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CNBC
3 days ago
- Business
- CNBC
CNBC Daily Open: It's a dicey matter to play 'chicken' in markets
When threatened, birds puff up their feathers to appear larger than they actually are, and squawk to signal aggression. On Friday, U.S. President Donald Trump suggested he would no longer be "Mr. NICE GUY" to China after the country "totally violated" its trade agreement with America. The same day, Trump said he would raise tariffs on steel imports to 50% from 25%. The escalations follow a détente in May, during which Trump reached a trade deal with the U.K., agreed with Beijing to sharply reduce reciprocal import duties and delayed for more than a month a tariff of 50% on the European Union — two days after announcing it. Those glad tidings lifted stocks. For May, the S&P 500 rose 6.2% and the Nasdaq Composite jumped 9.6%, with both indexes enjoying their best month since November 2023. The Dow Jones Industrial Average gained 3.9% for the month. But the mood among investors might change quickly, depending on communication coming from the White House. The word "chicken" is used as a metaphor for cowardice. In reality, they can be dangerous — there have been reports of humans being killed by Colonel Sanders' favorite bird. Asia markets start June in the redU.S. markets traded mixed Friday. The S&P 500 was flat, the Dow Jones Industrial Average rose 0.13% and the Nasdaq Composite fell 0.32%. Futures tied to the three indexes ticked down Sunday evening stateside. Asia-Pacific stocks fell Monday. Hong Kong's Hang Seng index dropped 1.9% and Japan's Nikkei 225 lost 1.32% at 1:30 p.m. Singapore time. Expected Trump-Xi talkTrade tensions between China and the U.S. are escalating. On Monday, Beijing claimed that the White House's "export control measures" breach the two countries' agreement reached in Geneva, Switzerland, refuting Trump's claim on Friday that China has "TOTALLY VIOLATED" it. That said, reconciliation could happen as Trump and Chinese President Xi Jinping are expected to discuss trade negotiations "this week," U.S. National Economic Council director Kevin Hassett said on Sunday. Trump says he'll double steel tariffsTrump on Friday told steelworkers at U.S. Steel that he will raise import duties on steel to 50% from 25%. The new import duties will start June 4, the president posted on Truth Social. On Saturday, the European Union said it is "prepared to impose countermeasures, including in response to the latest U.S. tariff increase." Even so, "tariffs are not going away," U.S. Commerce Secretary Howard Lutnick said on "Fox News Sunday." Musk cuts himself from DOGEElon Musk bid farewell to his role at the U.S. Department of Government Efficiency Friday. Musk said on Sunday that he doesn't want to "take responsibility for everything the administration's doing," expressing disappointment at the White House's "massive spending bill." Tesla shares lost 14% this year amid Musk's involvement in politics, but gained 22% in May following Musk's April statement he would spend less time at DOGE. Australia's Soul Patts and Brickworks to mergeShares of Australian investment firm Washington H. Soul Pattinson, also known as Soul Patts, spiked more than 15%, and its affiliate Brickworks rocketed over 25% after both companies announced a merger of 14 billion Australian dollars ($9 billion). As part of the deal, a new company listed in Sydney will acquire all outstanding shares of Soul Patts and Brickworks. The merged entity will have holdings across real estate, private equity and credit totaling A$13.1 billion. [PRO] May jobs report in focusThe U.S. nonfarm payrolls report for May, out Friday, will provide more information on how the economy is holding up amid Trump's multiple tariffs —and play a big role in determining whether the May rally in stocks still has legs. Economists expect the number of jobs added in May to dip from April. It misses the forecast, markets could take a downturn as the White House appears to ratchet up its tariff rhetoric. Investors are piling into big, short Treasury bets alongside Warren Buffett Investors always pay close attention to bonds, and what the latest movement in prices and yields is saying about the economy. Right now, the action is telling investors to stick to the shorter-end of the fixed-income market with their maturities. Long-term treasuries and long-term corporate bonds have posted negative performance since September, which is very rare, said Todd Sohn, senior ETF and technical strategist at Strategas Securities, on "ETF Edge." The only other time that's happened in modern times was during the Financial Crisis," he added. "It is hard to argue against short-term duration bonds right now." It would seem that Warren Buffett agrees, with Berkshire Hathaway doubling its ownership of T-bills and now owning 5% of all short-term Treasuries, according to a recent JPMorgan report.
