Latest news with #TrumpAlways
Economist
3 days ago
- Business
- Economist
A fresh retail-trading frenzy is reshaping financial markets
Finance & economics | Meme stocks Photograph: Alamy Jul 29th 2025 | NEW YORK | 4 min read I nvestors love an acronym. In recent months they have embraced the TACO (Trump Always Chickens Out) trade. They once swooned over the FAANG stocks (Facebook, Apple, Amazon, Netflix and Google). During Europe's sovereign-debt crisis of the 2010s traders fretted over the PIIGS (Portugal, Italy, Ireland, Greece and Spain). A good memory for initials takes a financial historian a long way. Stocks Finance & economics A deal with America chooses certain tariffs over risky retaliation Foreign companies are sharing the load. For now Hegemons should care about even puny countries A fierce battle is under way in China The more useful stablecoins and tokens prove to be, the greater the risk There are advantages to the old-fashioned working day
AU Financial Review
5 days ago
- Business
- AU Financial Review
Here's why fixed income has a good shot at beating equities
Winston Churchill once said Russia was a 'riddle wrapped in a mystery inside an enigma'. He might well have been talking about the financial markets in 2025. With the TACO (Trump Always Chickens Out) trade in full swing, we seem to have come full circle, ending up back where we were at the start of the year from a fundamental perspective – yet risk assets have ended up well ahead.
The Citizen
7 days ago
- Business
- The Citizen
Weekly economic wrap: local politics and US tariffs coming next week
While inflation remained low in June, the picture can change from 1 August if the US tariff on South Africa remains at 30%. It was another busy week on the local political front, with a minister fired, while on the international front countries are waiting to see if US president Donald Trump will TACO (Trump Always Chickens Out) or stick to his guns and implement the tariffs he recently proposed. Lisette IJssel de Schepper, chief economist at the Bureau for Economic Research (BER) says while it was a big week on the local political front, there was some constructive momentum. President Cyril Ramaphosa dismissed higher education and training minister Nobuhle Nkabane who is facing accusations that she misled parliament. After Nkabane's dismissal, the DA agreed to support the departmental budget on higher education, essentially clearing the way for the Appropriation Bill to be passed. 'While this will not be the last test for the government of national unity (GNU), she says it is a welcome sign that Budget 3.0 can now be finalised, allowing attention to shift toward the October medium term budget policy statement (MTBPS),' De Schepper said. ALSO READ: 'Open our eyes and ears' – Ramaphosa on how to tackle US tariff hike on SA cars US tariffs: will Trump TACO? She said that ahead of next week's 1 August deadline, Trump announced another 'massive' trade deal. Japan and the US agreed on a 15% reciprocal tariff, rather than the 25% that Trump initially threatened. 'Reports suggest that the European Union and the US are nearing a deal, also for 15%, but this has not been confirmed. Unlike other nations or regions, the EU already announced that it has a retaliatory package ready to implement, if necessary, which puts the global economy at additional risk should negotiations fail. 'Trump has said that 15% will probably serve as a floor for reciprocal tariffs, which means the UK was 'lucky' to have been able to settle at 10% early on. In addition to Japan, a deal was reached with the Philippines, with tariffs at 19%, in line with Indonesia and just below Vietnam's 20%.' ALSO READ: JSE All Share Index hit 100k points Oil and gold lower as risk appetite increases Bianca Botes, Citadel Global director, commenting on commodities, says Brent crude breached $69/barrel as markets cheered progress on a US-EU trade agreement, anticipating that reduced tensions would spur global growth and oil demand. 'Supply-side forces further bolstered prices, including constrained Russian exports and tighter diesel markets due to new EU import restrictions and talks of sanctions on Russian oil. These factors offset demand concerns and underpinned the week's rally,' she said Botes saidgold hovered near $3 360 per ounce, consolidating earlier gains after a midweek pullback as risk appetite improved. 