Latest news with #TruistAdvisoryServices
Yahoo
4 days ago
- Business
- Yahoo
Analysis-US stocks heal from tariff pain but trade news to keep markets edgy
By Lewis Krauskopf NEW YORK (Reuters) -After months of Wall Street gyrations to the twists and turns of U.S. trade policy, signs suggest stock investors are becoming more resilient to developments and cautiously defaulting to optimism that they have weathered the worst of the tariff-related shocks. U.S. equities have edged higher over the past two weeks as they digest a sharp rally that has brought the benchmark S&P 500 within 3% of its February record high, fueled in part by easing fears about the economic fallout from tariffs. A case in point: stocks ended Monday's session higher even as markets had grappled with President Donald Trump's announcement of doubling steel tariffs to 50%. Trump's stunning "Liberation Day" tariff announcement on April 2 sent stocks plunging and set off some of the most extreme market swings since the onset of the COVID-19 pandemic five years ago. Since then, volatility measures have moderated considerably, and, with the market's rebound, there are signs that technical damage from the slide has healed. Still, investors are mindful that markets remain susceptible to daily swings stemming from negotiations between the U.S. and trading partners as key deadlines near in coming weeks, with elevated valuations making stocks more vulnerable to disappointments. "What has allowed this almost full recovery in the stock market hinges on the negotiations that are now under way," said Angelo Kourkafas, senior investment strategist at Edward Jones. "Markets, consumers and businesses have vested interest that we get clarity sooner than later," Kourkafas said. "So potentially it's going to be a critical summer that is going to test the market's momentum." After falling to the brink of confirming a bear market on April 8, the S&P 500 has surged back nearly 20% and erased its losses for the year. Near the halfway mark of 2025, the index is now up 1.5%. While Trump's tariffs remain a risk, the market no longer is perceiving them as "this big outlier event," said Keith Lerner, co-chief investment officer at Truist Advisory Services. "We went through a period where the only thing that mattered for the markets was tariffs," Lerner said. "And now we are in a period where tariffs still matter, but they are not the only thing that matters." Truist is among the firms becoming more upbeat on the outlook for equities, with RBC Capital Markets and Barclays this week lifting their year-end targets for the S&P 500. Deutsche Bank strategists this week boosted their year-end target to 6,550, about 10% above current levels, as they cited a less severe expected tariffs hit to corporate profits. The strategists noted they expect the rally to be "punctuated by sharp pullbacks on repeated cycles of escalation and de-escalation on trade policy." Several investors and strategists pointed to a "base case" on Wall Street emerging for Trump's tariffs - 10% broadly, 30% on China along with some specific sectoral levies. The market "started saying the worst is behind us in terms of this whole tariff discussion," said King Lip, chief strategist at BakerAvenue Wealth Management. "The U.S. and China still have a lot of things to work out, but likely the worst is behind us." MODERATING VOLATILITY Volatility measures indicate calming fears about trade. The Cboe Volatility Index, an options-based measure of investor anxiety, reached 52.33 in early April, its highest closing level in five years, but has steadily receded and hovered at 17.6 on Wednesday, around its long-term median. In another sign, the average daily range of the S&P 500 has fallen to about 75 points, on a 10-session basis, about one-third the size from April during the height of post-Liberation Day volatility. Meanwhile, the S&P 500 has traded above its 200-day moving average - a closely watched trend-line - for about three weeks. The percentage of S&P 500 stocks trading in some form of an uptrend has jumped from 29.4% at the April 8 low to 60% as of last week, said Adam Turnquist, chief technical strategist for LPL Financial. "There is a growing list of technical evidence that suggests this recovery is real," Turnquist said in a note this week. Options data also suggests growing bullishness. Over the last month, on average about 0.84 S&P 500 call options traded daily against every put contract traded, the most this measure of sentiment has favored call contracts in at least the last four years, according to a Reuters analysis of data from options analytics firm Trade Alert. Calls confer the right to buy stocks at a specific price and future date, while puts grant the right to sell shares. To be sure, some investors warn the threat of tariff disruptions is not going away anytime soon and are wary of market complacency. "There is still just so much uncertainty," said Matthew Miskin, co-chief investment strategist at John Hancock Investment Management. Indeed, talk of the acronym "TACO" - Trump Always Chickens Out - has spread on Wall Street as a rationale for why markets should not fear harsh tariffs because many believe they will likely be walked back. But some investors are worried about a backlash from the president. BCA Research strategists said they were wary of "relying on a TACO backstop." "Trade tensions may have peaked, but we are unwilling to assume they won't sporadically rise from current levels," BCA said in a note this week. Stock valuations also continue to swell, with the S&P 500's forward price-to-earnings ratio reaching 21.7, its highest level since late February and well above its long-term average of 15.8, according to LSEG Datastream. Stocks are at "a more vulnerable level," said Chuck Carlson, chief executive officer at Horizon Investment Services. "The market is probably going to be a little bit more sensitive to what it perceives as negative news."
