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Free Malaysia Today
3 days ago
- Business
- Free Malaysia Today
From TACO to FAFO, investors love parodies of Trump acronyms
US President Donald Trump was inaugurated in January after winning the November elections. (AP pic) NEW YORK : Four months into US President Donald Trump's second term, market observers have taken a cue from his fondness for condensing slogans into catchy acronyms like MAGA, DOGE and MAHA, and devised a few of their own that have been spreading across trading desks. Even those acronyms that do not directly reflect a specific trading strategy, still capture factors that traders say are important in Trump-era markets, such as volatility and uncertainty, that investors need to consider when making decisions. Some of the new labels are associated with investment strategies that aimed to capitalise on Trump's economic and trade policies, and international relations goals. Others riff off economic implications or his abrupt U-turns as markets and trade partners react to his proposals. The 'Trump trade' that played on the Make America Great Again theme in the wake of his November election victory and January inauguration, and contributed to record highs on Wall Street in February, is hardly discussed now that stocks, the dollar and treasury bonds have succumbed to worries about his tariff polices. 'Post the election, we heard a lot about YOLO (You Only Live Once), which seemed to promote taking outsize risks in a concentrated investment theme,' Art Hogan, strategist at B Riley Wealth, said. YOLO, is an acronym used to describe the tendency that was part of that Trump trade to chase high momentum strategies such as cryptocurrency. 'While the term YOLO was popular for a period of time, it goes against all traditional advice,' Hogan said. Here are a few more acronyms that have gotten play in the investment world in recent weeks: TACO (Trump Always Chickens Out) This one, coined by a Financial Times columnist, has been used as a way to describe Trump's to-ing and fro-ing on tariffs in the wake of his April 2 'Liberation Day' speech. When asked about TACO in a recent press conference, the president lashed out, calling the question 'nasty'. 'Where we end up might not be too far from what he promised on the campaign trail. So, does he always chicken out? I wouldn't go as far as to say that,' said Christian DiClementi, fixed income portfolio manager at AllianceBernstein. 'I think that he wants to rebalance the economy without pushing it off a cliff. And we're watching that being executed in real time. I think some of the ideas are thought out and some of them change on the fly.' MEGA (Make Europe Great Again) MEGA, first coined last year to address European competitiveness, resurfaced this spring as a way to describe the flurry of investor interest in and flows into European markets. MEGA hats, spoofing their MAGA counterparts, are easily purchased online It's been revived by investors and traders in light of the outperformance European stocks in the immediate aftermath of Trump's 'Liberation Day' tariffs bombshell. MAGA (Make America Go Away) While the original Trump trade was also known as the MAGA trade, this variation cribbed the president's motto, first appearing in response to vice-president JD Vance's brief and unfruitful visit to Greenland, the autonomous territory of Denmark, which Trump has expressed interest in annexing. At least one Canadian investor says that quip is making the rounds of trading desks in Toronto and Montreal and sparking 'wishful thinking' about simply boycotting US investments. FAFO (F*** Around and Find Out) Although the acronym also came into being well before Trump's inauguration, it is being heard with increasing frequency in trading desk conversations. It is used to capture the financial market's volatility and chaos that Trump's policymaking process has created. Mark Spindel, chief investment officer of Potomac River Capital LLC, described the market as being caught in a 'pinball machine as a result of that policymaking process'. When reached for comment, White House spokesman Kush Desai said in an email 'these asinine acronyms convey how unserious analysts have consistently beclowned themselves by mocking president Trump and his agenda that've already delivered multiple expectation-beating jobs and inflation reports, trillions in investment commitments, a historic UK trade agreement, and rising consumer confidence.'