'Easing of global trade frictions and equity records prompted some investors to rotate out of safe haven assets, but gold still managed a 0.6% rise for the week, benefiting from lingering uncertainty around US Fed policy and geopolitics.' ALSO READ: Economists lower GDP growth forecast due to global and domestic risks Rand firmed against the dollar this week Turning to the rand, Botes says it firmed against the dollar, moving in tandem with rising JSE equities and elevated commodity prices. 'Steadiness in domestic bond yields, resilient mining sector profits and improved global risk appetite provided support for the currency, despite local growth and fiscal headwinds.' Busisiwe Nkonki and Isaac Matshego, economists at the Nedbank Group Economic Unit, said the rand gained strength on Wednesday, trading at R17.55/$ against the dollar, as inflation increased slightly, suggesting the Reserve Bank (Sarb) may proceed with further interest rate cuts. 'Renewed optimism on the GNU also supported the local unit. All parties in the GNU supported the 2025 Appropriation Bill, dampening earlier fears of a deadlock after the DA threatened to oppose the bill if the president did not act against a truant cabinet minister. 'However, the local unit surrendered some of the gains this morning to trade around R17.77/$ this afternoon.' ALSO READ: Inflation still low enough for repo rate cut, but only in September – economists Inflation edged up to 3% in June as expected Inflation edged up to 3% in June from 2.8% in May, driven by food and non-alcoholic beverages that increased by 5.1% and housing and utilities that increased by 4.4%. The increase in food inflation was mainly driven by an acceleration in meat prices (6.6%) amid supply chain issues due to avian flu and foot and mouth disease, Tshepiso Maroga, economist at the BER, says. Mamello Matikinca-Ngwenya, Siphamandla Mkhwanazi, Thanda Sithole and Koketso Mano, economists at FNB, say they see headline inflation rising to 3.6% in July, as utility and food costs ratchet up and fuel deflation moderates. For the year, they forecast average headline inflation of 3.5%. Nkonki and Matshego also said the increase was in line with their expectations. 'The food price increases were caused by temporary restrictions on poultry imports from Brazil due to avian flu, some tightening in local red meat supplies due to new outbreaks of foot-and-mouth disease and the lingering impact of earlier floods on vegetable and fruit supplies.'
Business Insider
21-07-2025
- Business
- Business Insider
5 reasons Wall Street is in chill mode
Stock markets are shrugging off major risks and smashing records — so much so that even seasoned investors are scratching their heads. On Friday, the S&P 500 and Nasdaq 100 closed little changed after notching record highs on Thursday. Both indexes are hovering near the all-time highs they reached earlier this month, continuing a rebound after the post-"Liberation Day" sell-off. That rebound has stunned analysts, given the pile-up of macro risks, particularly President Donald Trump's ongoing threats to impose steep tariffs on key trading partners. Yet investors keep piling in — even if many are doing so with one eye on the exit. "In many ways, this is a rally that really no one's had much conviction in it," Andrew Pease, the Asia Pacific head of investments for Russell Investments, told Business Insider. He said the firm's analysis shows investors are neutral, not euphoric. "Everyone's very wary about this particular rally," Pease said. Wall Street veterans have spent months warning that investors may be underestimating the risks. "Unfortunately, I think there is complacency in the markets," JPMorgan Chase's CEO, Jamie Dimon, said earlier in July, referring to tariffs. Those concerns may soon be put to the test. Trump's proposed levies on trading partners — ranging from 10% to 70% — threaten to disrupt supply chains, fuel inflation, and slow global growth. "I think the market is too complacent about the damage of such high tariffs on both the US and the global economy," said Zhiwei Zhang, chief economist at Pinpoint Asset Management. It's not just tariffs that suggest trouble could be brewing. China's economic slowdown, Middle East tensions, and softening US data all suggest trouble could be brewing. So why are stocks still surging? 