CNBC
3 days ago
- Business
- CNBC
CNBC Daily Open: Playing "chicken" in markets can be a risky affair
When threatened, birds puff up their feathers to appear larger than they actually are, and squawk to signal aggression. On Friday, U.S. President Donald Trump suggested he would no longer be "Mr. NICE GUY" to China after the country "totally violated" its trade agreement with America. The same day, Trump said he would raise tariffs on steel imports to 50% from 25%. The escalations follow a détente in May, during which Trump reached a trade deal with the U.K., agreed with Beijing to sharply reduce reciprocal import duties and delayed for more than a month a tariff of 50% on the European Union — two days after announcing it. Those glad tidings lifted stocks. For May, the S&P 500 rose 6.2% and the Nasdaq Composite jumped 9.6%, with both indexes enjoying their best month since November 2023. The Dow Jones Industrial Average gained 3.9% for the month. But the mood among investors might change quickly, depending on communication coming from the White House. The word "chicken" is used as a metaphor for cowardice. In reality, they can be dangerous — there have been reports of humans being killed by Colonel Sanders' favorite bird. Mixed U.S. markets for end of May U.S. markets traded mixed Friday. The S&P 500 was flat, the Dow Jones Industrial Average rose 0.13% and the Nasdaq Composite fell 0.32%. Futures tied to the three indexes ticked down Sunday evening stateside. The pan-European Stoxx 600 index added 0.14% Friday, breaking a two-day losing streak. Germany's DAX climbed 0.27% as the country's inflation eased to 2.1% in May from 2.2% the previous month — but was still higher than expected. Expected Trump-Xi talkTrump and Chinese President Xi Jinping could discuss trade negotiations "this week," U.S. National Economic Council director Kevin Hassett said on Sunday. The conversation might ease tensions, which rose after Trump on Friday said that China has "TOTALLY VIOLATED" its preliminary trade agreement with America, and Chinese U.S. embassy spokesperson Liu Pengyu responded by accusing the U.S. of engaging in "abuse of export control measures." Trump says he'll double steel tariffsTrump on Friday told steelworkers at U.S. Steel that he will raise import duties on steel to 50% from 25%. The new import duties will start June 4, the president posted on Truth Social. On Saturday, the European Union said it is "prepared to impose countermeasures, including in response to the latest U.S. tariff increase." Even so, "tariffs are not going away," U.S. Commerce Secretary Howard Lutnick said on "Fox News Sunday." Mild U.S. inflation in AprilThe U.S. personal consumption expenditures price index, the Federal Reserve's preferred inflation reading, was muted for April. Prices ticked up 0.1% for the month, in line with the Dow Jones forecast. On an annual basis, it rose 2.1%, 0.1 percentage points lower than expected. Excluding food and energy, the core reading on which Fed policymakers tend to focus came in at 0.1% and 2.5%, against respective estimates of 0.1% and 2.6%. Musk cuts himself from DOGEElon Musk bid farewell to his role at the U.S. Department of Government Efficiency Friday. At the press conference, Musk deflected a reporter's question about a New York Times article detailing his alleged drug use last year. Tesla shares lost 14% this year amid Musk's involvement in politics — but they gained 22% in May following Musk's April statement he would spend less time at DOGE. [PRO] May jobs report in focusThe U.S. nonfarm payrolls report for May, out Friday, will provide more information on how the economy is holding up amid Trump's multiple tariffs —and play a big role in determining whether the May rally in stocks still has legs. Economists expect the number of jobs added in May to dip from April. It misses the forecast, markets could take a downturn as the White House appears to ratchet up its tariff rhetoric. Investors are piling into big, short Treasury bets alongside Warren Buffett Investors always pay close attention to bonds, and what the latest movement in prices and yields is saying about the economy. Right now, the action is telling investors to stick to the shorter-end of the fixed-income market with their maturities. Long-term treasuries and long-term corporate bonds have posted negative performance since September, which is very rare, said Todd Sohn, senior ETF and technical strategist at Strategas Securities, on "ETF Edge." The only other time that's happened in modern times was during the Financial Crisis," he added. "It is hard to argue against short-term duration bonds right now." It would seem that Warren Buffett agrees, with Berkshire Hathaway doubling its ownership of T-bills and now owning 5% of all short-term Treasuries, according to a recent JPMorgan report.
