Latest news with #Uncertainty
Yahoo
02-08-2025
- Business
- Yahoo
Market moves past trade deal euphoria—Morgan Stanley dives into what comes next
-- Trade war fears may no longer be dominating the spotlight, but beneath the surface, the global trade regime remains a moving target, with new deals, shifting deadlines, and policy lags fueling persistent uncertainty for businesses and investors alike. But as markets celebrate recent U.S. deals with the EU and Japan, the tariff story is far from over—a reality set to linger well into year-end and beyond, Morgan Stanley analysts warned in a recent note. "Tariffs are likely to remain a moving target. Deals that have been announced lack clarity or legal foundations, making it hard to assess their longevity," Morgan Stanley analysts said, warning that announced agreements often 'lack a legal structure, legislative process, and sector details... raising key questions, especially for businesses trying to invest' Baseline Trajectory: Higher but Volatile Tariffs into Year-End Morgan Stanley's expects a 'steady baseline of ~10-15% tariffs,' with higher rates reserved for China (potentially 20-45%). The analysts stress the volatility and execution risks remain as recent headline agreements remain 'difficult to implement and track.' 'Trade policy uncertainty in the aggregate is still high, with the potential for future frictions as these agreements are difficult to implement and track,' they added. Current Tariff Landscape: Hard to Pin Down Despite a flurry of deals, 'the post-August tariff landscape remains broadly consistent with our base case. Though, we caution that tariff levels remain difficult to pin down with precision because of volatility in import shares, compliance rates under USMCA, and the inherent lag in shipping data,' The EU deal, in particular, 'seems to have raised tariff levels from ~10% to ~15%, contributing as much as 2 percentage points to the overall tariff rate on US imports,' especially as pharma and semis lose exemptions. Tariffs Showing Up in Data—With a Lag The actual impact of tariffs is only just beginning to filter into the numbers. May's U.S. import data reflected an effective tariff rate of just 8.3%, but analysts expect 'convergence in June and July to a mid-teens effective tariff rate' as shipping delays and in-transit exemptions expire. 'We did see very clear signs of tariff-driven inflation across most goods' in the June CPI print, and Morgan Stanley expects 'tariffs to result in up to 1 percentage point level shift in prices in the coming months before subsiding as demand softens in reaction' Supply Chains Scramble in Real Time Companies aren't waiting for the dust to settle. Morgan Stanley said, pointing to material shift in supply chains to Vietnam and India. 'Material shifts to Vietnam and India are visible in recent months' across electronics supply chains, as firms react to changing tariff regimes. China's share of U.S. imports slumped to just 7.7% in May from 13.7% in 2024, but could rebound as embargo-level tariffs are relaxed. Tariffs on Mexico and Canada, meanwhile, have been lower than expected at 4.3% and 1.9%, respectively; this is likely due to a "combination of unexpectedly high USMCA compliance, significant US content in autos, and possibly lenient enforcement.' Inventory Frontloading: Not as Widespread as Feared Front-loading effects, meanwhile, were more targeted than broad-based. 'Roughly 80% of the increase in Q1 imports was driven by just seven HS6 categories including gold, pharmaceuticals, and AI-related goods... Excluding these, the cumulative excess imports compared to 2024 levels amounted to less than 2% of annual imports,' the analysts found. By May, as tariffs took hold, overall import volumes fell 5%. Sector-Specific Winners—and Losers Sectors are experiencing varying levels of impact from tariffs. 'Tariffs were highest in sectors like Fabricated Metal Products (Section 232 tariffs) and Textiles and May rates remained elevated at ~24% and ~20%, respectively. These sectors, however, account for a relatively small share of total imports. In contrast, high-volume categories such as Computers & Electronics, Chemicals & Pharmaceuticals, and fuels faced much lower tariff rates—under 10%—"dampening the aggregate inflationary impulse," the analysts added. The costs are falling squarely on U.S. importers, not exporters, and 'volumes are giving way rather than prices...[but] we are early in the tariff story, and things are very much in flux' Related articles Market moves past trade deal euphoria—Morgan Stanley dives into what comes next These Under-the-Radar Stocks Offer Better Risk-Reward Ratio Than Nvidia Surge of 50% since our AI selection, this chip giant still has great potential 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
New York Times
30-07-2025
- Business
- New York Times
U.S. Economy Grew in Second Quarter as Tariffs Scrambled Data
Economic growth softened in the first half of the year, as tariffs and uncertainty upended business plans and scrambled consumers' spending decisions. The disruptions extended to the economic data itself. Gross domestic product, adjusted for inflation, increased at a 3 percent annual rate in the second quarter, the Commerce Department said on Wednesday. On the surface, that appeared to represent a strong rebound from the first three months of the year, when output contracted at a 0.5 percent rate. But both those figures were skewed — in opposite directions — by big swings in trade and inventories caused by President Trump's ever-shifting tariff policies. Taken as a whole, the data from the first six months of the year tell a more consistent story of anemic, though positive, economic growth. Many forecasters expect a further deterioration in the months ahead, as tariffs work their way through supply chains, federal job cuts filter through the economy and stricter immigration policies take a toll on industries that rely on foreign-born workers. 