1. The US economy still looks resilient Despite inflationary concerns tied to Trump's tariff threats, the US economy remains on solid footing. As BI's Jennifer Sor recently reported, recession fears are fading. Big banks kicked off earnings season on a strong note last week. The consumer "basically seems to be fine," JPMorgan's chief financial officer, Jeremy Barnum, said on an earnings call on July 15. That's despite some cracks in the data. US GDP contracted 0.5% in the third quarter, and consumer spending growth slowed to 0.5% in Q1 — down sharply from 4% in Q4 2024. But retail sales rose 0.6% in June from May and the job market remains robust. The US added 147,000 jobs in June, well above expectations, while unemployment dipped to 4.1% from 4.2%. American consumers are, as top CEOs said recently, "a little numb" to tariffs and "very resilient," even as inflation ticks up. 2. Betting on the TACO trade Some investors are leaning on the "TACO trade" — short for "Trump Always Chickens Out." Markets are increasingly assuming that Trump's tariff threats are more talk than action. "Finally, the market is not wrong in pricing in a good chance that Trump will not follow through with his latest tariff threats, instead settling for some deal by 1 August," wrote Davide Oneglia, the director of European and global macro at Global Lombard, on July 16, referring to the trade deadline. Daniela Sabin Hathorn, senior market analyst at agreed: "The prevailing view among investors seems to be that these tariff threats are more bark than bite — a negotiating tactic rather than a firm policy stance." That's created what analysts call "asymmetry:" Markets could keep rising if talks go well, but they are vulnerable to sharp corrections if discussions break down. 3. FOMO + MOMO = a runaway rally Even as risks loom, traders don't want to miss out. That's fueling what analysts describe as a combination of FOMO, or fear of missing out, and MOMO, or momentum-based trading. Retail traders have been jumping back in, chasing gains as indexes push higher, even if they missed the earlier run-up. "MOMO and FOMO" are likely to dominate until proven otherwise," wrote Steve Sosnick, the chief strategist at Interactive Brokers, in a June 30 note. "Newton's First Law applies: A body (market) that is in motion will stay in motion until acted upon by an external source," he added. Sosnick said that implied volatility remains low, even as risks mount, suggesting investors are choosing to look past potential trouble. Pease at Russell Investments agreed that momentum could unravel quickly — but only if there's a clear macro shock. 4. Fed cuts are back on the table The Federal Reserve has signaled it could cut rates another two times this year — a boon for stocks. Lower rates reduce bond yields, making equities more attractive. They also encourage borrowing and investment. But rising inflation could complicate that path. In June, US inflation climbed 2.7% from a year ago, up from 2.4% in May. Dimon warned that the Fed might still hike if inflation proves sticky. He sees a 40% to 50% chance of another increase this cycle. 5. AI continues to power tech gains AI hype continues to drive the market, especially Big Tech. "AI is still the dominant theme, particularly as the Big Tech companies are giving solid earnings guidance and other companies are joining in as well, then that's the world in which you could see that this rally has further to go," Pease said, while cautioning that gains could become overdone. Bank of America's latest global fund manager survey, published July 15, shows 40% of respondents already see productivity gains from AI adoption. Another 21% expect gains within the next year. Caution still lingers Despite the optimism, there's unease under the surface. Summer trading is thinner, meaning volatility can spike quickly. Last year's yen carry trade unwind is a fresh reminder that things can turn fast. Trump's tariff threats are still on the table, but Oneglia thinks markets are right to be relatively unfazed. "Negotiations have not broken down and the market is acting rationally — at least on this," Oneglia wrote. Still, others are more cautious. "Ultimately, markets are at a crossroads," wrote Hathorn. "The rally, particularly in US equities, has been driven by optimism and underpinned by assumptions about political behavior." Until August, market asymmetry remains, so there's "room to rise on good news, but the potential for a swift and severe correction if trade tensions escalate," Hathorn added.