Yahoo
4 days ago
- Business
- Yahoo
Analysis-US stocks heal from tariff pain but trade news to keep markets edgy
By Lewis Krauskopf NEW YORK (Reuters) -After months of Wall Street gyrations to the twists and turns of U.S. trade policy, signs suggest stock investors are becoming more resilient to developments and cautiously defaulting to optimism that they have weathered the worst of the tariff-related shocks. U.S. equities have edged higher over the past two weeks as they digest a sharp rally that has brought the benchmark S&P 500 within 3% of its February record high, fueled in part by easing fears about the economic fallout from tariffs. A case in point: stocks ended Monday's session higher even as markets had grappled with President Donald Trump's announcement of doubling steel tariffs to 50%. Trump's stunning "Liberation Day" tariff announcement on April 2 sent stocks plunging and set off some of the most extreme market swings since the onset of the COVID-19 pandemic five years ago. Since then, volatility measures have moderated considerably, and, with the market's rebound, there are signs that technical damage from the slide has healed. Still, investors are mindful that markets remain susceptible to daily swings stemming from negotiations between the U.S. and trading partners as key deadlines near in coming weeks, with elevated valuations making stocks more vulnerable to disappointments. "What has allowed this almost full recovery in the stock market hinges on the negotiations that are now under way," said Angelo Kourkafas, senior investment strategist at Edward Jones. "Markets, consumers and businesses have vested interest that we get clarity sooner than later," Kourkafas said. "So potentially it's going to be a critical summer that is going to test the market's momentum." After falling to the brink of confirming a bear market on April 8, the S&P 500 has surged back nearly 20% and erased its losses for the year. Near the halfway mark of 2025, the index is now up 1.5%. While Trump's tariffs remain a risk, the market no longer is perceiving them as "this big outlier event," said Keith Lerner, co-chief investment officer at Truist Advisory Services. "We went through a period where the only thing that mattered for the markets was tariffs," Lerner said. "And now we are in a period where tariffs still matter, but they are not the only thing that matters." Truist is among the firms becoming more upbeat on the outlook for equities, with RBC Capital Markets and Barclays this week lifting their year-end targets for the S&P 500. Deutsche Bank strategists this week boosted their year-end target to 6,550, about 10% above current levels, as they cited a less severe expected tariffs hit to corporate profits. The strategists noted they expect the rally to be "punctuated by sharp pullbacks on repeated cycles of escalation and de-escalation on trade policy." Several investors and strategists pointed to a "base case" on Wall Street emerging for Trump's tariffs - 10% broadly, 30% on China along with some specific sectoral levies. The market "started saying the worst is behind us in terms of this whole tariff discussion," said King Lip, chief strategist at BakerAvenue Wealth Management. "The U.S. and China still have a lot of things to work out, but likely the worst is behind us." MODERATING VOLATILITY Volatility measures indicate calming fears about trade. The Cboe Volatility Index, an options-based measure of investor anxiety, reached 52.33 in early April, its highest closing level in five years, but has steadily receded and hovered at 17.6 on Wednesday, around its long-term median. In another sign, the average daily range of the S&P 500 has fallen to about 75 points, on a 10-session basis, about one-third the size from April during the height of post-Liberation Day volatility. Meanwhile, the S&P 500 has traded above its 200-day moving average - a closely watched trend-line - for about three weeks. The percentage of S&P 500 stocks trading in some form of an uptrend has jumped from 29.4% at the April 8 low to 60% as of last week, said Adam Turnquist, chief technical strategist for LPL Financial. "There is a growing list of technical evidence that suggests this recovery is real," Turnquist said in a note this week. Options data also suggests growing bullishness. Over the last month, on average about 0.84 S&P 500 call options traded daily against every put contract traded, the most this measure of sentiment has favored call contracts in at least the last four years, according to a Reuters analysis of data from options analytics firm Trade Alert. Calls confer the right to buy stocks at a specific price and future date, while puts grant the right to sell shares. To be sure, some investors warn the threat of tariff disruptions is not going away anytime soon and are wary of market complacency. "There is still just so much uncertainty," said Matthew Miskin, co-chief investment strategist at John Hancock Investment Management. Indeed, talk of the acronym "TACO" - Trump Always Chickens Out - has spread on Wall Street as a rationale for why markets should not fear harsh tariffs because many believe they will likely be walked back. But some investors are worried about a backlash from the president. BCA Research strategists said they were wary of "relying on a TACO backstop." "Trade tensions may have peaked, but we are unwilling to assume they won't sporadically rise from current levels," BCA said in a note this week. Stock valuations also continue to swell, with the S&P 500's forward price-to-earnings ratio reaching 21.7, its highest level since late February and well above its long-term average of 15.8, according to LSEG Datastream. Stocks are at "a more vulnerable level," said Chuck Carlson, chief executive officer at Horizon Investment Services. "The market is probably going to be a little bit more sensitive to what it perceives as negative news."
