U.S. Leading Indicators Show Economic Clouds Gathering
The Leading Economic Index, or LEI, published Monday by research group The Conference Board, declined 0.3% to 98.8 in June, a stronger fall than the 0.2% expected by a consensus of economists polled by The Wall Street Journal. It followed an unchanged reading in May that was revised upward from the 0.1% downtick originally reported.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
43 minutes ago
- Yahoo
Fine Print: ETFs Born in Banner Year May Lack Staying Power
From leveraged funds that invest only in Robinhood to products built to combat anti-semitism, exchange-traded funds are having a banner year. ETFs — investment vehicles known for their low costs, tax efficiencies and transparency — had collected $540 billion in new money, and issuers had launched 464 new funds, through the first six months of 2025, according to market researcher Morningstar. The industry is on track to launch a record 726 funds by the end of the year. Issuers are pumping out funds to meet investor demand, but there's a growing risk that many of the new ETFs will have short shelf lives because they serve very specific purposes or incorporate traditionally niche investing strategies. 'If that purpose falls out of favor and assets dwindle, it may be difficult for the ETF sponsor to keep the lights on,' said Zachary Evens, Morningstar research analyst. 'As the space gets saturated, only a relative few will likely see sustained success.' READ ALSO: Tariffs 'The World Can Live With': US-Japan Trade Pact Pushes Markets to Record Highs and Amazon, Meta Wear AI-mbitions on Their Wrists Fund on the Bun Low-cost funds with broad market exposure typically have the most assets under management and are the most popular with new investors. However, so few of them have launched this year that they're almost being seen as novel in the current ETF landscape. 'Perhaps Vanguard and [Charles] Schwab's continued push into very-low-cost bond strategies is unique amongst the sea of leveraged, covered call and buffer ETF launches,' Evens told The Daily Upside. The Morningstar data showed: First Trust, BlackRock's iShares and Graniteshares were among the top issuers in the first half of 2025, launching 23, 20 and 19 funds, respectively. Plenty of the new ETFs have also been fairly costly. The average expense ratio of 2025 ETF launches is 0.74%, much higher than all ETFs' average expense ratio of 0.6%. Active-ish: Many ETFs launched this year are being labeled as 'active,' meaning a fund manager is at the helm, regularly making investment decisions in the hopes of outperforming a benchmark instead of just mirroring it. That title is a bit of a misnomer, however, as some of those funds are more reliant on algorithms than traditional discretionary strategies, Evens said. They're only being called active because they don't track an index. 'Managers essentially have a formula for how to execute a strategy, removing much of the judgement or discretion associated with traditional stock-picking funds,' he said. This post first appeared on The Daily Upside. To receive delivering razor sharp analysis and perspective on all things finance, economics, and markets, subscribe to our free The Daily Upside newsletter. 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
Yahoo
43 minutes ago
- Yahoo
Crowded by EV Rivals, Tesla Preps For Critical Earnings Report
For what feels like the third or fourth time in a row now, Tesla is gearing up for what may be the most important earnings call in its history. The electric vehicle maker reports after the bell today, holding its first call with analysts and investors at the dawn of a new era that finds the company squeezed between increased competition and a high-stakes feud involving its enigmatic CEO and the US federal government. At stake are billions in lucrative tax credits. Buckle up, things could get pretty bumpy. READ ALSO: Tariffs 'The World Can Live With': US-Japan Trade Pact Pushes Markets to Record Highs and Amazon, Meta Wear AI-mbitions on Their Wrists Credit Score After something of a shareholder mutiny earlier this year sparked by his divided attention while serving as an aide to President Trump, Elon Musk has seemingly quelled the critics. Now, Tesla must confront its myriad headwinds. First and foremost: The regulatory credits Tesla sells to combustion-engine carmakers to offset their tailpipe emissions. Selling the credits has been big business for Tesla, generating more than $10 billion in revenue since 2019 and accounting for a substantial portion of its free cash flow in 2024. Recent legislation, however, eliminates the hefty fines that traditional automakers face for failing to reach emissions standards, thus reducing the demand for Tesla's carbon credits. Tesla's credit sales already dipped in the first quarter, generating revenue of just $595 million compared with $692 million in the final quarter of 2024. Analysts at William Blair and Co. recently projected that revenue in the category might fall by 75% next year, and be virtually eliminated by 2027. Analysts at Piper Sandler, meanwhile, are slightly more bullish, recently projecting that 'Tesla will still book around $3B in credits this year, followed by $2.3B in 2026.' Many legacy automakers have long-term contracts for carbon credits from Tesla. Still, those same legacy automakers are suddenly catching up to Tesla in the EV realm: While Tesla remains the EV king in the US, its sales are shrinking just as rivals' are growing. The Automotive News Data Center estimates that Tesla sold 125,000 EVs in the US in the second quarter, down almost 17% year-over-year (Tesla doesn't break down its delivery figures by region). GM, meanwhile, reports that it sold 46,280 EVs in the second quarter and 78,167 EVs so far this year, representing a 111% increase from 2024. That puts GM's domestic EV market share at around 13%, while most estimates peg Tesla's once-dominant US market share at just 43% now. 'GM is quietly building trust while Elon burns it,' Paul Waatti, director of industry analysis for AutoPacific, recently told USA Today. Bleep Bloop: Still, Tesla has a sky-high forward price-to-earnings ratio for a reason. Thus far, at least, Musk has been able to sell investors on a future of self-driving cars and robotics. A robotaxi pilot program launched in Austin, Texas, earlier this summer. 'Outside of guidance, the market will likely be focusing on the robotaxi business, which had to navigate a slew of weather problems,' David Wagner, head of equity and portfolio manager at Aptus Capital Advisors, told The Daily Upside. 'The company has a 'hopes and dreams' multiple, so anything focusing on [autonomous vehicles], robotics and the other innovative products should be the focal point.' This post first appeared on The Daily Upside. To receive delivering razor sharp analysis and perspective on all things finance, economics, and markets, subscribe to our free The Daily Upside newsletter. 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