Deccan Herald
15-07-2025
- Business
- Deccan Herald
US deal: Why India must not trade under coercion
India is in the midst of negotiations for a trade deal with the United States under an environment of unpredictability laced with unabashed and overt arm-twisting that has become the signature call of that nation under President Donald Trump. These are understandably difficult negotiations, and a lot is at stake given that the US remains one of India's most significant trade partners, reflected in the trade numbers and in deep ties seen through the lens of the large and vibrant Indian community in the US and the number of Indians who flock to the US for work, tourism, or to study. The US has extended the deadline for a trade deal from July 9 to August 1 under the threat of punitive tariffs of 26% if an agreement is not reached by extension signals hope and optimism that a deal is possible, but it equally signals that the US side is pushing hard to see if India will bend under pressure. Another explanation is that the extension in itself is a case of 'TACO', or 'Trump Always Chickens Out', given that blanket tariffs on the rest of the world, as envisaged by the US, are not sustainable. But this is less likely with the dominant mood in Washington being to push hard, unmindful of the consequences, and India not being in a very strong position to dictate terms. Further, the US has extracted significant concessions from others, including the UK, and would demand that India, too, fall in course, the people of India would expect the country not to bend to anything unreasonable, even though making such demands has become the currency of the US. In this context, it is good to delink the success or failure of a trade deal with the performance or the influence of the Narendra Modi government. In other words, this government should ignore image management within the nation vis-a-vis the trade deal and take tough calls that protect Indian interests, even if this runs the risk of not having a trade deal. We may have a deal and be worse off as a nation if India allows concessions and gives in where it should not; we may equally not have a trade deal and be worse off in different ways because the tariffs will impact trade and hurt India and its latter will create disruption in the immediate, but it has chances of some mitigation with the US in a trade war against all that will likely bring some reversals over time, as its own economy will not be able to take the hit of tariffs beyond a point. Besides, this will be a signal to the world that India will not and should not be pushed. Having a trade deal by granting undue concessions can be far worse since it may open Indian markets in ways and to products and services that will have long-lasting impacts on the nation. The risks are many, but they will take their toll long after the deal is signed, so this is the space to be more watchful. Powerful US lobbies sitting close to, if not right within, the White House are at work pushing for what India will see as undue in dairy, agriculture this context, two hot-button items that appear to have emerged are the US push for exports of GM crops and cow milk to India. None of these are new demands. They cannot be part of discussions if the Indian side makes it clear that no negotiations on these are possible. For example, India requires that dairy products used as food must be from animals that are not given blood meals or given feeds containing internal organs or tissues of ruminant or porcine origin. This is a perfectly fair and reasonable requirement – cows and buffaloes used for milk production are herbivores and must not be given any animal products as milk in the Indian context is culturally sensitive, given that it is used for religious offerings and in sweets for auspicious occasions. Yet, the US position as articulated in the US' '2025 National Trade Estimate Report on Foreign Trade Barriers (FTB)' is that Indian requirements 'lack a discernible animal health or human health justification'. Such a sectoral opening up will kill the Indian dairy sector. It will mix up imported US milk that contains recombinant bovine growth hormone (rBGH), which has been approved in the US since 1993 to increase milk production in cows but is banned in the European Union and Canada. Drinking milk from these sources is linked to higher levels of IGF-1 in humans. IGF-1 is a growth hormone which, at high levels, is said to be linked to prostate, breast, colorectal, and other cancers though the linkage is not definitive, according to the American Cancer GM crops, the Alliance for Sustainable and Holistic Agriculture, or ASHA-Kisan Swaraj network, which brings together farmers and agriculturists, has written to the government appealing against any concessions to the US. In a letter, the alliance said: 'We strongly urge you to stand firm and unequivocally reject any such move, which would have serious and irreparable implications for India's agriculture, biosafety, public health, rural livelihoods, and seed and food sovereignty.'.The US wants much more than this. Take the example of stent prices, which were capped in India when the regulators found that price inflation was extremely high. Everyone made merry while patients suffered, till the caps came in. The US in the 2025 FTB report has argued that 'price controls (on coronary stents and knee implants) have not been increased in line with inflation and do not differentiate based on the cost of production or technological innovation, which dissuades US companies from serving the market.' The drift is clear. The US wants to extract, if not extort. India must resist..(The writer is a journalist and faculty member at SPJIMR; Syndicate: The Billion Press)
