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Yahoo
an hour ago
- Business
- Yahoo
Market Resilience Challenged by Trump's Weekend Tariff Salvo
(Bloomberg) -- Financial markets, which have shown increasing insensitivity to tariff threats from the US, will face a test at the Monday open after President Donald Trump declared a 30% rate for the European Union and Mexico effective Aug. 1. Singer Akon's Failed Futuristic City in Senegal Ends Up a $1 Billion Resort Why Did Cars Get So Hard to See Out Of? How German Cities Are Rethinking Women's Safety — With Taxis Philadelphia Reaches Pact With Workers to End Garbage Strike Trump has ratcheted up trade measures, promising that more tariffs are coming to everyone from Canada to Brazil to Algeria and inviting trading partners to negotiate further. Despite warnings of complacency from the likes of JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon, investors have so far behaved as if they're counting on the US president to back down, having seen previous U-turns from his administration. 'Investors shouldn't bank on Trump only bluffing with the 30% tariff threat on EU goods,' Brian Jacobsen, chief economist at Annex Wealth Management, wrote in an email. 'That level of tariffs is punitive, but it likely hurts them more than the US, so the clock is ticking.' Having set a record high in recent days, Bitcoin, which trades through the weekend, was little moved after the latest Trump missives. Currency markets will give earlier indications of the impact on global risk appetite when they resume trading at 5 a.m. Sydney time. The euro touched its strongest level against the dollar since 2021 this month as investors assessed the region's relative growth prospects. Meanwhile, the Mexican peso set a one-year high of 18.5525 versus the dollar on July 9. President Trump and his allies' criticism of Jerome Powell's handling of the expensive renovation of the Fed's headquarters — with some administration officials building a case to remove Powell from the Fed's Board of Governors — may also weigh on markets at the start of the week. Deutsche Bank AG strategist George Saravelos said the potential dismissal of Powell is a major and underpriced risk that could trigger a selloff in the US dollar and Treasuries. 'If Trump were to force Powell out, the subsequent 24 hours would probably see a drop of at least 3% to 4% in the trade-weighted dollar, as well as a 30 to 40 basis point fixed-income selloff, Saravelos said. The greenback and bonds would carry a 'persistent' risk premium, he said in a note, adding that investors may also grow anxious about the potential politicization of the Fed's swap lines with other central banks. Tariff Campaign Financial markets have been struggling with how to price in the on-again, off-again tariff campaign instigated by Trump so far in his second term. While markets responded to the April 2 'Liberation Day' announcements by selling risk assets and even US Treasuries, those moves have now almost all reversed as the president delayed many of his threatened levies. The EU had been trying to conclude a tentative deal with the US to stave off higher tariffs, but Trump's letter punctured the recent optimism in Brussels. The US president did, however, leave an opening for additional adjustments. 'As usual, there are many conditions and clauses that can get these rates reduced,' Jacobsen wrote. 'That's probably why the market might not like the tariff talk, but it's not panicking about it either.' Even when Trump said that Aug. 1 would be a hard deadline, markets reacted as if that date was still negotiable. They did show some signs of caution Friday, when stocks fell from all-time highs as Trump intensified his trade offensive, and the dollar rallied for its best week since February. 'The market isn't believing Trump, so we may see pressure on the exchange rate, but only temporarily,' said Gabriela Siller, director of economic analysis at Grupo Financiero Base. 'Unless the tariff actually goes into effect and is collected, because according to US trade data, the IEEPA tariffs aren't being collected to the letter.' In his letter to Mexican President Claudia Sheinbaum, Trump said the country has been 'helping me secure the border,' but added that it wasn't enough. The US doesn't intend to apply the 30% rate to USMCA-compliant goods, according to a White House official. --With assistance from Kelsey Butler. (Adds comments on the Mexico peso, Trump pressure on Fed Chair starting in the sixth paragraph) 'Our Goal Is to Get Their Money': Inside a Firm Charged With Scamming Writers for Millions Trump's Cuts Are Making Federal Data Disappear Soccer Players Are Being Seriously Overworked Will Trade War Make South India the Next Manufacturing Hub? Trade War? No Problem—If You Run a Trade School ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
