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42 minutes ago
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Bessent Tells Markets Not to Worry About China Tariff Deadline
(Bloomberg) -- Advocates Fear US Agents Are Using 'Wellness Checks' on Children as a Prelude to Arrests LA Homelessness Drops for Second Year Treasury Secretary Scott Bessent suggested the deadline for a US-China tariff truce slated to end next month is flexible, saying that talks between the world's largest economies are in a 'very good place' ahead of an expected meeting in coming weeks. 'I tell market participants not to worry about Aug. 12,' Bessent said Tuesday on 'Bloomberg Surveillance,' referring to the end of a 90-day reprieve that was announced May 12. The remarks may ease investor concern that commerce between the two nations faces further disruption if tariffs return to their damaging pre-truce levels in less than a month. Bessent's perceived confidence in stable relations with Beijing also reinforces his role as a counterweight to the China hawks advising Trump. The Treasury chief, who has taken the leading role in Washington's negotiations with China, said that he hopes to meet with his counterpart Vice Premier He Lifeng soon, possibly in a third country, either before or after the Chinese leadership hold a meeting early next month. 'We're still working on it,' he said. 'The Chinese leadership has a big conclave at the beginning of August. We're trying to work out whether that could be in a third country either before or after that conclave.' Market Rally The S&P 500 has rallied 26% from an April low to a record high as investors grew more confident that the US will negotiate lower tariff rates with trading partners than those announced April 2. The domestic economy, meanwhile, remains solid with underlying inflation largely staying in check. A report on June consumer prices, released after the Bessent interview, showed product categories more exposed to tariffs indicate that companies are starting to pass higher import costs on to households. The dollar remains lower since the initial April announcement, while longer-dated Treasury yields are higher. The greenback has been hit particularly hard, with Bloomberg's gauge of the currency down more than 8% this year. Bessent and his fellow US trade negotiators previously met with Chinese officials in Geneva in May, where they agreed to reduce their overall tariffs rates on each other. They held more talks in June in London, where they reached an understanding on easing export controls on semiconductors and so-called rare earths. The US government has recently assured chip maker Nvidia Corp. that licenses for sales of its advanced H20 GPU to Chinese firms would be granted, the company said in a blog post. In the Bloomberg TV interview, Bessent confirmed that development and said the granting of such licenses was among the offerings from the Trump administration in its talks with China. 'You might say that that was a negotiating chip that we used in Geneva and in London,' he said. 'It was all part of a mosaic. They had things we wanted. We had things they wanted, and we're in a very good place.' --With assistance from Annmarie Hordern, Jonathan Ferro, Lisa Abramowicz, David Goodman and Farah Elbahrawy. (Adds markets in fifth paragraph) Thailand's Changing Cannabis Rules Leave Farmers in a Tough Spot The New Third Rail in Silicon Valley: Investing in Chinese AI 'The Turbulence Is Brutal': Four Shark Tank Businesses on Tariffs 'Our Goal Is to Get Their Money': Inside a Firm Charged With Scamming Writers for Millions Will Trade War Make South India the Next Manufacturing Hub? ©2025 Bloomberg L.P.
