Biotech Stocks Trading Under Water Pose a Conundrum for Bargain-Hunters
In the wake of the selloff, roughly 25% of the 263-member Nasdaq Biotechnology Index have market values that were less than their most recently reported cash holdings after President Donald Trump made good on his promise of a trade war. That's up from about 19% at the end of February.
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Wall Street Journal
29 minutes ago
- Wall Street Journal
Global Markets Slip With Tariff Deadline in Focus
Stock markets began a crucial week on the back foot amid elevated uncertainty around President Donald Trump's tariff plans ahead of the July 9 deadline. Trump said he will start sending out letters telling countries what rates they will get on Monday and threatened a 10% additional levy on those aligning themselves with 'un-American' BRICS policies. Commerce Secretary Howard Lutnick on Sunday said 'tariffs go into effect Aug. 1, but the president is setting the rates, and the deals, right now.' Oil benchmarks were modestly lower after OPEC+ agreed to an outsized output boost over the weekend. Looking ahead, the market will also be eyeing Federal Reserve minutes on Wednesday.
Yahoo
30 minutes ago
- Yahoo
Analysis-China's rare earth export controls are good for Beijing, bad for business
(Reuters) -China's export restrictions on rare earths brought parts of the global auto supply chain to a halt and U.S. President Donald Trump to the negotiating table. But at home, they're a big headache for companies already struggling with a slow economy. Beijing curbed rare earth and magnet exports in April in retaliation against U.S. tariffs, driving down magnet makers' offshore sales at the same time as they face pressure from a weak economy and tough times in one of their key markets - EVs. The pain for magnet makers is unlikely to ease soon, even after the U.S. announced a deal with China on June 27 to get rare earths flowing again. Any agreement would take time to implement, said Baotou Rare Earth Products Exchange, a state-backed trading platform, noting that inventory was piling up in warehouses, in a post on WeChat 12 hours after the deal was announced. The export curbs led to a 75% drop in magnet exports in the two months after the restrictions were imposed and forced several global auto makers to pause some production. The restrictions caused a "crisis" for some local magnet makers, the Baotou exchange, based in Inner Mongolia, one of China's rare earths hubs, said in May. While China produces 90% of the rare earth magnets used worldwide and consumes most of them, exports ranged from 18% to 50% of total revenue in 2024 among the 11 largest publicly listed magnet producers by capacity, public filings show. "Their sales are now being squeezed from both ends – disrupted exports and flagging domestic demand," said Ellie Saklatvala, head of metal pricing at commodities information provider Argus. "They have temporarily lost an important part of their customer base, with no certainty about when they will regain it." Rare earths are politically sensitive in China and few major listed rare earth companies have commented directly about how the controls will affect their business. However, two rare earth magnet producers told Reuters revenue is expected to fall this year, speaking on condition of anonymity given the issue's sensitivity. "It will have a huge impact on the export business, although it's hard to tell exactly how much of a loss we will suffer for now," said one of the rare earth magnet producers, requesting anonymity due to the sensitivity of the matter. Small- and medium-sized producers cut production by around 15% in April and May, according to another source with knowledge of the matter, who also declined to be named. EXPORT CURBS' IMPACT UNDERESTIMATED Much like U.S. chipmaker Nvidia, China's rare earth magnet makers are victims of their own importance. Caught in the geopolitical crossfire of Washington's tariffs and China's retaliation, share prices of the listed magnet makers slumped in April after the export curbs were announced. However, they have climbed off their lows over the past three months. The rebound does not appear to be based on any reasonable forecast of the industry's future, said Cory Combs, head of critical mineral research at consultancy Trivium China. "I can see various market outlooks, more or less negative depending on the assumptions, but none of them yield a sustainable rise in share price like we're seeing," he said. Many magnet makers are also private, so share prices only tell a limited story, he said. Many producers already faced weaker conditions at home, including a price war among electric vehicle makers, a key customer segment, that has seen manufacturers demand discounts from suppliers. In addition, the highly customised nature of many magnet products makes it hard to resell cargoes domestically, forcing magnet makers to store them during the wait for licenses, four sources said, also speaking anonymously. CHALLENGES MAY SPUR CONSOLIDATION Listed magnet maker Baotou Tianhe Magnetics Technology Co noted the export curbs in its annual report released in late April, and said its export revenue could decline if the international situation deteriorated. Yantai Zhenghai Magnetics said last week it had received export licenses and production was normal. It referred investors to its upcoming financial filings for specific operating results. However, a quick return to the previous status quo is unlikely if the rare earth controls are implemented in a manner similar to those on other critical minerals including germanium and antimony, according to Argus' Saklatvala. China imposed export controls on germanium and antimony over the course of 2023 and 2024. Despite being used mostly by civilian industries, which in theory should face few issues getting licenses, exports have still not recovered fully, customs data shows. Europe is receiving