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Time of India
4 days ago
- Business
- Time of India
Charting the global economy: US GDP falls on larger trade hit
The US economy contracted slightly to start the year, largely reflecting a bigger tariff-related trade hit but also a larger downshift in household spending growth than first estimated. In contrast, an export surge help drive the Canadian economy in the first quarter as businesses accelerated shipments ahead of higher US duties. Gross domestic product in India rose at a stronger-than-forecast 7.4% pace. Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy , markets and geopolitics: US & Canada Bloomberg The US economy shrank at the start of the year, restrained by weaker consumer spending and an even bigger impact from trade than initially reported. The economy's primary growth engine — consumer spending — advanced 1.2%, down from an initial estimate of 1.8% and the weakest pace in almost two years. Meantime, net exports subtracted nearly 5 percentage points from the GDP calculation, slightly more than the first projection and the largest on record. Bloomberg A strong jump in tariff-driven exports fueled Canada's growth at the start of this year, offsetting domestic weakness in other parts of the economy. Preliminary data also suggests some continued momentum at the start of the second quarter, with output rising 0.1% in April, led by mining, oil and gas, and finance industries. Bloomberg Consumer sentiment rebounded in late May from one of the lowest readings on record earlier in the month and long-term inflation expectations retreated as concerns about the economy eased after the rollback of China tariffs. Live Events Bloomberg In the wake of Nvidia Corp.'s latest earnings report and upbeat sales forecast, the US government's GDP report also underscored the locomotive power of the artificial intelligence boom. Business investment in computers and other information processing equipment contributed a record 1.01 percentage points to first-quarter GDP. Europe Bloomberg European firms in China are the most pessimistic about growth prospects since 2011, underscoring the challenges of doing business in the world's second-largest economy despite recent government efforts to address some complaints. Some 29% of respondents were downbeat on the outlook for their sector over the next two years, according to an annual report by the European Union Chamber of Commerce in China. Bloomberg Germany's inflation rate dropped to 2.1% in May, slowing less than expected and highlighting lingering risks as the European Central Bank prepares to cut rates again. The data follow reports from Italy and Spain, where inflation eased to just below 2%, supporting the case for borrowing costs to be lowered further. Meanwhile, France said consumer price rose just 0.6% from the previous year. Bloomberg Europe is gradually adding gas to its depleted storage sites despite seasonal works at production facilities across the globe. In addition, overall demand for liquefied natural gas in Asia remains weak, which is a relief for European buyers that compete for the same fuel. Asia Bloomberg For decades, Asia's export powerhouses had a simple financial strategy: Sell goods to the US, then invest the proceeds in American assets. That model is now facing its biggest threat since the 2008 global financial crisis as Donald Trump tries to remake global trade and the US economy — upending the logic behind $7.5 trillion of investments from Asia. Some of the world's biggest money managers say an unwind is just getting started. Bloomberg India's economy grew at a faster pace than analysts expected, driven by some pick up agricultural activity and investments. While India retains its title as the world's fastest-growing major economy, the annual growth rate marks a notable slowdown from the 8% average seen in recent years — the pace needed by Prime Minister Narendra Modi to achieve his ambitious goal of making the country a developed nation by 2047. Emerging Markets Bloomberg Brazil's consumer prices rose less than forecast in early May, fueling bets that the central bank will halt its cycle of interest rate hikes while keeping its monetary policy restrictive going forward to tame inflation. World Bloomberg Japan lost its position as the world's largest creditor nation for the first time in 34 years, giving up the title to Germany despite posting a record amount of overseas assets. Japan's status as the world's biggest net-creditor nation was a consequence of decades of current account surpluses that saw Japanese investors and companies load up on holdings abroad. Bloomberg New Zealand lowered rates for sixth straight meeting. South Africa, the Bank of Korea, Mozambique and Eswatini also cut. Hungary, Israel, Uruguay, Guatemala and Tunisia kept borrowing costs unchanged.