an hour ago
- Business
- Yahoo
Market Resilience Challenged by Trump's Weekend Tariff Salvo
(Bloomberg) -- Financial markets, which have shown increasing insensitivity to tariff threats from the US, will face a test at the Monday open after President Donald Trump declared a 30% rate for the European Union and Mexico effective Aug. 1. Singer Akon's Failed Futuristic City in Senegal Ends Up a $1 Billion Resort Why Did Cars Get So Hard to See Out Of? How German Cities Are Rethinking Women's Safety — With Taxis Philadelphia Reaches Pact With Workers to End Garbage Strike Trump has ratcheted up trade measures, promising that more tariffs are coming to everyone from Canada to Brazil to Algeria and inviting trading partners to negotiate further. Despite warnings of complacency from the likes of JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon, investors have so far behaved as if they're counting on the US president to back down, having seen previous U-turns from his administration. 'Investors shouldn't bank on Trump only bluffing with the 30% tariff threat on EU goods,' Brian Jacobsen, chief economist at Annex Wealth Management, wrote in an email. 'That level of tariffs is punitive, but it likely hurts them more than the US, so the clock is ticking.' Having set a record high in recent days, Bitcoin, which trades through the weekend, was little moved after the latest Trump missives. Currency markets will give earlier indications of the impact on global risk appetite when they resume trading at 5 a.m. Sydney time. The euro touched its strongest level against the dollar since 2021 this month as investors assessed the region's relative growth prospects. Meanwhile, the Mexican peso set a one-year high of 18.5525 versus the dollar on July 9. President Trump and his allies' criticism of Jerome Powell's handling of the expensive renovation of the Fed's headquarters — with some administration officials building a case to remove Powell from the Fed's Board of Governors — may also weigh on markets at the start of the week. Deutsche Bank AG strategist George Saravelos said the potential dismissal of Powell is a major and underpriced risk that could trigger a selloff in the US dollar and Treasuries. 'If Trump were to force Powell out, the subsequent 24 hours would probably see a drop of at least 3% to 4% in the trade-weighted dollar, as well as a 30 to 40 basis point fixed-income selloff, Saravelos said. The greenback and bonds would carry a 'persistent' risk premium, he said in a note, adding that investors may also grow anxious about the potential politicization of the Fed's swap lines with other central banks. Tariff Campaign Financial markets have been struggling with how to price in the on-again, off-again tariff campaign instigated by Trump so far in his second term. While markets responded to the April 2 'Liberation Day' announcements by selling risk assets and even US Treasuries, those moves have now almost all reversed as the president delayed many of his threatened levies. The EU had been trying to conclude a tentative deal with the US to stave off higher tariffs, but Trump's letter punctured the recent optimism in Brussels. The US president did, however, leave an opening for additional adjustments. 'As usual, there are many conditions and clauses that can get these rates reduced,' Jacobsen wrote. 'That's probably why the market might not like the tariff talk, but it's not panicking about it either.' Even when Trump said that Aug. 1 would be a hard deadline, markets reacted as if that date was still negotiable. They did show some signs of caution Friday, when stocks fell from all-time highs as Trump intensified his trade offensive, and the dollar rallied for its best week since February. 'The market isn't believing Trump, so we may see pressure on the exchange rate, but only temporarily,' said Gabriela Siller, director of economic analysis at Grupo Financiero Base. 'Unless the tariff actually goes into effect and is collected, because according to US trade data, the IEEPA tariffs aren't being collected to the letter.' In his letter to Mexican President Claudia Sheinbaum, Trump said the country has been 'helping me secure the border,' but added that it wasn't enough. The US doesn't intend to apply the 30% rate to USMCA-compliant goods, according to a White House official. --With assistance from Kelsey Butler. (Adds comments on the Mexico peso, Trump pressure on Fed Chair starting in the sixth paragraph) 'Our Goal Is to Get Their Money': Inside a Firm Charged With Scamming Writers for Millions Trump's Cuts Are Making Federal Data Disappear Soccer Players Are Being Seriously Overworked Will Trade War Make South India the Next Manufacturing Hub? Trade War? No Problem—If You Run a Trade School ©2025 Bloomberg L.P.