'We don't think we've seen the full effects from tariffs yet,' said Michael Gapen, chief U.S. economist for Morgan Stanley. 'I don't see how we power through without a soft patch at least for a little while.' But the economy has repeatedly defied such gloomy predictions in recent years, and some forecasters believe it could do so again. Unemployment remains low, measures of consumer confidence have rebounded, and tariffs have so far done little to push up prices overall. The tax-and-spending bill passed by Congress this month could also provide a short-term boost to economic activity, although many budget experts have warned that it could pose a long-term risk by adding trillions to the federal debt. 'We're going to look back and either say, 'Wow, the economy was super resilient and these things didn't matter as much as we thought they would,' or we're going to say, 'Yeah, you could kind of feel it was weakening,'' said Louise Sheiner, an economist at the Brookings Institution. 'I think we just don't know.' Officials at the Federal Reserve will be weighing those dueling narratives at their meeting on Wednesday. They are widely expected to hold interest rates steady, but a flood of economic data this week could help decide whether and when they will cut rates again. The data released on Wednesday showed that consumer spending grew at a 1.4 percent annual rate in the second quarter. That was a modest acceleration from the 0.5 percent rate in the beginning of the year, but was well below the 2.8 percent growth in spending in 2024. The second-quarter figures are preliminary and will be revised at least twice in coming months as more complete data becomes available. Those revisions can be significant: Many economists initially dismissed the contraction in G.D.P. in the first quarter because consumer spending was solid and measures of underlying growth were strong. But subsequent updates made the first quarter look significantly weaker than the preliminary data had suggested.
The Wire
10-07-2025
- Business
- The Wire
FIS Unveils InnovateIN48 Champions as Technologists Push the Boundaries of AI
Key facts • InnovateIN48, FIS' flagship innovation competition challenged its technologists to "Transform Fintech Through the Power of AI" • Now in its 12th year, nearly 2,000 developers and engineers across 438 teams from 15 countries participated in the event, demonstrating the global scale of enterprise AI talent development at FIS. • Hosted in Bengaluru, India, the competition highlighted FIS' commitment to nurturing talent and advancing the future of fintech that supports the world's Money Lifecycle. JACKSONVILLE, Fla. and BENGALURU, India, July 10, 2025 /PRNewswire/ -- Global financial technology leader FIS® (NYSE: FIS), has announced the winners of its 12th annual InnovateIN48 innovation competition, with competitors pushing the boundaries of AI to help solve operational challenges faced by today's businesses. The competition comes at a crucial time, with many businesses now making significant investments in AI and automation technologies. New research from FIS' landmark report, 'The Harmony Gap: Finding the Financial Upside in Uncertainty', found that 55% of companies are investing in innovative solutions such as generative AI and machine learning to help meet their strategic objectives, while 78% of organizations that have already integrated AI reported measurable improvements in fraud detection and risk management. However, 73% cited the high cost of implementation and maintenance as an obstacle to their firm's adoption of AI and automation, as well as struggling with a lack of in-house expertise (64%). To help address the expertise gap, InnovateIN48 competitors developed early-stage prototypes and conceptual AI frameworks, pushing the boundaries of how AI can help organisations accomplish their strategic goals. These included automated code vulnerability detection, intelligent regulatory compliance checking and AI-powered treasury operations. The winners were team Latent Space, who developed a solution that helps confirm that software projects follow important internal and external AI guidelines, with the solution's potential to improve AI compliance impressing judges. Ramkumar Narayanan, Head of FIS India and Philippines Technology and Services Organization said, "This year's InnovateIN48 focused on showcasing innovative use cases for employing AI to solve real-world business issues. While AI as a technology is transformational, the knowledge of how to use AI is a fundamental component of a firm's success. We're working to develop the in-house talent that the fintech industry needs to realize AI's potential while fostering innovative thinking that could lead to breakthrough solutions." About FIS FIS is a financial technology company providing solutions to financial institutions, businesses, and developers. We unlock financial technology to the world across the money lifecycle underpinning the world's financial system. Our people are dedicated to advancing the way the world pays, banks and invests, by helping our clients to confidently run, grow, and protect their businesses. Our expertise comes from decades of experience helping financial institutions and businesses of all sizes adapt to meet the needs of their customers by harnessing where reliability meets innovation in financial technology. Headquartered in Jacksonville, Florida, FIS is a member of the Fortune 500® and the Standard & Poor's 500® Index. To learn more, visit Follow FIS on LinkedIn, Facebook and X. (Disclaimer: The above press release comes to you under an arrangement with PRNewswire and PTI takes no editorial responsibility for the same.).