Yahoo
an hour ago
- Yahoo
Polymarket probe ended by DOJ in win for crypto bets under Trump
(Bloomberg) — A pair of US investigations into crypto-betting platform Polymarket that went full-throttle in the waning days of the Biden administration are now being shut down just as Donald Trump's White House seeks to give the industry a boost. The predictions exchange received formal notice earlier this month from the US Justice Department and Commodity Futures Trading Commission that the probes had ended, according to a person with direct knowledge of the matter, who asked not to be identified discussing the confidential inquiries. Representatives for Polymarket, the CFTC and DOJ declined to comment. The decisions are the latest example of US authorities reversing course on Biden-era actions involving digital-asset firms. Some in Washington are celebrating what's being billed as 'Crypto Week' with plans to usher in industry-backed rules that have sent the price of Bitcoin to a record. Polymarket's popularity surged during last year's election campaigns as users flocked to the platform to place cryptocurrency wagers on the outcome. But that also drew investigators, examining whether the site was accepting trades from US-based users in violation of a previous settlement with federal regulators. The situation escalated dramatically a week after the November elections, when FBI agents carried out a pre-dawn raid at the Soho penthouse of Shayne Coplan, the force behind Polymarket. Soon after, the 27-year-old chief executive officer lashed out on social media, describing the action as a 'last-ditch effort' to go after companies deemed to be associated with President Joe Biden's political opponents. He also made light of the seizure of his mobile phone on the same day. The bravado captured the mood in the broader crypto community, which saw Trump as a full-throated proponent who would reverse Washington's Biden-era crackdown on crypto firms deemed to be running afoul of regulations. So far, that has proved right. Congress is expected to send the first major legislation to regulate some digital assets to the president's desk for his signature after a House floor vote this week. The confluence of digital assets and prediction markets — which allow users to bet on all sorts of future events — stand to occupy a chunk of the CFTC's time in the Trump administration. Brian Quintenz, an executive at a16z, the digital asset-focused arm of venture-capital giant Andreessen Horowitz, has been nominated to lead the agency. Quintenz has served on the board of directors of Kalshi, Polymarket's chief rival. The CFTC had its own investigation into the platform. The derivatives regulator, which oversees prediction platforms because their contracts are considered akin to swaps, had entered into a settlement with Polymarket in January 2022 over allegations it failed to register with the agency. As part of the deal, Polymarket vowed to wall off US traders from its exchange. Both the CFTC and Justice Department lawyers in Manhattan were investigating whether the New York-based platform continued accepting wagers from people in the US using virtual private networks or other means to bypass the company's controls. The prediction market notched about $2.6 billion in trading volume in November. The resolution of the two investigations may even pave the way for Polymarket to officially re-enter the US market. That could include registering with the CFTC as a futures exchange or potentially acquiring another entity with a CFTC license. Polymarket has been building a war chest with new investment rounds led by Peter Thiel's Founders Fund. It also recently announced a partnership with Elon Musk's X and xAI to offer event forecasts on the social media platform. —With assistance from Ava Benny-Morrison. ©2025 Bloomberg L.P. 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
an hour ago
- Yahoo
Stock Pros See Forecasts as ‘Necessary Evil' in Era of Policy Chaos
(Bloomberg) -- As President Donald Trump awaited his second inauguration in January, David J. Kostin, Goldman Sachs Group Inc.'s chief US equity strategist, had a clear view of what that would mean for stocks: another year of solid gains. Advocates Fear US Agents Are Using 'Wellness Checks' on Children as a Prelude to Arrests LA Homelessness Drops for Second Year He forecast the S&P 500 Index would rise 11% to 6,500 by 2025's end. It didn't take long for his outlook to unravel. China's DeepSeek technology burst the artificial intelligence bubble, recession warnings rang out as Trump unveiled the harshest tariffs in 90 years and the S&P 500 slumped toward a bear market. A week later, Trump reversed and unleashed the best stock rally since the 1980s. As those events unfolded, Kostin felt compelled to change his target a whopping four times over the course of four months. In the past decade, he's made an average of just two changes per year, according to data compiled by Bloomberg. Such is life for Wall Street strategists under the extreme capriciousness of the Trump administration, where global trade policies are set on whims and changed just as randomly. While investors seem to have grown inured to the vacillations — the S&P 500 has churned near a record for the past few weeks — forecasting where the benchmark will be in six or 12 months has become hazardous. 'It's like being on a roller coaster,' said Wall Street veteran Ed Yardeni, founder of Yardeni Research. 'As a strategist, you don't like to change your forecast too often because then you lose your credibility. But in my career, I don't recall so much uncertainty in such a short period of time.' Kostin had plenty of company as he tried to keep up with Trump. In December, the 19 strategists tracked by Bloomberg predicted on average the S&P 500 would rise 13% to 6,614 this year. Oppenheimer & Co.'s John Stoltzfus saw it jumping a Street-high of 21%. Even the most bearish prognosticator, Cantor Fitzgerald's Eric Johnston, expected gains of 2%. By May, the group had on average slashed their outlook by 9% — a faster pace than at the start of the pandemic in 2020. As June started, many had reverted to being bulls. The S&P 500 closed Monday at 6,268.56 points, bringing this year's rally to nearly 7%. Kostin now expects the benchmark to end the year at 6,600, but with Trump's trade policies far from cemented, it's a safe bet the Goldman man may have to act again. 