Yahoo
5 days ago
- Business
- Yahoo
S&P 500's Banner Month Faces Off With June's Lackluster Record
(Bloomberg) -- A frenzied May rally has equity analysts bracing for an end to the run in what has historically been one of the weakest months for S&P 500 Index returns. NYC Congestion Toll Brings In $216 Million in First Four Months Now With Colorful Blocks, Tirana's Pyramid Represents a Changing Albania The Economic Benefits of Paying Workers to Move NY Wins Order Against US Funding Freeze in Congestion Fight Why Arid Cities Should Stick Together The prospect of renewed trade-war concerns, uncertainty over the path of Federal Reserve policy and quarter-end portfolio rebalancing all risk rattling the market after the S&P 500 soared 6.2% this month through Thursday, putting it on track for the biggest May gain since 1990. The blistering rally, propelled by a reprieve from President Donald Trump's tariff offensive, has left the benchmark within 4% of its February record. 'Traders have become too desensitized to the tariff shock-and-awe strategy by Trump,' said Jeffrey Hirsch, editor of the Stock Trader's Almanac, who correctly forecast the recovery after the 2008 global financial crisis. 'After this massive rally, stocks will likely hit a bumpy stretch in the coming weeks on risks that this administration may try to implement more dramatic trade policies.' Pricey valuations, muted demand for hedges and stretched investor positioning have left stocks vulnerable to a pullback, according to Hirsch. That may lead to weaker returns in June. The S&P 500 has risen just 0.2% on average in June over the past three decades, compared with a 0.8% move in the other 11 months of the year, according to data compiled by Bloomberg. Fault lines are already forming after a Thursday rally mostly stalled out as solid results from Nvidia Corp. were overshadowed by uncertainties on Trump's levies. Tests Ahead The first test of the market's resolve will be the Fed's interest-rate decision on June 18. Two days later comes 'triple witching' — when a large swath of equity-tied options expire, amplifying volatility — and the end of the month brings quarterly portfolio rebalancing. Those are the critical milestones that will determine if bulls can keep driving stocks higher with the S&P 500 edging toward 6,000, a key psychological threshold. History doesn't bode well for stocks in the months ahead. In post-US presidential election years over the past seven decades, the S&P 500 has typically struggled in early June as investors book profits heading into the summer months, which is particularly the case if stocks get a strong boost in May, like this year, according to Hirsch. 'Sell in May' The adage 'sell in May and go away' alludes to a six-month stretch ending in October that historically has been the worst time to own stocks. Since the early 1970s, the S&P 500 has had a mediocre stretch from Memorial Day through Labor Day, averaging a gain of just 1.8%, Hirsch says. Still, in recent memory, the S&P 500 has suffered losses in June just once in the past decade, data compiled by Bloomberg show. This time though, fund managers have reduced cash holdings and invested heavily in US stocks in recent weeks. That bullish tilt raises questions over who's left to buy after fund managers piled into stocks at a furious pace in May. Commodity trading advisers, or CTAs, which typically buy stocks as index prices rise and sell when they decline, turned net long on equities last week for the first time since early March after the S&P 500 broke above 5,800, according to UBS Group AG. But CTAs will be only moderate buyers in the coming weeks if the S&P 500 doesn't top 6,000 soon, says Maxwell Grinacoff, an equity derivatives strategist at the bank. 'CTA positioning remains skewed to the downside,' Grinacoff said by phone. 'If the market rally unwinds soon, those trend followers will be forced to turn net short on stocks. That would inevitably push shares lower from here.' YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Mark Zuckerberg Loves MAGA Now. Will MAGA Ever Love Him Back? Millions of Americans Are Obsessed With This Japanese Barbecue Sauce Inside the First Stargate AI Data Center How Coach Handbags Became a Gen Z Status Symbol ©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
6 days ago
- Business
- Yahoo
Nvidia's earnings are the stock market's next major test after May's Big Tech comeback
Megacap technology stocks have gotten a huge boost in May, as investors seek to turn the page on recent tariff tumult and as Nvidia Corp.'s earnings loom. U.S. banks might kick off earnings season and help set the tone, but it's the tech companies that lately have had the final word on whether the stock market had a good quarter or not. 'You never know what might happen': How do I make sure my son-in-law doesn't get his hands on my daughter's inheritance? My ex-wife said she should have been compensated for working part time during our marriage. Do I owe her? Trade court strikes down Trump tariffs: What it means for markets — and what's next My husband and I earn $115K and owe $220K on our home. We're inheriting $300K. Should we invest in real estate or stock? 'Is this a good tax strategy or a sham transaction?' My mother wants to give me her home. I have a plan to avoid taxes. With that in mind, Wednesday's fiscal first-quarter earnings from artificial-intelligence darling Nvidia NVDA have a special place on the week's calendar. Read: Nvidia reports earnings tomorrow. Here's the main issue on investors' minds. Shares of Nvidia climbed 3.1% on Tuesday, a day before its quarterly results were due, and are up 24.3% on the month so far, according to FactSet. The AI chip maker will be the final 'Magnificent Seven' company to walk the earnings gantlet this quarter. While 2025 has been fraught on Wall Street, the past few weeks have benefited this particular group of tech titans. That's because investors worried about tariffs and their potential toll on the economy once again have turned to technology names, instead of the broader stock market, as a port in the storm. This chart shows the huge gains of the 'Magnificent Seven' stocks since the lows of early April, against a rise of about 4.4% for the broader S&P 500 index, as well as a roughly 1.3% gain for its equal-weight version. 