Latest news with #Ines Ferré
Yahoo
5 days ago
- Business
- Yahoo
What the US–Japan deal signals for future global trade talks
Yahoo Finance Reporters Josh Schafer, Allie Canal, and Ines Ferré join Morning Brief with Julie Hyman to discuss how the US–Japan trade deal is hitting the auto, defense, and consumer goods sectors and what it signals for future deals. To watch more expert insights and analysis on the latest market action, check out more Morning Brief here. We had this Japanese tariff deal being and now. So 15% is the baseline which spares an uptick in tariffs that was expected for August 1st that deadline right for the tariffs to change here. And so really implications here for the countries auto industry in particular, and maybe raising hopes about other deals. Josh, you and I have been talking recently about that the markets not moving on trade headlines one day one way or another. Does today disprove that? What do you think? I don't know if it fully disproves it actually. I I think you're seeing futures move higher sure, but when you look at sort of what's moving specifically, I think you could really sort of pin that down to specifically what this trade deal was and as we've been making that argument that maybe trade deals are moving the broad broader market. We have been pointing out, it has been moving sort of sector specific items, right? And so really, I don't know if futures necessarily took off off this news last night, right? If you looked at a chart of just S&P 500 futures, but where you are seeing the largest moves are where you would expect to see moves when the US and Japan make a trade deal, right? So Nikkei futures are up about 4%. A stock like Toyota is up over 13% at least. It was the last time I looked in pre-market trading. So you're seeing the areas of the market that would be most impacted by this deal, definitely move higher, but I don't know if necessarily the broader market is really rallying off this news and I mean, we're up about 35 basis points on S&P 500 futures. So yes, we're higher but I mean, we're kind of creeping higher here in the same fashion we have been really over the last couple of days. Right, and clearly the implications bigger to your point for the Japanese market and some individual Japanese companies than here in the US. Inez, um there's also this investment that President Trump talked about, right? $550 billion. Um, it sounds like it's going to be sort of over time. President Trump says he's going to have some discretion over where that where that money is spent as well. So what should we be looking for there? Yeah, and what we should be looking for is some of the areas that have been doing well to continue to do well when it comes to these investments. You mentioned 550 million, it's expected that some of that will go into semiconductors, into energy infrastructure, pipeline infrastructure, also aerospace and defense. So these are sectors that have been doing well. The industrial sector has been doing well. So this is part of a trade deal that's very bullish for the market. And look, as far as the trade deal is concerned, it's bullish overall because Japan is a key ally of the US in Asia. So this is this gives optimism, hope for other perhaps uh countries and and blocks of countries, i.e. the EU, to also be able to come to a favorable deal because the market is and is basically saying this is better than feared. And that's what you're looking at when you look at Toyota stock. You're also seeing that with some of the German automakers that are also up as well because of that optimism that if this could be done with a key ally of the US, then perhaps other deals could follow as well. Yeah, I thought Peter Boockvar, um, who longtime commentator out in his morning note said a couple of interesting things. First of all, he points out um even though there is maybe a hope that US automakers would be able to sell more cars into the Japanese Japanese market. Guess what? US autos aren't tariffed in Japan. There there hasn't been a tariff on them. He points out at least since 1977. So he says maybe there's some other reasons that that US cars have not been selling in Japan. He also, you know, repeats the sort of line that we've heard a lot you guys, that this is ultimately a tariff on US consumers. So even if it's less than the worst-case scenario, it is still going to be um higher than it was and at least some of that cost is going to get passed on to us. And then there's the dollar equation, Allie, um which has an effect on the on how much the tariff what the tariff effect is going to be. Yeah, and we've seen the dollar weaken considerably against other currencies. The US dollar index is down about 10% since the start of the year. And that's going to be a bigger tariff burden or lead to a bigger tariff burden for companies and consumers. Now we have seen companies so far absorb a lot of that tariff impact, but Goldman Sachs economists are now saying that the US effective tariff rate is going to be around 15%. This is significantly higher than what we saw at the start of the year. And even on the consumer price side, we have seen tariffs start to trickle through a little bit when it comes to certain products like apparel, furniture, footwear. But as this US effective tariff rate rises, as we solidify a lot of these trade deals, and then you factor in the weakening dollar, it's going to be harder and harder for companies to fully absorb these costs without having it hit their bottom line. So that is really where the rubber meets the road here when it comes to how prices could continue to tick higher and at what point do these companies have to pass on some of those higher costs to the consumer?
