Can the Quad Counter China in the Indo-Pacific?
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Stock market closes out chaotic quarter on a high note as S&P 500 notches another new record
The S&P 500 and hit new highs Monday, ending a turbulent quarter that saw a near-bear market two months ago. Monday's U.S. stock market close marked fresh highs for multiple indices, a sharp departure from previous months as one of the most chaotic quarters for equities in recent memory came to an end. The second quarter began on an historically tumultuous note, with President Donald Trump's April 2 announcement of sweeping tariffs sending stocks into free fall and the bond market into turmoil, and putting the U.S.'s global economic dominance at risk. Since then, though, the market has steadily climbed and climbed, as investors shake off concerns about the policies and focus on the news they want to see, like potential tax cuts. In fact, the S&P 500 and Nasdaq both hit all-time highs Friday after Trump said that the U.S. signed a trade deal with China. The momentum continued Monday, with the S&P 500 and Nasdaq notching new all-time highs and increasing 0.52% and 0.47%, respectively, from Friday's session. The Dow Jones Industrial Average ended the day up 0.63% (though not in record territory). 'As markets reach new all-time highs—even with economic surprises at an 11-month low and geopolitical and tariff-related uncertainties lingering—equity investors appear to have entered another 'bad news is good news' phase, with the focus shifting to potential rate cuts, tax incentives, and deregulation,' says Lisa Shalett, chief investment officer of Morgan Stanley Wealth Management. The upward swing comes as inflation stabilizes and earnings trend higher. That said, some analysts and economists point to other potential cracks. 'Arguably, the S&P 500 just returning to its previous record is not enough,' writes Hubert de Barochez, senior markets economist at Capital Economics. He notes that while larger company stocks look good, the Russell 2000, an index of U.S. small caps, is still below its record high, and the index of so-called Magnificent Seven tech stocks, including stalwarts like Amazon, Apple, and Tesla, has also not surpassed its previous high. That said, shares of Meta—one of the Mag Seven stocks—hit a record high late Monday, after CEO Mark Zuckerberg announced a restructuring of the company's artificial intelligence group. More volatility is possible. Next week, the president's 90-day tariff pause is set to expire, and deals with many countries have yet to be made. There is also uncertainty surrounding the Republican tax bill that would add nearly $3.3 trillion to deficits over a decade and whether it can make it through both chambers of Congress this week. And analysts say inflation related to tariff policies has yet to be seen in the official data. 'We think that the high level of uncertainty, which notably stems from Trump's chaotic policymaking, will prevent the S&P 500 from rising as quickly as it has recently,' writes de Barochez. 'The impending expiration of tariff 'pauses' may spark another boot of volatility in the markets.' This story was originally featured on Sign in to access your portfolio
Yahoo
7 minutes ago
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Australia's Commodity Exports Face Headwinds
Australia has been out of luck lately. The country's consumer watchdog just this week warned the east coast could face a gas shortage as soon as this year. Smelters and miners are complaining about high energy costs and asking for government help. And now the industry department is warning that commodity exports are about to weaken on trade headwinds. In a new report, the Australian Department of Industry, Science and Resources said it expected commodity exports to keep rising over this year and next, but income from them is set to weaken—because of lower commodity prices. The trend would be an extension of the decline in commodity export profits from the 2024/25 fiscal year, the department said. By the numbers, the Department of Industry, Science and Resources expects A$2 billion ($1.3 billion) lower profits from commodity exports for fiscal 2024/25, falling further by A$4 billion ($2.6 billion) in the current fiscal year that begins today, and moving lower still, by A$8 billion ($5.3 billion), in fiscal 2026/27. It seems the Australian government expects a consistent oversupply situation in most of its export commodities, citing growth in supply. For instance, iron ore supply globally is set to keep growing over the next two years, leading to consistently soft prices, affecting Australia's export earnings. Iron ore accounts for as much as a quarter of the country's total resource and energy commodity exports, so an impact on iron ore profits is an impact on total profits. Indeed, the industry department sees iron ore export profits sliding from A$116 billion in 2024/25 to A$105 billion in the current fiscal year and further to A$97 billion in fiscal 2026/27. In U.S. dollars, the decline is from $75.6 billion to $69 billion in 2025/26, and to $63.7 billion in 2026/27. Interestingly, over the longer term, it could be Australia itself contributing to the price decline trend. A new iron ore deposit was recently discovered in Western Australia that holds an estimated 55 billion metric tons of the basic metal, valued at some $6 trillion. The outlook for liquefied natural gas is not much better than the one for iron ore. According to the industry department, while it prepares for weaker iron ore prices, Australia's commodity industry should brace for softer LNG prices as well. Again, the reason cited for the prediction is robust global supply. Most of that, according to analysts, is set to come from the United States but Canada just shipped its first LNG cargo from the Shell-led LNG Canada facility in British Columbia, so there will be non-U.S. supply growth as well, most likely. Related: Speaking of Shell, it is not even half as bothered about LNG demand, supply, and prices as the Australian government appears to be. In fact, Shell expects global LNG demand to rise by 60% by 2040, which should theoretically support reasonably healthy price levels for all producers. Coal, meanwhile, will remain a major contributor to Australia's energy commodity earnings, despite the government's determination to phase out hydrocarbons from the country's energy system. Yet profits from thermal coal exports, the sort used in electricity generation, are expected to follow the decline in iron ore and LNG. One big reason for this may be China's boost in domestic coal supply, which has reduced its demand for imported coal. Metallurgical coal exports, however, are seen remaining steady over the next two years, suggesting healthy demand from the metallurgical sector abroad. There are a couple of commodities that are enjoying stronger growth in demand than in supply, with profits from their exports set to rise substantially. One of them is gold, seen rising to the top third place among Australia's commodity export profit contributors. The other is copper—exports are seen surging by 25% this fiscal year. These metals, it seems, are going to remain in strong demand even as iron ore falters. By Irina Slav for More Top Reads From this article on Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
