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Yahoo
a day ago
- Business
- Yahoo
Forget tariffs, here's why CEOs worry about a looming recession
Forget tariffs, here's why CEOs worry about a looming recession originally appeared on TheStreet. Tariffs are on the tip of many Americans' tongues, thanks to the multifaceted trade war in which U.S. President Donald Trump has used foreign taxes as a key negotiating tactic against foreign economic rivals. While Trump says he loves everything about tariffs, including the word itself, the rest of the world's business leaders don't share his affinity. Global stock markets certainly hate the trade war. Every time a new tariff is announced, foreign and domestic markets fall. Every time Trump announces a deal has been reached, markets rise, even if no concrete deals are ever moreso than investors, Trump's tariffs place business leaders in a most awkward position. Businesses love predictability. Knowing what to expect and when to expect it allows them to plan for the future and forecast expectations. However, Trump's on-again, off-again tariffs have had the opposite effect, casting doubt on what businesses will have to pay their suppliers quarterly, monthly, or even weekly. This environment has, understandably, had an adverse effect on CEO confidence, as reflected in the latest survey data from The Conference Board. Every quarter, The Conference Board releases its Measure of CEO Confidence in collaboration wth The Business Council. Over 130 CEOs participated in the Q2 survey between May 5 and May 19, and the results are concerning. A reading below 50 indicates a negative outlook. The confidence index fell by 26 points to 34, the lowest level recorded since Q4 2022. 'All components of the Measure weakened into pessimism territory,' said Conference Board's Senior Economist of Global Indicators Stephanie Guichard.'Expectations for the future also plummeted, with more than half of CEOs now expecting conditions to worsen over the next six months, both for the economy overall and in their own industries.' The overwhelming majority of CEOs (83%) said they expect a recession in the next 12 to 18 months, nearly matching the rate reached in late 2022 and early 2023. While tariffs and trade issues were near the top of the list of concerns, geopolitical concerns were the number one concern. Geopolitical instability surpassed cybersecurity, 'which dominated CEOs' concerns over the past two years,' but dropped to fourth this year. However, the forecast from the top 1% isn't all doom and gloom. Most CEOs anticipate no change in the size of their workforce over the next 12 months. So while they expect hiring to be stagnant, they aren't anticipating any layoffs. The share of CEOs expecting to expand their workforce fell slightly to 28% from 32% in Q1. The share of CEOs planning to reduce their workforce rose 1% to 28%. 'Still, consistent with more pessimism about the outlook in their own industries, the share of CEOs expecting to revise down investment plans doubled in Q2 to 26%, while the share expecting to upgrade investment plans dropped 14 ppts to 19%,' said Business Council Vice Chairman Roger W. Ferguson. Part of the reason employers are confident in the labor market is that they currently aren't having trouble finding qualified candidates. Since there's less competition, the share of CEOs planning to raise wages by 3% or more over the next year dropped to 5% from 71% in Q1. While the future is murky for many CEOs, the present is almost equally disorienting. The percentage of CEOs who say that economic conditions are worse now than they were six months ago jumped 11% to 82% in Q2. Only 2% of respondents felt economic conditions were better. This change in sentiment is also reflected in the 69% of CEOs who said conditions in their own industries were worse than six months ago, a dramatic increase from 22% in Q1. Only 7% said conditions improved in their industries, and there was also a significant drop from 37% in tariffs, here's why CEOs worry about a looming recession first appeared on TheStreet on May 31, 2025 This story was originally reported by TheStreet on May 31, 2025, where it first appeared. 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
ABC News
3 days ago
- Business
- ABC News
CBA customers hit by transfer glitch, ASX finishes the day higher — as it happened
Commonwealth Bank customers reported problems with electronic transfers from their accounts, while stock markets digested the latest US tariff developments. US stocks gained despite an appeals court ruling that has, at least temporarily, reinstated the Trump administration's "Liberation Day" tariffs on virtually every nation. Australian stocks also gained, finishing the day up +0.3% at 8,435. Look back on the trading day with the ABC business and markets blog. Disclaimer: this blog is not intended as investment advice.
