Latest news with #SellAmerica
Business Insider
03-06-2025
- Business
- Business Insider
Treasury and dollar slides reignite 'Sell America' fears. But there's still a buying opportunity in one corner of US debt.
Treasurys have been under scrutiny amid President Donald Trump's trade policies, with long-dated debt facing pressure. But analysts say there is still opportunity in the bond market. Short-dated Treasurys are still seen as safe amid the dollar's dominance and likely Federal Reserve interest rate cuts should the economy enter a downturn. "We have seen a bit more outflow from US dollar bonds, but I don't see anything that will be replacing the US dollar in the future," Warut Promboon, the managing partner at Hong Kong-based research firm Bondcritic, told Business Insider. His comments come as 30-year yields recently climbed above 5% — a sign of weaker demand as investors grow wary of locking in lending to the US government for decades. Warut, who has over 20 years of experience in the bond market, is advising clients to lean into gold and shorter-dated dollar bonds, such as five-year Treasurys. While Warut isn't bearish on 10-year Treasurys, he prefers the five-year term debt due to its shorter maturity and lower exposure to long-term volatility. His comments come amid an unusual divergence in Treasury yields, which have risen, and the dollar, which has declined — a trend that some have termed the "Sell America trade." His take echoes a recent call from Goldman Sachs, which last week recommended adding gold and short-term Treasurys to portfolios. Gold prices reached a record high of over $3,500 per ounce in April as investors fled to the time-tested store of value due to unprecedented uncertainty. Caution over longer-dated Treasurys Due to Trump's import tariffs and policy uncertainty, analysts are uncertain about the longer-term outlook for growth and bond yields. "The broader structural story is that US economic exceptionalism is fading as the burden of twin deficits grows heavier," wrote analysts at Deutsche Bank on Monday, referring to the US's fiscal and current account deficit. The analysts said they are bearish on the dollar and see upward pressure on bond yields. "The dollar's dominance is waning; valuation and capital flow dynamics are taking over," the Deutsche Bank analysts added. However, it may be premature to assume that the divergence in the dollar and Treasury yields is a permanent feature, wrote Vishnu Varathan, Mizuho's head of macro research for Asia, excluding Japan. "The negative flip in USD-UST yield correlation arguably reflects a temporary recalibration process of risk re-pricing, even if it is abrupt and non-linear," he wrote. "Specifically, to account for a conspiracy of fiscal, credit, trade, geo-economic risks in the wake of brutal Trump 2.0 tariff and wider geo-economic assault that has inflicted untold US self-harm," Varathan wrote. The recent developments in the usually stable Treasury markets are raising fears of a US debt crisis. On Sunday, Treasury Secretary Scott Bessent addressed the issue directly, saying categorically that the US is "never going to default" on its debt. "That is never going to happen," Bessent told CBS' "Face the Nation" on Sunday. "We are on the warning track, and we will never hit the wall."
Mint
29-05-2025
- Business
- Mint
Infosys, Wipro and other IT stocks jump up to 3.5% after US court blocks most Trump tariffs
IT stocks in focus today: Domestic technology stocks came under the bulls' radar in Thursday's session, May 29, after being beaten down in the last couple of trading sessions. The selling in IT stocks had also exerted pressure on the front-line indices. The renewed interest lifted all stocks in the Nifty IT pack into the green, with LTIMindtree, Persistent Systems, Infosys, and Wipro emerging as the top gainers, jumping up to 3.5% in intraday trade. Consequently, the Nifty IT index rose nearly 2% to the day's high of 38,121 and was set to end May with a gain of 5.4%, snapping its four-month losing streak. The strength in tech stocks came as investors cheered a U.S. federal court's decision to block President Trump's proposed "Liberation Day" tariffs. Although the White House has appealed the decision, the ruling raised hopes that Trump may scale back from imposing the highest tariff levels he had threatened, lifting global risk sentiment. The ruling halts most of Trump's 'Liberation Day' tariffs, including a 10% across-the-board tariff and higher rates on countries like China, though tariffs imposed under other laws, such as Section 232 on steel and aluminum, remain unaffected. Global financial markets were hit by a sweeping selloff after Trump's bid to remake the world trading order proved more aggressive than expected. Trump's tariff blitz announced April 2, spooked investors who caught on to a 'Sell America' trade as they remain wary of how the levies will impact growth. Trump's pause on the tariffs and negotiations with countries have since helped stabilise the global markets. The recent threat to impose tariffs on the EU, which was later postponed, has once again resurfaced trade tensions on the global stage. Meanwhile, investors kept a close eye on US Senate debates over Trump's sweeping tax and spending bill, which is likely to undergo significant revisions in the upper chamber. On the monetary policy front, the latest FOMC minutes indicated that officials are adopting a cautious, wait-and-see approach, aiming to assess the economic fallout from recent government actions and tariff developments. Policymakers also noted that risks of both rising inflation and unemployment had increased. Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted that tariff-related developments involving U.S. President Donald Trump continue to influence market sentiment. He highlighted that the recent U.S. federal court decision striking down reciprocal tariffs sends a strong signal that such unilateral economic decisions cannot go unchecked. This marks the second major setback for Trump's tariff plans, following earlier pressure from the bond market that led to a temporary pause. From a market standpoint, Vijayakumar sees this as a positive move. He added that the Nifty is currently consolidating within a narrow 500-point range of 24,500 to 25,000, and a breakout or breakdown in the near term appears unlikely. Most of the market action, he observed, is concentrated in the mid- and small-cap segments, driven by earnings results. However, he cautioned investors against chasing these stocks blindly, stressing that quality and valuation discipline remain crucial for outperformance in the broader market. Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
Economic Times
29-05-2025
- Business
- Economic Times
US stock futures jump, dollar gains on tariff ruling
US stock futures jumped and the dollar strengthened after President Donald Trump's global tariffs were deemed illegal and blocked by the US trade court. Upbeat earnings from Nvidia Corp. also boosted investor sentiment. ADVERTISEMENT Contracts for the S&P 500 and Nasdaq 100 gained 1.4% and 1.7% respectively. The ruling can now be appealed by the Trump administration in federal court. The yen declined 0.7% and oil jumped. Shares in Nvidia rose over 5% in post-market trading in New York after the company delivered a solid revenue forecast. Equities in Japan and South Korea advanced at the open. Global financial markets were hit by a sweeping selloff after Trump's bid to remake the world trading order proved more aggressive than expected. Trump's tariff blitz, announced April 2, spooked investors who caught on to a 'Sell America' trade as they remain wary on how the levies will impact growth. Trump's pause on the tariffs and negotiations with countries have since helped stabilize the markets, putting the MSCI All Countries World Index within striking distance of a record high. 'More details are needed,' Rodrigo Catril, a strategist at National Australia Bank Ltd. in Sydney said in reference to the ruling. 'Particularly whether there is an injunction or whether this goes to an appeal process and tariffs remain in place for now. The best guess at this stage is that the administration has enough powers to bypass the ruling and implement tariffs on several grounds.'Meanwhile, Nvidia Chief Executive Officer Jensen Huang soothed investor fears about a China slowdown by delivering a solid sales forecast, saying that the AI computing market is still poised for 'exponential growth.' While Nvidia boosted optimism, HP Inc. dropped about 15% in extended trading after the company's profit outlook fell short of estimates and it cut the annual earnings forecast, pointing toward a weaker economy and continuing costs from US tariffs on goods from China. ADVERTISEMENT News reports that the Trump administration is moving to restrict the sale of chip design software to China spurred a plunge in Cadence Design Systems Inc. and Synopsys Inc. Meantime, Tesla Inc. was said to begin its robotaxi service in Austin on June bristled at suggestions that Wall Street believes he's ultimately unwilling to follow through on extreme tariff threats, saying his repeated retreats are instead part of a strategy to exert trade concessions. ADVERTISEMENT 'It's called negotiation,' Trump said on Wednesday, adding that he intentionally would 'set a number at a ridiculous high number' and then 'go down a little bit' as part of talks. (You can now subscribe to our ETMarkets WhatsApp channel)
Axios
28-05-2025
- Business
- Axios
Fed officials called out financial system risks as tariffs stoked sell-off, minutes show
