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Reuters
26-05-2025
- Business
- Reuters
Asian stocks, euro gain after Trump delays EU tariffs
SINGAPORE, May 26 (Reuters) - Stock markets across Asia edged higher on Monday, and the euro rallied after President Donald Trump abruptly extended by more than a month his threat to slap 50% tariffs on EU goods, marking another temporary reprieve as part of his erratic trade policy. On Sunday, Trump agreed to extend his deadline for trade talks until July 9, from the June 1 deadline he set on Friday, after European Commission President Ursula von der Leyen said the bloc needed more time to "reach a good deal." Market sentiment had been steadying after a sharp selloff across most assets last month as Trump paused his growth-denting tariffs and investors were keen on fresh trade deals after a pact with UK and a temporary agreement with China. However, Trump's latest policy moves were a reminder to investors how quickly circumstances could change and analysts have been pointing out that investors are shifting their money out of the U.S. to Europe and Asia as they price in a possible U.S. recession and a consequent global slowdown. "(The tariffs are) well above the 20% original reciprocal tariff on the EU. The U.S., EU, and China account for 60% of global GDP and so this escalation bodes ill for the entire world," analysts at Brown Brothers Harriman said in a note. Apple (AAPL.O), opens new tab was also caught in the trade crossfire on Friday, after Trump threatened a 25% levy on all imported iPhones bought by U.S. consumers. On Monday, MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS), opens new tab inched up 0.12%, while Japan's Nikkei (.N225), opens new tab was marginally higher. Trading volumes on Monday are expected to be thin given that markets in the United States and the United Kingdom are closed due to public holidays. Japan's Nippon Steel's (5401.T), opens new tab jumped 4.3% after Trump on Friday expressed support for the company's $14.9 billion bid for U.S. Steel (X.N), opens new tab, saying their "planned partnership" would create jobs and help the American economy. Shares of U.S. Steel soared 21% on Friday. Super-long Japanese bonds will be in focus, with inflation data expected later in the week as investors try to gauge the Bank of Japan's monetary policy outlook. Yields on the tenors hit record levels last week. Ballooning debt levels in developed economies were also brought back into focus following Moody's credit rating downgrade of the United States and weak debt auctions in the U.S. and Japan last week. China's blue-chip index (.CSI300), opens new tab slipped 0.2% in early trading on Monday, while Hong Kong's Hang Seng Index (.HSI), opens new tab dipped 0.4%. Among currencies, the euro strengthened 0.3% to $1.1397 to touch its highest since April 30, while the greenback recovered as much as 0.3% to 143.085 yen , after diving 1% on Friday. On Wednesday, an earnings report from artificial intelligence bellwether Nvidia (NVDA.O), opens new tab will be in the spotlight - the last of the "Magnificent Seven" group of growth stocks that had spearheaded a more than two-year U.S. bull market. Analysts said the semiconductor giant's quarterly report could be the next catalyst for markets, given its forecasts are seen as an indication of demand for tech infrastructure. Nvidia's shares are down more than 2% this year after investors took notice of cheaper Chinese AI models in the aftermath of DeepSeek's release, while CEO Jensen Huang has flagged that U.S. export curbs will also hit sales. Reuters reported on Saturday that Nvidia will launch a new AI chipset for China at a significantly lower price, subject to U.S. government approval. On the commodities front, crude prices traded higher, while gold eased marginally from a two-week high.
