Latest news with #EdYardeni
Forbes
12 hours ago
- Business
- Forbes
Constellation Energy Stock Roars On Meta AI Nuclear Deal
Facebook parent Meta announced an unprecedented deal with Constellation Energy, the largest American nuclear power plant operator, cementing Meta's turn to turn to nuclear energy to power its energy intensive, generative artificial intelligence initiatives, and sending Constellation shares surging. Meta inked an agreement to buy all power produced in Constellation's plant in Clinton, Ill., for the 20-year period beginning 2027, the companies said Tuesday. It's the first-ever example of a company committing to buy all energy from a single nuclear plant, according to The Wall Street Journal, though Constellation did enter a similar, but stripped down, 2024 agreement with Microsoft to reopen a Pennsylvania plant. Financial terms of the deal were not disclosed, but Constellation CEO Joseph Dominguez told the Journal it's 'billions of dollars of capital that you're signing up for to run a plant for 20 more years.' Constellation stock popped more than 5% following the announcement, hitting a five-month high of $340 per share and market value of more than $100 billion. Constellation Energy has been one of the biggest winners on Wall Street as AI reshaped corporate America. Dating back to the late 2022 release of OpenAI's ChatGPT chatbot, Constellation has returned more than 230% to investors, far outperforming the S&P 500's 51% return during the period. Constellation is the 16th-best performer on the S&P during the stretch, besting perhaps more obvious AI winners like Amazon, Google parent Alphabet, Microsoft, Oracle and Tesla. 'Nuclear energy, once a pariah left for dead, is enjoying a rebirth, bolstered by AI's voracious need for energy and the growing acknowledgment that additional sources of energy will be needed to balance out the intermittency of solar and wind power,' Yardeni Research founder Ed Yardeni wrote in a recent note to clients. President Donald Trump signed an executive order May 23 aiming to quadruple the U.S.' nuclear energy capacity by 2050. 'It's time for nuclear,' Trump said at a press conference on the initiative, flanked by Dominguez. Nuclear energy does not produce carbon emissions like fossil fuels, but nuclear had largely gone out of vogue prior to the AI proliferation given its high maintenance costs and concerns about safety. $64 billion to $72 billion. That's the amount Meta expects to shell out on capital expenditures this year as it builds out its generative AI initiatives, the firm said in its latest earnings report.
Yahoo
a day ago
- Business
- Yahoo
Stock market today: Dow, S&P 500, Nasdaq close higher as US-China trade tensions flare up
US stocks closed higher on Monday as investors largely shrugged off escalating US trade tensions with China and the European Union. The Dow Jones Industrial Average (^DJI) was up less than 0.1%. The S&P 500 (^GSPC) was up about 0.4%, while the tech-heavy Nasdaq Composite (^IXIC) rose 0.7%. China hit back at President Trump's claim that it violated the Geneva tariff truce on Monday, blaming the US instead for failing to keep up its end of the deal. The mutual finger-pointing has undermined hopes for a revival of trade talks between the two top economies and stoked lingering trade uncertainty. The escalation comes after Trump ratcheted up pressure on Friday, saying he would double US tariffs on imported steel and aluminum to 50% from 25%. While a federal court last week struck down significant portions of Trump's duties, easing market fears, a higher court temporarily reinstated the duties a day later to allow legal proceedings to continue. Meanwhile, the EU said Monday that it opposed Trump's steel and aluminum escalation, throwing a wrench into those looming talks. The US dollar ( fell as markets assessed trade-war risks, with rising inflation and slowing growth in particular focus. Meanwhile, gold (GC=F) futures rose amid demand for safer assets. Against this backdrop, all eyes now turn to a critical slate of economic data this week — most notably the May nonfarm payrolls report due Friday, which will offer fresh clues on how trade frictions and interest rate expectations are shaping the broader US economy. On Monday, new data from the Institute for Supply Management showed economic activity in the US manufacturing sector continued to contract in May as imports tumbled to their lowest level since 2009. US stocks turned mostly higher on Monday as US trade tensions with China and the European Union flared up again, setting investors on guard as they turned the page on a bullish May. The Dow Jones Industrial Average (^DJI) was up less than 0.1%. The S&P 500 (^GSPC) was up about 0.4%, while the tech-heavy Nasdaq Composite (^IXIC) rose 0.7%. The moves came in the first trading session since President Trump said he would double US tariffs on imported steel and aluminum to 50% from 25%. But for the second-straight session, stocks rose off their lows throughout the day shaking off any fears over new tariff headlines. As Yardeni Research President Ed Yardeni put it in a note before Monday's trading session, compared to the initial large swings in stocks seen in April, it appears for now markets are "barely reacting" to new tariff updates. Since the second quarter started at the beginning of April, analysts have been cutting their earnings estimates for S&P 500 companies by more than usual. During the past two months, analysts have cut S&P 500 earnings growth estimates for the second quarter by 4%, well above the 20-year average of a 3.1% decline, per FactSet senior earnings analyst John Butters. But as our chart below shows, analysts cutting estimates more than historically average, hasn't been abnormal since the start of the current S&P 500 bull market in late 2022. Given the uncertain macro backdrop amid the changing tariff narrative, Charles Schwab senior investment strategist Kevin Gordon told Yahoo Finance the lower bar for companies to surpass when second quarter reports come around could wind up being a net positive. "We keep going through this pattern