Latest news with #non-USMCA
Yahoo
6 days ago
- Business
- Yahoo
Why the 'TACO Trade' still matters for your portfolio
-- Over the past 48 hours, the term 'TACO Trade' has been widely circulated on social media and even made it to the White House. TACO is an acronym for 'Trump Always Chickens Out', which suggests that despite his tough talk on tariffs, he will always back down in the end. Trump was asked about the TACO trade on Wednesday, enraging the President. '… don't ever say – what you said, that's a nasty question,' Trump slapped back when asked about it. Commenting on the TACO Trade and if the President always chickens, analysts at Sevens Report stated Wednesday, '[s]o far, yes (at least compared to his tariff threats).' They highlight that Trump reduced the impact of tariffs by exempting USMCA goods from Mexico/Canada duties, delaying reciprocal tariffs a week after the 'Liberation Day' announcement, cutting steep China tariffs weeks after implementation, and postponing a 50% EU tariff threat until July 9—the end date for other reciprocal tariff exemptions. Has the TACO trade worked? According to Sevens Report, 'yes.' The analysts note that the TACO trade thesis is simple: buy the Trump tariff dip. Trump's history shows he rarely follows through on extreme tariff threats, so market sell-offs tend to reverse. The S&P 500 rose 2% after the March 4 tariffs on Canada, Mexico, and China. It's up nearly 10% from the April 2 'Liberation Day' dip, and 11% since the April 11 announcement of 145% China tariffs. The index is now higher than before Friday's 50% EU tariff threat. In short, buying during tariff scares has paid off. Will the TACO trade keep working? 'Probably,' according to Sevens. Tariff-related dips may be shallower now as more investors buy them, so caution is warranted. Still, history shows Trump rarely enforces extreme tariffs, they're likely just part of a negotiation tactic: make bold threats to secure moderate outcomes. And so far, that strategy has worked. Sevens added that TACO trade doesn't eliminate tariff or trade war concerns. While Trump often backs off extreme threats, tariffs have still increased significantly, they highlight with 10% on all U.S. partners, 35% on China, and 25% on steel and non-USMCA goods from Canada and Mexico (10% on energy). While these aren't as severe as first proposed, but they're far higher than pre-Trump levels, and their economic impact remains uncertain. The TACO trade's success doesn't mean the risks aren't real. So, while the TACO trade has worked and may keep working short-term, it doesn't change the fact that tariffs are at multi-decade highs. Regarding how investors should approach the TACO trade, they suggest a short-term strategy of buying consumer discretionary (XLY), tech (XLK), financials (XLF), industrials (XLI), and energy (XLE (NYSE:XLE)) after major Trump tariff threats. These sectors fall hardest but rebound strongest. Scale in over a day or two after the sell-off. Meanwhile, for the long term they said, 'Ignore TACO.' The next 15–20% move in the market will hinge on the economy's resilience to tariffs, policy volatility, high rates, no Fed cuts, and weaker consumer spending. Trump's threats may shake sentiment, but unless enforced, they're not long-term drivers. Still, with tariff burdens rising, it's wise to stay long but reduce volatility exposure. So, while the TACO trade received a reprieve today after a federal court struck down President Trump's tariffs as illegal and beyond his authority, the Trump administration has stated it will appeal the ruling. Many on Wall Street expected it to be overturned. Related articles Why the 'TACO Trade' still matters for your portfolio Paramount cut to Neutral at Citi Boeing stock climbs on production ramp-up plans 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
Entrepreneur
7 days ago
- Automotive
- Entrepreneur
Goodyear Stock Surges 28% in 2025: Is More Growth Ahead?
