Is Wall Street Still Too Bearish on the Impact of Tariffs?
Earnings estimates for the more trade-sensitive companies still haven't rebounded from the very serious hit they took after April 2. Maybe (just maybe) we'll start to see that happen as companies announce their quarterly results. Though tariffs are no joke for profit margins, many large companies are finding ways to mitigate the impact, and there's no clear sign that the levies will precipitate the economic downturn that many initially feared.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
24 minutes ago
- Yahoo
Editorial: More unlawful tariffs: Trump has no authority to institute damaging trade barriers
On Friday, Donald Trump followed up a concerning jobs report with massive new global tariffs, driving markets down and once more raising prices on consumers for no reason after weeks of supposed trade negotiations. Like with his first round of import duties, announced in the Rose Garden on his ludicrous April 2 'Liberation Day,' these tariffs are not only chaotic and destructive, but they're illegal. The president is leaning on a 1977 law meant to be invoked for targeted financial actions in certain emergency circumstances to reshape trade globally. Just the day before these newest tariffs were implemented, the administration's lawyers had been grilled by the 11 judges of the U.S. Court of Appeals for the Federal Circuit in Washington, who pointed out among other things that the law doesn't even mention tariffs at all. If the plaintiffs, made up of states and businesses, need anywhere to look for inspiration and evidence for their legal arguments, they don't have to look much further than Trump's own ramblings and social media feed, where he constantly tells the whole world that he is engaging in the tariff actions for all manner of reasons completely unrelated to any economic objectives. So far, he's threatened tariffs over Brazil's domestic prosecution of its former president Jair Bolsonaro and over Canada's intent to recognize a Palestinian state, among other things. This is a real disparate set of rationales, but what they have in common is that they are ideological battles probably drawn from something Trump saw on TV and have nothing to do with correcting a supposed trade imbalance with those countries, already an incredibly flimsy argument to begin with. Don't just take our word for it; the Manhattan-based U.S. Court of International Trade — you know, the judicial entity set up specifically and explicitly to have expertise on these matters — already struck down most of Trump's tariff regime on the grounds that it was unlawful. That ruling has been stayed for now, but the evidence just keeps piling on that Trump is significantly exceeding his authority. Unfortunately, even if this insanity were to be fully struck down tomorrow, we've had months of chaos that has indelibly damaged trade relationships as well as general diplomatic relations. The world is not going to wait for the U.S. to hash out its chaos, and other countries are already moving to reorient parts of their manufacturing and trade schemes to circumvent an unreliable United States. Of course, this seems like one more issue headed at some point to the U.S. Supreme Court, perhaps the shadow docket where the court these days like to conduct its unsigned pro-Trump business. It's long since become clear that the high court is more interested in ideological outcomes than the uniform application of the law, but even then, siding with Trump here would be farcical. This is the exact same court that just last year ruled that Joe Biden attempting to clear some student debt by invoking emergency powers in the context of the COVID pandemic — a real global catastrophe that killed countless people and crashed the economy while putting millions out of work — was an unlawful exercise of authority. If that's the case, but Trump is in his rights to wildly alter tariff policies at a whim in service to random political grievances around the world, then the law truly means nothing anymore. Let's stop this madness while we still can, before economic forces take it out of our hands. ___
Yahoo
24 minutes ago
- Yahoo
Euro zone business growth inched up in July but remained subdued, PMI shows