where the bar is lowered and basically brought down to the floor, and then is a relatively easy jump over," Gordon said. "So I think that if that continues to be the case, you can see how that's an ultimate benefit to the market." Yahoo Finance's Jennifer Schonberger reports: A divide is emerging within the Federal Reserve about whether to hold rates steady for some time or get more comfortable about cuts later this year as officials try to determine whether any inflation coming from President Trump's tariffs will prove to be longer-lasting. Some policymakers are arguing for "looking through" the impact of the duties as temporary, a stance that would leave the door open for cuts. Many on the rate-setting committee, however, believe there is a risk that inflation from tariffs could become more persistent. Federal Reserve governor Chris Waller is now firmly in the first camp. On Sunday night, he made another argument for why any impact on inflation from tariffs likely won't last. "Given my belief that any tariff-induced inflation will not be persistent and that inflation expectations are anchored, I support looking through any tariff effects on near-term inflation when setting the policy rate," Waller said in a speech in Seoul, South Korea. Read more here. The S&P 500 just logged its best May in more than 30 years, in large part due to the return of dominance from the "Magnificent Seven" tech stocks. In May, Apple (AAPL), Alphabet (GOOGL, GOOG), Microsoft (MSFT), Amazon (AMZN), Meta (META), Tesla (TSLA), and Nvidia (NVDA) combined represented 62% of the S&P 500's advance in May. Nvidia and Tesla led the gains, rising more than 20% in the month. Overall, six of the seven stocks outperformed the S&P 500's 6.2% gain, with Apple ending the month as the lone laggard. DataTrek Research co-founder Nicholas Colas wrote in a note to clients that the recent outperformance of Big tech shows "this important slice of the US equity market has genuine momentum." "The fact that capital is rotating back into US large cap Tech/Big Tech is further proof that the market has finally found its footing," he added. Yahoo Finance's Brooke DiPalma reports: Read more here. Ford (F) and General Motors (GM) stock were both down about 5% on Monday as investors digested President Trump's latest tariff threat. The moves come after Trump said Friday he will be doubling current tariffs on steel and aluminum, from 25% to 50%. Yahoo Finance's Pras Subramanian reports: Read more here. In May, economic activity in the US manufacturing sector contracted further. The Institute for Supply Management's (ISM) manufacturing PMI registered a reading of 48.5 in May, up from April's reading of 48.7. Readings above 50 for this index indicate an expansion in activity, while readings below 50 indicate contraction. The manufacturing sector has been in contraction for most of the past two years. The import index tumbled to a reading of 39.9, its lowest level since 2009. 'Imports continue to contract as demand has reduced the need to maintain import levels from previous months, as well as due to the impact of tariff pricing,' Susan Spence, chair of the ISM Manufacturing Business Survey Committee, said in the release. A separate reading on manufacturing activity from S&P Global, also released on Monday, registered a reading of 52, up from a prior reading of 50.2. But S&P global chief business economist Chris Williamson wrote in the release the headline data "masks worrying developments under the hood" of the US manufacturing sector. "While growth of new orders picked up and suppliers were reportedly busier as companies built up their inventory levels at an unprecedented rate, the common theme was a temporary surge in demand as manufacturers and their customers worry about supply issues and rising prices," Williamson wrote. Read more here. US stocks pulled back on Monday after China added fuel to simmering trade tensions with the US, setting investors on guard as they turned the page on a bullish May. The Dow Jones Industrial Average (^DJI) fell around 0.4%, or around 170 points. The S&P 500 (^GSPC) declined nearly 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) ticked lower by about 0.2%. Several biotech stocks jumped ahead of the opening bell: BioNTech (BNTX) stock popped 12% on news of a new cancer drug deal. Bristol Myers Squibb (BMY) announced it will pay the German biotech company $11.1 billion to license a next-generation cancer drug as it looks to compete with Merck (MRK) and its drug Keytruda. Moderna (MRNA) stock added more than 3% in premarket trading after the FDA approved its COVID-19 vaccine for individuals 65 and older and those ages 12-64 with an underlying condition. Blueprint Medicines (BPMC) soared 26% after Sanofi (SNY) agreed to acquire the company for as much as $9.5 billion in a deal expected to close in the third quarter. The acquisition adds Blueprint's Ayvakit drug to Sanofi's portfolio, boosting its rare immunology profile. Sanofi stock edged lower. Check out more trending stocks here. Shares of US steelmaker Cleveland-Cliffs (CLF) soared as much as 26% in premarket trading Monday while foreign steel stocks slumped. The moves came after President Trump announced on Friday that steel and aluminum tariffs would double from 25% to 50% starting June 4. US-based Nucor (NUE) and Steel Dynamics (STLD) also popped more than 10% in premarket trading. Shares of US Steel Corporation (X), which is being taken over by Nippon (NPSCY), fell slightly. South Korean steel stocks Posco (PKX) and Hyundai Steel ( also dropped 1.5% and 2.6%, respectively. Reuters reports that Hyundai Steel announced a plan to build a $5.8 billion factory in Louisiana, but the factory will not open until 2029. Tesla's (TSLA) sales in Norway soared over 200% in May, thanks to strong deliveries of the revamped Model Y — but elsewhere in Europe, the EV maker's sales rout continues. Cratering demand has turned up the heat on CEO Elon Musk, who has pledged to be "super focused on Tesla" as he quits his DOGE role and returns to the office, as my colleague Pras Subramian reports. Shares in Tesla slid 1.6% in