Latest news with #StrategasSecurities
Yahoo
01-08-2025
- Business
- Yahoo
Trump's tariffs latest: What you need to know
President Trump's Aug. 1 tariff deadline is here. The announcements brought some surprises. Yahoo Finance Washington Correspondent Ben Werschkul shares the latest news and Strategas Securities managing director, policy research Jeannette Lowe shares her analysis. To watch more expert insights and analysis on the latest market action, check out more Market Catalysts. White House released a slew of adjusted tariff rates for US trading partners ranging from 10% to as high as 40%. The new rates will mostly take effect on August 7th. Here with me now, Yahoo Finance correspondent Ben Worshkol and Janette Lo, Strategist Securities Managing Director of Policy Research. Ben, I want to start with you. Set it up for us here. What changed overnight in terms of where these tariff rates are landing? Yeah, a lot to go through here, but we had kind of three areas that I think were surprises in terms of what we were expecting going into last night. This all kind of came out late last night with a lot with a lot of data here. The first one is this a seven-day delay that you mentioned, where we were expecting a lot of these rates to go into effect right now. Um, Canada is in effect right now, they jumped from 25 to 35%, but the vast majority of these have a seven-day delay. The White House says that's mostly about logistics, more than anything else, but it also means clearly there's going to be a lot more negotiations over the next seven days as countries that aren't happy with the rate they saw try to get that lowered in this seven-day window. Second is that over 100 nations are staying at 10%. These are mostly much smaller trading partners, um, but it comes after a lot of signals of 15% as kind of a new global minimum, which clearly isn't the case for at least for these countries. Um, elsewhere, there is a clear convergence towards this 15% number. The totals here are about 120 nations now at 10%, 40 nations at 15%, and then 30 nations higher than that. And in that 30 that are higher than that, we do have a few surprises that I think are notable. Switzerland is getting a lot of attention this morning. They have a 39% rate that was announced last night. This is very significant for them because they're, you know, competing with the European Union that has a 15% rate. So that's going to be a real challenge for them. So they're going to be reaching out of that for certain. Another one that jumped out to me is Taiwan, which has a 20% rate. This is this will be adjusted on the semiconductor front, but it's another clear grouping of a bunch of Southeast Asian nations in the 19 to 20% range kind of in China's orbit. So those are the top lines for certain. So, Janette, let's bring you into this. The market seems a little bit surprised by some of this. Were you surprised? How do you think this comports with what the expectations were around this whole situation? Yeah, I mean, I think there were obviously some surprises. I think the Switzerland rate obviously would be a notable one, but again, that adds pressure to try to get a deal since there already had been talk. There had been a framework that had been passed between the two sides. So some of these pieces are a push, and they were a little bit more aggressive than maybe the market had been anticipating. And I think that's going to kind of play out over the next couple of days, and we'll see where that lands. Um, I think that overall, though, if we looked at all the rates and kind of how it ended up, these higher rates had been forecast over a month ago. So we've had some time to kind of digest it. And overall, when we looked at the numbers, you did have Switzerland coming in at 39%, but then the same time you had Thailand and Cambodia's rates coming down significantly. So that is important. So overall, it kind of netted out to about the same of what we've seen before. But overall, that means we've had about a $100 billion tariff increase than we had before the tax bill was enacted, but it hasn't gone up significantly more than that. And I think that is important because we had looked at some of the rates, and they could have actually come in even more aggressive had there not been these trade deals. They're still much higher than obviously we had before April 2nd, but overall, we're kind of at a level that's a little bit easier to maintain. The tax bill has the ability to sterilize the effect of some of these tariffs, though, of course, one big caveat is that we still could have more sectoral tariffs down the pike.
Yahoo
02-06-2025
- Business
- Yahoo
What Trump tariff revenues mean for the US deficit
Strategas Securities managing director of policy research Jeannette Lowe joins the Morning Brief team for a conversation on the long-term view on revenue from President Trump's tariffs and what it could mean for the US deficit as lawmakers debate the next spending bill package. Also catch Lowe weigh in on the latest tariff drama in this clip here. To watch more expert insights and analysis on the latest market action, check out more Morning Brief here. If the tariff revenue is impacted by all of this back and forth, how does that impact the taxes that are potentially going to be coming in, the tax cuts? Yeah, I think this is a really good point because the tariff revenue has actually been coming into the US Treasury at quite an accelerated rate over the past couple of weeks. And so what we've seen is that it's about 190 billion on an annualized basis coming into treasury. So over 10 years, if this were to remain in place, that's $2 trillion of tax revenue or tariff revenue that's coming into the US. Now obviously, if the tariffs get pulled back and there's a lag time, that would change that trajectory. But this is also not even the full breadth of what the Trump administration was looking to do in terms of tariffs. So tariff revenue does provide a backstop for any uh deficit increase that may come from the tax and spending bill. If those tariffs were to be pulled off, that would obviously reduce, make it the deficit less better in the from its current trajectory and it could play into a little bit into Congress's uh mindset as they continue to finish this bill before July 4th potentially. But now that the tariffs remain in place, I don't think it's really going to have as much of an effect because even though Congress wasn't really thinking about including the tariffs as part of the overall package and then what their revenue would be, it does also keep them in place which means that right now, Congress doesn't have to worry about that revenue stream coming away. Um, but it might be something that they continue to keep about going forward, particularly the fiscal conservatives in the House and Senate who'd be worried about what that's going to happen to the deficit long term.