Business Times
15-05-2025
- Business
- Business Times
US: Stocks end mostly up after mixed data
[NEW YORK] Wall Street stocks finished mostly higher on Thursday following mixed US economic data as markets await further announcement from Washington of trade deals. Data showed US retail sales were near-flat in the United States in April, while US wholesale inflation unexpectedly fell during the month. 'We're back into the vacuum where news about trade dominates everything,' said Art Hogan of B. Riley Wealth Management. The Dow Jones Industrial Average finished up 0.7 per cent at 42,322.75. The broad-based S&P 500 gained 0.4 per cent to 5,916.93, while the tech-rich Nasdaq Composite Index fell 0.2 per cent to 19,112.32. After tumbling in early April following President Donald Trump's sweeping tariff plan, stocks have been on the upswing in recent weeks as Trump has retreated from some of the most onerous levies while announcing a trade deal with Britain and a deescalation with China. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up But Hogan said markets are bracing themselves for a hit to inflation later in 2025 from the overall policy shift to higher tariffs. Among individual companies, UnitedHealth plunged more than 11 per cent after the Wall Street Journal reported the health giant faces a US criminal investigation for possible Medicare fraud. UnitedHealth said in a statement it had not been notified by the Justice Department of an investigation and criticised the 'deeply irresponsible' article. Walmart dipped 0.4 per cent as it warned of higher prices due to tariffs, saying the levies were still too high for the company to absorb without passing on to consumers. Dick's Sporting Goods dropped 14.6 per cent after announcing a deal to acquire Foot Locker for about US$2.4 billion. Foot Locker surged 85.7 per cent. AFP
Straits Times
15-05-2025
- Business
- Straits Times
US stocks end mostly up after mixed data
Traders working on the floor of the New York Stock Exchange, in New York City. PHOTO: REUTERS US stocks end mostly up after mixed data NEW YORK - Wall Street stocks finished mostly higher on May 15 following mixed US economic data as markets await further announcement from Washington of trade deals. Data showed US retail sales were near-flat in the United States in April, while US wholesale inflation unexpectedly fell during the month. 'We're back into the vacuum where news about trade dominates everything,' said Mr Art Hogan, of B. Riley Wealth Management. The Dow Jones Industrial Average finished up 0.7 per cent at 42,322.75. The broad-based S&P 500 gained 0.4 per cent to 5,916.93, while the tech-rich Nasdaq Composite Index fell 0.2 per cent to 19,112.32. After tumbling in early April following President Donald Trump's sweeping tariff plan, stocks have been on the upswing in recent weeks as Mr Trump has retreated from some of the most onerous levies while announcing a trade deal with Britain and a deescalation with China. But Mr Hogan said markets are bracing themselves for a hit to inflation later in 2025 from the overall policy shift to higher tariffs. Among individual companies, UnitedHealth plunged more than 11 per cent after the Wall Street Journal reported the health giant faces a US criminal investigation for possible Medicare fraud. UnitedHealth said in a statement it had not been notified by the Justice Department of an investigation and criticised the 'deeply irresponsible' article. Walmart dipped 0.4 per cent as it warned of higher prices due to tariffs, saying the levies were still too high for the company to absorb without passing on to consumers. Dick's Sporting Goods dropped 14.6 per cent after announcing a deal to acquire Foot Locker for about US$2.4 billion (S$3.1 billion). Foot Locker surged 85.7 per cent. AFP Join ST's Telegram channel and get the latest breaking news delivered to you.
