Latest news with #GlobalDataTSLombard
CNBC
09-05-2025
- Business
- CNBC
India's long-term growth story is 'intact' despite ongoing conflict, says economist
Shumita Sharma Deveshwar, Chief India Economist at GlobalData TS Lombard discusses India's economic resilience despite rising tensions with Pakistan. She highlights the significance of an India-U.K. trade deal and emphasizes the country's progress in advanced manufacturing, while stressing the need for parallel job creation in labor-intensive sectors.
Yahoo
26-04-2025
- Business
- Yahoo
What a plunge in shipping traffic from China says about tariffs, stocks and the economy
Fears of pandemic-era shortages at American stores have made a big comeback as shipping-container traffic between China and the U.S. plunged in the wake of President Trump's tariffs. A look at estimates of container ships departing China to the U.S. shows a dramatic drop in recent weeks, based on a 15-day rolling period. 'I'm literally afraid to look at my balance': I have $300K in a 2025 target-date fund. Is there a chance it will recover? 'I survived a head-on car wreck': I'm on Medicaid, but inheriting $290K. How do I protect it from the 5-year look-back rule? 'She's kept him afloat': I'm 78 and leaving my daughter, 41, my life savings, but her partner is a mooch. How can I protect her? A cruel summer looms, but here's why JPMorgan still expects a higher S&P 500 finish this year 'She can absolutely live on the income!' My stepmother, 85, makes bizarre requests for money from my father's $10M trust. Should I be concerned? Torsten Slok, Apollo Global Management's chief economist, warned in a Friday note of the potential for 'empty shelves in U.S. stores in a few weeks,' as well as significant downside risks to the economy if layoffs start hitting some of the 9 million workers in U.S. trucking-related jobs and the 19 million employees in the retail sector. Potential shortages and higher costs have been a worry for households and business. Yet there's another way to look at the plunge in shipping traffic: U.S. firms that rely on Chinese manufacturing for their goods have been pulling forward orders and cargo transports as Trump escalated tariffs. That makes the current cargo backdrop look different from earlier pandemic-era shortages, mainly because U.S. companies to start 2025 knew for months that higher tariffs were likely. That also gave them time to take some steps pre-emptively, unlike during the COVID crisis. 'Everybody front-loaded their imports,' said Steve Blitz, chief U.S. economist at GlobalData TS Lombard. 'What happened was a surge in imports in the first quarter, which was unsustainable, before tariffs hit. Now you are seeing the backwash of it.' Instead of a supply shock, Blitz said watching the economic impact of tariffs will hinge on prices. 'The stuff is going to come in,' he said Friday, but the question will be what retailers can do to protect their margins and maintain unit sales as higher tariffs start flowing through to new orders and goods. Trump's tariffs on goods flowing into the U.S. already sit at the highest level in a century, even after talking into account his 90-day pause on additional tariffs outlined on April 2. China was excluded from the pause, and tit-for-tat tariffs between the nations have escalated. The potential scope of global tariffs over the long run has spooked investors and the business community. Neither group has sat idle. Grace Zwemmer, associate economist at Oxford Economics, pointed out that sharply increased air-freight traffic should also be factored into any analysis of supply chains, because 'much of the increased shipments to the US are coming via air freight rather than ocean freight.' 'Front-loading has increased demand for air freight because it offers a faster shipping method than traditional ocean carriers,' Zwemmer wrote in a Monday client note. 'In the context of tariffs, making sure a shipment gets sent before tariffs are enacted could be a difference of thousands of dollars for a business.' While lower fuel prices CL00 have helped offset increased demand for now, Zwemmer said supply-chain issues could spur more persistent inflation down the road, 'something the Federal Reserve is worried about.' The S&P 500 stock index SPX may have met the typical definition of exiting its correction on Thursday, but there's still been plenty of losses to go around. Taking a step back from supply chains, the stock market and credit conditions also loom large in the consumer-centric U.S. economy. Trump provided a degree of calm to Wall Street recently by saying he doesn't plan on firing Fed Chair Jerome Powell, a factor investors said contributed to the rally in stocks. See: Trump shifts to friendlier tone for Fed's Powell: 'I have no intention of firing him' A meeting of big-box retailers at the White House this week to talk tariffs also was in focus on Wall Street, with the retailers describing the meeting as 'productive.' Longer Treasury yields BX:TMUBMUSD10Y moved lower, signaling a slight reprieve in borrowing costs for companies and people trying to finance a home or vehicle. Anxiety around the global trade dispute has soured how consumers and business owners feel about the economy, with the 90-day pause providing only a modest boost to sentiment. The more pressing problem for Wall Street has been how to