food and energy (which rose 0.7% from March) are two of the areas where consumers most frequently encounter inflation; however, they're also the most volatile and affected by temporary events such as weather, war, disease, supply chain snarls, and demand swings. The Core CPI gauge, which strips out food and energy, rose 0.2% from March, remaining at an annual rate of 2.8%, according to Tuesday's report. This story is developing and will be updated. 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