Epoch Times
08-05-2025
- Business
- Epoch Times
Senior Trump Official Credits President for ‘New Relationship' With Canada
White House official Stephen Miller says U.S. President Donald Trump has helped to secure a new trade and defence relationship with Canada, following the first meeting between Trump and Prime Minister Mark Carney. 'President Trump has opened up a completely new relationship with Canada because of his strength and because of his diplomacy,' Miller said during an interview with Fox News on May 7. Miller serves as United States homeland security advisor and White House deputy chief of staff for policy. Miller said Canada is 'finally' discussing increasing military spending to meet the NATO requirement of 2 percent of GDP on defence, 'so they're not a free rider with the United States anymore.' He also highlighted that Carney 'acknowledged the need to strike a fairer trade deal with the United States' and that Ottawa is taking additional steps to secure the Canada-U.S. border and reduce illegal immigration and drug smuggling. 'It's just one concrete win after another because of President Trump's leadership on this issue,' Miller said, 'We want friendship with Canada, but we also insist upon and demand fairness from Canada.' Related Stories 5/6/2025 5/6/2025 Carney met with Trump in the White House on May 6 to discuss ending the trade dispute between the two countries. Canada introduced retaliatory measures after Trump imposed various sets of tariffs on Canada. Following the meeting, Carney told reporters the event marked the 'end of the beginning of a process of the United States and Canada redefining that relationship of working together.' Carney said there would be more meetings held in the coming weeks, but could not say when the tariffs might be taken off of Canada. During the White House meeting, Carney said Trump had 'revitalized international security' and encouraged more NATO members to meet their spending requirement. Former Prime Minister Justin Trudeau said back in NATO's defence spending target of 2 percent of GDP by 2032, while Carney's government has said it will exceed the 2 percent goal by 2030. Trump acknowledged in the meeting that Canada has been 'stepping up the military participation.' The U.S. president has been highly critical of countries, including Canada, that do not meet the NATO requirement, at times calling them 'delinquent' and questioning whether the United States should protect them from adversaries. Carney also said during the meeting that Canada is focused on securing its borders and stopping fentanyl deaths and illegal immigration. Ottawa announced a $1.5 billion spending package for border security in late 2024, and has seen a reduction in illegal border crossings in the months since. The 25 percent tariffs that the United States placed on Canada in March were related to fentanyl and illegal immigration at the Canada-U.S. border, which has resulted in Ottawa attempting to strengthen border measures and highlight its successes to Washington. U.S. National Economic Council Director Kevin Hassett that Canada was not doing enough to tackle fentanyl labs in the country, and reiterated that the 25 percent tariffs are part of a 'drug war,' and not a 'trade war.' Meanwhile, Trump has said the 'We put tariffs on cars from Canada, and at a certain point it won't make economic sense for Canada to build those cars,' Trump said in the White House on May 7. 'We really don't want Canadian steel, and we don't want Canadian aluminum and various other things, because we want to be able to do it ourselves.'
CBS News
27-04-2025
- Business
- CBS News
Transcript: Gary Cohn on "Face the Nation with Margaret Brennan," April 27, 2025
The following is the transcript of an interview with Gary Cohn, IBM vice chairman and former director of the U.S. National Economic Council, that aired on "Face the Nation with Margaret Brennan" on April 27, 2025. MARGARET BRENNAN: And we turn now to Gary Cohn, who served as the top economic adviser in President Trump's first term. He is now the Vice Chairman of IBM. Good to have you back, Gary. GARY COHN: Thanks for having me. MARGARET BRENNAN: So we saw the stock market rebound this week, and yet, you see in our polling data, you see in economic indicators that there is real concern about what is coming, even recession predictions. What are you seeing? COHN: So I think we need to take a step back here. We entered the year with just unbelievable euphoric excitement about what was going to happen. We also entered the year with the market sort of priced for perfection. I think now, as we roll forward to where we are today, we're sort of in a world where we're in a price for realistic uncertainty, and uncertainty is not good for growth. So we've gone from this excitement to unpredictability, and the unpredictability has to do with where are we on the economy. And I think a lot of your data showed there's still a little bit of confusion on the economy right now. What we have seen for the beginning of the last three months, in the early stages of the presidency, is we've seen the consumers starting to be a little bit concerned about tariffs. The concern about tariffs has driven them to preload or front-end buy a lot of the larger items that they were going to buy. MARGARET BRENNAN: Buy them now, because they might be cheaper than in a few months. COHN: We've seen automobile sales almost all-time record highs. So we see people buying automobiles because they're trying to avoid tariffs. They're buying consumer goods, they're buying washing machines, they're buying technology items. So we've seen the economy actually be in relatively good shape. So if you look at the actual data, what people would call hard data coming out of the economy right now, it looks pretty solid. If you look at the softer data, and the softer data is polling data, and you just showed some polling data, there's an awful lot of economic polling data. You start to see much more weakness in the polling data. So if you look at consumer confidence, consumer confidence is an indication of what I'm thinking I'm going to do going forward, you start to see a lot more weakness in consumer sentiment and in consumer data. And I think that's starting to play through the economy. This week, we started to see a lot of the major companies in America report earnings for the first quarter. MARGARET BRENNAN: Right. COHN: Now, remember that's backwards looking, the first quarter, but companies also have a view of what's going on in the second quarter. So you started to see some of the major consumer-facing brands say, look, our first quarter was pretty good, but we're starting to see signs the second