CNBC
02-06-2025
- Business
- CNBC
The market's biggest trades sending skeptical message on U.S. stocks
This year has already packed a lot of action into stocks: an aggressively bullish start, a swift correction, and a full recovery from those April losses. But based on the the flows into the U.S. exchange-traded funds, where much of the daily trading action occurs across asset classes, the message coming through most clearly from investors is lingering skepticism about the strength of the U.S. equities market. May was a great month for stocks, with the S&P 500 Index up over 6%, the Nasdaq Composite up over 9%, and the Dow Jones Industrial Average up roughly 4%. But making up for April's losses hasn't removed the underlying fears from the market, with stocks sliding to start the month of June on Monday as trade uncertainty, from the state of U.S.-China deal talks to the Trump administration's battle with courts over the legality of tariffs, continue to serve as hurdles for sustained momentum. At the start of 2025, equity ETFs were trading roughly $3 billion in daily inflows, an "extreme" level of bullishness, according to recent report from Strategas Securities. Since the market recovered all of its April losses, those daily inflows have fallen by more than half, to roughly $1.4 billion, despite the rally. Where has the money been going? "Mostly, just hiding out in ultra-short duration," said Todd Sohn, senior ETF and technical strategist at Strategas, on a recent "ETF Edge" podcast. The iShares 0-3 Month Treasury Bond ETF (SGOV) and SPDR Bloomberg 1-3 T-Bill ETF (BIL) are both among the top 10 ETFs in investor flows this year, taking in over $25 billion in assets. "Skepticism, that's what the equity flows are telling us," said Sohn of the action since the market low in April. He added this suggests a year that could follow a pattern from bull market history, what he called a "reset year." Going back to 1950, years one and two of a bull market generate linear returns that take all equities higher, while third years are more often reset years that tend to reflect a cautious stance on stocks. Or, as Sohn put it: "How much of a good thing can last is a fair question." Since getting back to even, the U.S. market's 0.6% performance year-to-date through the end of May places it at the bottom of the list for 2025 relative to the performance of regional markets around the world, though it is by no means the worst country market in the world. But at least to date, the ETF flows do suggest a "year three" of a bull market cycle, which tends to more often be a trader year than investor year, with a wide dispersion in returns across equity sectors, according to Sohn. Coming off back-to-back years with 20 percent-plus returns for U.S. stocks, the top ETF categories in flows since the April 8 low are crypto, short duration bond, T-bill ETFs, and value (including overseas value stocks such as EAFE ETFs). Meanwhile, tech ETFs, single-stock levered ETFs, and cyclical and small-cap stock ETFs that are most closely linked to aggressive stock bets and conviction about the overall health of domestic economy are near the bottom of the list, with negative flows since the April low. "Folks want to hang out on the short-end of the [bond yield] curve and are very skeptical on what to do about U.S. equities," said Sohn. "It's almost like they are throwing in the towel on cyclicals and small-caps," he added. Part of the reason for the lack of interest in cyclicals is related to the yields currently on offer in the bond market, which can make cyclical plays with healthy dividend levels, such as consumer staples, financials, industrials, and materials, less attractive to investors who might otherwise assume the stock market risk for the income component. "That has disappeared with the return of bond yields," said Sohn. "There's not really any reason to hold," he added, as all the income flows that in the past may have gone into income-producing equities go to short duration bond ETFs instead. One place where investors should keep the faith with U.S. corporations is with their ability to fund bond payments, Joanna Gallegos, BondBloxx ETFs co-founder, said on "ETF Edge." After the strong years of 2023 and 2024, corporate credit sheets are "set up to weather the storm," Gallegos said, and she added that it is possible to stay shorter in corporate credit without exposing oneself to a high level of interest rate risk. After short duration bonds and T-bills, intermediate duration bonds have seen the most daily ETF flows since the April low among fixed-income categories, and are fifth overall in flows among stock and bond ETF asset classes, according to Strategas. Unlike equities, most fixed income categories have had positive returns year to date, even with yields near their highest levels in years, according to BondBloxx data. "Income is back. In fixed income, that's what is important right now," she said. "Any investor trying to offset volatility in their equity portfolio, if they haven't looked at how income is serving their portfolio, that's what they should do," Gallegos said. While Gallegos recommends investors consider investment grade credits in the BBB class, where yields are near 5%, and the first rung of the high-yield universe, BB, where yields are roughly 6%, short-duration yields are the most popular right now for a good reason. "It is hard to argue with 4-4.25% with no volatility," Sohn said. Disclaimer
Yahoo
02-06-2025
- Business
- Yahoo
What Trump tariff revenues mean for the US deficit
Strategas Securities managing director of policy research Jeannette Lowe joins the Morning Brief team for a conversation on the long-term view on revenue from President Trump's tariffs and what it could mean for the US deficit as lawmakers debate the next spending bill package. Also catch Lowe weigh in on the latest tariff drama in this clip here. To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.
Yahoo
02-06-2025
- Business
- Yahoo
What Trump tariff revenues mean for the US deficit
Strategas Securities managing director of policy research Jeannette Lowe joins the Morning Brief team for a conversation on the long-term view on revenue from President Trump's tariffs and what it could mean for the US deficit as lawmakers debate the next spending bill package. Also catch Lowe weigh in on the latest tariff drama in this clip here. To watch more expert insights and analysis on the latest market action, check out more Morning Brief here. Sign in to access your portfolio