17 minutes ago
- Yahoo
House Republicans race toward a final vote on Trump's tax bill, daring critics to oppose
WASHINGTON (AP) — Republican leaders in the House are sprinting toward a Wednesday vote on President Donald Trump's tax and spending cuts package, determined to seize momentum from a hard-fought vote in the Senate while essentially daring members to defy their party's leader and vote against it. 'The American people gave us a clear mandate, and after four years of Democrat failure, we intend to deliver without delay,' the top four House GOP leaders said Tuesday after the bill passed the Senate 51-50, thanks to Vice President JD Vance's tiebreaking vote. It's a risky gambit, one designed to meet Trump's demand for a July 4 finish — and there's a steep climb ahead. Since launching early this year, Republicans have struggled mightily with the bill nearly everystepoftheway, often succeeding by only a single vote. Their House majority stands at only 220-212, leaving little room for defections. Some Republicans are likely to balk at being asked to rubber stamp the Senate bill less than 24 hours after passage, having had little time to read or absorb the changes that were made, many at the last minute to win the vote of Alaska Sen. Lisa Murkowski. House Republicans from competitive districts have bristled at the Senate bill's cuts to Medicaid, while conservatives have lambasted the legislation as straying from their fiscal goals. It falls to Speaker Mike Johnson and his team to convince them that the time for negotiations is over. Trump pushes Republicans to do 'the right thing' The bill would extend and make permanent various individual and business tax breaks that Republicans passed in Trump's first term, plus temporarily add new ones that Trump promised during the campaign, including allowing workers to deduct tips and overtime pay, and provide a new $6,000 deduction for most older adults. In all, the legislation contains about $4.5 trillion in tax cuts over 10 years. The bill also provides some $350 billion for defense and Trump's immigration crackdown. Republicans partially pay for it all through less spending on Medicaid and food assistance. The Congressional Budget Office projects that it will add about $3.3 trillion in federal deficits over the coming decade. The House passed its version of the bill back in May, despite worries about spending cuts and the overall price tag. Now, they are being asked to give final passage to a version that, in many respects, exacerbates those concerns. The Senate bill's projected impact on federal deficits, for example, is significantly higher. Trump praised the bill profusely in a social media post, saying 'We can have all of this right now, but only if the House GOP UNITES, ignores its occasional 'GRANDSTANDERS' (You know who you are!), and does the right thing, which is sending this Bill to my desk.' The high price of opposing Trump's bill Speaker Johnson, R-La., is intent on meeting the president's July 4 timeline. He's also betting that hesitant Republicans won't cross Trump because of the heavy political price they would have to pay. They need only look to Sen. Thom Tillis, R-N.C., who announced his intention to vote against the legislation over the weekend. Soon, the president was calling for a primary challenger to the senator and personally attacking him on social media. Tillis quickly announced he would not seek a third term. Others could face a similar fate. One House Republican who has staked out opposition to the bill, Rep. Thomas Massie of Kentucky, is already being targeted by Trump's well-funded political operation. House Majority Leader Steve Scalise, R-La., said leadership was not entertaining the possibility of making changes to the bill before the final vote. He said the two chambers already agree on the vast majority of what's in it. 'It's not as easy as saying, 'hey, I just want one more change,' because one more change could end up being what collapses the entire thing,' Scalise said. Democratic lawmakers, united against the bill as harmful to the country, condemned the process as rushed. Rep. Jim McGovern, D-Mass., said there's no real deadline for getting the bill passed by July 4th. 'We're rushing not because the country demands it, but because he wants to throw himself another party,' McGovern said. 'This isn't policy. It's ego management.' Democrats warn health care, food aid are being ripped away House Democratic leader Hakeem Jeffries described the bill in dire terms, saying that cuts in Medicaid spending would result in 'Americans losing their lives because of their inability to access health care coverage.' He said Republicans are 'literally ripping the food out of the mouths of children, veterans and seniors.' 'House Democrats are going to do everything we can for the next few hours, today, tomorrow, for the balance of this week and beyond to stop this bill from ever becoming law,' Jeffries said. Republicans say they are trying to rightsize the safety net programs for the population they were initially designed to serve, mainly pregnant women, the disabled and children, and root out what they describe as waste, fraud and abuse. The package includes new 80-hour-a-month work requirements for many adults receiving Medicaid and applies existing work requirements in the Supplemental Nutrition Assistance Program to more beneficiaries. States will also pick up more of the cost for food benefits, with the amount based on their payment error rates, which include both underpayments and overpayments. The driving force behind the bill, however, is the tax cuts. Many expire at the end of this year if Congress doesn't act. 'Passing this bill means smaller tax bills and bigger paychecks for the American people — permanently,' said Senate Majority Leader John Thune. 'It will also help get our economy firing on all cylinders again.' The Tax Policy Center, which provides nonpartisan analysis of tax and budget policy, projected the bill would result next year in a $150 tax break for the lowest quintile of Americans, a $1,750 tax cut for the middle quintile, and a $10,950 tax cut for the top quintile. That's compared to what they'd face if the 2017 tax cuts expired. ___ Associated Press writer Joey Cappelletti contributed to this report. Kevin Freking And Lisa Mascaro, The Associated Press 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