Yahoo
29-05-2025
- Business
- Yahoo
Stocks rally after a federal court halted Trump's tariffs
Stock futures gained Thursday after a federal court ruled that President Donald Trump overstepped his authority to impose sweeping tariffs, throwing into chaos the administration's core trade policy that has threatened to raise prices for businesses and slow the economy. Investors cheered – but not overwhelmingly. Dow futures rose 200 points, or 0.5%. S&P 500 futures were up 1.1%. And the tech-heavy Nasdaq futures were 1.6% higher, boosted by Nvidia's strong earnings Wednesday afternoon. Gains were somewhat muted because the fate of Trump's tariffs remains unclear. Trump's administration immediately appealed, so the ruling may ultimately be overturned. A number of Wall Street analysts also suggested the White House could simply reclassify some of its sweeping tariffs under a different law that was not challenged in the court ruling. 'The Trump administration has other authorities it can use to impose tariffs similar to those the court struck down,' noted Alec Phillips, managing director at Goldman Sachs, in a note to investors. And Wall Street had largely moved beyond the trade war after a number of rollbacks, pauses and deals had taken much of the sting out of the tariffs that at one point early last month sent the S&P 500 into bear market territory before rallying. 'This is a positive, but it doesn't have the same oomph as it may have in early April when the market was down,' said Keith Lerner, co-chief investment officer at Truist Advisory Services. 'Investors have already been pricing in less concern about tariffs. A month ago, we might have seen a 1,000-point rally on this.' Many stocks that had been particularly hit hard by tariffs bounced back. Apple, Target, Nike, Crocs, Wayfair and RH all rose between 2% and 5% in premarket trading. Some traditional safe haven assets, including US Treasury bonds and gold, sold off somewhat as part of Thursday's relief rally. The dollar gained somewhat, as did US crude oil. But some Wall Street analysts cautioned that investors shouldn't get too excited: The economic pain caused by tariffs remains, and Trump will almost certainly fight to maintain his signature policy. 'While Wednesday's ruling may lift markets and the spirits of businesses and consumers concerned about the negative effects of tariffs, the uncertainty that's starting to weigh on the economy isn't going away,' said Gary Clyde Hufbauer, a nonresident senior fellow at the Peterson Institute for International Economics. 'The uncertainty is only over if Trump does his own surprise and accepts the decision and does not come in with tariffs under these other statutes, and I'm not giving that much credence.' CNN's Matt Egan contributed to this report. 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
CNN
29-05-2025
- Business
- CNN
Stocks rally after a federal court halted Trump's tariffs
Stock futures gained Thursday after a federal court ruled that President Donald Trump overstepped his authority to impose sweeping tariffs, throwing into chaos the administration's core trade policy that has threatened to raise prices for businesses and slow the economy. Investors cheered – but not overwhelmingly. Dow futures rose 200 points, or 0.5%. S&P 500 futures were up 1.1%. And the tech-heavy Nasdaq futures were 1.6% higher, boosted by Nvidia's strong earnings Wednesday afternoon. Gains were somewhat muted because the fate of Trump's tariffs remains unclear. Trump's administration immediately appealed, so the ruling may ultimately be overturned. A number of Wall Street analysts also suggested the White House could simply reclassify some of its sweeping tariffs under a different law that was not challenged in the court ruling. 'The Trump administration has other authorities it can use to impose tariffs similar to those the court struck down,' noted Alec Phillips, managing director at Goldman Sachs, in a note to investors. And Wall Street had largely moved beyond the trade war after a number of rollbacks, pauses and deals had taken much of the sting out of the tariffs that at one point early last month sent the S&P 500 into bear market territory before rallying. 'This is a positive, but it doesn't have the same oomph as it may have in early April when the market was down,' said Keith Lerner, co-chief investment officer at Truist Advisory Services. 'Investors have already been pricing in less concern about tariffs. A month ago, we might have seen a 1,000-point rally on this.' Many stocks that had been particularly hit hard by tariffs bounced back. Apple, Target, Nike, Crocs, Wayfair and RH all rose between 2% and 5% in premarket trading. Some traditional safe haven assets, including US Treasury bonds and gold, sold off somewhat as part of Thursday's relief rally. The dollar gained somewhat, as did US crude oil. But some Wall Street analysts cautioned that investors shouldn't get too excited: The economic pain caused by tariffs remains, and Trump will almost certainly fight to maintain his signature policy. 'While Wednesday's ruling may lift markets and the spirits of businesses and consumers concerned about the negative effects of tariffs, the uncertainty that's starting to weigh on the economy isn't going away,' said Gary Clyde Hufbauer, a nonresident senior fellow at the Peterson Institute for International Economics. 'The uncertainty is only over if Trump does his own surprise and accepts the decision and does not come in with tariffs under these other statutes, and I'm not giving that much credence.' CNN's Matt Egan contributed to this report.