Yahoo
an hour ago
- Yahoo
Southwest Falls on $1 Billion Profit Cut From Tariff Fallout
(Bloomberg) -- Southwest Airlines Co. plunged after the carrier said it expects economic turmoil to wipe out as much as $1 billion of its annual pre-tax profit this year and offered shareholders a much-reduced outlook for the balance of 2025. Trump Awards $1.26 Billion Contract to Build Biggest Immigrant Detention Center in US The High Costs of Trump's 'Big Beautiful' New Car Loan Deduction Salt Lake City Turns Winter Olympic Bid Into Statewide Bond Boom Can This Bridge Ease the Troubled US-Canadian Relationship? Earnings before interest and taxes for the year will be $600 million to $800 million, Southwest said in a statement on Wednesday that also included second-quarter results that fell short of analyst expectations. The carrier originally expected $1.7 billion in pre-tax profit at the start of the year. Southwest is one of a few companies so far to put a price on the fallout from President Donald Trump's efforts to reset global trade, inflation and economic uncertainty that caused travel demand to collapse early this year. Most carriers pulled financial guidance in April, saying it was impossible to forecast demand. Domestic leisure travel — Southwest's bread and butter — stabilized in the second quarter, 'and we already see signs that demand is coming back in volumes,' Chief Executive Officer Bob Jordan said in an interview on Thursday. Business travel remains down, largely on cutbacks in spending by state and federal governments, he said. 'My only caution is I've been in this business a long time and it's hard to read a few weeks into a trend,' Jordan said. 'I don't have any less optimism than anybody else, I'm just always cautious.' Rival American Airlines Group Inc., which also is highly dependent on the US domestic market, reinstated its annual earnings guidance on Thursday in a lower range than expected. Southwest Air fell 11% to $33.45 as of 2:08 p.m. New York time, its largest drop since April 10. The stock is down about 1% this year, compared with the S&P Supercomposite Airlines Index's roughly 10% decline. The carrier offered a more cautious outlook than larger rivals United Airlines Holdings Inc. and Delta Air Lines Inc. The airlines said earlier this month that travel in the US has picked up after being hammered at the start of 2025. Trump's dizzying tariff campaign, inflation and disruptions at some key airports rattled business and consumer confidence and cratered demand earlier in the year. United and Delta have extensive global networks and premium seating that Southwest lacks, allowing rivals to tap into markets where demand has remained stronger. Delta cited improved corporate travel and an uptick in consumer trips later in the year, while United said it may beat its 2025 earnings targets on the recovery in demand. Southwest is in the middle of rolling out an extensive makeover plan that breaks from a one-size-fits-all business model that set it apart from rivals for more than five decades. Premium fares with more leg room, assigned seats and a new boarding process will debut next year. The carrier also furloughed workers for the first time in its history earlier in 2025. Southwest's business overhaul and leadership shakeup followed a pressure campaign by Elliott Investment Management, one of its biggest shareholders. The airline began charging for checked bags in May, and said Wednesday that results have exceeded expectations with no negative effect on flight operations. Southwest said it expects $350 million in earnings before interest and taxes this year from checked bag fees that began on May 28. That will increase to $1 billion over the course of a full year, the carrier said. It also plans to start selling assigned seats July 29 for flights beginning Jan. 27. Southwest had to offer additional fare discounts after disappointing results with its new basic economy offering, with fewer customers than expected completing a purchase after considering the fare, the carrier said. That cut second quarter revenue from each seat flown a mile by nearly one-half percentage point before the airline could implement a fix, and will reduce the measure this quarter by one percentage point. That measure, known as unit revenue, will be in a range of up 2% to down 2% in the third quarter, while analysts were expecting growth of 1.7%. The airline said it's shifting its capital allocation framework from a cash target to a liquidity target of $4.5 billion, including $3 billion cash and a credit revolver of $1.5 billion. The shift is intended to help the carrier maintain an investment grade credit rating, Chief Financial Officer Tom Doxey told analysts on a call after the company reported results. Southwest also said its board of directors approved a new $2 billion share repurchase program, expected to be completed over a period of as long as two years. Southwest reported adjusted earnings of 43 cents per share in the second quarter, compared to the 53 cents per share analysts estimated. Its second quarter revenue was $7.24 billion, slightly less than the $7.3 billion analysts expected. (Updates throughout with Southwest's shares, details on bag fees, capital allocation.) Burning Man Is Burning Through Cash Elon Musk's Empire Is Creaking Under the Strain of Elon Musk It's Not Just Tokyo and Kyoto: Tourists Descend on Rural Japan A Rebel Army Is Building a Rare-Earth Empire on China's Border How Hims Became the King of Knockoff Weight-Loss Drugs ©2025 Bloomberg L.P. 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