Yahoo
6 days ago
- Business
- Yahoo
Gold prices fall after Trump delays EU tariffs
Gold prices fell on Tuesday morning, after US president Donald Trump delayed raising tariffs on the European Union (EU), easing concerns about trade tensions. Trump said in a social media post on Friday that the EU had been "very difficult to deal with" and was recommending that tariffs on imports from the bloc be raised to 50% from 1 June. Following a conversation on Sunday between Trump and European Commission president Ursula von der Leyen, the US president then said he would delay imposting the 50% levies until 9 July. UK and US markets were closed on Monday for public holidays but other stock markets rose on the news of a delay, with the pan-European STOXX 600 (^STOXX) gaining 0.9% in the session. Read more: FTSE 100 LIVE: London higher as markets catch up on Trump EU tariff pause The UK's FTSE 100 (^FTSE) advanced 0.6% shortly after the market open on Tuesday morning, while US stock market futures jumped, as the postponing of levies on the EU bolstered investor optimism. Gold prices declined on Tuesday morning as stocks rose, signaling investors' pivot back into risk assets away from the precious metal, which is considered to act as a safe haven amid economic and geopolitical uncertainty. Gold futures (GC=F) were down 1.7% at $3,307.80 per ounce at the time of writing, while the spot gold price fell 1% to $3,308.48 per ounce. Richard Hunter, head of markets at Interactive Investor, said: "It remains to be seen as to when investors, businesses and consumers grow weary of needing to react slavishly to every tariff pronouncement, if they have not already. "The constant back and forth has made planning all but impossible, and many companies over the recent quarterly reporting season have opted not to give outlook figures as a result of the ever-changing goalposts." Oil prices were also down on Tuesday morning, as investors looked ahead to a potential output hike announcement from the Organization of the Petroleum Exporting Countries and their allies – known as OPEC+. Bloomberg reported last week that members of OPEC+ were discussing making a third consecutive increase in output, with a decision set to be made at the group's meeting on 1 June. Brent crude futures (BZ=F) fell 0.3% to $63.98 a barrel on Tuesday morning, while West Texas Intermediate futures (CL=F) declined 0.4% at $61.29 a barrel. Stocks: Create your watchlist and portfolio Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "As expectations rise for further trade deals to be inked in the coming months, worries about global growth have eased a little. This has helped keep oil prices steady, given there should be higher demand for energy, if trade deals mean factories, cargo ships and trucks can keep shifting goods." "But there's unlikely to be a dramatic shift higher in crude prices given the uncertainty," she added. "Eyes will turn to an OPEC+ meeting later this week, and it's expected that members will agree higher production targets, which will also keep supplies higher on global markets." The pound dipped 0.2% against the dollar (GBPUSD=X) on Tuesday morning, trading at $1.3530, as a stronger greenback weighed on sterling. The US dollar index ( which measures the greenback against a basket of six currencies, was up 0.3% to 99.40 at the time of writing. In terms of data releases on Tuesday, UK food inflation rose to 2.8% year-on-year in May, up from 2.6% in April, according to the British Retail Consortium (BRC). However, shop price inflation declined 0.1% year-on-year in May, following a 0.1% dip in April. "There's been plenty of discounting around, as shops put on promotions, particularly for electronic goods, to shift stock before any impact of Trump's tariffs," said Streeter. "Prices have continued to fall for fashion and furniture but some of the discounting appears to have been easing off." Read more: Stocks to watch this week: Nvidia, Salesforce, Dell, Costco and Kingfisher "The risk ahead is that as companies absorb higher payroll costs due to increased national insurance contributions, prices could head higher, but given the highly competitive supermarket sector, and the pressure to keep shoppers loyal, sharp increases may only be limited to certain ranges," she added. In other currency moves, the pound was up 0.1% against the euro (GBPEUR=X), trading at €1.1922 at the time of writing. For more details, on broader market movements check our live coverage here. Read more: How getting ahead on your tax return can help cut your tax bill UK 'bargain' stocks that have outperformed the market long-term More interest rate cuts in doubt after surprise inflation surgeError 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