Forbes
2 hours ago
- Business
- Forbes
Digital Employees Will Mean We Need Non-Human Resources Departments
BEIJING, CHINA - MARCH 26: Humanoid robots work at an information desk at Zhongguancun International ... More Innovation Center, venue for the 2025 Zhongguancun Forum (Photo by Li He/VCG via Getty Images). The Chief Analytics Officer at JPMorgan Chase, Derek Waldron, suggests that 'digital employees' is a helpful model to help those of us in business to think about how AI tools will used. Meanwhile, Bank of New York Mellon now employs dozens of AI 'digital employees' that have company logins so they can work alongside its human staff. Digital Employees Are Here In James Boyle's fascinating book 'The Line', he argues that a debate over the personhood of AI agents is inevitable and suggests that our existing legal frameworks will come under strain trying to resolve the complex social, political and legal issues that attend such debate. He is right, of course, and recent developments must make us think more carefully about what these development mean for the evolution of the enterprise. A digital employee is an agent designed to autonomously perform tasks that are traditionally performed by trained people. Unlike traditional rule-based software that follows simples instructions, agents can learn and adapt to a complex environment and make decisions similar to humans. As enterprises begin to deploy these kinds of systems, how we are going to resolve such as issues as: The issues are not new. I remember reading Jerry Kaplan's "Humans Need Not Apply' a few years ago and this helped me to develop some of my own thoughts about personhood (including the ability to own assets) for AIs at a time when I'd been thinking about issues around reputation management (and management of reputation in the context of punishing AIs for misbehaving). This naturally led me ask myself whether Kaplan calls 'forged laborers' would need digital identities linked to legal personhood, or whether they would be the property (in some way I can't think through, because I'm not a lawyer) of real-world legal entities of one form or another? I rather thought then that they would in the future have to have some kind of digital identity. My reasoning was that interactions in the virtual world are interactions between virtual identities (personas) and in my specific worldview, virtual identities need underlying digital identities. Whether the underlying digital identities of robots need to be bound to real-world legal entities is then a regulatory issue, not a technical one and either possibility could work. As of now, I tend to think that we will have both solutions in place but in different timescales. Employment. BNY's Chief Information Officer Leigh-Ann Russell says that their digital employees have their own logins and can directly access the same apps as human employees so that they can work autonomously and that soon they will have their own email accounts and may even be able to communicate with colleagues in other ways like through Microsoft Teams (I wonder if they will be required to keep their cameras on during calls!). Each 'persona' (a digital employee with a specifc job, such as cleaning up code) can exist in a few dozen instances, and each instance is assigned to work narrowly within a particular team. These digital employees are property—tools operated by or on behalf of the business entity that deploys them—and the legal and economic relationships around output quality, liability and so on are all assigned to the company. I asked Jo Levy, a partner at The Norton Law Firm in California and Chair of the Alliance for Responsible Data Collection (ARDC), who was speaking in Geneva this week at the UN's "AI for Good' Global Summit, about this and she agreed that legal entity status for AI Agents and robot-workers is inevitable but explained that the property vs personhood issue is not real a dichotomy: AI Agents can be 'owned' and be persons under the law, just as corporations are owned by shareholders but can sue and be sued, own property and be held criminally liable for crimes. She also pointed out that agency law already exists and hundreds of years of jurisprudence could easily be applied to digital employees so it seems to me that as most jurisdictions already have such well-developed laws governing agents acting on another's behalf and there is no obvious reason that these could not be extended or adapted to AI agents relatively quickly. Agents as agents, so to speak, is clearly the right way to think about digital employees now, but as these agents (or more likely, networks of agents) make more complex decisions, so assigning liability, to choose an obvious hard care, might be come even more complex. This is why, in the longer term, some kind of limited legal personhood, like the electronic agent personhood mentioned above, might simplify accountability (and insurance) so that these digital employees could become parties to litigation. Digital Employees Have Rights The 2017 European Parliament report on 'Civil Law Rules on Robotics' made just such a suggestion about creating a specific legal status of "electronic persons' as a pragmatic legal tool to address the liability gaps that could arise when highly autonomous systems act without direct human control. The suggestion was not taken up at the time (the European Commission was not obliged to act on the recommendations) but I think it has some merit. Limited personhood for advanced AIs as a means of assigning liability, but not full legal personhood seems a good next step. Levy pointed out that such a new legal status could be used to provide disclosures to others about the parameters of the AI agent's behavior: A digital employee might be required to act in the best interests of the corporation, to choose an obvious example. This isn't only about AI by the way. Similar approaches have been suggested for 'smart' 'contracts' as well. Not because of any moral presumptions about the persistent script's immortal sole, but for economy expedience when constructing distributed autonomous organisations (DAOs). Wyoming has already passed laws giving limited liability company (LLC)-like status to DAOs and some people see this as a step towards more distinct recognition of AI-driven collectives. (Both real corporations and DAOs might be required to pay registration fees for digital employees that are assigned legal identities. I had not thought about the idea of a digital payroll tax, but it seems a suggestion that deserves consideration.) I cannot help but agree with Alon Jackson, CEO and Co-Founder of Astrix Security, when he says that companies at the forefront of the new era of agentic business will be those that understand that managing digital employees is not "a niche IT issue but as a strategic board-level imperative". Personally, I suspect that the Non-Human Resources Department will find life much easier than the Human-Resources Department because the digital bankers can be programmed not to get drunk, not to take stupid risks and not to engage in insider-trading or interest rate-fixing!