pre-market trading as investors absorbed the latest negative data. Reuters reports: Read more here. Crude oil futures jumped on Monday after OPEC+ decided to hike output in July at a lower rate than traders had feared. The group of leading oil producers agreed on Saturday to add 411,000 barrels a day of supply next month, the same level of increase as for May and June. West Texas Intermediate (CL=F) climbed about 4% to $63.25 a barrel. International benchmark Brent (BZ=F) crude futures rose 3.7% to $65.07. Bloomberg reports: Read more here. Earnings: The Campbell's Company (CPB) Economic data: S&P Global US manufacturing PMI (May final); ISM manufacturing (May); ISM prices paid (May); Construction spending (April) Here are some of the biggest stories you may have missed over the weekend and early this morning: May jobs report, Trump tariff updates: What to know this week China accuses US of 'violating' trade truce, vows to hit back Why the 'TACO' trade may have run its course The Lone Star State — and Trump — versus BlackRock Tesla execs questioned Musk after he denied killing $25K EV project Analysts' bullish reviews mask weak conviction in US stock rally Fed's Waller breaks ranks, sees path to rate cuts this year Gold climbs as geopolitical and trade tensions rise Trump moves to lift Biden-era curbs on Arctic oil drilling Yahoo Finance's Alexandra Canal reports: Read more here. Stock markets in Germany and elsewhere are staging a world-beating rally, far outperforming the S&P 500 (^GSPC) this year as President Trump's trade-war push to boost US fortunes apparently backfires. Bloomberg reports: Read more here. Asian stocks fell on Monday, weighed down by escalating geopolitical tensions and fresh trade friction between the US and China. Hong Kong's Hang Seng Index (^HSI) led regional losses, sinking 2.2% as renewed sparring between Beijing and Washington spooked investors. Markets in mainland China were closed for a public holiday, but a doubling of steel tariffs to 50% due to take effect Wednesday is set to hit markets as they reopen Tuesday. Elsewhere in Asia, Japan's Nikkei 225 (^N225) declined 1.4%, South Korea's Kospi (^KS11) shed 0.3% and Australia's S&P/ASX 200 (^AXJO) edged down 0.2%. US stocks turned mostly higher on Monday as US trade tensions with China and the European Union flared up again, setting investors on guard as they turned the page on a bullish May. The Dow Jones Industrial Average (^DJI) was up less than 0.1%. The S&P 500 (^GSPC) was up about 0.4%, while the tech-heavy Nasdaq Composite (^IXIC) rose 0.7%. The moves came in the first trading session since President Trump said he would double US tariffs on imported steel and aluminum to 50% from 25%. But for the second-straight session, stocks rose off their lows throughout the day shaking off any fears over new tariff headlines. As Yardeni Research President Ed Yardeni put it in a note before Monday's trading session, compared to the initial large swings in stocks seen in April, it appears for now markets are "barely reacting" to new tariff updates. Since the second quarter started at the beginning of April, analysts have been cutting their earnings estimates for S&P 500 companies by more than usual. During the past two months, analysts have cut S&P 500 earnings growth estimates for the second quarter by 4%, well above the 20-year average of a 3.1% decline, per FactSet senior earnings analyst John Butters. But as our chart below shows, analysts cutting estimates more than historically average, hasn't been abnormal since the start of the current S&P 500 bull market in late 2022. Given the uncertain macro backdrop amid the changing tariff narrative, Charles Schwab senior investment strategist Kevin Gordon told Yahoo Finance the lower bar for companies to surpass when second quarter reports come around could wind up being a net positive. "We keep going through this pattern where the bar is lowered and basically brought down to the floor, and then is a relatively easy jump over," Gordon said. "So I think that if that continues to be the case, you can see how that's an ultimate benefit to the market." Yahoo Finance's Jennifer Schonberger reports: A divide is emerging within the Federal Reserve about whether to hold rates steady for some time or get more comfortable about cuts later this year as officials try to determine whether any inflation coming from President Trump's tariffs will prove to be longer-lasting. Some policymakers are arguing for "looking through" the impact of the duties as temporary, a stance that would leave the door open for cuts. Many on the rate-setting committee, however, believe there is a risk that inflation from tariffs could become more persistent. Federal Reserve governor Chris Waller is now firmly in the first camp. On Sunday night, he made another argument for why any impact on inflation from tariffs likely won't last. "Given my belief that any tariff-induced inflation will not be persistent and that inflation expectations are anchored, I support looking through any tariff effects on near-term inflation when setting the policy rate," Waller said in a speech in Seoul, South Korea. Read more here. The S&P 500 just logged its best May in more than 30 years, in large part due to the return of dominance from the "Magnificent Seven" tech stocks. In May, Apple (AAPL), Alphabet (GOOGL, GOOG), Microsoft (MSFT), Amazon (AMZN), Meta (META), Tesla (TSLA), and Nvidia (NVDA) combined represented 62% of the S&P 500's advance in May. Nvidia and Tesla led the gains, rising more than 20% in the month. Overall, six of the seven stocks outperformed the S&P 500's 6.2% gain, with Apple ending the month as the lone laggard. DataTrek Research co-founder Nicholas Colas wrote in a note to clients that the recent outperformance of Big tech shows "this important slice of the US equity market has genuine momentum." "The fact that capital is rotating back into US large cap Tech/Big Tech is further proof that the market has finally found its footing," he added. Yahoo Finance's Brooke DiPalma reports: Read more here. Ford (F) and General Motors (GM) stock were both down about 5% on Monday as investors digested President Trump's latest tariff threat. The moves come after Trump said Friday he will be doubling current tariffs on steel and aluminum, from 25% to 50%. Yahoo Finance's Pras Subramanian reports: Read more here. In May, economic activity in the US manufacturing sector contracted further. The Institute for Supply Management's (ISM) manufacturing PMI registered a reading of 48.5 in May, up from April's reading of 48.7. Readings above 50 for this index indicate an expansion in activity, while readings below 50 indicate contraction. The manufacturing sector has been in contraction for most of the past two years. The import index tumbled to a reading of 39.9, its lowest level since 2009. 