Zawya
6 days ago
- Business
- Zawya
Mideast factors to watch: May 27
Here are some factors that may affect Middle East stock markets on Tuesday. Reuters has not verified the press reports and does not vouch for their accuracy. INTERNATIONAL/REGIONAL * GLOBAL MARKETS-Asian shares dip, dollar struggles after Trump's tariff backflip * Oil edges down as potential higher OPEC+ output eyed * PRECIOUS-Gold hovers near two-week high on dollar weakness, US fiscal woes * Palestinian official says Hamas agrees to Gaza proposal, Israel dismisses it * Eight OPEC+ countries to meet on May 31, not June 1 - three sources * US-backed aid group begins Gaza operations as airstrikes kill dozens * Gulf Cooperation Council, Malaysia agree to launch free trade talks, GCC says * Iran says it could survive if US nuclear talks end without a deal SAUDI ARABIA * Kuwait and Saudi Arabia announce oil discovery in Neutral Zone * Saudi official denies reports alcohol ban will be lifted * Arabian Pipes Signs Contract With Saudi Aramco * Saudi Exchange announces listing of United Carton Industries' shares on main market on May 27 UAE * ADNOC Drilling secures $1.15 billion, 15-year contract for two jack-up rigs IRAQ * Iraq's April oil exports at 100.95 million barrels, ministry says * Baghdad sues Iraqi Kurds over US energy deals
Globe and Mail
23-05-2025
- Business
- Globe and Mail
Investment puzzle
Trying to make investment decisions amidst so much geopolitical uncertainty is like trying to win at poker with a deck that keeps reshuffling itself mid-hand. A stray comment from a central banker, a vague tweet from a billionaire president, haphazard tariff headlines and trade deals that are more about strategy than substance have sent U.S. equity markets reeling or surging. The latest in this fear/greed playbook was an agreement between the U.S. and China to reduce their embargo style tariffs by 85% for 90 days so the parties could open negotiations for a comprehensive trade deal. That was welcome news for Chinese factories and U.S. importers. It also reset third- and fourth-quarter earnings expectations and spurred a massive rally in U.S. and Chinese stocks. At the end of trading on Monday, May 12, U.S. equities had recovered all the losses that were triggered by President Trump's April 2 'Liberation Day' levels. At the time of writing, U.S. equity markets were still below 2024-year-end levels (see chart below) but had made a remarkable recovery from the post-liberation day selloff. Perhaps more remarkable is the year-to-date performance of the Canadian market as measured by the iShares S&P/TSX 60 Index ETF (TSX: XIU), that is up 3.00% since the end of 2024. There is a puzzling divergence between hard and soft economic data as well as the uncertainty triggered by President Trump's haphazard approach to tariffs. The problem lies in trying to decipher why equity markets are paradoxically performing better than expected in light of the largest corporate tax hike in U.S. history. On a positive note, first-quarter earnings have come in better than expected. However, in keeping with our uncertainty barometer, forward guidance had all but disappeared. That's problematic for experts trying to predict outcomes across forward-looking equity markets. How can analysts assign reasonable probabilities to outcomes when corporate insiders cannot? We believe the performance of equity markets over the next six to nine months will come down to macroeconomic conditions rather than company-specific events. Perhaps, given the rally on May 12, investors have come to believe that Trump's tariff policies will deliver the results that he has been promising. A little pain now for a better economy later. Our view based on trading volumes and frequency of buy and sell decisions is that gyrations in the U.S. equity markets are being propelled by long-short hedge funds and retail day traders. And while we never discount the premonitions of the retail investor collective, one must ask if we are experiencing a classic fakeout boosted by misguided optimism. One thing is certain, the May 12 rally has diminished the outlook for any near-term rate cuts. We know that the U.S. economy did not feel the pinch of tariffs in the first quarter. There is also a view that consumers and companies attempted to front run the tariffs by stockpiling supplies and inventory. That would explain the better-than-expected profits during the first quarter. The hard economic data provides additional support to that