Goodyear stock is up 28% in 2025, driven by investor optimism around its restructuring plan and insulation from new tariffs This story originally appeared on MarketBeat [content-module:CompanyOverview|NASDAQ:GT] At the market close on May 28, the S&P 500 remains statistically flat for the year. So it may not be saying much to point out that Goodyear Tire & Rubber Co. (NASDAQ: GT) is burning up the market in 2025. GT stock is up 28%, buoyed by a 22% increase in the last three months. Undeniably, there are more attractive choices among automotive stocks. Goodyear took on a significant pile of debt with its acquisition of Cooper Tire in 2021. That's stressed operating margins and earnings. It's also a big reason why GT stock is still down more than 5% in the last 12 months despite the strong rally in 2025. But this is no ordinary market. If investors are looking for opportunities, particularly if they have a contrarian mindset, GT stock may offer a compelling short-term opportunity. JPMorgan Just Issued a Bullish Price Target Goodyear delivered its first quarter 2025 earnings on May 7. The results were mixed. Negative earnings per share of four cents were better than the negative six cents forecast. However, revenue of $4.25 billion missed expectations for $4.51 billion. Both numbers were lower year-over-year (YoY). That's why it's significant to note that two weeks after the earnings report, JPMorgan Chase & Co. (NYSE: JPM) reiterated its Overweight rating on GT stock with a $17 price target. That was lower than its prior target of $18, but it's still 46% above the stock's closing price on May 28. It's also 21% higher than the consensus price target of $14. The reason for the upgrade is confidence in the company's restructuring plan. Analyst Ryan Brinkman believes that Goodyear's "Going Forward" plan, which kicked off in 2023, is ahead of schedule. The plan's goals call for $1.5 billion in savings, margin growth, and debt reduction. One way Goodyear is accomplishing those goals is by divesting itself of assets. So far in 2025, the company has sold off two major assets, which have helped the company raise nearly $1.4 billion in cash. In January, Goodyear announced it was divesting its assets in Dunlop. Then, in May, it announced the sale of a majority stake in Goodyear Chemicals to Gemspring Capital Management. The Company is Shielded from Tariff Troubles [content-module:Forecast|NASDAQ:GT] Goodyear's debt-to-equity ratio is down to 1.30. That puts it at a discount to its historical averages. However, cost-cutting will only get the company so far. A key reason for investor optimism is that Goodyear is insulated from tariffs. The iconic tire company has a strong manufacturing base in the United States. In its earnings report, Goodyear said that only 12% of its U.S. tire supply (accounting for 60% of its revenue) comes from non-USMCA countries. The sector average is 50%, putting Goodyear at a competitive advantage. This is a case where investors can put on their consumer hats. Vehicle owners know that in addition to death and taxes, tires are one of the most predictable expenses. They also know that tires don't come cheap. Goodyear won't necessarily come cheap, but without the burden of tariffs, it should have pricing power that could be accretive to market share. That's music to the ears of the current administration, which is pushing for a more protectionist approach to manufacturing, and it could give GT stock more room to run. At This Point, GT Stock is All About Growth Owning GT stock in 2025 is about stock price growth. Like many companies, Goodyear suspended its dividend in 2020. However, because of the company's current debt woes brought about by its acquisition of Cooper Tire in 2021, it hasn't reinstated that dividend. Goodyear is a contrarian play to be sure, but for investors looking to find an undervalued stock that may surprise to the upside, it may be a good year to own Goodyear stock. Before you make your next trade, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and none of the big name stocks were on the list. They believe these five stocks are the five best companies for investors to buy now... See The Five Stocks Here
Yahoo
16-05-2025
- Business
- Yahoo
Here's Why Shares in Stanley Black & Decker Soared This Week
An improving trading relationship between the U.S. and China is good news for Stanley Black & Decker. Investors can pencil in better earnings and cash-flow outcomes than management gave recently, provided the tariffs don't go back up. 10 stocks we like better than Stanley Black & Decker › Stanley Black & Decker (NYSE: SWK) stock rose by 12.8% in the week to Friday morning. The move comes as a thawing in the U.S./China trading relationship encouraged investors to price in a better outcome for the toolmaker's earnings in 2025 and beyond. The U.S. and China said they would suspend the incremental tariffs imposed on each other's goods, which were announced in early April for an initial period of 90 days. In addition, the parties will "establish a mechanism to continue discussions about economic and trade relations." Due to its exposure to China-sourced products, the company is a bellwether for U.S./China trading relations. Its total adjusted cost of sales for the U.S. by country of origin is about $6.8 billion, with $0.9 billion to $1 billion directly from China, $1.5 billion to $1.6 billion from the rest of the world (also impacted by tariffs), and $1.2 billion to $1.3 billion from Mexico, two-thirds of which is non-USMCA compliant. The