'Imports continue to contract as demand has reduced the need to maintain import levels from previous months, as well as due to the impact of tariff pricing,' Susan Spence, chair of the ISM Manufacturing Business Survey Committee, said in the release. A separate reading on manufacturing activity from S&P Global, also released on Monday, registered a reading of 52, up from a prior reading of 50.2. But S&P global chief business economist Chris Williamson wrote in the release the headline data "masks worrying developments under the hood" of the US manufacturing sector. "While growth of new orders picked up and suppliers were reportedly busier as companies built up their inventory levels at an unprecedented rate, the common theme was a temporary surge in demand as manufacturers and their customers worry about supply issues and rising prices," Williamson wrote. Read more here. US stocks pulled back on Monday after China added fuel to simmering trade tensions with the US, setting investors on guard as they turned the page on a bullish May. The Dow Jones Industrial Average (^DJI) fell around 0.4%, or around 170 points. The S&P 500 (^GSPC) declined nearly 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) ticked lower by about 0.2%. Several biotech stocks jumped ahead of the opening bell: BioNTech (BNTX) stock popped 12% on news of a new cancer drug deal. Bristol Myers Squibb (BMY) announced it will pay the German biotech company $11.1 billion to license a next-generation cancer drug as it looks to compete with Merck (MRK) and its drug Keytruda. Moderna (MRNA) stock added more than 3% in premarket trading after the FDA approved its COVID-19 vaccine for individuals 65 and older and those ages 12-64 with an underlying condition. Blueprint Medicines (BPMC) soared 26% after Sanofi (SNY) agreed to acquire the company for as much as $9.5 billion in a deal expected to close in the third quarter. The acquisition adds Blueprint's Ayvakit drug to Sanofi's portfolio, boosting its rare immunology profile. Sanofi stock edged lower. Check out more trending stocks here. Shares of US steelmaker Cleveland-Cliffs (CLF) soared as much as 26% in premarket trading Monday while foreign steel stocks slumped. The moves came after President Trump announced on Friday that steel and aluminum tariffs would double from 25% to 50% starting June 4. US-based Nucor (NUE) and Steel Dynamics (STLD) also popped more than 10% in premarket trading. Shares of US Steel Corporation (X), which is being taken over by Nippon (NPSCY), fell slightly. South Korean steel stocks Posco (PKX) and Hyundai Steel ( also dropped 1.5% and 2.6%, respectively. Reuters reports that Hyundai Steel announced a plan to build a $5.8 billion factory in Louisiana, but the factory will not open until 2029. Tesla's (TSLA) sales in Norway soared over 200% in May, thanks to strong deliveries of the revamped Model Y — but elsewhere in Europe, the EV maker's sales rout continues. Cratering demand has turned up the heat on CEO Elon Musk, who has pledged to be "super focused on Tesla" as he quits his DOGE role and returns to the office, as my colleague Pras Subramian reports. Shares in Tesla slid 1.6% in pre-market trading as investors absorbed the latest negative data. Reuters reports: Read more here. Crude oil futures jumped on Monday after OPEC+ decided to hike output in July at a lower rate than traders had feared. The group of leading oil producers agreed on Saturday to add 411,000 barrels a day of supply next month, the same level of increase as for May and June. West Texas Intermediate (CL=F) climbed about 4% to $63.25 a barrel. International benchmark Brent (BZ=F) crude futures rose 3.7% to $65.07. Bloomberg reports: Read more here. Earnings: The Campbell's Company (CPB) Economic data: S&P Global US manufacturing PMI (May final); ISM manufacturing (May); ISM prices paid (May); Construction spending (April) Here are some of the biggest stories you may have missed over the weekend and early this morning: May jobs report, Trump tariff updates: What to know this week China accuses US of 'violating' trade truce, vows to hit back Why the 'TACO' trade may have run its course The Lone Star State — and Trump — versus BlackRock Tesla execs questioned Musk after he denied killing $25K EV project Analysts' bullish reviews mask weak conviction in US stock rally Fed's Waller breaks ranks, sees path to rate cuts this year Gold climbs as geopolitical and trade tensions rise Trump moves to lift Biden-era curbs on Arctic oil drilling Yahoo Finance's Alexandra Canal reports: Read more here. Stock markets in Germany and elsewhere are staging a world-beating rally, far outperforming the S&P 500 (^GSPC) this year as President Trump's trade-war push to boost US fortunes apparently backfires. Bloomberg reports: Read more here. Asian stocks fell on Monday, weighed down by escalating geopolitical tensions and fresh trade friction between the US and China. Hong Kong's Hang Seng Index (^HSI) led regional losses, sinking 2.2% as renewed sparring between Beijing and Washington spooked investors. Markets in mainland China were closed for a public holiday, but a doubling of steel tariffs to 50% due to take effect Wednesday is set to hit markets as they reopen Tuesday. Elsewhere in Asia, Japan's Nikkei 225 (^N225) declined 1.4%, South Korea's Kospi (^KS11) shed 0.3% and Australia's S&P/ASX 200 (^AXJO) edged down 0.2%.