LONDON (Reuters) -Business activity in the euro zone grew at a slightly faster pace in July than in June but remained sluggish as demand dipped, a survey showed on Tuesday. The HCOB Eurozone Composite Purchasing Managers' Index, compiled by S&P Global, edged up to 50.9 in July from 50.6 in June, just below a preliminary estimate of 51.0. PMI readings above 50.0 indicate growth in activity while those below point to a contraction. July's reading marked a four-month high but was still below the survey's long-term average of 52.4, reflecting persistent weakness in the 20-country currency bloc. Services activity expanded at a slightly faster rate with the sector's PMI climbing to 51.0 from 50.5 in June. "This could turn out to be a good summer for service providers. In Italy and Spain, business activity rose more sharply in July than in the previous month, while Germany, after several challenging months, has clawed its way back into growth territory," said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank. Overall new orders remained virtually unchanged, continuing a trend seen in June, while export sales contracted for the 41st consecutive month, acting as a persistent drag on growth. The composite new business index nudged up to 49.8 from 49.7. Among the bloc's largest economies, Spain led the way with the strongest expansion, followed by Italy. Germany, the region's biggest economy, recorded only modest growth, however. France was the only major euro zone economy to contract, with its PMI falling from the previous month, marking the 11th straight month of decline. Despite sluggish demand, the bloc's firms added jobs for a fifth consecutive month in July. The pace of job creation, while still modest, reached its fastest rate in over a year. Business confidence dipped for the first time since April, falling further below its long-term average as sentiment weakened across both manufacturing and services sectors. Cost pressures eased to their lowest level since October last year, primarily driven by the services sector, while output price inflation increased marginally to a three-month high. The services input prices index fell to 56.5 from 58.1. "Inflation is easing in the euro zone's services sector, increasing the likelihood of one further interest rate cut by the European Central Bank in the second half of the year," de la Rubia added. The ECB left interest rates unchanged in July but is expected to make one further cut this year, according to a July Reuters poll. 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
CNBC
24 minutes ago
- CNBC
Dollar weakens as rate cut odds rise, tariff uncertainties linger
The U.S. dollar wavered on Tuesday as the rising odds of Federal Reserve rate cuts weighed on sentiment, while investors assessed the broader economic impact of U.S. tariffs unleashed last week. The dollar remained under pressure following Friday's U.S. jobs report that showed cracks in the labor market, prompting traders to swiftly price in rate cuts next month. U.S. President Donald Trump's firing of a top statistics official and the resignation of Federal Reserve Governor Adriana Kugler also exacerbated market unease, leading to a sharp dive in the dollar on Friday. The U.S. currency found its footing on Monday but was weaker in early trading on Tuesday. The euro last bought $1.1579 while sterling stood at $1.3298. The dollar index, which measures the U.S. currency against six other units, was at 98.688 after touching a one-week low earlier in the session. Traders are now pricing in a 94.4% chance of the Fed cutting rates in its next meeting in September, compared to 63% a week earlier, CME FedWatch tool showed. Goldman Sachs expects the Fed to deliver three consecutive 25 basis point cuts starting in September, with a 50 basis point move possible if the unemployment rate climbs further in the next report. San Francisco Federal Reserve Bank President Mary Daly said on Monday that given mounting evidence that the U.S. jobs market is softening and no signs of persistent tariff-driven inflation, the time is nearing for rate cuts. "I was willing to wait another cycle, but I can't wait forever," Daly said. Meanwhile, the focus remains on tariff uncertainties after the latest duties imposed on scores of countries last week by Trump, stoked worries about the health of the global economy. The Japanese yen firmed slightly to 146.95 per dollar after minutes of its June policy meeting showed a few Bank of Japan board members said the central bank would consider resuming interest rate increases if trade frictions de-escalate. The Swiss franc was steady at 0.8081 per dollar after dropping 0.5% in the previous session as Switzerland geared up to make a "more attractive offer" in trade talks with Washington to avert a 39% U.S. import tariff on Swiss goods that threatens to hammer its export-driven economy. The long-term impact of the tariffs though remains uncertain, with traders bracing for volatility. "This is going to be like the pandemic, we all expect to see the transitory impact on supply chains to happen very quickly," said Rodrigo Catril, currency strategist at National Australia Bank in Sydney. "It'll probably take six months to a year to see exactly where we land and who's going to be winners and losers from all this." In other currencies, the Australian dollar was 0.11% higher at $0.64736, while the New Zealand dollar rose 0.11% to $0.5914. "We're still of a view that the big dollar is heading down," Catril said, referring to the U.S. dollar. "While global growth means pro-growth currencies like Asian currencies and the AUD should struggle, we've other structural dynamics in the USD, where policies are dollar-negative."