Some officials at the Federal Reserve warned about "vulnerabilities to the financial system" as President Trump's trade war caused sharp swings in stock and bond prices, minutes from the central bank's May 6-7 policy meeting show. Why it matters: The central bank said the heightened volatility could cause market stress that would expose underlying concerns about the financial system, while noting that a so-called Sell America trade could take a toll on the economy. What they're saying: "In their discussion of financial stability, participants who commented noted vulnerabilities to the financial system that they assessed warranted monitoring," according to the minutes released on Wednesday. The Fed noted "heightened volatility" seen in April, though officials pointed out that markets "had continued to function" despite a surge in trading volumes. "Some participants mentioned high levels of leverage at hedge funds or potential concerns about private credit and equity," the minutes say. The intrigue: Some officials called out last month's unusual mix of financial market conditions, which saw rising borrowing costs and the U.S. dollar depreciating, alongside falling stock prices. It's a combination that suggested investors might be losing faith in the U.S. as home to the world's safest assets. "These participants noted that a durable shift in such correlations or a diminution of the perceived safe-haven status of U.S. assets could have long-lasting implications for the economy," according to the minutes. What to watch: The stock market has recovered since officials gathered earlier this month, but at the time some Fed officials questioned the extent of asset price declines as trade tensions appeared to be ratcheting up. " While noting that asset prices had declined somewhat, several participants observed that downside risks to the outlook had increased, leading them to question whether asset prices had actually gotten closer to fundamental valuations," the minutes show. Several Fed officials noted that while households, banks and other corporations looked to be in solid shape, "an economic downturn or higher interest rates could lead to a deterioration in those conditions," the minutes show. State of play: The Fed kept interest rates steady for the third consecutive time earlier this month, though it warned about inflation and economic effects from tariffs. "Participants observed that there was considerable uncertainty surrounding the evolution of trade policy as well as about the scale, scope, timing, and persistence of associated economic effects," the minutes show. The central bank decision came days before the Trump administration said it would reduce tariffs on Chinese imports to 30% from triple-digit levels for 90 days.
Free Malaysia Today
20-05-2025
- Business
- Free Malaysia Today
US stocks edge higher while dollar dips after Moody's downgrade
US Treasury yields surged early, reviving the 'Sell America' narrative that shook markets after Donald Trump's tariff move in April. (AP pic) NEW YORK : Wall Street stocks finished a meandering session higher Monday, shrugging off Moody's downgrade of US sovereign debt, which could balloon further. Yields of US Treasury bonds spiked early in the day in a dynamic that revived talk of the 'Sell America' narrative that unsettled markets in early April following President Donald Trump's sweeping tariff announcements. But US Treasury yields subsequently eased as markets concluded that Moody's analysis contained no surprises. After the knee-jerk reaction, 'the market settles down and focuses on the economic fundamentals,' said Subadra Rajappa, head of US rates strategy at Societe Generale. The downgrade reflects serious concerns about the US' fiscal picture, but these were well known prior to the Moody's downgrade, Rajappa said. All three major US indices finished with modest gains. The dollar retreated somewhat against the euro and other major currencies. But the move was less substantial than during most volatile stretches earlier this year. In comparison with that turbulent period, a closely-watched volatility index remained relatively stable on Monday. Stocks have rallied since Trump suspended many of his most onerous tariff measures. Gold, seen as a safe haven investment, jumped more than one percent. In Europe, London and Frankfurt erased early losses to close higher after UK and EU leaders reached a series of defense and trade accords at a landmark summit, the first since Britain's acrimonious exit from the European Union. British Prime Minister Keir Starmer said leaders had agreed a 'win-win' deal that his office said would add nearly £9 billion (US$12 billion) to the British economy by 2040. The euro, meanwhile, strengthened despite a cut to the eurozone's 2025 economic growth forecast due to global trade tensions sparked by Trump's tariffs. The European Commission said the 20-country single currency area's economy should grow 0.9% in 2025 – down from a previous forecast of 1.3% – due to 'a weakening global trade outlook and higher trade policy uncertainty'. 'Underpinned by a robust labor market and rising wages, growth is expected to continue in 2025, albeit at a moderate pace,' EU economy chief Valdis Dombrovskis said. In company news, Walmart returned to the list of firms feeling a rollercoaster effect under Trump, after the US president slammed the retail giant for warning of price increases due to his tariffs. Trump called on the company to 'EAT THE TARIFFS' on social media, adding, 'I'll be watching.' Walmart shares finished slightly lower on Monday.