quarter is not going to be as good as we hoped. We saw it in fast food restaurants like Chipotle. We saw it in snack foods for Pepsi Cola. We saw it in the airlines. The airlines have talked about how difficult their restaurants are, and we've also seen it in the very high-end product. We saw it in LVMH is warning about sales slowing down. So we're in this part of the economy where there's this lack of predictability, there's uncertainty and the consumers acting that way by sort of withdrawing from the market and only buying the essentials and the necessity products or products they think they can buy today because they may be more expensive tomorrow. MARGARET BRENNAN: Or perhaps not on shelves tomorrow. That's something that we heard some of these retail CEOs privately told the White House in meetings this week. And our Richard Escobedo reports that in a separate meeting, the Treasury Secretary told investors the booking of container ships that carry goods between China and the U.S., it's down more than 60%. COHN: Well, we're seeing the data. We're seeing the data coming out of China, and -- MARGARET BRENNAN: That means if people even want to buy it, it won't be there. COHN: So what people need to understand is the cycle from a good being sold in China, loaded on a vessel, sailed across the ocean, unloaded in the United States, put in a factory, distributed to a shelf, is about eight weeks in the United States. So if you go back to the April 2nd date when the tariffs kicked in, you're talking about seeing the effect really May 2nd. So I would say the last couple weeks of, of, of, of May you'll start, you'll start seeing this effect here. So you know we're a few weeks away from starting to see the early effects of what will happen in the transportation of goods. You're also starting to see many of the small businesses, and this is where it's really interesting, you know, small businesses who have to order goods, and you saw a lot of data out of the toy industry recently, the toy industry, which is really small industry runs the vast majority of retail toy sales. You know, people are ordering their toys for Christmas today, have to order those toys. Those toys are now coming with a massive 145% tariff. The vast majority of small business toy stores cannot order toys today because they cannot afford the 145% tariff. So they're making a conscientious decision. They're either going out of business or they're just going to wait and see what happens. So you're right, the lag effect of getting goods this country will not be felt for another two to four weeks. MARGARET BRENNAN: And there are no active trade negotiations underway, according to the Treasury Secretary. There may be contact between the U.S. and China, but that's not going to be a quick fix. COHN: That said, the Treasury Secretary did acknowledge this week that the relationship between China and the United States is unsustainable. And I think we have to acknowledge that. MARGARET BRENNAN: He, he said the trade war, right? COHN: He said, he did say -- MARGARET BRENNAN: He pumped the brakes on that. COHN: He did. He did. But at the end of the day, the trading issue really has started, for better, to coalesce around the China issue. I think we're all starting to realize that the country we're most dependent upon in the United States and for our shelves and what we would miss the most would be what comes out of China. MARGARET BRENNAN: We knew that. You knew that. COHN: We've always known that. We've always known that. MARGARET BRENNAN: You told President Trump that during the first term. COHN: We've known it. But the fact that the Treasury Secretary is acknowledging that we are in an unsustainable situation, and we have to start negotiating with the, with the Chinese is very important. MARGARET BRENNAN: They also have to say we're ready to talk, and they haven't yet. In fact, the Chinese seem to be really holding the line on this so far. But I also want to ask you about what President Trump has said because when you're talking about what's coming down the line, he's indicated that it could be up to the Fed, the Federal Reserve, to cut interest rates to sort of make up for what happened. He did pull back on his threat to fire the Fed chair. Do you think there is an interest rate cut that's necessary? COHN: So I think the Fed is doing exactly what they were empowered to do. The Fed is an independent agency with a dual mandate. And their dual mandate, very simply stated, is full employment on one side, and stable prices. And their definition of stable prices is an inflation rate at or around 2%.They are in a position right now where they're basically at full employment, inflation at about 2.4%. So they're basically saying we have done our job right now. So there is, in essence, really no reason for us to take action at this moment. And on top of that, we have this unpredictable economy. We have this potential instability. We know that the Customs Border Patrol is starting to collect more and more tariff money every day. We know that those costs have to feed through the economic system. We predict that that will be inflationary, even if it's just a one time price shock. MARGARET BRENNAN: Right. COHN: So there are those that say, look, it is a one time price shock, it's not inflationary. But the one time you move prices up, if you're not moving wages up commensurate with the one time price move, every American is losing purchasing power. So if you have a fixed price wage, but the cost of goods goes up once, you can purchase less. MARGARET BRENNAN: So on that point, the President also says you may pay more here, right, but I got you on the tax cuts. In fact, he tweeted when tariffs cut in, just this morning he said this, many people's income taxes will be reduced or eliminated, and he's going to focus on those making less than $200,000 a year. This is not going to get done by Memorial Day, is it? COHN: Look, I don't, I don't know. That would be very fast for it to get done. The other thing we need to understand about tariffs, and I think this is obvious, is tariffs are highly regressive. Meaning that poorer people end up paying a disproportionate percentage of the tariffs. MARGARET BRENNAN: Right. COHN: Because they spend 100% of their paychecks on goods. So they're going to Walmart, they're going to their stores. They're buying goods with their paycheck. Wealthier people send it, save a bigger percentage of their paycheck. So the tariffs are going to affect the poorer people more. MARGARET BRENNAN: We got to leave it there, Gary. We're going to watch this though. COHN: Okay. MARGARET BRENNAN: All right, Face the Nation will be back in a minute. Stay with us.
