Latest news with #tailwind
Wall Street Journal
05-05-2025
- Business
- Wall Street Journal
U.S. Natural Gas Futures Hold Onto Gains
0914 ET – U.S. natural gas futures hold their ground while oil prices fall on the OPEC+ decision to bring back another 411,000 barrels a day of production in June. 'Bullish longs are jumping back into the natural gas market,' Eli Rubin of EBW Analytics says in a note. The accelerated return of OPEC+ production is a long-term tailwind for natural gas as it will pressure U.S. shale and associated gas production, while the near-term rally may be unsustainable given soft seasonal fundamentals, he says. Nymex natural gas edges up 0.1% at $3.634/mmBtu.(
Yahoo
30-04-2025
- Business
- Yahoo
US economy shrinks as Americans brace for Trump's trade war
President Donald Trump promised that his second term would mark the beginning of a new golden age. The early economic returns look more like pewter. The Commerce Department on Wednesday estimated that the U.S. economy shrank during the first three months of 2025, its worst performance in three years. The 0.3 percent contraction is a sharp decline from the 2.4 percent expansion that was notched in the final full quarter of President Joe Biden's presidency, and it's a far cry from the boom times Trump allies and top CEOs had anticipated after the president was reelected. What's more, the pro-growth elements of his agenda like the extension of the 2017 tax cuts haven't materialized, providing little cover for the negative effects of the president's trade war. 'We came into this year with the idea that your tax policy was going to be enough of a tailwind to overcome the negatives from trade,' said Brett Ryan, a senior U.S. economist at Deutsche Bank Securities. 'That script has been flipped.' Commerce's initial estimate is a rough start for a president who was elected on the promise of unleashing private investment and boosting the spending power of American consumers. Recession fears have climbed in the weeks since Trump began rolling out a series of massive tariffs — followed by quick reversals — that economists and Wall Street CEOs say will drive up costs and weaken investment. The first-quarter contraction may soon force Trump and his advisers to reckon with the political consequences of an electorate that is quickly souring on major elements of his economic agenda. And it threatens to cut into his political capital at a time when he needs it the most, as he asks the American people to trust him on his aggressive tariff policies. 'There is no good news on the economic front. And since he was elected with that as a primary mandate, they have a problem,' said Douglas Holtz-Eakin, the president of American Action Forum who was a top economic adviser to Sen. John McCain (R-Ariz.) during the 2008 presidential campaign. Less than an hour after the report was released, Trump defiantly posted on Truth Social that he 'didn't take over until January 20th' and suggested that it may take time for his agenda to generate economic returns. 'Tariffs will soon start kicking in, and companies are starting to move into the USA in record numbers. Our Country will boom, but we have to get rid of the Biden 'Overhang.' This will take a while, has NOTHING TO DO WITH TARIFFS, only that he left us with bad numbers, but when the boom begins, it will be like no other. BE PATIENT!!!' Trump said. The White House did not immediately respond to a request for comment. Yet Trump's tariff policy was among the biggest factors cutting into the economy's growth. Demand for foreign goods surged during the first three months of the year as businesses scrambled to get ahead of his new trade barriers. The Census Bureau reported that the trade deficit for goods hit a record high in March, which negatively affected Commerce's estimate since it subtracts from GDP. While the stock market has climbed on recent statements suggesting the administration has made meaningful progress on trade agreements, there is still tremendous uncertainty on how higher trade barriers could ultimately affect growth and prices in the coming months. 'Tariffs cause hell with the economy,' said economist Arthur Laffer, a Trump supporter who advised the president on tax policy during the president's first term. 'I don't know exactly where President Trump thinks things should go. I don't know where he's going. I'm very hopeful that he's going to get tariffs down substantially,' he said. 'When he's in the midst of negotiations, he scares the hell out of me like he scares the hell out of everyone else." Consumers have grown increasingly pessimistic about the economy. The Conference Board's monthly survey reported that expectations for the future are now at their lowest level since 2011. The view from the C-suite is equally dreary. Blue chip companies like Delta Air Lines, GM and UPS have scrapped financial guidance in light of tariff-related uncertainty, and Republican titans on Wall Street like Citadel's Ken Griffin and Elliott Investment Management's Paul Singer have warned that Trump's policies could undermine the foundations of U.S. markets. 