'I do think they are viewed, because of their business models and pervasiveness,' as a kind of 'safer play, no matter what happens with the economy,' said Melissa Brown, head of investment decision research at SimCorp. 'And despite their higher valuations, as a group, those have been the ones to really be able to deliver on earnings expectations.' The Big Tech comeback in May followed a harsh fall after President Donald Trump's 'liberation day' tariffs shocked investors, businesses and U.S. trade partners in early April. Trump's proposed 'maximalist' levies triggered a collective $2.12 trillion loss of market capitalization for the 'Magnificent Seven' companies between the market's close on April 2 to the lows of April 8, according to Dow Jones Market Data. In addition to Nvidia, Inc. AMZN, Microsoft Corp. MSFT, Google-parent Alphabet Inc. GOOG GOOGL, Meta Platforms Inc. META, Tesla Inc. TSLA and Apple Inc., AAPL make up this group. Trump's trade fight has evolved since early April to include 'pauses' on some tariffs to help cajole trade partners into quicker negotiations, as well as the promise of more deals to come after the U.S. and U.K. outlined a new trade agreement. Read: Trump rolls out U.K. trade agreement. It's a relief — but deals with other countries are more crucial. After details of the U.S.-U.K. deal emerged, the 'Magnificent Seven' added back $3.7 trillion in market cap between the April 8 low and a May 14 peak, bringing their combined valuation to about $16.8 trillion, according to Dow Jones Market Data. Since then, sharply higher bond yields BX:TMUBMUSD10Y BX:TMUBMUSD30Y have failed to dull demand for this popular group of stocks, a trend strategists attributed to their strong earnings, as well as optimism around plans to keep up AI spending. While first-quarter earnings have been good for the S&P 500 index SPX, they've been even better for technology companies. The S&P 500's blended earnings growth rate was pegged recently at 12.9% for the first quarter versus a year before, well above the 10-year average of 8.9%, according to FactSet data. But that's only part of the story. 'The Communication Services sector reported the second-highest (year-over-year) earnings growth rate of all 11 sectors at 29.2%,' John Butters, senior earnings analyst at FactSet, wrote in a May 23 report. Alphabet and Meta, however, ranked as the biggest contributors to the sector's earnings growth. Without those two companies, its blended earnings growth rate would have fallen to 9.6% from 29.2%, according to Butters. Still, this chart shows just how much the 'Magnificent Seven' stocks have outpaced the broader market, when comparing their earnings growth against the rest of the S&P 500's 493 companies. Their collective capex guidance for 2025 was pegged at about $330 billion, according to Jeff Buchbinder, chief equity strategist at LPL Financial. 'After Nvidia reports this week, these seven companies will likely end up driving nearly half of the S&P 500's EPS growth overall,' he wrote in a Monday client note. The broader S&P 500 posted a 2.1% gain on Tuesday, after Trump said over the long holiday weekend that his idea of a 50% tariff against the E.U. would be delayed until July 9, while the Dow Jones Industrial Average DJIA gained 1.8% and the Nasdaq Composite Index COMP rose 2.5%, according to FactSet. Nvidia's earnings are the stock market's next major test after May's Big Tech comeback Investors who followed 'sell in May and go away' are missing what could be the best May for the S&P 500 in decades It's my dream to travel to Africa. Can I pay for my husband's trip without commingling our finances? Treasury Secretary Bessent has a plan to bring down long-term yields. But will it work? After 25 years, I finally asked for separate checks — and my friends iced me out. Did I do something terrible? Sign in to access your portfolio
6 days ago
- Business
Tokyo Stocks Jump after U.S. Court Blocks Trump Tariffs
News from Japan Economy May 29, 2025 17:40 (JST) Tokyo, May 29 (Jiji Press)--Stocks jumped on the Tokyo Stock Exchange on Thursday after a U.S. trade court issued a ruling overnight blocking President Donald Trump's administration from imposing tariffs. A wide range of stocks, especially automakers and other economically sensitive issues, attracted buying as the yen slid against the dollar and other major currencies following the U.S. court ruling. U.S. chip giant Nvidia Corp.'s solid earnings report, released after the U.S. stock market closed overnight, boosted artificial intelligence-related issues on the Tokyo market. The benchmark Nikkei 225 average surged 710.58 points, or 1.88 pct, to close at 38,432.98, its highest finish in about three months. The broader TOPIX index advanced 42.51 points, or 1.53 pct, to 2,812.02. In Tokyo currency trading, the dollar stood at 145.26-26 yen at 5 p.m., up from 144.14-15 yen at the same time on Wednesday. The euro was at 1.1275-1276 dollars, down from 1.1326-1327 dollars, and at 163.79-81 yen, up from 163.28-30 yen. [Copyright The Jiji Press, Ltd.] Jiji Press
Yahoo
28-05-2025
- Business
- Yahoo
Nvidia Earnings Preview: What to Watch for in AI, Chips
Nvidia Corp. is projected to deliver around $19 billion in net income on revenue of $43 billion in the first quarter, up 31% and 66%, respectively, from the same period a year ago. The company is due to deliver its first-quarter earnings report after the bell Wednesday with a focus on the supply of computer systems based on its new Blackwell chips. Mandeep Singh of Bloomberg Intelligence has a preview. Sign in to access your portfolio