Yahoo
5 days ago
- Business
- Yahoo
Trump's Fed visit: What to expect from FOMC next week
Consumers are cautious as some companies report mixed sales results amid ongoing economic uncertainty. CFRA Research chief investment strategist Sam Stovall and Yahoo Finance Senior Reporters Brooke DiPalma and Ines Ferré discuss what the latest earnings say about the market and the Federal Reserve's next moves. To watch more expert insights and analysis on the latest market action, check out more Opening Bid here. ever seen that type of exchange between a Fed chair uh and a sitting president? Uh it just extraordinary stuff. And then what's the read through to markets if there's any? Well, no. I have never seen that kind of an exchange before. Uh so it certainly does make for interesting headlines. I'm not necessarily sure it's going to be affecting bottom lines because I think Fed chair Powell is going to stick with the timetable that is based upon the data. So when they meet next week, I think the outcome is likely to be that uh that they are happy with the trajectory of inflation, uh that the economy remains resilient along with employment trends that uh the trade agreements are coming through. Uh but they're not going to be cutting rates until they feel that they need to. And we think that will probably happen first in September and then again sometime in the fourth quarter. Sam, I mean the the Fed chair got embarrassed again now on a very public exchange. Um do you think I mean he's still human of course. But do you think this digs him in even more? I mean, how could he come out next week and cut rates? But then how could he also even signal that rate cuts may happen next year or even at the end of this year? Well, I think like I said, he's basically trying to block out uh outside interference and focus on the data. So we don't think that they're going to be cutting rates next week, but we would not be surprised if there were a bit more dovish statements acknowledgement of the two members who are encouraging a rate cut to take place at the July meeting. Um but we feel that the focus will be on the data uh because Powell's term does end uh in the first half of 2026. And as a result, I think he would like to go out looking good rather than simply responding to what others are requesting. And as I never thought I would see a Fed chair uh wearing a hard hat. Um I go back to when I first started, it was Alan Greenspan. I know for damn sure he would never be putting on a hard hat. Um but I think one thing to watch next week is in the Fed meeting is who dissents against pal? For sure. And look, can we say just awkward because it was an awkward scene? It was to the point almost ridiculous comical when you were watching them together there with those two hard hats because you could tell that Powell did not want to be there. He would have been anywhere else but next to Trump in that scene. But look, I think that this underscores two things. One of them, this highlights that the government is desperate. I mean, Trump is desperate for these interest rates to come down. Interest expenses are sky high and he wants those rates lower. The other one is, I think that there is a perception that Fed independence is eroding before our very own eyes because there seems to be a shadow fed emerging here. And this is signaling to the markets that the next person that is sitting in that in Jerome Powell's seat will do what Trump wants them to do or will do what the government wants him to do and it puts that person in an awkward situation. So whether or not even Powell sits out the rest of the term, which he's expected to, that is almost irrelevant because it's almost like you're watching this erosion of Federal Reserve independence. Well said and as Brook, uh you were running through the results out of Decker's. Uh Uggs, I believe up double digit sales, Hoka up double digit sales. And this is not If the economy was falling apart and in badly need of a rate cut, I don't think you get these results out of a out of a brand or a company. I really don't need a lot more of what they How many more pairs of Uggs do we need in our closet? How many more pairs of Uggs? I mean, I certainly I could have tons. I love wearing them. But but when you really hear this story, it's an ongoing environment of what we've seen over this past quarter really play out. The consumer needs to be convinced to buy. Now, keep in mind, here in domestic here in the US, we did see a same store sales decline of 2.8%. And they're really alluding that to this ongoing volatile environment. And this is largely what we've seen play out over the course of this past earnings week. We've heard from Chipotle cite an ongoing volatile consumer environment that led to their second consecutive quarter of sales decline. And so it's really this this lean into this idea that certain companies are winning in this environment and certain companies are not performing as well because they're not really catering to the company. Chipotle even saying that they lost their value proposition. On the other hand, Decker's saying that overseas, they saw their international sales rise. And so certainly they're able to lend themselves to this consumer that is willing to spend up if they're convinced to. Related Videos What Volkswagen's $1.5B tariff hit means for US expansion Kalshi CEO Talks AI's Impact on Prediction Markets How Hulk Hogan shaped TKO and the pro wrestling business Intel stock sinks: CEO prioritizes cost-cutting over innovation Sign in to access your portfolio