'With each passing day that we get away from the implementation, from Liberation Day, it gets harder to fully restore sentiment,' said Tim Quinlan, a managing director and senior economist at Wells Fargo. 'It's kind of like trust. It takes a lifetime to build and only a moment to destroy.' Until now, dour forecasts about the economy's future hadn't translated into any material weaknesses to the economy. Treasury Secretary Scott Bessent said this week that he doesn't pay attention to the surveys and that the 'actual data' on the economy 'is actually quite good.' Unemployment remains near historic lows and Americans spent freely in March. Larry Kudlow, the Fox Business host who led Trump's National Economic Council during his first administration, dismissed recent polls giving the president dismal marks as skewed. Even so, the weak GDP report suggests that bad vibes are starting to negatively affect real economic output. Some leading economists — including those at BNP Paribas, Deutsche Bank and Wells Fargo — had expected the GDP report to show the economy shrank during the first quarter. Still, real final sales to private domestic purchasers — which reflects consumer spending and private investment — climbed by a healthy 3 percent during the first quarter, which is a sign that demand remains strong. There are concerns, however, that could fade in the coming months if surging import costs cause prices to spike, or if companies begin laying off workers. The Conference Board's survey found that consumers are pulling back plans to make major purchases or take vacations, and expectations for job availability have softened as the number of available positions declines. Trump's commitment to imposing record-breaking tariffs, coupled with the uncertainty created by frequent escalations and reversals in the ongoing trade war, has hammered the ability of U.S. companies to plan for future hiring. The Business Roundtable's quarterly survey of top CEOs reported a sharp decline in the number of businesses that are likely to expand their workforces in the next six months. The Labor Department earlier in the week reported that job openings fell by 288,000 to just under 7.2 million in March, the lowest reported tally since late 2020. 'What we found in the past is that trade uncertainty has a depressing effect on firms' spending on capex and on hiring,' Deutsche Bank Securities' Ryan said. 'A slowdown in hiring means less income growth.' Victoria Guida contributed to this report.
Business Recorder
24-04-2025
- Automotive
- Business Recorder
Tech, autos boost Japan's Nikkei on receding trade war worries
TOKYO: Japan's Nikkei share average rose to a three-week high on Thursday, tracking a tech-led rally on Wall Street overnight, as the White House signalled a willingness to de-escalate its trade war with China. A rebound in the dollar against the yen provided a further tailwind, while an FT report that US President Donald Trump may exempt car companies from some tariffs lent additional support to auto shares. The Nikkei gained 1.1% as of the midday recess, and touched 35,287.95 for the first time since April 2 when Trump stunned world markets with his far more aggressive-than-anticipated 'Liberation Day' reciprocal tariffs. The broader Topix rose 1%. On Wednesday, US Treasury Secretary Scott Bessent said that the current astronomical levies between the United States and China are not sustainable and 'a break between the two countries in trade does not suit anyone's interest,' signalling the White House's willingness to talk. Japanese Finance Minister Katsunobu Kato will likely meet Bessent in Washington later in the day on the sidelines of International Monetary Fund and World Bank annual meetings. Ahead of that, Bessent said he does not have specific currency targets in mind as part of bilateral trade talks, a reversal from Trump's accusations earlier this month that Tokyo was intentionally weakening its currency to help exporters. The auto sub-index rose 3.6% to be the second-best performer among the 33 industry groupings after nonferrous metals, which climbed 4.4%. Toyota Motor, which announced an additional $88 million investment in a plant in West Virginia, advanced 4.7%. Chip shares won big, with Tokyo Electron and Advantest the Nikkei's two top movers in index-point terms. Nintendo jumped 5.4% as early demand for the upcoming Switch 2 outstripped the video game maker's ability to deliver the gaming console. Japan's Nikkei tracks Wall Street rebound, jumps to three-week high Robot maker Fanuc advanced 3.2% on strong financial results, even as it withheld forecasts for the current fiscal year due to uncertainties around global trade, with Japan's earnings season picking up momentum this week. 'If the number of companies withholding full-year guidance increases, so will the sense of uncertainty about corporate performance, and that will be a weight on the stock market,' said Nomura strategist Maki Sawada. 'This is a theme that investors need to keep an eye on.'