Yahoo
a day ago
- Business
- Yahoo
Stock market today: Dow, S&P 500, Nasdaq close higher as US-China trade tensions flare up
US stocks closed higher on Monday as investors largely shrugged off escalating US trade tensions with China and the European Union. The Dow Jones Industrial Average (^DJI) was up less than 0.1%. The S&P 500 (^GSPC) was up about 0.4%, while the tech-heavy Nasdaq Composite (^IXIC) rose 0.7%. China hit back at President Trump's claim that it violated the Geneva tariff truce on Monday, blaming the US instead for failing to keep up its end of the deal. The mutual finger-pointing has undermined hopes for a revival of trade talks between the two top economies and stoked lingering trade uncertainty. The escalation comes after Trump ratcheted up pressure on Friday, saying he would double US tariffs on imported steel and aluminum to 50% from 25%. While a federal court last week struck down significant portions of Trump's duties, easing market fears, a higher court temporarily reinstated the duties a day later to allow legal proceedings to continue. Meanwhile, the EU said Monday that it opposed Trump's steel and aluminum escalation, throwing a wrench into those looming talks. The US dollar ( fell as markets assessed trade-war risks, with rising inflation and slowing growth in particular focus. Meanwhile, gold (GC=F) futures rose amid demand for safer assets. Against this backdrop, all eyes now turn to a critical slate of economic data this week — most notably the May nonfarm payrolls report due Friday, which will offer fresh clues on how trade frictions and interest rate expectations are shaping the broader US economy. On Monday, new data from the Institute for Supply Management showed economic activity in the US manufacturing sector continued to contract in May as imports tumbled to their lowest level since 2009. US stocks turned mostly higher on Monday as US trade tensions with China and the European Union flared up again, setting investors on guard as they turned the page on a bullish May. The Dow Jones Industrial Average (^DJI) was up less than 0.1%. The S&P 500 (^GSPC) was up about 0.4%, while the tech-heavy Nasdaq Composite (^IXIC) rose 0.7%. The moves came in the first trading session since President Trump said he would double US tariffs on imported steel and aluminum to 50% from 25%. But for the second-straight session, stocks rose off their lows throughout the day shaking off any fears over new tariff headlines. As Yardeni Research President Ed Yardeni put it in a note before Monday's trading session, compared to the initial large swings in stocks seen in April, it appears for now markets are "barely reacting" to new tariff updates. Since the second quarter started at the beginning of April, analysts have been cutting their earnings estimates for S&P 500 companies by more than usual. During the past two months, analysts have cut S&P 500 earnings growth estimates for the second quarter by 4%, well above the 20-year average of a 3.1% decline, per FactSet senior earnings analyst John Butters. But as our chart below shows, analysts cutting estimates more than historically average, hasn't been abnormal since the start of the current S&P 500 bull market in late 2022. Given the uncertain macro backdrop amid the changing tariff narrative, Charles Schwab senior investment strategist Kevin Gordon told Yahoo Finance the lower bar for companies to surpass when second quarter reports come around could wind up being a net positive. "We keep going through this pattern where the bar is lowered and basically brought down to the floor, and then is a relatively easy jump over," Gordon said. "So I think that if that continues to be the case, you can see how that's an ultimate benefit to the market." Yahoo Finance's Jennifer Schonberger reports: A divide is emerging within the Federal Reserve about whether to hold rates steady for some time or get more comfortable about cuts later this year as officials try to determine whether any inflation coming from President Trump's tariffs will prove to be longer-lasting. Some policymakers are arguing for "looking through" the impact of the duties as temporary, a stance that would leave the door open for cuts. Many on the rate-setting committee, however, believe there is a risk that inflation from tariffs could become more persistent. Federal Reserve governor Chris Waller is now firmly in the first camp. On Sunday night, he made another argument for why any impact on inflation from tariffs likely won't last. "Given my belief that any tariff-induced inflation will not be persistent and that inflation expectations are anchored, I support looking through any tariff effects on near-term inflation when setting the policy rate," Waller said in a speech in Seoul, South Korea. Read more here. The S&P 500 just logged its best May in more than 30 years, in large part due to the return of dominance from the "Magnificent Seven" tech stocks. In May, Apple (AAPL), Alphabet (GOOGL, GOOG), Microsoft (MSFT), Amazon (AMZN), Meta (META), Tesla (TSLA), and Nvidia (NVDA) combined represented 62% of the S&P 500's advance in May. Nvidia and Tesla led the gains, rising more than 20% in the month. Overall, six of the seven stocks outperformed the S&P 500's 6.2% gain, with Apple ending the month as the lone laggard. DataTrek Research co-founder Nicholas Colas wrote in a note to clients that the recent outperformance of Big tech shows "this important slice of the US equity market has genuine momentum." "The fact that capital is rotating back into US large cap Tech/Big Tech is further proof that the market has finally found its footing," he added. Yahoo Finance's Brooke DiPalma reports: Read more here. Ford (F) and General Motors (GM) stock were both down about 5% on Monday as investors digested President Trump's latest tariff threat. The moves come after Trump said Friday he will be doubling current tariffs on steel and aluminum, from 25% to 50%. Yahoo Finance's Pras Subramanian reports: Read more here. In May, economic activity in the US manufacturing sector contracted further. The Institute for Supply Management's (ISM) manufacturing PMI registered a reading of 48.5 in May, up from April's reading of 48.7. Readings above 50 for this index indicate an expansion in activity, while readings below 50 indicate contraction. The manufacturing sector has been in contraction for most of the past two years. The import index tumbled to a reading of 39.9, its lowest level since 2009. 