only a tiny fraction of the antimony it imported from China before export controls were imposed last September. The shortages are already causing major problems for lead-acid battery makers, commonly found in gasoline engines. "Looking at China's recent export controls on other critical minerals – such as antimony – it is clear that it can sometimes take longer than expected for exports to resume and normalise," Saklatvala added. The large amounts of information required by export license authorities are a permanent change for the industry that will add delays and costs for producers, said David Abraham, affiliate professor at Boise State University, in Idaho. "In some sense, there's no going back," he said. In an industry that has hundreds of manufacturers, the pressures could lead to consolidation, he said. "I do not know if Beijing sees that as a bad thing, because further consolidation is helpful for controlling and understanding where materials go." (Reported by Reuters staff; Editing by Lewis Jackson and Sonali Paul)
Yahoo
35 minutes ago
- Yahoo
Trump says US nears trade deals as tariff deadline delayed
(Corrects paragraph 3 to show new date offers three-week reprieve) By Andrea Shalal MORRISTOWN, New Jersey (Reuters) -The United States is close to finalizing several trade pacts in coming days and will notify other countries of higher tariff rates by July 9, President Donald Trump said on Sunday, with the higher rates set to take effect on August 1. Since taking office, Trump has set off a global trade war that has roiled financial markets and sent policymakers scrambling to protect their economies, through efforts such as deals with the United States and other countries. In April Trump unveiled a base tariff rate of 10% on most countries and additional duties of up to 50%, but later gave a three-week reprieve until Wednesday for all but 10% of them. Trump, whose remarks to reporters on Sunday came just before his return to Washington from a weekend golfing in New Jersey, had flagged the August 1 date earlier, but it was unclear if all tariffs would increase then. Asked to clarify, Commerce Secretary Howard Lutnick told reporters the higher tariffs would take effect on August 1, but Trump was "setting the rates and the deals right now." In a posting on his Truth Social website, Trump later said the U.S. would start delivering tariff letters from 12:00 pm ET (1600 GMT) on Monday. In a separate post, he rolled out a wholly new tariff policy, calling for countries "aligning themselves with the Anti-American policies" of the BRICS developing nations to be charged an extra 10% tariff, with no exceptions to be granted. The first BRICS summit in 2009 was attended by leaders from Brazil, China, India and Russia, with South Africa joining later while Egypt, Ethiopia, Indonesia, Iran, Saudi Arabia and the United Arab Emirates were included last year. Trump has close ties to leaders of some of those countries, such as Saudi Arabia and UAE, and has been touting the prospect of a trade deal with India for weeks. On Sunday, BRICS leaders condemned attacks on Gaza and Iran, called for reforms to global institutions and warned that the rise in tariffs threatened global trade. It was not immediately clear if Trump's tariff threat would derail trade talks with India, Indonesia and other BRICS nations, however. Earlier on Sunday, U.S. Treasury Secretary Scott Bessent told CNN's "State of the Union" that several big trade agreements would be announced in the next days, adding that European Union talks had made good progress. Trump would also send letters to 100 smaller countries with which the United States does not have much trade, notifying them of higher tariff rates, he added. "President Trump's going to be sending letters to some of our trading partners saying that if you don't move things along, then on August 1 you will boomerang back to your April 2 tariff level," Bessent said. "So I think we're going to see a lot of deals very quickly." Kevin Hassett, who heads the White House National Economic Council, told CBS's "Face the Nation" program there might be wiggle room for countries engaged in earnest negotiations. "There are deadlines, and there are things that are close, and so maybe things will push back past the deadline," Hassett said, adding that Trump would decide. 'I HEAR GOOD THINGS' Stephen Miran, chairman of the White House Council of Economic Advisers, told ABC News' "This Week" program that countries needed to make concessions to get lower tariff rates. "I hear good things about the talks with Europe. I hear good things about the talks with India," Miran said. "And so I would expect that a number of countries that are in the process of making those concessions ... might see their date rolled." Bessent told CNN the Trump administration was focused on 18 important trading partners that account for 95% of the U.S. trade deficit. But he said there had been "a lot of foot-dragging" among countries in finalizing trade deals. Thailand, keen to avert a 36% tariff, is now offering greater market access for U.S. farm and industrial goods and more purchases of U.S. energy and Boeing jets, Finance Minister Pichai Chunhavajira told Bloomberg News on Sunday. India and the United States are likely to make a final decision on a mini trade deal in the next 24 to 48 hours, local Indian news channel CNBC-TV18 reported on Sunday, with average tariffs of 10% on Indian goods shipped to the U.S., it said. Hassett told CBS News that framework agreements already reached with Britain and Vietnam offered guidelines for other countries. He said Trump's pressure was prompting countries to move production to the United States. The Vietnam deal was "fantastic," Miran said. "It's extremely one-sided. We get to apply a significant tariff to Vietnamese exports. They're opening their markets to ours, applying zero tariff to our exports." 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