decode first-quarter earnings, which would benefit from front-loading ahead of tariffs but also paint a cloudy picture of what comes next. For one thing, investors remain unsure about talk of progress on trade deals from the White House, when China has said they aren't happening. That makes it hard to guess where tariff levels will ultimately land, if consumers will pull back on spending or what to make of the outlook for corporate profit margins. With macroeconomic uncertainty, businesses generally will hunker down and scale back any significant plans to spend on new business lines or invest in existing ones, said John Canally, chief portfolio strategist at TIAA Wealth Management. He also expects corporate profits to come under further pressure due to lower margins from higher input costs and loss of revenues overseas. Companies might look to layoffs to offset lower margins, which can hurt the economy. But further tumult in the stock market could also cause wealthier consumers helping fuel the economy to pull back on spending. 'Rule one of a retail store is units sold,' Blitz at GlobalData. 'You've got supply, and you need to get that supply through the store. If you don't sell it, your store closes,' he said. 'The issue isn't supply, but price.' 10 'pure value' stocks favored by analysts to soar 20% to 96% over the next year I held power of attorney for my late brother. Can I withdraw money from his bank account to give to his favorite charity? 'I am suspicious': My father died, leaving me $250,000. My brother says it's all gone. What can I do? 'An argument ensued': My mother entrusted my inheritance to her second husband. It all went horribly wrong. S&P 500's rapid exit from correction territory hinged on Trump's walk-backs of tariffs and Fed fight Sign in to access your portfolio
Yahoo
19-04-2025
- Business
- Yahoo
Resist the urge to buy the dip in stocks because recession risk is still being ignored, research firm says
The macro strategist Daniel von Ahlen advises against buying stocks due to the risk of a recession. Investors underestimate the risks of tariffs, spending cuts, and other Trump policies, he says. Von Ahlen suggests investors focus on defensive sectors and inflation-protected Treasurys. Daniel von Ahlen, a senior macro strategist at GlobalData TS Lombard, says now is not the time to buy the broad decline in stocks. The S&P 500 is down 13% from its mid-February peak as investors worry about the impacts of President Donald Trump's tariffs. But they're not worrying enough, von Ahlen said in a note on Wednesday, adding that investors are complacent and "significantly underpricing" the risk of an imminent recession. "Trump's tariff reprieve has triggered a relief rally in equity markets, but we think it will be short-lived and recommend selling into rallies and staying away from buying the dip," von Ahlen said. He said consensus estimates for US GDP growth this year were "too rich" at 1.8%. That type of growth is inconsistent with a tariff-induced downturn taking shape, as higher prices are likely to weigh down consumers' purchasing power. This disconnect is clearly illustrated in the chart below, which shows the median decline in corporate earnings during past recessions compared with rising corporate profit expectations over the next year. Von Ahlen said federal government spending cuts by the White House DOGE office would negatively influence the labor market and lead to lower corporate profits. And if the Trump administration wants to pass tax cuts, DOGE will have to do a lot more spending cuts as an offset, which would put further pressure on the economy, the note said. Another concern for investors is the potential for a slowdown in corporate investment spending and hiring intentions due to the "pervasive uncertainty" of Trump's economic policies, the note added. Finally, the crackdown on immigration could lead to a decline in the US labor force growth. "Collectively, these factors could be powerful enough to push the US economy into recession, especially as rapidly cooling real personal income growth leaves little room for error," von Ahlen said. While the stock market is not the economy, they are closely linked, and the sky-high volatility in recent weeks could ultimately become a problem for the economy. That's because of the wealth effect, which is the idea that rising asset values make consumers more confident to spend more money. Well, it has the exact opposite effect when the stock market is plunging at a pace not seen since the onset of the COVID-19 pandemic in March 2020. "The languishing stock market will likely dampen animal spirits given that households equity allocation is around all-time highs," von Ahlen said. Steve Sosnick, the chief strategist at Interactive Brokers, told Business Insider on Wednesday that investors were not heeding von Ahlen's advice. "We have seen customers continually on the buy side. They bought the rally. They bought the dip," Sosnick said. "Our customers have consistently been buying." One of the top stocks Interactive Brokers clients have been buying amid the recent volatility is Nvidia, which is still suffering from tariff uncertainty. Sosnick said investors would probably not change their behavior until there's a deep and prolonged drawdown in the stock market. "A lot of people in this market have made a lot of money over the past couple of years by buying dips, and it's a strategy that's worked very well, but it's not to say that works all the time," Sosnick said. Instead of buying the broad stock market, von Ahlen recommends investors be more selective in what they buy. The strategist identified defensive sectors as buys, which include utility, consumer-staple, and healthcare stocks. On the bond side, von Ahlen said investors should watch out for a rebound in inflation. "Longer-term inflation expectations seem too low for what lies ahead, and we would expect them to gradually move higher," he said. Von Ahlen recommended investors purchase long-duration inflation-protected Treasurys. Read the original article on Business Insider Sign in to access your portfolio