'Imports continue to contract as demand has reduced the need to maintain import levels from previous months, as well as due to the impact of tariff pricing,' Susan Spence, chair of the ISM Manufacturing Business Survey Committee, said in the release. A separate reading on manufacturing activity from S&P Global, also released on Monday, registered a reading of 52, up from a prior reading of 50.2. But S&P global chief business economist Chris Williamson wrote in the release the headline data "masks worrying developments under the hood" of the US manufacturing sector. "While growth of new orders picked up and suppliers were reportedly busier as companies built up their inventory levels at an unprecedented rate, the common theme was a temporary surge in demand as manufacturers and their customers worry about supply issues and rising prices," Williamson wrote. Read more here. US stocks pulled back on Monday after China added fuel to simmering trade tensions with the US, setting investors on guard as they turned the page on a bullish May. The Dow Jones Industrial Average (^DJI) fell around 0.4%, or around 170 points. The S&P 500 (^GSPC) declined nearly 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) ticked lower by about 0.2%. Several biotech stocks jumped ahead of the opening bell: BioNTech (BNTX) stock popped 12% on news of a new cancer drug deal. Bristol Myers Squibb (BMY) announced it will pay the German biotech company $11.1 billion to license a next-generation cancer drug as it looks to compete with Merck (MRK) and its drug Keytruda. Moderna (MRNA) stock added more than 3% in premarket trading after the FDA approved its COVID-19 vaccine for individuals 65 and older and those ages 12-64 with an underlying condition. Blueprint Medicines (BPMC) soared 26% after Sanofi (SNY) agreed to acquire the company for as much as $9.5 billion in a deal expected to close in the third quarter. The acquisition adds Blueprint's Ayvakit drug to Sanofi's portfolio, boosting its rare immunology profile. Sanofi stock edged lower. Check out more trending stocks here. Shares of US steelmaker Cleveland-Cliffs (CLF) soared as much as 26% in premarket trading Monday while foreign steel stocks slumped. The moves came after President Trump announced on Friday that steel and aluminum tariffs would double from 25% to 50% starting June 4. US-based Nucor (NUE) and Steel Dynamics (STLD) also popped more than 10% in premarket trading. Shares of US Steel Corporation (X), which is being taken over by Nippon (NPSCY), fell slightly. South Korean steel stocks Posco (PKX) and Hyundai Steel ( also dropped 1.5% and 2.6%, respectively. Reuters reports that Hyundai Steel announced a plan to build a $5.8 billion factory in Louisiana, but the factory will not open until 2029. Tesla's (TSLA) sales in Norway soared over 200% in May, thanks to strong deliveries of the revamped Model Y — but elsewhere in Europe, the EV maker's sales rout continues. Cratering demand has turned up the heat on CEO Elon Musk, who has pledged to be "super focused on Tesla" as he quits his DOGE role and returns to the office, as my colleague Pras Subramian reports. Shares in Tesla slid 1.6% in pre-market trading as investors absorbed the latest negative data. Reuters reports: Read more here. Crude oil futures jumped on Monday after OPEC+ decided to hike output in July at a lower rate than traders had feared. The group of leading oil producers agreed on Saturday to add 411,000 barrels a day of supply next month, the same level of increase as for May and June. West Texas Intermediate (CL=F) climbed about 4% to $63.25 a barrel. International benchmark Brent (BZ=F) crude futures rose 3.7% to $65.07. Bloomberg reports: Read more here. Earnings: The Campbell's Company (CPB) Economic data: S&P Global US manufacturing PMI (May final); ISM manufacturing (May); ISM prices paid (May); Construction spending (April) Here are some of the biggest stories you may have missed over the weekend and early this morning: May jobs report, Trump tariff updates: What to know this week China accuses US of 'violating' trade truce, vows to hit back Why the 'TACO' trade may have run its course The Lone Star State — and Trump — versus BlackRock Tesla execs questioned Musk after he denied killing $25K EV project Analysts' bullish reviews mask weak conviction in US stock rally Fed's Waller breaks ranks, sees path to rate cuts this year Gold climbs as geopolitical and trade tensions rise Trump moves to lift Biden-era curbs on Arctic oil drilling Yahoo Finance's Alexandra Canal reports: Read more here. Stock markets in Germany and elsewhere are staging a world-beating rally, far outperforming the S&P 500 (^GSPC) this year as President Trump's trade-war push to boost US fortunes apparently backfires. Bloomberg reports: Read more here. Asian stocks fell on Monday, weighed down by escalating geopolitical tensions and fresh trade friction between the US and China. Hong Kong's Hang Seng Index (^HSI) led regional losses, sinking 2.2% as renewed sparring between Beijing and Washington spooked investors. Markets in mainland China were closed for a public holiday, but a doubling of steel tariffs to 50% due to take effect Wednesday is set to hit markets as they reopen Tuesday. Elsewhere in Asia, Japan's Nikkei 225 (^N225) declined 1.4%, South Korea's Kospi (^KS11) shed 0.3% and Australia's S&P/ASX 200 (^AXJO) edged down 0.2%. US stocks turned mostly higher on Monday as US trade tensions with China and the European Union flared up again, setting investors on guard as they turned the page on a bullish May. The Dow Jones Industrial Average (^DJI) was up less than 0.1%. The S&P 500 (^GSPC) was up about 0.4%, while the tech-heavy Nasdaq Composite (^IXIC) rose 0.7%. The moves came in the first trading session since President Trump said he would double US tariffs on imported steel and aluminum to 50% from 25%. But for the second-straight session, stocks rose off their lows throughout the day shaking off any fears over new tariff headlines. As Yardeni Research President Ed Yardeni put it in a note before Monday's trading session, compared to the initial large swings in stocks seen in April, it appears for now markets are "barely reacting" to new tariff updates. Since the second quarter started at the beginning of April, analysts have been cutting their earnings estimates for S&P 500 companies by more than usual. During the past two months, analysts have cut S&P 500 earnings growth estimates for the second quarter by 4%, well above the 20-year average of a 3.1% decline, per FactSet senior earnings analyst John Butters. But as our chart below shows, analysts cutting estimates more than historically average, hasn't been abnormal since the start of the current S&P 500 bull market in late 2022. Given the uncertain macro backdrop amid the changing tariff narrative, Charles Schwab senior investment strategist Kevin Gordon told Yahoo Finance the lower bar for companies to surpass when second quarter reports come around could wind up being a net positive. "We keep going through this pattern where the bar is lowered and basically brought down to the floor, and then is a relatively easy jump over," Gordon said. "So I think that if that continues to be the case, you can see how that's an ultimate benefit to the market." Yahoo Finance's Jennifer Schonberger reports: A divide is emerging within the Federal Reserve about whether to hold rates steady for some time or get more comfortable about cuts later this year as officials try to determine whether any inflation coming from President Trump's tariffs will prove to be longer-lasting. Some policymakers are arguing for "looking through" the impact of the duties as temporary, a stance that would leave the door open for cuts. Many on the rate-setting committee, however, believe there is a risk that inflation from tariffs could become more persistent. Federal Reserve governor Chris Waller is now firmly in the first camp. On Sunday night, he made another argument for why any impact on inflation from tariffs likely won't last. "Given my belief that any tariff-induced inflation will not be