cost exposure is sufficient for management to lower its full-year planning assumptions after the announcement of incremental tariffs (now paused for the U.S./China) in April: The post-April guidance calls for base case adjusted full-year earnings per share (EPS) of $3.30 compared to the previous guidance of $4.05. The post-April guidance calls for base case full-year free cash flow (FCF) of $500 million compared to the previous guidance of $750 million. Given the pause in incremental tariffs and the possibility of a further de-escalation in the conflict, investors are now pencilling in figures for full-year EPS and FCF somewhere between the initial and post-April tariff guidance outlined above. That's why the stock rose this week. Before you buy stock in Stanley Black & Decker, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Stanley Black & Decker wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $635,275!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $826,385!* Now, it's worth noting Stock Advisor's total average return is 967% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 12, 2025 Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Here's Why Shares in Stanley Black & Decker Soared This Week was originally published by The Motley Fool
Yahoo
09-05-2025
- Business
- Yahoo
New report sheds more light on how tariffs could impact Utah — but uncertainty still abounds
Traffic moves along I-15 near neighborhoods in North Salt Lake on Wednesday, January 3, 2024. (Photo by Spenser Heaps for Utah News Dispatch) A new report released Thursday details the latest numbers illustrating the significant impact international trade had on Utah's economy in 2024 — and also lays out the possible ramifications of President Donald Trump's trade wars. In short, there's plenty to be uncertain about — and uncertainty itself can cause economic disruptions. 'What do tariffs mean to Utah?' the report by the University of Utah's Kem C. Gardner Policy Institute said. 'The current upheaval in U.S. trade policy creates greater economic uncertainty and elevates the risk of a recession.' SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX The impacts could reach far and wide. 'Unsure about the cost and availability of inputs, businesses freeze or delay hiring, purchasing, and investment decisions,' the report said. 'With inflation still above the Federal Reserve's target rate of 2.0%, persistent tariffs could lead to stagflation, where the economy is shrinking or not growing but prices rise.' They could also further aggravate Utah's already expensive and strained housing market at a time when the price of homes is near record highs, at roughly $550,000 for a median-priced single family home. 'Tariffs could also adversely affect Utah's housing market in the short term,' the report said. 'In addition to the indirect macro impacts on household balance sheets and interest rates, higher prices for imported lumber and other materials would lead to higher home prices in a state already struggling with housing affordability.' As of the fourth quarter of 2024, Utah's housing market ranked as the ninth most expensive in the country when it came to the median sales price of a single-family home. Only areas including Oregon, New York, Colorado, Washington, Massachusetts, Washington D.C., California and Hawaii ranked higher. According to a World Trade Center Utah survey of Utah businesses across all of the state's major sectors in late January and early February gauging their responses to proposed tariffs, 71% said they planned to raise prices for buyers of their goods, the report said. About 56% said they would reduce revenue, 29% said they would freeze planned investments, and many respondents chose more than one of those actions. The report also included a quote from the investment research firm Alpine Macro: 'Uncertainty over the endpoint of U.S. trade policy could be as damaging as the tariffs themselves.' While unpacking U.S. trade policy considerations under Trump, the report also notes that proposed tariffs on a wide variety of imported goods remain 'negotiable,' and included a list of proposals that had been contemplated as of April 10, including but not limited to: 10% universal tariff on all countries Up to 125% tariff on Chinese goods 25% tariff on non-USMCA compliant goods from Canada and Mexico 25% tariff on goods imported from any country that imports Venezuelan oil 25% tariffs on aluminum and steel 25% tariffs on autos and auto parts 'The ultimate impact on the overall U.S. effective tariff rate remains to be seen but could range from 11.5% to 25.0%, up from about 3.0% in January 2025,' the report said. 'Everybody agrees it's going to cause pain': Utah governor on tariffs, possible recession However, it added: 'The uncertainty of current U.S. trade policy makes it difficult to estimate the impact of the new rounds of tariffs.' 'Analysts can, however, surmise the new administration's economic policy and the motivation for tariff increases, as well as summarize the economic theory that supports free trade and discourages barriers to trade, including tariffs,' the report said. To that end, the report said the Trump administration 'appears to be focused on four major economic goals,' including: Trade deficit: Reducing the U.S. trade deficit and rebalancing global trade. The report noted that the U.S. trade imbalance in 2024 tallied $918 billion. Budget deficit: Lowering U.S. federal fiscal deficits. 