Yahoo
24-02-2025
- Business
- Yahoo
VinFast Auto Ltd. (VFS): Among the Best Low Priced Stocks to Invest In Now
We recently compiled a list of the . In this article, we are going to take a look at where VinFast Auto Ltd. (NASDAQ:VFS) stands against the other low priced stocks. As per American Century Investments, global small-cap stocks might be well-placed to benefit from changes in the macroeconomic factors in 2025. Inflation, elevated interest rates, and fears of recession impacted smaller companies in recent years, resulting in the significant underperformance of small-caps as compared to the large-caps. This trend was seen in 2024, with large caps dominating through the first half. However, sentiments shifted at mid-year when some momentum was seen in small caps. The small caps picked up an additional tailwind post the US elections, says American Century Investments. The investors expected stocks, mainly small-caps, to benefit from Trump's approach to taxes, tariffs, and regulations. The expectations for continued cuts by the US Fed and several other central banks have resulted in favorable conditions for small-caps. Trump's approach towards tariffs can result in large companies bringing their supply chains closer. The small-caps can benefit from higher capital spending associated with reshoring and nearshoring. The growth of AI is anticipated to continue to increase demand for data centers and energy. Even though the Mag 7 companies have managed to get more attention, American Century Investments believes that this trend can also support small-caps in multiple categories. The beneficiaries might include data center operators and providers of energy-efficient cooling solutions. While M&A and IPO activity witnessed a fall in 2022 and 2023, reduced rates and a favorable US regulatory environment can result in more deals in 2025. The investment firm expects that deregulation might fuel capital markets activity, supporting banks and boutique investment firms. READ ALSO: and . BNP Paribas Asset Management expects that earnings will fuel the next leg higher for small-cap stocks. The analysts are expecting strong earnings growth i.e., by 42% in 2025 and by 36% in 2026 in comparison to just 6% in 2024. This is ahead of the historical earnings growth rate of 15%. For decades after China was admitted to the World Trade Organisation (WTO) in 2001, US companies were focused on outsourcing production to lower-cost nations (like China) to drive profits. The asset management firm now expects this trend to reverse over the coming years. During COVID-19, having supply chains and manufacturing far from home resulted in significant difficulties for US firms. Therefore, they are now looking to 're-shore' production. Also, elevated geopolitical tensions and protectionism remain other catalysts, supported by financial support from the US federal government's CHIPS Act as well as the Infrastructure Investment and Jobs Act. To list the 10 Best Low Priced Stocks to Invest in Now, we used a screener and shortlisted the stocks trading at less than $10. Next, we chose the ones that were popular among hedge funds. Finally, the stocks were ranked in ascending order of their hedge fund sentiments, as of Q4 2024. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 363.5% since May 2014, beating its benchmark by 208 percentage points (see more details ). Two brightly colored electric vehicles parked neatly in a row next to a state-of-the-art manufacturing facility. VinFast Auto Ltd. (NASDAQ:VFS) is engaged in designing and manufacturing EVs, e-scooters, and e-buses. The company continues to place itself as a competitive player in the broader EV market, with a strong focus on affordably priced vehicles. VinFast Auto Ltd. (NASDAQ:VFS)'s vertical integration strategy is expected to act as a significant potential advantage, enabling greater control over the supply chain and potentially resulting in cost efficiencies. This approach can enable the company to reduce costs, improve its quality control, and respond to market demands as compared to competitors with more fragmented supply chains. As VinFast Auto Ltd. (NASDAQ:VFS) scales production and witnesses economies of scale, the benefits of vertical integration are expected to become more pronounced, resulting in an improvement in profit margins. Notably, increasing scale, production cost optimization, and improvement in operating efficiencies have started to have a positive impact on gross margin and will continue to be critical drivers for VinFast Auto Ltd. (NASDAQ:VFS)'s path to profitability. Notably, in Q3 2024, its gross margin came in at negative 24.0%, representing a strong improvement as compared to a negative 27.0% margin in the same quarter of the previous year and a negative 62.7% margin in Q2 2024. Overall VFS ranks 10th on our list of the best low priced stocks to invest in now. While we acknowledge the potential of VFS as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than VFS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