Yahoo
18-04-2025
- Business
- Yahoo
Why U.S. investors might be seriously underestimating the risk of a recession
President Donald Trump's latest tariff tweaks appear to have helped stabilize U.S. financial markets — at least, for now. But Daniel von Ahlen, a senior macro strategist at GlobalData TS Lombard, fears investors might be underestimating the risk of a recession. If he turns out to be right, this could lead to more pain later this year, especially for stocks. Dow sees first 'death cross' since 2023 — but here's the good news Wall Street's 12 favorite stocks could soar as much as 54% over the next year, analysts say 'It's just not done': Why Trump firing Powell could rock U.S. financial markets The U.S. dollar's role as the de facto global reserve currency is looking increasingly uncertain I'm administrator of my sister's estate. Her bank won't tell me the names of her beneficiaries. Is that legal? In a report shared with MarketWatch on Wednesday, Von Ahlen highlighted a few concerning signs culled from recent economic reports and headlines. Firings of federal-government workers will test the capacity of the labor market just as the hiring rate has weakened. Also, Trump's tariffs should boost prices of many goods, denting consumers' purchasing power when income growth has slowed. Retaliatory tariffs from China could hurt U.S. exporters. A crackdown on immigration could shrink the labor force, and spending cuts necessary to extend Trump's tax cuts from his first term could also rob the U.S. economy of a valuable source of stimulus at a particularly inopportune moment. 'Collectively, these factors could be powerful enough to push the U.S. economy into recession, especially as rapidly cooling real personal income growth leaves little room for error,' von Ahlen wrote in the report. To add some heft to his argument, the macro strategist measured the rate of economic growth currently priced into U.S. markets. His model showed that investors have yet to abandon their expectations for strong economic growth, even as the consensus growth rate forecast by Wall Street economists has fallen considerably. Another possible negative for stocks: Wall Street analysts were still too sanguine about the prospects for corporate earnings growth in 2025. While analysts have started to cut their forecasts, the bottom-up consensus was still calling for 8.9% growth in 2025. Typically, earnings see little or no growth in a recession. Furthermore, weakness in the stock market could also help weigh on consumer spending, as stocks have contributed a growing share to average household wealth in recent years. Von Ahlen isn't alone in worrying that investors might be blindsided by what comes next. Michael Brown, a senior research strategist at Pepperstone, also expressed some concerns in commentary recently shared with MarketWatch. 'Sectoral tariffs on computer chips, and pharmaceuticals are on the way; a 10% blanket tariff is still in place on the vast majority of U.S. imports; Sino-U.S. trade is still essentially blockaded, with China having now halted deliveries of Boeing jets; and, even if it's still early days, progress towards trade deals to eradicate the 'reciprocal' tariffs altogether seems rather slower than most would like,' Brown said. 'Consequently, I remain concerned that participants are being lulled into a bit of a false sense of security here. Not only does ample trade uncertainty remain, but we have also yet to fully discount either the upside inflation, or downside growth risks that tariffs will bring to the US economy, and globally.' How should investors position themselves for a recession? Von Ahlen recommended a few different trades. One was going long defensive sectors via popular ETFs like the Utilities Select Sector SPDR Fund XLU, while betting against ETFs tied to more cyclical sectors, like the Financial Select Sector SPDR Fund XLF. He also recommended buying long-dated inflation-protected bonds, perhaps via an ETF. The Pimco 15+ Year U.S. TIPS Index ETF LTPZ was one option. Using Mexican pesos to fund a long position in the Japanese yen MXNJPY would also make sense, given the yen's reputation as a safe-haven currency. Despite its recent appreciation against the U.S. dollar, the Japanese currency was still looking exceptionally cheap. Wall Street economists, including a team at Goldman Sachs Group, had warned about the likelihood of a recession after Trump unveiled his 'liberation day' tariffs on April 2. However, the Goldman team quickly tweaked those forecasts once Trump announced a 90-day pause on some of the levies on April 9. U.S. stocks were back in the red on Wednesday, with the S&P 500 SPX down 1.3% in recent trade, while the Nasdaq Composite COMP was off by more than 2% after Nvidia Corp. NVDA said late Tuesday that the White House had blocked export of more of the company's artificial-intelligence chips to China without a license. Also on Tuesday, Bloomberg News reported that Beijing had ordered domestic airlines to stop accepting deliveries of Boeing jets. Wall Street predicts a 10% stock rebound by the end of 2025. Why investors shouldn't buy the hype just yet. 