'In federal fiscal year 2024, the federal government collected $4.9 trillion in revenues and spent $6.8 trillion in expenditures for a $1.9 trillion deficit,' the report said. 'The accumulated U.S. debt stands at $36.5 trillion.' Labor: Reversing the decadeslong decline in labor's share of income. 'Employee compensation as a share of national income fell from 67.1% in 1980 to 62.0% in 2024,' the report said. Taxes: Making permanent the tax cuts from the Tax Cut and Jobs Act in 2017 from the first Trump administration and enacting other tax reductions. The Trump administration is also considering taxes including taxes on tips, overtime, auto loan payments and more. 'The implementation of these policies is under way and includes short-term disruptions with the hope of long-term benefits,' the report said. Utah's international imports and exports continue to be a significant economic driver, according to the report. Last year, Utah imported $21.9 billion worth of goods from 154 countries while it exported $18.2 billion in goods to 201 countries, representing a goods trade deficit of $3.7 billion. Three countries accounted for the lion's share (55.7%) of Utah's imports. 'Mexico provided $4.8 billion of goods (nearly $2.0 billion of which was unwrought gold), Canada provided $4.7 billion (roughly $1.5 billion of which was gold), and China sent almost $2.7 billion,' the report said. Utah's 2024 exports supported an estimated $8 billion in the state's gross domestic product, $3.9 billion of earnings, $15.9 billion of gross output, and 70,171 jobs. 'These impacts represent 2.6% of GDP, 2.3% of earnings, 3.0% of output, and 2.9% of total employment in Utah,' according to the report. Of the countries sending the most goods to Utah, Mexico is the largest, followed closely by Canada and China, according to the report. 'The three accounted for 56% of the value of Utah's imports in 2024, with Mexico alone supplying 22%,' the report said. Over the past decade, from 2014 to 2024, Utah's exports have increased by 12%, according to the report. That's compared with a national growth of 15.8%, adjusted for inflation. Natalie Gochnour, director of the Kem C. Gardner Institute, said in a prepared statement issued Thursday alongside the report that its findings show 'Utah consistently punches above its weight in international trade, outperforming many peer states.' 'This research underscores how critical exports are in maintaining a diverse and robust economy in the state, creating opportunities and strengthening our economic foundation,' she said. Read the entire report here: IntTrade-May-2025 SUPPORT: YOU MAKE OUR WORK POSSIBLE
Yahoo
07-05-2025
- Business
- Yahoo
Gov. Cox tells Canadian leaders Utah is ‘open for business'
Following an hourlong meeting with his executive counterpart in Ontario, Cox told reporters at the province's legislative building that he will have conversations with Trump about the future of his tariff policy. 'There was no hesitation,' Cox said. 'It was the exact opposite. I'm more excited because of what's happening now, because I think the opportunities are even greater.' Before the trip, Cox said he was asked whether he still planned to visit Canada amid the market turmoil and political tensions. On Thursday, Cox said he understood Canadians' sense of 'betrayal' but said he was hopeful about the future of U.S.-Canada relations because of what he had seen during his week in Canada. In response to the tariffs, Canada has imposed reciprocal 25% tariffs on around $60 billion of American goods and non-USMCA compliant vehicles. Canadian Prime Minister Mark Carney stated last month that the U.S.-Canada relationship as the world had known it was 'over.' The tariffs on Canadian products include a 25% charge for automobiles, auto parts and up to $360 billion of other goods that fall outside of the U.S.-Mexico-Canada Agreement (USMCA); 10% on non-USMCA compliant energy and minerals; and 25% on all steel and aluminum imports to the U.S. Other than China, few nations have been as impacted by the new trade levies as Canada. Canada is the second largest overall trading partner with the U.S. and with Utah. Despite having very few barriers to American trade, Canada was the target of Trump's first tariff announcement and has been disproportionately impacted by industry-specific tariffs. During his four years in office, Cox has continued the practice of leading one or two trade missions a year. The Canada trip was originally planned for last year but was rescheduled for 2025 before the international economic upheaval following Trump's 'Liberation Day' announcement last week. 'Sub-national relationships are more important than they've ever been before,' Cox said, speaking at a 'Why Utah' luncheon. 'This will work itself out at some point, and when it does, I'm here to tell you that Utah and Ontario will have even stronger relationships because of it.' As the first governor to visit Canada since President Donald Trump implemented a new global tariff regime, Cox expressed optimism about the strength of the U.S.-Canada relationship in meetings with Ontario Premier Doug Ford and the Toronto business community on Thursday. TORONTO — Utah Gov. Spencer Cox told top Canadian officials and investors that now was the best time for Utah to lead a trade mission to the country and said he would encourage his fellow governors to do the same. Story Continues Cox, the previous chair of the National Governors Association, also said he plans to send a letter to his fellow governors, urging them to follow Utah's lead by visiting Canada. 