'The shifting tariff landscape creates large uncertainty around our earnings forecasts,' Kostin wrote in a note to clients. 'However, we expect the digestion of tariffs to be a gradual process, and large-cap companies appear to have some buffer from inventories ahead of the increase in tariff rates.' A spokesperson for Goldman Sachs declined to comment. The rapid-fire changes to once stolid forecasts have rekindled an age-old debate about the utility of Wall Street strategists. Generally, the cohort offers fairly similar views — usually between a 0% and 10% annual gain in the S&P 500. Big misses, of which there have been many in recent years, do little reputational damage. 'Most of the time, you look back at the year-ahead forecasts and you laugh because you say, what was I thinking?,' said Anthi Tsouvali, UBS Global Wealth Management's multi-asset strategist. 'But it's very hard to shift to an environment where no one publishes those forecasts, because it's a relatively easy way for people to understand how bullish or bearish you are.' Changing Models In the era of Trump, strategists have had to amend the way they model forecasts. The team at BlackRock Inc. briefly reduced its 'tactical' investment horizon to three months from six-to-12 months, noting the shorter time-frame would better reflect the pressure on US stocks. Tsouvali's team began focusing on granular opportunities among single stocks instead of taking 'very big outright risk' at the index level. Beata Manthey, head of European and global equity strategy at Citigroup Inc., tweaked her forecasting methodology to add a measure of how wars and trade policies would impact stocks. After the wild market ride in April, they now account for a 'geopolitical risk premium,' which includes policy fluctuations as well as volatility linked to conflicts. 'We were in a very scary place back then,' Manthey said. 'Even so, all the big events of this year were absolutely predictable and everybody should have had them in the models, but we underestimated the scale.' Her models now show the market is again too sanguine about a potential trade-driven shock after the rebound to records. With Wall Street forecasts reverting to broadly bullish, 'that's a worry,' Manthey said. Citi's US strategy team upgraded its S&P 500 target to 6,300 in June after slashing it by 11% on Trump's tariff shock in April. Adam Parker, founder of Trivariate Research and ex-Morgan Stanley chief US equity strategist, said gauging the hit from tariffs on corporate profits has made market forecasting particularly challenging. Here, too, Wall Street misfired. Analysts had been cutting profit estimates throughout the first quarter, and by early April, the number of revisions had reached levels usually seen during times of economic duress. Four weeks later, S&P 500 firms had delivered earnings growth double what was expected, data compiled by Bloomberg Intelligence show. 'There are two things you're trying to forecast: one is earnings and the other is the multiple,' said Parker, who has revised his profit forecast three times since April. 'This year, we're unsure of the earnings trajectory even more than normal.' No First-Mover Advantage Former Citi strategist and industry veteran Robert Buckland said Wall Street prognosticators should've shown more resolve in their predictions. Their mistake was taking Trump at his word on the level of tariffs. 'Most strategists came into the year thinking 'take Trump seriously, not literally,' but they didn't stick to their guns and they did take him literally. And that's what got them into trouble,' said Buckland, who served as Citi's chief global equity strategist until 2023. 'I would've gone quiet a bit,' Buckland said. 'When you get a big move like this, there's no first-mover advantage in my experience. It's not really about getting it wrong, it's about what you do when you get it wrong.' One strategist who did hold steady to his optimistic target is Wells Fargo Securities LLC's Christopher Harvey. The bank's head of equity strategy remains Wall Street's biggest bull with his projection that the S&P 500 will rally 19% over the year. At a time when his peers were racing to slash targets in May, Harvey — correctly — expected the White House to take an easier stance on trade and said the market was past peak uncertainty. His prediction proved right, with the Cboe Volatility Index trading well below a peak of 60 hit in early April. For others, though, the threat of Trump upending the world economic order proved too worrisome to disregard at the time. Global investors reflected that panic, slashing exposure to US equities by the most on record in March, according to a Bank of America Corp. survey. At Ned Davis Research, chief US equity strategist Ed Clissold called forecasting a 'necessary evil.' 'President Eisenhower once said, 'In preparing for battle I have always found that plans are useless, but planning is indispensable,'' Clissold said. 'We have a similar attitude when it comes to our forecasts — they are helpful thought processes, but we recognize they will need to be adjusted throughout the forecast period.' --With assistance from Michael Msika and Lu Wang. Thailand's Changing Cannabis Rules Leave Farmers in a Tough Spot The New Third Rail in Silicon Valley: Investing in Chinese AI 'The Turbulence Is Brutal': Four Shark Tank Businesses on Tariffs 'Our Goal Is to Get Their Money': Inside a Firm Charged With Scamming Writers for Millions Will Trade War Make South India the Next Manufacturing Hub? ©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