RTHK
15-05-2025
- Business
- RTHK
US stocks end mostly up after mixed data
US stocks end mostly up after mixed data One analyst says markets are bracing themselves for a hit to inflation. Photo: AFP Wall Street stocks finished mostly higher on Thursday following mixed US economic data as markets await further announcements from Washington on trade deals. Data showed US retail sales were near-flat in the United States in April, while US wholesale inflation unexpectedly fell during the month. "We're back into the vacuum where news about trade dominates everything," said Art Hogan of B Riley Wealth Management. The Dow Jones finished up 0.7 percent at 42,322. The S&P 500 gained 0.4 percent to 5,916, while the Nasdaq fell 0.2 percent to 19,112. After tumbling in early April following US President Donald Trump's sweeping tariff plan, stocks have been on the upswing in recent weeks as Trump has retreated from some of the most onerous levies while announcing a trade deal with Britain and a de-escalation with China. But Hogan said markets are bracing themselves for a hit to inflation later in 2025 from the overall policy shift to higher tariffs. Among individual companies, UnitedHealth plunged more than 11 percent after the Wall Street Journal reported the health giant faces a US criminal investigation for possible Medicare fraud. UnitedHealth said in a statement it had not been notified by the Justice Department of an investigation and criticised the "deeply irresponsible" article. Walmart dipped 0.4 percent as it warned of higher prices due to tariffs, saying the levies were still too high for the company to absorb without passing on to consumers. Dick's Sporting Goods dropped 14.6 percent after announcing a deal to acquire Foot Locker for about US$2.4 billion. Foot Locker surged 85.7 percent. (AFP)
Business Times
11-05-2025
- Business
- Business Times
Alphabet shares take US$138 billion blow as search warnings blare
FOR more than a year, Alphabet shareholders have fretted over long-term risks posed by artificial intelligence (AI) to the company's money-printing search business. Last week the threat became much more immediate. Court testimony from an Apple executive on Wednesday (May 7) revealed that the iPhone maker is exploring adding AI services to its Web browser for which Google now pays an estimated US$20 billion a year to be the default search engine. Potentially more worrisome: searches on Apple's Safari fell for the first time last month, according to Eddy Cue, Apple's senior vice-president of services. The revelations implied that queries fielded by rivals such as OpenAI and Anthropic may already be eating into Google search, which accounts for more than half of the parent company's revenue and the vast majority of profits. Alphabet said in a subsequent blog post that search queries continue to rise, including those coming from Apple users. Alphabet shares ended the week down nearly 7 per cent, while the Nasdaq 100 fell just 0.2 per cent. The drop erased US$138 billion in market value. 'The basic issue is, will Alphabet lose its cash cow?' said Art Hogan, chief market strategist at B Riley Wealth Management. 'This is the first time Alphabet has really seen competition in search since the category was originated, and we're already seeing chinks in the armor.' Fears that Alphabet is falling behind in AI have resulted in multiple selloffs since ChatGPT's debut in late 2022; in February 2023, for example, the stock sank on concerns about the accuracy of its AI chatbot. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up However, it has shown an ability to rebound off those losses, and up until Wednesday, Alphabet had been on an upswing. The shares rallied in the days following its earnings report that showed its search advertising business remained strong in the first quarter, which ended on Mar 31. The size and speed of Alphabet's selloff shows how nervousness about the risks of disruption from AI – even for a company with formidable talent in the field – is overshadowing everything else and making it difficult for investors to value the tech giant. Alphabet has long traded at a discount to megacap peers like Microsoft Corp. But that gap has widened over the past year amid worries the YouTube owner is falling behind in AI. At the close on Wednesday, Alphabet shares were priced at 15 times profits projected over the next 12 months, compared with an average of 21 times over the past decade, according to data compiled by Bloomberg. Microsoft is priced at 30 times projected profits, compared with an average of 26. The problem is that the greater competition in search could put future profits at risk, according to B Riley's Hogan. 'We don't know how much share it might lose, or how quickly,' he said. 'That means we can't be confident in the earnings part of the price-to-earnings multiple.' An Alphabet representative declined to comment further. Alphabet's market share seems to be holding up. According to the latest Statista data, which is from March, Alphabet has about 89.7 per cent of worldwide market share for search engines. That compares with 92.9 per cent share in January 2023, just after ChatGPT's release. Most analysts on Wall Street remain bullish on Alphabet. More than 80 per cent of the 76 analysts tracked by Bloomberg who cover the company have buy ratings. While that is below other megacaps – Microsoft, and Meta Platforms are all rated buy by 90 per cent or more of analysts – Alphabet trades nearly 30 per cent below the average analyst price target, a higher return potential than the others. Evercore ISI's Mark Mahaney said that even though Google search volume growth has slowed, revenue expansion remains consistent. In a research note published on Thursday, he advised clients to buy shares in the wake of the drop. However, some are getting more cautious. Current estimates calling for 2025 net income of US$115 billion could be overly optimistic, according to Melius analyst Ben Reitzes. 'Given the April trends indicated in Cue's comments, paid clicks could be getting worse,' he wrote in a research note on Wednesday. 'In our experience, this stuff happens quickly.' BLOOMBERG