persistent and that inflation expectations are anchored, I support looking through any tariff effects on near-term inflation when setting the policy rate," Waller said in a speech in Seoul, South Korea. Read more here. The S&P 500 just logged its best May in more than 30 years, in large part due to the return of dominance from the "Magnificent Seven" tech stocks. In May, Apple (AAPL), Alphabet (GOOGL, GOOG), Microsoft (MSFT), Amazon (AMZN), Meta (META), Tesla (TSLA), and Nvidia (NVDA) combined represented 62% of the S&P 500's advance in May. Nvidia and Tesla led the gains, rising more than 20% in the month. Overall, six of the seven stocks outperformed the S&P 500's 6.2% gain, with Apple ending the month as the lone laggard. DataTrek Research co-founder Nicholas Colas wrote in a note to clients that the recent outperformance of Big tech shows "this important slice of the US equity market has genuine momentum." "The fact that capital is rotating back into US large cap Tech/Big Tech is further proof that the market has finally found its footing," he added. Yahoo Finance's Brooke DiPalma reports: Read more here. Ford (F) and General Motors (GM) stock were both down about 5% on Monday as investors digested President Trump's latest tariff threat. The moves come after Trump said Friday he will be doubling current tariffs on steel and aluminum, from 25% to 50%. Yahoo Finance's Pras Subramanian reports: Read more here. In May, economic activity in the US manufacturing sector contracted further. The Institute for Supply Management's (ISM) manufacturing PMI registered a reading of 48.5 in May, up from April's reading of 48.7. Readings above 50 for this index indicate an expansion in activity, while readings below 50 indicate contraction. The manufacturing sector has been in contraction for most of the past two years. The import index tumbled to a reading of 39.9, its lowest level since 2009. 'Imports continue to contract as demand has reduced the need to maintain import levels from previous months, as well as due to the impact of tariff pricing,' Susan Spence, chair of the ISM Manufacturing Business Survey Committee, said in the release. A separate reading on manufacturing activity from S&P Global, also released on Monday, registered a reading of 52, up from a prior reading of 50.2. But S&P global chief business economist Chris Williamson wrote in the release the headline data "masks worrying developments under the hood" of the US manufacturing sector. "While growth of new orders picked up and suppliers were reportedly busier as companies built up their inventory levels at an unprecedented rate, the common theme was a temporary surge in demand as manufacturers and their customers worry about supply issues and rising prices," Williamson wrote. Read more here. US stocks pulled back on Monday after China added fuel to simmering trade tensions with the US, setting investors on guard as they turned the page on a bullish May. The Dow Jones Industrial Average (^DJI) fell around 0.4%, or around 170 points. The S&P 500 (^GSPC) declined nearly 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) ticked lower by about 0.2%. Several biotech stocks jumped ahead of the opening bell: BioNTech (BNTX) stock popped 12% on news of a new cancer drug deal. Bristol Myers Squibb (BMY) announced it will pay the German biotech company $11.1 billion to license a next-generation cancer drug as it looks to compete with Merck (MRK) and its drug Keytruda. Moderna (MRNA) stock added more than 3% in premarket trading after the FDA approved its COVID-19 vaccine for individuals 65 and older and those ages 12-64 with an underlying condition. Blueprint Medicines (BPMC) soared 26% after Sanofi (SNY) agreed to acquire the company for as much as $9.5 billion in a deal expected to close in the third quarter. The acquisition adds Blueprint's Ayvakit drug to Sanofi's portfolio, boosting its rare immunology profile. Sanofi stock edged lower. Check out more trending stocks here. Shares of US steelmaker Cleveland-Cliffs (CLF) soared as much as 26% in premarket trading Monday while foreign steel stocks slumped. The moves came after President Trump announced on Friday that steel and aluminum tariffs would double from 25% to 50% starting June 4. US-based Nucor (NUE) and Steel Dynamics (STLD) also popped more than 10% in premarket trading. Shares of US Steel Corporation (X), which is being taken over by Nippon (NPSCY), fell slightly. South Korean steel stocks Posco (PKX) and Hyundai Steel ( also dropped 1.5% and 2.6%, respectively. Reuters reports that Hyundai Steel announced a plan to build a $5.8 billion factory in Louisiana, but the factory will not open until 2029. Tesla's (TSLA) sales in Norway soared over 200% in May, thanks to strong deliveries of the revamped Model Y — but elsewhere in Europe, the EV maker's sales rout continues. Cratering demand has turned up the heat on CEO Elon Musk, who has pledged to be "super focused on Tesla" as he quits his DOGE role and returns to the office, as my colleague Pras Subramian reports. Shares in Tesla slid 1.6% in pre-market trading as investors absorbed the latest negative data. Reuters reports: Read more here. Crude oil futures jumped on Monday after OPEC+ decided to hike output in July at a lower rate than traders had feared. The group of leading oil producers agreed on Saturday to add 411,000 barrels a day of supply next month, the same level of increase as for May and June. West Texas Intermediate (CL=F) climbed about 4% to $63.25 a barrel. International benchmark Brent (BZ=F) crude futures rose 3.7% to $65.07. Bloomberg reports: Read more here. Earnings: The Campbell's Company (CPB) Economic data: S&P Global US manufacturing PMI (May final); ISM manufacturing (May); ISM prices paid (May); Construction spending (April) Here are some of the biggest stories you may have missed over the weekend and early this morning: May jobs report, Trump tariff updates: What to know this week China accuses US of 'violating' trade truce, vows to hit back Why the 'TACO' trade may have run its course The Lone Star State — and Trump — versus BlackRock Tesla execs questioned Musk after he denied killing $25K EV project Analysts' bullish reviews mask weak conviction in US stock rally Fed's Waller breaks ranks, sees path to rate cuts this year Gold climbs as geopolitical and trade tensions rise Trump moves to lift Biden-era curbs on Arctic oil drilling Yahoo Finance's Alexandra Canal reports: Read more here. Stock markets in Germany and elsewhere are staging a world-beating rally, far outperforming the S&P 500 (^GSPC) this year as President Trump's trade-war push to boost US fortunes apparently backfires. Bloomberg reports: Read more here. Asian stocks fell on Monday, weighed down by escalating geopolitical tensions and fresh trade friction between the US and China. Hong Kong's Hang Seng Index (^HSI) led regional losses, sinking 2.2% as renewed sparring between Beijing and Washington spooked investors. Markets in mainland China were closed for a public holiday, but a doubling of steel tariffs to 50% due to take effect Wednesday is set to hit markets as they reopen Tuesday. Elsewhere in Asia, Japan's Nikkei 225 (^N225) declined 1.4%, South Korea's Kospi (^KS11) shed 0.3% and Australia's S&P/ASX 200 (^AXJO) edged down 0.2%.