Yahoo
22-04-2025
- Business
- Yahoo
Global markets: Investors continue to flee the U.S. as analysts predict tariff-induced recession
Investors continued to shy away from U.S. assets as they digested the ongoing potential fallout from President Trump's tariff regime, and China's response to it, over the Easter weekend. The S&P 500 is down 10% year to date. Futures in the S&P were down more than 1% this morning. Stock trading was thin over the Easter weekend as many global markets were closed for Good Friday and Easter Monday. But there was one obvious indicator of sentiment regarding the U.S. economy: the weakening dollar. This year, the dollar has lost nearly 10% of its value against the DXY, an index of commonly traded foreign currencies, as investors pull away from U.S. economic uncertainty. The dollar has lost 9% of its value versus the British pound and 8% against the euro, year to date. A big part of the dollar's losses comes from the fear that the Trump administration will take political control of the Fed. 'U.S. National Economic Council director [Kevin] Hassett said U.S. President Trump was investigating whether they could fire Federal Reserve Chair [Jerome] Powell. Investors seem less than happy with the idea of a politicized Fed—the U.S. dollar and long-dated government bonds have weakened,' wrote UBS's Paul Donovan in a note to clients this morning. Mainland China's CSI 300 rose 0.3% Monday, in contrast with broad premarket drops in U.S. indexes. Investors pulled their money out of U.S. assets after China threatened to retaliate against countries that made trade deals with the U.S. that hurt Chinese interests, deepening worries that the Trump administration's tariffs will unleash a global trade war. 'China is determined and capable of safeguarding its own rights and interests,' China's Commerce Ministry said in a statement. The S&P 500 is down 10% year to date. It closed at 5,282.70 before the Easter holiday. Futures in the S&P were down more than 1% this morning. futures are down 1% premarket. Asian markets were mixed this morning with Japan's Nikkei 225 down 1.3% but India's Nifty 50 and Hong Kong's Hang Seng both up more than 1%. European markets are largely closed this Easter Monday. Japanese automakers got hit hard as Japan's Prime Minister, Shigeru Ishiba, said his country wouldn't concede to all U.S. trade demands, opening up the possibility of a lengthy tariff battle: Toyota was down 2.9%. Mazda dropped 5%. Netflix—which is largely unaffected by the tariffs—was up by 2.83% to $1,000.61 in aftermarket trading. Bitcoin hit $87,554.80 this morning, up 3.7% for the month. European markets are largely observing the Easter Monday holiday. There is a 90% chance of a recession in the U.S. in 2025, according to Apollo Global Management's Torsten Sløk. His latest estimate is far higher than those published by Goldman Sachs or JPMorgan. 'Tariffs have been implemented in a way that has not been effective, and there is now a 90% chance of what can be called a Voluntary Trade Reset Recession ('VTRR'),' he wrote. 'The negative impact on GDP in 2025 could be almost four percentage points, not including additional nonlinear effects because of the current increase in uncertainty for consumer spending decisions and business planning.' His counterpart at Oxford Economics, John Canavan, was similarly negative. In a recent note to clients he wrote: 'While the easing of tariff threats has helped to soothe markets for the moment, the level of tariffs on the rest of the world remains historically high, and risks to inflation and economic growth remain high.' Big Tech's 'Magnificent Seven'—Apple, Microsoft, Nvidia, Amazon, Tesla, Alphabet, and Meta—kick off earnings season this week, starting with Tesla on Tuesday. The second Trump administration has not been kind to their stock values so far: In the period between President Trump's inauguration and April 20, their combined market capitalization dropped by $3.8 trillion, or 22%, according to an AP analysis. This story was originally featured on