The Hill
2 hours ago
- Business
- The Hill
Debanking innocent Americans should be illegal
Republican and Democratic leaders agree: Closing the bank accounts of Americans for no apparent reason is wrong. In recent years, major banks have begun the quiet, calculated and often callous closing of bank accounts belonging to honest, law-abiding Americans — typically without warning, cause or recourse. The practice is called debanking. And, to put it plainly, it just ain't right. According to members of the Senate Committee on Banking, Bank of America 'was the subject of 988 improper closure complaints and 584 improper account denial complaints.' JPMorgan Chase 'was the subject of 1,423 improper closure complaints and 443 improper account denial complaints,' and in 2021, Chase closed the account of retired former National Security Adviser Gen. Michael Flynn's nonprofit, citing 'reputational risk.' Wells Fargo 'was the subject of 1,053 improper closure complaints and 350 improper account denial complaints'; it has faced allegations of closing long-standing customer accounts in 'high-risk' categories, like firearms dealers. Citigroup 'was the subject of 742 improper closure complaints and 96 improper account denial complaints,' including closing personal and business accounts of Armenian Americans. Most people are unaware of this practice until it touches them directly. Bank failures and employee embezzlements get far more attention from the media and policymakers. But to those affected, debanking is as devastating as being caught in a bank robbery crossfire — and the consequences can be permanent. To put things in context, we are not talking about fraudsters, drug lords or terror financiers. Debanking is being used against men and women whose only crime is running a small business, engaging in lawful commerce or having views or associations that run counter to traditional orthodoxy, such as adult content creators. Some are foreign nationals. Others are part of religious nonprofits. Some are just on the conservative side of the political spectrum. It has been happening to regular people — people like the owner of a barbershop in a historically Black neighborhood who manages an informal savings club. To his neighbors, the owner is a lifeline. But to the bank, he is a suspicious actor whose account gets frozen after depositing a large sum of money. There's no warning and no conversation — just an ATM terminal denying him access to his own funds. Or it could be a cybersecurity expert whose firm defends against hackers and cybercriminals. Because she interacts with cyberthreats, the bank froze her account, assuming she was the criminal. Maybe it's the owner of a bakery whose teenage son sells inert replicas of firearms online as collectibles. Because of his hobby, the bank closed down the mother's account. Perhaps the next victim is a retired Marine and Civil War re-enactor who was told his bank account was closed because of his 'military paraphernalia.' These are not anomalies. They are becoming more commonplace as banks are increasingly guided — or misguided — by the concept of reputational risk, driven by the fear of being associated with certain businesses like adult entertainment, cannabis, firearms, crypto or fringe political groups. Understandably, no bank wants to be grilled by a hostile Senate committee or slapped with a billion-dollar fine for missing a bad actor. Nor do they want to be accused of helping to finance terrorism or violent organizations. So they overreach. To avoid risk, they 'de-risk' certain people, not based on their behavior but on categories and algorithms. This is not compliance. It is digital profiling. Earlier this year, the chairman of the Senate Banking Committee, Sen. Tim Scott (R-S.C.), introduced the Financial Integrity and Regulation Management Act, which expressly prohibits federal regulators from using 'reputational risk' as a justification for examining or penalizing banks. In rare bipartisan agreement, Sen. Elizabeth Warren (D-Mass.) also highlighted thousands of complaints collected in recent years from people who could not open accounts or had them abruptly closed. 'Big banks are relying on black-box algorithms and middlemen companies, and shutting down accounts without doing careful due diligence,' she said, citing Muslims, cannabis businesses and recently incarcerated people as victims. Beyond the personal harm, the societal impact of debanking is enormous. In a digital economy, it widens the gap between the unbanked and the rest of the world, and forces good people into underground economies that cut them off from full economic participation. Banks are meant to be neutral custodians of commerce, not referees of righteousness. To be sure, banks have a duty to fight illicit finance. But that duty should not include disenfranchising individuals based on vague reputational concerns. Federal watchdogs should clarify what 'reputational risk' means, and there must be much more transparency. Congress should also encourage banks to practice diligent risk analysis, not blanket exclusion. Regulators should reward, not penalize, banks that create culturally competent, innovation-friendly frameworks. Every American deserves to know why their financial life has been upended. Vague form letters are not acceptable. A bank should not be allowed to destroy someone's livelihood without a process for redress. Reasons must be specific, reviewable and appealable. Most Americans who have had their accounts closed are not money launderers, cybercriminals, militia leaders or threats to national security. They are citizens. Taxpayers. Workers. Innovators. Parents. Patriots. They are being punished not for what they've done, but for how they are perceived. Without question, banks must guard against criminality. But they should do so with discernment, discretion and decency. Otherwise, they are not protecting consumers. They are prosecuting them. And in America, that just ain't right. Adonis Hoffman writes on business law and policy. He served in senior legal roles at the FCC and in the U.S. House of Representatives.