Chicago Tribune
2 days ago
- Business
- Chicago Tribune
Forrest Claypool: Can bond vigilantes save Chicago?
What if Chicago government tried to issue more debt to pay for unaffordable budgets, but no one bought the city's bonds? Far-fetched as it sounds, it's not inconceivable. In fact, economist Ed Yardeni coined the term 'bond vigilantes' to describe investors who sell or refuse to buy bonds to force governments to abandon irresponsible fiscal practices. Responding to a preliminary U.S. House budget adding trillions to the national debt, bond vigilantes recently withheld purchases at a routine auction of U.S. Treasury notes, forcing yields to the highest levels in 18 years. Investors demanded a risk premium against inflationary spending. When the House passed the final budget, it added hundreds of billions in spending cuts. When President Donald Trump paused his tariffs for 90 days, he blamed 'yippy' bond investors who had reacted by jacking up interest rates and sending the dollar lower. James Carville, a former adviser to President Bill Clinton, famously quipped that he wanted to be reincarnated as the bond market because 'you can intimidate anybody.' If bond vigilantes can alter the policies of the federal government, can they force Chicago to face up to its unsustainable debt practices? Each Chicago family is responsible for $85,000 in public debt, roughly half each from the city and state. No other city resident's debt burden comes close. More than 43% of Chicago's budget is consumed by debt service and pension payments, by far the highest in the nation. (The median nationally is 12%.) And pension debt is accelerating, rising $24 billion in the last decade even as taxpayers poured an extraordinary $20 billion into the city's five funds. By increasing pension benefits during a 20-year period when household incomes barely doubled, the Illinois legislature sent Chicago down a path to eventual financial ruin. Pension and debt payments consume nearly every dollar from property taxes — levies that are among the highest of American cities. Property taxes are so high that they have become the third rail of local politics. When Mayor Brandon Johnson tried to raise them, the City Council rebelled. Instead, the city simply borrowed more money. Escalating debt payments have forced reductions in police positions despite elevated violent crime. Businesses and taxpayers have left in droves, further reducing the city's ability to keep up. Annual migration reports from Allied Van Lines and Zillow consistently show the Chicago area as a national leader in departures. 'The word bankruptcy has been hanging over Chicago like a storm cloud about to burst,' bankruptcy expert Andrew Biggs wrote in The New York Times. Biggs is a presidential overseer of Puerto Rico's bankruptcy. Chicago Public Schools is the canary in the coal mine. Its exorbitant debt is junk-rated, the poorest credit rating among major U.S. school districts. Yet CPS has increased staffing 20% since 2019 while losing 10% of its students. It recently inked an irresponsible four-year teacher contract that adds $1.5 billion in expenses with no apparent means to fund the contract's last three years. Average Chicago teacher salaries will reach $114,000, the highest in the nation. The Civic Federation, a fiscal watchdog, warned the state may have to take over the school district, despite its own massive debt and multibillion-dollar budget shortfalls. Although Illinois law does not provide for municipal bankruptcy, it can't prevent one from occurring. Biggs warns bondholders that bankruptcy courts in places such as Detroit have prioritized pensioners, leaving bond investors at risk of losing most or all of their investments. With Chicago and CPS unable to keep up with soaring pension costs, and cowardly state and local leaders with their heads rooted firmly in the sand, bond vigilantes could be the city's last best hope, forcing a crisis that demands a restructuring of debts, protecting ordinary retirees but capping the runaway six-figure pensions benefiting the political class. Absent a forced crisis, Chicago may follow the path of many other once-great cities, cutting services and raising taxes each year and slowly bleeding residents and jobs. On May 10, 1981, the Tribune warned that Chicago risked such a fate, calling it a 'city on the brink.' Reporter R.C. Longworth wrote: 'Often, cities stricken in this way become irrelevant. Business moves away. So do the best young people. The population ages. The city becomes a backwater.' A multidecade revival, largely led by the 22-year mayoralty of Richard M. Daley, prevented the city from such a fate. Now, however, Chicago stands on the brink again. But no political savior waits on the sideline. If the economy enters a recession, a reckoning could come sooner than later. For five years, Chicago and CPS have helped cover deficits with billions of dollars from the pandemic bailout issued by President Joe Biden's administration. The money runs out next year. Will bond vigilantes be the force that saves Chicago from the city and state politicians unwilling to restore fiscal sanity? Forrest Claypool is author of 'The Daley Show: Inside the Transformative Reign of Chicago's Richard M. Daley.' He served twice as Daley's chief of staff and was CEO of Chicago Public Schools from 2015 to 2017.
CNBC
27-05-2025
- Business
- CNBC
My underlying bullishness remains intact, says Ed Yardeni
Ed Yardeni, Yardeni Research president, joins 'Squawk Box' to discuss the latest market trends, state of the economy, impact of the administration's policy uncertainty, what to make of the recent bond market volatility, and more.
