Odd Lots: How a Trade War With China Could Become a Hot War
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Bloomberg
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US and China Are Expected to Extend Trade Truce by 90 Days, SCMP Says
US and China are expected to extend their tariff truce by another three months, the South China Morning Post reported, citing unnamed sources. The two countries will not impose additional tariffs on each other during the extension, one of the sources told the newspaper. The current pause was to end Aug. 12.
Yahoo
an hour ago
- Yahoo
'Haves and have-nots': The stock market thinks more consumers are reaching a breaking point
Consumer stocks are falling out of favor with US investors. While the benchmark S&P 500 (^GSPC) is trading at record highs and up nearly 10% year to date, the Consumer Discretionary (XLY) sector, often viewed as a bellwether for household health, is trailing far behind. The sector is up a modest 0.3% this year, making it second-worst-performing sector in the S&P 500 this year, ahead of only Health Care (XLV). High interest rates, shifting spending patterns, and economic uncertainty have weighed heavily on the group, which houses recognizable names like Nike (NKE), Target (TGT), and Home Depot (HD), as well as Magnificent Seven giants Tesla (TSLA) and Amazon (AMZN). "I still think that we have a bit of a K-shaped economy," Charles Schwab's Liz Ann Sonders told Yahoo Finance on Wednesday, pointing to the growing disparity between high- and low-income households. "You're seeing it in a lot of the travel-related stocks with concerns particularly around lower-end income consumers. ... It's the haves and have-nots, both at the consumer level and the stock level." This week's earnings added fresh weight to that thesis. Chipotle (CMG) shares sank double digits after the company reported a larger-than-expected drop in same-store sales and traffic, slashing its full-year outlook. Hilton (HLT) also fell after reporting a decline in US room revenue that weighed on sentiment, and Hasbro (HAS) slid after warning of continued promotional pressure and delaying product rollouts due to consumer price sensitivity. Eric Freedman, chief investment officer at US Bank Asset Management Group, said the recent moves reflect a bifurcated consumer landscape and that companies catering to more price-sensitive shoppers will need to work harder to capture demand. "This is a hyper-promotional environment to get people, especially lower-income and lower-middle-income consumers, to spend money," he told Yahoo Finance. "You have to be out with deals." Airlines, which are housed in the Industrials sector but have significant consumer exposure, have also suggested a softer spending environment in recent reports. American Airlines (AAL) stock fell after CEO Robert Isom echoed the weakness seen by peer Southwest (LUV), citing softer domestic travel demand last quarter. "Let's face it, the domestic network has been under stress because of the uncertainty in the economy and the reluctance of domestic passengers to get in the game," Isom said on Thursday. Meanwhile, companies catering to wealthier consumers have held up far better. JPMorgan (JPM) and American Express (AXP) both pointed to continued strength in consumer spending, particularly among higher-income households. Notably, their stocks, along with the broader Financials (XLF) sector, have outperformed since the April bottom. Bank of America data shows Industrials and Financials drew the largest inflows last week, underscoring investor appetite for cyclical names with strong earnings momentum. Consumer Discretionary, meanwhile, saw the biggest outflows. Still, with risk-on sentiment rippling through markets, from surging crypto bets to the return of the meme trade, even some of 2025's laggards could be poised for a second look. In a note to clients on Tuesday, Bespoke Investment Group flagged 21 S&P 500 stocks — including Consumer Discretionary names Tesla (TSLA), D.R. Horton (DHI), Caesars Entertainment (CZR), and Mohawk Industries (MHK) — that are down 30% or more from their 52-week highs, yet are trading above rising 50-day moving averages. That signals some beaten-down names may be starting to build short-term momentum, even as longer-term pressures persist. The outlook for consumers, however, remains fragile. "Consumer spending is down but not out," Oxford Economics deputy chief US economist Michael Pearce wrote following June's stronger-than-expected retail sales report last week. "The first half of the year was one to forget for most consumer-facing firms, and we expect there is a bit more pain to come before conditions begin to improve heading into 2026." Allie Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at Sign in to access your portfolio
Yahoo
an hour ago
- Yahoo
Strategist's two stocks to buy (and one to skip)
There are thousands of stocks for investors to choose from to invest money in. Morningstar chief US market strategist David Sekera tells Market Domination Overtime Host Josh Lipton two he thinks are worth buying and one investors may want to avoid. Find out what they are and the reasons for his call in the video above. To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime here. I just think the market in the short term has just gotten to be a little overly complacent, starting to see some signs of excess speculation, you know, meme stocks starting to make a comeback, short squeezes. I actually just heard about a resurgence in SPACs. You know, we haven't seen those for years at this point, you know, an increase in call buying. So in my mind, you know, still market weight overall. I think positioning is more important than ever, but I do think it's a good time to look to take profits where stocks have rebounded too far too fast off those April lows. You know, April 7th on the morning filter, which is my, you know, weekly podcast, is when I'd officially moved to an overweight. So at this point, I just don't see the tailwinds to really continue to keep pushing the market that much higher here in the short term. You know, you were talking about the ease earlier, you know, when we look at the US economic growth, our economic team expects the US economy to slow sequentially, you know, for the next three quarters. Of course, we have, you know, the tariff negotiations going on. I think it's really going to be all about with China. China, of course, is not going to roll over on these negotiations. I think that's going to be hard fought. Not getting a tailwind from long-term interest rates. They're still kind of in that trading range in the mid fours. You know, inflation still moderate, but again, that's going to come up later this year as the tariffs, you know, start to hit. And for now, I think the Fed's on hold. So again, I'm not seeing those tailwinds really to get the market to continue moving up that much more. So, good time to take some profit taking, but then also, as you talked about earlier, move into some of those, you know, low valuation stocks.