Forbes
4 hours ago
- Business
- Forbes
Second Quarter Earnings Season Preview
The second-quarter earnings season begins this week, with 39 S&P 500 companies scheduled to report. ... More This week has a heavy emphasis on banks including: JPMorgan Chase (JPM), Wells Fargo (WFC), Citigroup (C), Bank of America (BAC), and Goldman Sachs (GS) (AP Photo/File) The second-quarter earnings season begins this week. 39 S&P 500 companies scheduled to report, with a heavy emphasis on the large banks. Notable companies scheduled to release earnings include: Blackrock (BLK), JPMorgan Chase (JPM), Wells Fargo (WFC), Citigroup (C), Bank of America (BAC), Johnson & Johnson (JNJ), Goldman Sachs (GS), PepsiCo (PEP), Netflix (NFLX), 3M (MMM), and American Express (AXP). Earnings At A Glance With only a few companies reporting and combining actual results with consensus estimates for companies yet to report, the S&P 500's blended earnings growth rate for the quarter is at 4.8% year-over-year, slightly below the expectations at the end of the quarter. Notably, the calendar year 2025 expected earnings growth rate is 9.0% and 2026's expectations are at 14.0%. S&P 500 Earnings Estimate Summary Market Performance Tariff worries led to a slight decline in the S&P 500 last week. The Magnificent 7, consisting of Microsoft (MSFT), Meta Platforms (META), (AMZN), Apple (AAPL), NVIDIA (NVDA), Alphabet (GOOGL), and Tesla (TSLA), outperformed last week. Market Performance Magnificent 7 Because these companies are critical drivers of earnings growth, a significant percentage of the S&P 500's market capitalization, and are currently in a bear market, the Magnificent 7 remains the group to watch this earnings season. The first of the Magnificent 7 is scheduled to report results next week. Magnificent 7: Q2 Estimated Earnings Growth Earnings Insights By Sector According to FactSet data, the earnings expectations for the financial sector are deceptively low due to JPMorgan Chase (JPM). JPM reported a significant gain from sales of Visa (V) stock in the same quarter last year, so the company has challenging year-over-year comparisons. If JPM is excluded from the financial sector, year-over-year earnings growth improves to 9.3% from 2.4%. Earnings Growth Estimates By Sector On the other side of the ledger, earnings growth rate expectations within the communication services sector are being flattered by Warner Bros. Discovery (WBD). According to FactSet, WBD reported a significant loss last year due to a goodwill impairment charge, so it is benefiting from extremely easy comparisons. If WBD is excluded, the expected growth of the communication services sector falls from 29.4% year-over-year to 8.2%. The energy sector is predicted to show the most significant decline in year-over-year earnings due to lower oil prices. Energy Commodities Revenue Results By Sector Sales growth is closely tied to nominal GDP growth, which combines after-inflation economic growth (real GDP) with inflation. If the estimates of second quarter nominal year-over-year GDP growth of 4.7% are correct, there could be some upside to sales growth. At this early point in the earnings season, sales growth at 4.2% is meeting expectations. GDP Growth Fuels S&P 500 Sales Consistent with the earnings picture, revenues in the energy sector should see the most significant year-over-year decline. Estimated Sales Growth By Sector Dollar Weakens The US dollar weakened relative to the same quarter last year. On the margin, this should benefit companies' international earnings. According to FactSet, 41% of S&P 500 sales are from international sources. US Dollar What To Watch Next Week The economic calendar also heats up this week with consumer inflation (CPI) and retail sales. Tuesday's June CPI is expected to be hotter, increasing to 2.6% year-over-year from 2.4%. The Federal Reserve already expects some inflation impact from tariffs and is likely on the sidelines until at least September. The retail sales report on Thursday is expected to show a modest rebound for the US consumer. Since consumers are a crucial driver of the US economy, this rebound will be essential for economic growth expectations. Newsflow about the administration's trade negotiations and new tariff announcements will remain a focus. Significant new tariffs are currently scheduled to be implemented on August 1, barring an acceptable trade agreement. With financials dominating the first week of earnings season, the headline earnings should begin on a positive note. With the tariff overhang and consensus expecting an acceleration in earnings growth for the third quarter, forward earnings guidance from management will be watched closely.
