Latest news with #EliasHaddad
Zawya
3 days ago
- Business
- Zawya
Stocks head for best month since 2023 ahead of inflation data
LONDON - World stocks were heading for their best month since late 2023 on Friday and the dollar was flirting with its first monthly rise of the year, while traders waited for key inflation data and assessed the latest in Washington's to and fro on tariffs. Markets have been see-sawing all week as investors try to ride out a rollercoaster news flow after a U.S. court blocked most of President Donald Trump's tariffs and a federal appeals court temporarily reinstated them. An initial fall by European stocks on Friday turned into 0.3%-1% gains despite an unexpected dip in German retail sales and as Wall Street futures beginning to sag again ahead of U.S. PCE inflation data due later. MSCI's main world index is up over 5% this month while the dollar, which was up 0.3% on Friday, is tantalizingly close to its first positive month of 2025. It was helped by benchmark 10-year U.S. Treasury yields - which are a proxy for U.S. borrowing costs - rising 0.5 basis points in European trade. They had dipped on Thursday on soft economic data and a solid 7-year bond auction. Investors have also been rattled by a little-publicized provision in Trump's budget bill that would allow the government to impose taxes of up to 20% on foreign investment. "A foreign tax provision in the One Big Beautiful Bill Act is alarming," Brown Brothers Harriman strategist Elias Haddad said, adding that all the uncertainty raised the risk of the U.S. entering "a period of stagflation". Oil prices were on track for a second consecutive weekly drop on expectations of another OPEC+ output hike, although they were up on the day and still up for the month as a whole. Japan's Nikkei saw profit taking overnight after its near 2% rally the previous day, with investors also concerned about Japanese debt levels and the impact of tariffs. The yen appreciated as much as 2% from its low on Thursday and was changing hands at roughly 144 per dollar in London. The euro and pound were down 0.3% and 0.1% at $1.13 and $1.34 respectively. In Asia, Hong Kong's Hang Seng had dropped 1.2%, with Apple suppliers hit by the U.S. tariff reversal. Mainland Chinese blue chips dipped 0.5% too although both scored solid monthly gains. Korean stocks have fared even better, notching up their best month since November 2023 in line with the main world index. An index tracking emerging market currencies meanwhile has also gained about 2% for the month. That is also its best since November 2023. Soaring gold prices have helped Ghana's cedi rocket nearly 40% this month. "Trump's trade agenda remains alive and kicking, with the legal battle adding yet another layer of uncertainty," said Rodrigo Catril, senior FX strategist at National Australia Bank. "The only thing that looks more certain is more uncertainty," he said. Despite the courtroom drama, the Trump administration said negotiations with top trading partners were continuing unabated. Treasury Secretary Scott Bessent said during an interview with Fox News that he was scheduled to have talks with a high-level Japanese delegation later on Friday in Washington, although he said talks with China were "a bit stalled".
Telegraph
25-02-2025
- Business
- Telegraph
Investors bet on US downturn as Trump triggers ‘red flags'
Investors are piling their money into safe haven US government bonds amid fears that Donald Trump will trigger an economic downturn. In a flight to safety, the yield on the 10-year US Treasury bond – a benchmark for global government borrowing costs – plunged below 4.3pc for the first time in more than two months on Tuesday. The bond market rally, which helped send the UK's 10-year gilt yield briefly below 4.5pc, came as part of a shift away from riskier assets amid fears for the health of the American economy. Wall Street stocks fell in early trading, with the Nasdaq Composite down more than 1pc as official figures showed US consumer confidence plummeted in February. The Conference Board research group reported that its consumer confidence index suffered its biggest monthly decline in more than four years, coming in well below market expectations. Meanwhile, the US president said late on Monday that 25pc tariffs on Canadian and Mexican imports were 'on time and on schedule' for their March 4 deadline, after he decided to postpone their introduction for a month. Elias Haddad, senior market strategist at Brown Brothers Harriman, said: 'Red flags are emerging for the US economy. 'Another month or two of poor US economic data would deliver a blow to the US exceptionalism narrative.' The US is already locked in a trade war with China, imposing additional 10pc tariffs earlier this month. Mr Trump signed an order last week restricting Chinese investments in strategic areas and has mooted tariffs on a range of sectors around the world from car manufacturers to the steel industry. It came as closely watched PMI data on Friday showed the US services sector contracted for the first time in more than two years. Chris Williamson, the chief business economist at S&P Global, which compiles the figures, said: 'The upbeat mood seen among US businesses at the start of the year has evaporated, replaced with a darkening picture of heightened uncertainty, stalling business activity and rising prices.' As a result, traders have begun betting that America's central bank, the Federal Reserve, will cut interest rates further. A reduction in the Fed rate is priced in by July, with a second drop now expected before the end of the year. Chris Verrone, at Strategas, said: 'The market still seems more worried about growth than inflation.' Another factor weighing on markets was Wednesday's impending annual results from AI chip behemoth Nvidia, one of the so-called 'magnificent seven' group of companies that has driven the US stock market higher in recent years. The semiconductor manufacturer grew rapidly to at one point become the world's most valuable company last year amid the clamour to capitalise on the mania surrounding artificial intelligence. However, its shares have fallen 15pc since hitting a record high in January, sending its market capitalisation below $3 trillion (£2.4 trillion) amid concerns over an AI bubble and disruption to the market from Chinese chatbot DeepSeek. Kathleen Brooks, the research director at XTB, said: 'Although a monster earnings report is expected, the market reaction to these results will hinge on the forward outlook. 'The market expects big things, otherwise the magnificent seven could come under even more pressure later this week.'