Yahoo
13-05-2025
- Business
- Yahoo
Dow soars 1,100 points after Trump team and China dramatically lower tariffs
US stocks surged on Monday after President Donald Trump's top trade officials brokered a surprisingly dramatic de-escalation in trade tensions with China over the weekend, dropping tariffs to much lower levels, which some economists say could stave off a US recession. The Dow closed higher by 1,161 points, or 2.81%. The broader S&P 500 gained 3.26%, and the tech-heavy Nasdaq Composite surged 4.35%. The three major indexes each posted their biggest single-day gains in over one month. 'The sharp market rally today reflects the unexpectedly positive tariff news,' said Keith Lerner, chief market strategist at Truist Advisory Services, in a Monday note. 'Many investors were not positioned for this outcome, leading to a significant market surge.' The Nasdaq, which had entered a bear market on April 4, closed up more than 20% from its lowest point this year — exiting its bear market and marking the start of a new bull market. (A rise of 20% from a recent low generally marks a bull market.) It's been a swift recovery in recent weeks for the Nasdaq, though the index is still down about 3.1% this year. US stocks on Monday firmly erased all their losses since Trump's April 2 'Liberation Day' trade announcement, which placed a 10% tariff on practically all goods coming into the United States and set significantly higher tariffs on dozens of countries. Trump paused most of those tariffs just days after they went into effect but jacked up import taxes on China — eventually to 145% on most Chinese imports. In turn, China hiked tariffs on US goods to 125%. The tit-for-tat trade war had effectively stopped trade between the two countries, risking substantial price hikes and shortages. Trump and Treasury Secretary Scott Bessent both had said in recent weeks that tariffs on China had grown unsustainably high and a détente was necessary. But few believed that the result of the discussions between Bessent, US Trade Representative Jamieson Greer and their Chinese counterparts in Geneva this weekend was going to be quite so significant. Both sides agreed to axe tariffs by 115 percentage points, still leaving the levies considerably higher than where they were before Trump took office in January — but much, much lower than the historic level over the past month that deeply concerned American businesses, consumers, economists and investors. 'No one had these low China tariff rates on their bingo cards,' said Jeff Buchbinder, chief equity strategist at LPL Financial, in an email. 'This is a big positive surprise.' Another key element of the discussions: Bessent said the US and China had put in place a mechanism to avoid raising tariffs on each other again, suggesting that the worst of the trade war may be behind us. Trump said as much during a Monday press conference. When asked if the tariffs on Chinese exports would snap back to 145% if there were to be an impasse on trade talks, Trump said, 'No.' 'No, but they would go up substantially higher' than the 30% rate during the pause, he said. 'I think you will have a deal, however.' The de-escalation of US-China tariffs further reduces global recession risks, Henry Allen, a strategist at Deutsche Bank, said in a note to investors Monday morning. 'The market's resilience itself is making a recession less likely by easing financial conditions,' he wrote. 'And policymakers don't want a downturn or market turmoil either, as we saw with the 90-day extension to the reciprocal tariffs.' As a result, Wall Street cheered Monday morning. Investors showed greater appetite for riskier assets, including stocks. The US dollar rose 1.4% against a basket of currencies. US oil, which had tumbled as investors feared a demand vacuum because of a tariff-induced global recession, surged 1.52% to $61.95 a barrel. Brent crude, the international benchmark, rose 1.64% to $64.96 a barrel. By contrast, investors sold off save-haven assets, such as gold, which tumbled 2.7%. US Treasuries also fell, sending the 10-year yield back above 4.45%. Bond prices and yields trade in opposite directions. Japan's yen fell 2% against the dollar. The CBOE Volatility Index, Wall Street's fear gauge, sank more than 15% to its lowest level since the end of March. 'Greed' was the sentiment driving markets, according to CNN's Fear and Greed index. The index had been staunchly in 'extreme fear' and 'fear' this year before surging into 'greed' this month. 