'He's the very first governor in 2025 to come to Canada, writ large, and spending the time here is incredibly important during these very, very challenging times,' said Brad Harper of the U.S. consulate in Canada. Why Utah? Cox's delegation, made up of around 30 cabinet members, state lawmakers, business leaders and university administrators, has spent the last week meeting with government agencies and industry experts in Quebec and Ontario to signal Utah's desire to forge additional economic ties in the areas of critical minerals and artificial intelligence. In private diplomatic settings and during Thursday's 'Why Utah' presentation with World Trade Center Utah and the Governor's Office of Economic Opportunity, Cox pitched Utah as the best-positioned state in the union to attract Canadian business and to strengthen cross-border ties. 'Utah (is) the gem of the United States economic machine,' Cox said. In 2024, the state had the highest gross domestic product growth in the United States at 4.5% — double the national GDP growth — according to the University of Utah's Kem C. Gardner Policy Institute. Utah has also been ranked the No. 1 state by U.S. News & World Report for two years running, the best place to start a business, the state with the highest social mobility, the state with the largest growth in the last census and the state with the best economic outlook for 17 years in a row. 'We are open for business,' Cox said. 'We recognize that the economic ties between your country and our country run deep, but it is so much more than just economics — you are our closest friend, our closest ally." Jonathan Freedman, the CEO of World Trade Center Utah, which helped to organize the trade mission, said there are 112 Canadian-owned businesses in the state of Utah employing around 5,000 people. In addition to hosting the Winter Olympics again in 2034, Freedman touted Utah as the most multilingual state in the country, with 131 languages being spoken by current residents of the state. 'We're internationally minded,' Freedman said, showing a picture of Cox and Ford holding up hockey jerseys from each others' NHL teams. In 2024, Utah's trade volume totaled $40.1 billion, including $18.2 billion in exports to other countries, a 5% increase from the year prior. Of those exports, $1.5 billion were to Canada. That same year, Utah imported $4.7 billion in goods from Canada. Ryan Starks, the executive director of the Governor's Office of Economic Opportunity, pointed out that while Utah is a mid-sized state, the Wasatch Front more closely resembles the greater Orlando and Charlotte metropolitan areas in terms of population. Starks also highlighted the state's economic development tax credits, as well as the state's high median income and interconnectedness as the crossroads of many international flights, the railway system and inland ports. What's the ROI? Members of Cox's trade delegation told the Deseret News they believe the weeklong mission would bring home big wins for the Beehive State because of the relationships that would not have been formed otherwise. 'A lot of trust was built,' said Rich Israelsen, chief revenue officer at World Trade Center Utah. 'We could see how we can work closer together with Canada in a very real way.' There were multiple 'aha' moments, Israelsen said, where Utah organizations that focus on critical mineral extraction were able to make supply-chain connections with Canadian companies that can process the raw materials coming out of Utah mines. The same was true for the state's defense industry, represented in Canada by Kori Ann Edwards, the chief strategy officer at 47G, previously known as the Utah Aerospace and Defense Association. 'I see a lot of supply chain opportunities,' Edwards said. 'There's a lot of companies that I met that are already doing business in Utah, and I think we can strengthen that and strengthen the aerospace and defense supply chain within the two countries, especially in Quebec.' Edwards said the state's rapidly growing defense industry is going to see a boost from strengthened relationships with Canada, which is America's top supplier of steel and aluminum. The trip also gave 47G, and other organizations tasked with forming the state's critical mineral strategy, a window into how Canadian provinces are coordinating mining priorities with smart regulation, Edwards said. In addition to critical minerals, the trade mission also focused on artificial intelligence and financial technology — two places where Utah hopes to be a leader. Ryan Christiansen, the first executive director of the Stena Center for Financial Technology at the University of Utah, said that finding shared priorities with Canadian universities and visiting some of the top AI and investing institutes in North America gave him insight into partnerships between higher education and business. 'Forming some relationships with some of the universities so that we can determine synergies and research in one space, and then also synergies in the industry partners that we work with,' will produce the greatest return on investment from his point of view, Christiansen said. According to Derek Cahoon, a representative of the banking industry, the benefits from the Canada trip came just as much from the interactions within the delegation as those with Canadian business leaders. 'For me, it's the relationships built with those who were on the delegation and those people who we met in Canada and fostering those relationships for future business opportunities,' Cahoon said.