'The whole thing feels predatory': My grandma, 97, pays $170 a month for a $10,000 life-insurance policy. Should we stop payments? The day before Good Friday is often a great day for the stock market. Here's how today is shaping up. I held power of attorney for my late brother. Can I withdraw money from his bank account to give to his favorite charity? 'Are we out of our minds?' My husband and I are in our 70s. Should we use $600K of our savings to buy our dream home? Sign in to access your portfolio
Yahoo
17-04-2025
- Business
- Yahoo
Resist the urge to buy the dip in stocks because recession risk is still being ignored, research firm says
The macro strategist Daniel von Ahlen advises against buying stocks due to the risk of a recession. Investors underestimate the risks of tariffs, spending cuts, and other Trump policies, he says. Von Ahlen suggests investors focus on defensive sectors and inflation-protected Treasurys. Daniel von Ahlen, a senior macro strategist at GlobalData TS Lombard, says now is not the time to buy the broad decline in stocks. The S&P 500 is down 13% from its mid-February peak as investors worry about the impacts of President Donald Trump's tariffs. But they're not worrying enough, von Ahlen said in a note on Wednesday, adding that investors are complacent and "significantly underpricing" the risk of an imminent recession. "Trump's tariff reprieve has triggered a relief rally in equity markets, but we think it will be short-lived and recommend selling into rallies and staying away from buying the dip," von Ahlen said. He said consensus estimates for US GDP growth this year were "too rich" at 1.8%. That type of growth is inconsistent with a tariff-induced downturn taking shape, as higher prices are likely to weigh down consumers' purchasing power. This disconnect is clearly illustrated in the chart below, which shows the median decline in corporate earnings during past recessions compared with rising corporate profit expectations over the next year. Von Ahlen said federal government spending cuts by the White House DOGE office would negatively influence the labor market and lead to lower corporate profits. And if the Trump administration wants to pass tax cuts, DOGE will have to do a lot more spending cuts as an offset, which would put further pressure on the economy, the note said. Another concern for investors is the potential for a slowdown in corporate investment spending and hiring intentions due to the "pervasive uncertainty" of Trump's economic policies, the note added. Finally, the crackdown on immigration could lead to a decline in the US labor force growth. "Collectively, these factors could be powerful enough to push the US economy into recession, especially as rapidly cooling real personal income growth leaves little room for error," von Ahlen said. While the stock market is not the economy, they are closely linked, and the sky-high volatility in recent weeks could ultimately become a problem for the economy. That's because of the wealth effect, which is the idea that rising asset values make consumers more confident to spend more money. Well, it has the exact opposite effect when the stock market is plunging at a pace not seen since the onset of the COVID-19 pandemic in March 2020. "The languishing stock market will likely dampen animal spirits given that households equity allocation is around all-time highs," von Ahlen said. Steve Sosnick, the chief strategist at Interactive Brokers, told Business Insider on Wednesday that investors were not heeding von Ahlen's advice. "We have seen customers continually on the buy side. They bought the rally. They bought the dip," Sosnick said. "Our customers have consistently been buying." One of the top stocks Interactive Brokers clients have been buying amid the recent volatility is Nvidia, which is still suffering from tariff uncertainty. Sosnick said investors would probably not change their behavior until there's a deep and prolonged drawdown in the stock market. "A lot of people in this market have made a lot of money over the past couple of years by buying dips, and it's a strategy that's worked very well, but it's not to say that works all the time," Sosnick said. Instead of buying the broad stock market, von Ahlen recommends investors be more selective in what they buy. The strategist identified defensive sectors as buys, which include utility, consumer-staple, and healthcare stocks. On the bond side, von Ahlen said investors should watch out for a rebound in inflation. "Longer-term inflation expectations seem too low for what lies ahead, and we would expect them to gradually move higher," he said. Von Ahlen recommended investors purchase long-duration inflation-protected Treasurys. Read the original article on Business Insider Sign in to access your portfolio