thesis. There is clear evidence that the U.S. economy is declining. U.S. GDP decreased at 0.3% in the first quarter (January through the end of March), according to the advance estimate released by the U.S. Bureau of Economic Analysis. In the fourth quarter of 2024, real U.S. GDP increased 2.4%. The decrease in real first-quarter GDP was driven by an increase in imports, which are subtracted from the GDP calculation, and a decrease in government spending. These movements were partly offset by increases in investment, consumer spending, and exports. Consumer spending and private investment remained steady, increasing by 3% in the first quarter, compared with 2.9% in the fourth quarter. Private investment is a more challenging statistic. It may be the result of companies investing to onshore their production to avoid future tariffs. Or it could be projects that were underway but may not necessarily imply future expenditures. Inflation is also sticky. The year-over-year price index for retail consumption increased 3.4% in April, compared with an increase of 2.2% at the end of the fourth quarter. The personal consumption expenditures (PCE) price index (the Fed's favorite inflation barometer) increased by 3.6%, compared with an increase of 2.4% in the fourth quarter. Excluding food and energy prices, the PCE price index increased 3.5%, compared with an increase of 2.6% in the fourth quarter of 2024. These numbers point to a worrying rise in prices which requires the U.S. Federal Reserve (Fed) to question whether the inflationary impact is transitory or more deep-rooted. Interestingly, the inflation data seem at odds with an upbeat employment report. Non-farm payroll employment surprisingly rose by 177,000 in April, roughly in line with the average monthly gain of 152,000 over the prior 12 months. Employment continued to trend up in health care, transportation and warehousing, financial activities, and social assistance. Federal government employment declined. The total non-farm employment change for February revised down from +117,000 to +102,000, and the change for March was revised down from +228,000 to +185,000. On net, employment over these months is 58,000 lower than previously reported. Average hourly earnings for all employees on private-sector payrolls rose by 6 cents, or 0.2% in the month of April. So far this year, average hourly earnings have increased by 3.8% which is above the prevailing inflation rate. Clearly, the stronger-than-expected labor market was one catalyst that supported the upward momentum in equities. And that may continue if the labor market remains buoyant and the upward bias of employment income persists. Unfortunately, neither scenario is predictable. The soft economic data paints a very different picture. Surveys taken during March 2025 showed a marked decline in sentiment. According to the U.S. Conference Board, the Consumer Confidence Index declined by 7.2 points to 92.9, marking a 12-year low in consumer expectations for the future. This decline Is reminiscent of the fallout during the covid pandemic and reflects ongoing concerns about the economy. Consumer confidence has declined for four consecutive months. If the soft data hold, it means the future will not look anything like the recent past. Next time: Tariff guesswork, the Fed's uncomfortable position, and outlook for Canada Richard Croft is Founder, Chief Investment Officer, and Portfolio Manager of R.N. Croft Financial Group Inc. Disclaimers Content © 2025 by R.N. Croft Financial Group Inc. All rights reserved. Reproduction in whole or in part by any means without prior written permission is prohibited. Used with permission. Commissions, trailing commissions, management fees and expenses all may be associated with fund investments. Please read the simplified prospectus before investing. Investment funds are not guaranteed and are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer. There can be no assurances that the fund will be able to maintain its net asset value per security at a constant amount or that the full amount of your investment in the fund will be returned to you. Fund values change frequently, and past performance may not be repeated. The foregoing is for general information purposes only and is the opinion of the writer. No guarantee of performance is made or implied. This information is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting or tax advice. R N Croft Financial Group Inc. is a Licensed Discretionary Portfolio Management and Investment Fund Management company serving investors and investment professionals across Canada since 1993.