Forbes
04-06-2025
- Business
- Forbes
Uncertainty Equals Confusion
If you approach an intersection and you don't know which way to turn to reach your destination, you are 'frozen' in place until an external event compels you to decide: left, right, straight, or reverse? That's how many small business owners feel today. NFIB's Uncertainty Index is based on six questions asked of a random sample of member firms for over 50 years. Since 1986, the Uncertainty Index has averaged 68. But, since 2016 it has averaged 80 and over the last eight months, the Index has reached 51 year-high levels, the highest level hitting 110 in October 2024. For individual owners, the Uncertainty measure is the number of 'uncertain' responses each owner gives to the six questions incorporated by the Index. For all firms, the Index is the sum of the percentages giving an uncertain response to each of the six questions. Interestingly, it appears that the level of uncertainty has increased steadily over the past 50 years. Why that has occurred is unclear, possibly related to the expanding reach of government at all levels. Uncertainty in the current period is undoubtedly related to the significant changes in domestic and international policies impacting the economy. And, trying to pass a tax bill that satisfies 535 elected officials in Congress is always an uncertain process. There is a lot to worry about. The level of uncertainty varies significantly by industry. Small business owners in the transportation industry most frequently registered high levels of uncertainty (4+). Some of this uncertainty is caused by high levels of regulation (e.g., California), tariffs, port uncertainty, and high fuel costs, to name a few. Firms in the manufacturing and services industries also expressed higher levels of uncertainty. Retail firms were least frequently found giving 3 or more uncertain responses, even with tariff uncertainty. They were more 'certain' about how they are or will be impacted. Uncertainty Level by Industry As Chart 2 shows, we are living in a period of elevated uncertainty, starting in 2016 with election issues and then again in the Covid era. Although the 'Covid panic' has passed, politics, elections, and swift policy changes in D.C. continue to stir the pot of concerns. NFIB's Optimism Index has been in recession territory for over a year, as have many traditional indicators. But, the recession stayed away. The future path may become clearer once the budget battle is done and tariff negotiations resolved. Uncertainty Index
Yahoo
22-05-2025
- Business
- Yahoo
'Addictive' Trump Tariffs Are 'Here To Stay' Even If Democrats Come Back To Power, Says Wharton Professor: 'The Truth Is Governments Need Revenues'
A professor from the Wharton Business School has suggested that tariffs implemented by President Donald Trump are likely to continue despite political opposition. What Happened: Professor Joao Gomes of the Wharton Business School, in a podcast, The Trade War Playbook: Tariffs, Uncertainty, and U.S. Economic Policy, stated that both Democrats and Republicans are likely to support tariffs due to their potential to generate revenue. 'I think the end game is some tariffs are here to stay,' Gomes said, adding that they are 'addictive for every country in the world.' He further suggested that the nature and extent of these tariffs are uncertain but they are 'definitely not a thing of the past.' Don't Miss: Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — this is your last chance to become an investor for $0.80 per share. Nancy Pelosi Invested $5 Million In An AI Company Last Year — Here's How You Can Invest In Multiple Pre-IPO AI Startups With Just $1,000. "The truth is governments need revenues and once you see the amount of revenue the tariffs bring, I think Democrats will be addicted to them as Republicans—or are as likely to be," explained Professor Gomes. While the British government has secured a 'first mover' deal with the Trump administration, Gomes stated that the number of such deals to be made remains uncertain. Why It Matters: Analysts are now exploring the potential for targeted tariffs on particular industries or products. In a recent note, UBS Group AG indicated that such measures could be implemented as soon as this summer, following trade investigations into key sectors such as pharmaceuticals, critical minerals, lumber, copper, and semiconductors. Trump's steep tariffs on countries have received widespread criticism from Democrats and major economists. On Monday, JPMorgan Chase & Co. (NYSE:JPM) CEO Jamie Dimon cautioned the market about displaying an 'extraordinary amount of complacency' amid the risks posed by tariffs, record U.S. deficits and geopolitical tensions. However, U.S. Treasury Secretary Scott Bessent dismissed concerns over the inflationary impact of tariffs on companies such as Walmart Inc. (NYSE:WMT). Meanwhile, former PIMCO CEO and current Allianz's chief economic adviser, Mohamed El-Erian, has suggested that the era of U.S. exceptionalism is on pause due to tariff wars and economic uncertainty, but it's not over. He believes it's too early to say if the damage inflicted is irreversible. Read Next: Hasbro, MGM, and Skechers trust this AI marketing firm — Invest before it's too late. Deloitte's fastest-growing software company partners with Amazon, Walmart & Target – Many are rushing to grab 4,000 of its pre-IPO shares for just $0.30/share! Image via Shutterstock Send To MSN: Send to MSN UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga? This article 'Addictive' Trump Tariffs Are 'Here To Stay' Even If Democrats Come Back To Power, Says Wharton Professor: 'The Truth Is Governments Need Revenues' originally appeared on Sign in to access your portfolio