South China Morning Post
20-05-2025
- Business
- South China Morning Post
Over 50% of US firms plan to raise prices amid Trump trade war risks: survey
More than half of surveyed companies from the United States plan to raise prices on their products and pass on costs in response to US President Donald Trump's tariffs, a new global survey by Allianz Trade has found. Fifty-four per cent of American firms said they would increase prices, according to the research released on Tuesday. A total of 4,500 exporters were surveyed across China, France, Germany, Italy, Poland, Singapore, Spain, the UK and the US – countries that collectively account for nearly 60 per cent of global GDP. 'Few companies intend to absorb increased costs or cut export prices to maintain market share,' the international insurance company said. 'Because of high uncertainty, sourcing from new markets is likely to continue... to mitigate the impact of tariffs.' Up to 45 per cent of firms in China also 'intend to raise their prices to cope with higher tariffs', according to Allianz Trade. The research was conducted both before and after 'Liberation Day' on April 2, when Trump announced duties on nearly all US trade partners. The survey follows comments by Walmart CEO Doug McMillon on May 15, when he warned the retail giant was unable to absorb all the costs of the trade war. On Saturday, Trump posted on social media that Walmart and China should 'eat the tariffs'. The temporary trade truce between the US and China will end on August 12, unless the agreement reached in Geneva is extended. US tariffs on Chinese imports have fallen from as high as 145 per cent to 30 per cent, while Beijing's duties on American imports have dropped from 125 per cent to 10 per cent. The deadline for most countries to reach a deal with Washington has been set for July 8. More than half of the surveyed respondents said they consider geopolitical risks as a top business threat. Diversifying supply chains and customer bases has become a mitigation strategy, with a majority of firms seeking alternative shipping routes to keep customs fees under control, the international insurance company said.
Globe and Mail
08-05-2025
- Business
- Globe and Mail
J.P. Morgan Warns Tariff Chaos Could Slash Global GDP 1% as U.S. Stocks Struggle
J.P. Morgan's (JPM) latest analysis on U.S. tariffs raises more questions than answers, especially when it comes to the global economic outlook. While President Trump's trade moves have been causing plenty of disruptions, J.P. Morgan analysts believe the impact is far from straightforward. The firm's commentary signals that tariffs might push global GDP down by 1%, but that could be just the tip of the iceberg. Protect Your Portfolio Against Market Uncertainty Discover companies with rock-solid fundamentals in TipRanks' Smart Value Newsletter. Receive undervalued stocks, resilient to market uncertainty, delivered straight to your inbox. Tariff Woes Could Lower Global GDP by 1% J.P. Morgan has warned that a global GDP reduction of up to 1% is possible if the trade war escalates, particularly with the U.S. slapping 10% tariffs on goods from all trading partners and ramping up those on China to 104%. Joseph Lupton, a global economist at J.P. Morgan, highlighted how the knock-on effects, including weakened business sentiment, could make this damage even worse. These tariffs could lead to higher costs for U.S. consumers, which, in turn, dampens spending and risks dragging both U.S. and global growth. S&P 500 Likely to Stay in a Tight Range Despite the trade war turbulence, J.P. Morgan's analysts aren't expecting an immediate crash in the stock market. Instead, they're forecasting a 'range-bound' S&P 500. Fabio Bassi, head of Cross-Asset Strategy at J.P. Morgan, said, 'We expect the S&P 500 to be constrained to the lower end of our range.' This sentiment echoes the concern that mixed tariff news, combined with President Trump's unpredictable moves, will keep markets in a holding pattern. Investors are bracing for a scenario where trade deals don't materialize quickly enough to boost sentiment. As indicated by the TipRanks graphic below, the S&P 500 has decreased by nearly 7% over the past three months. This drop reflects a turbulent market period (SPX). Investors are digesting the ongoing uncertainty surrounding tariffs and their global impact. Will a Recession Follow? J.P. Morgan Thinks It's Possible Adding to the uncertainty, J.P. Morgan's analysts see a 40% chance of a global recession by the end of 2025. Bruce Kasman, J.P. Morgan's Chief Global Economist, noted, 'The uncertainty surrounding tariffs is weighing on business confidence and could accelerate the push toward a downturn.' This isn't just about numbers on paper. The actual business sentiment has been dipping, and that means companies may hold back on investments and hiring. If that happens, it could further stifle growth and deepen the recession risk. Mixed Signals Make Tariffs More Complex Than Expected In a world where the trade policy landscape shifts almost daily, J.P. Morgan's analysis shows how tariffs are more than just taxes—they're changing the way the global economy works. In fact, GDP forecasts are being slashed and business confidence is at a low, this ongoing tariff drama is likely to have ripple effects for years. The situation remains pretty fluid, so its important to note that J.P. Morgan's cautious outlook paints a picture of a turbulent but range-bound future. The real question is, will things ever calm down, or are we stuck in this cycle?