'The larger-than-expected drop in the tariffs between the US and China, while temporary, and the establishment of a framework for continued discussion, is exactly what the stock market was hoping to see,' said Carol Schleif, chief market strategist at BMO Private Wealth. Tech stocks were particular winners on Monday: Despite a recent US carveout for hardware from tariffs on China, tech had been rocked in particular by the trade war between the US and China, because of the deeply intertwined relationship between American and Chinese technology sectors. Apple (AAPL) gained 6.3%, Tesla (TSLA) rose 6.75%, Nvidia (NVDA) was up 5.4%, Amazon (AMZN) rose 8.1% and Intel (INTC) was up 3.55%. Stocks of luxury goods makers, which had tumbled in recent months, bounced back sharply: Hermes rose 3.5%, Burberry was up 3.67% and LVMH surged 7%. Automakers also surged: Jeep and Chrysler maker Stellantis (STLA) was up 6.5%, General Motors (GM) rose 4.4% and Ford (F) was up 2.6%. 'The risk-on move in markets suggests that investors had not expected such a positive outcome to come so quickly,' said Ulrike Hoffmann-Burchardi, chief investment officer for global equities at UBS Global Wealth Management, in a Monday note. 'Investors will now be focused on signs that the temporary fix can be turned into a lasting agreement.' Bessent on Monday morning characterized the trade war de-escalation that he helped negotiate this weekend with his Chinese counterparts as tough but respectful. 'We were firm, and we moved forward,' Bessent told CNBC from Geneva. 'We tried to identify shared interest. We came with a list of problems that we were trying to solve, and I think we did a good job on that.' Bessent noted that America was negotiating from a position of strength because China needs the United States to buy its products more than the US relies on China for its goods exports. China's economy is on the ropes, amid a housing crisis and an emerging debt crisis. Consumer spending has fallen, as has factory output. This is a bad time for China to be dealing with a crippling trade war. 'I had seen what's going on in the Chinese economy. We can see what's going on with the shipments to the US,' Bessent said. 'Again, we are the (trade) deficit the deficit is a country has a better negotiating position.' But, as the saying goes, no one wins in a trade war. US consumer sentiment fell off a cliff in recent months as inflation-weary Americans grew anxious about the prospect of rising prices and shortages. Shipments to the US from China were all but halted, rattling corporate America. And investors had braced for a recession, as economists said the US economy could get hit particularly hard by the trade war. The detente, though welcome by Wall Street, consumers and businesses, represents a remarkable shift for a Trump administration that only days ago had said the trade standoff with China was necessary to restore America's lost manufacturing prowess. Trump had said last week that zero trade with China put America in a stronger position, because that meant it was no longer 'losing money' to the Chinese. Bessent said the deal didn't represent a major policy shift, however. 'This is just a pause,' he said. 'The April 2 tariff level for China was 34%, so we have moved that down from 34% to 10%.' As the next step in negotiating, the US will focus on expanding its supply chains for what Bessent called 'strategic necessities,' reducing its reliance on China for things like critical medicines, semiconductor chips and steel. 'What we do want is a decoupling for strategic necessities, which we were unable to obtain during Covid,' he said. 'And we realized that efficient supply chains were not resilient supply chains. So, we are going to create our own.' He also said the US would seek a fairer approach to international business. Bessent said the Trump administration wants to break down 'insidious, non-tariff trade barriers that hurt American companies trying to do business' in other countries. The trade war de-escalation with China represents a big win for the US economy and the American consumer, Kevin Hassett, Director of the National Economic Council of the United States, told CNN's Kate Bolduan Monday. Hassett said Trump had scored major concessions from China and the United Kingdom in their respective recent frameworks for trade negotiations, announced over the past few days, particularly by opening up the UK market to American beef and potentially paring back some of the barriers China had put in place on American companies looking to do business there. And Hassett suggested the agreement reached over the weekend should prevent further issues with supply shocks from China. 'A lot of that is cleared up now — the potential for supply disruptions from China,' Hassett said. 'I think it's really a very historic fresh start in the relationship between the US and China.' But Hassett said the recent turn of events is not a contradiction in Trump's prior policy. 'The bottom line is what President Trump was saying was that if we don't work out that good deal, we'll be fine,' Hassett said. 'The fact is that we didn't sell practically anything to China. We're buying a lot of stuff from China. We could buy that stuff from other countries, or make it ourselves.' 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
