Latest news with #PaulDonovan
Yahoo
a day ago
- Business
- Yahoo
S&P 500, Nasdaq Climb After 15% Tariff Deal Between U.S and EU
July 28 - U.S. stocks started the week with early gains on Monday after Washington and Brussels reached a trade deal, but the momentum eased as the morning moved on. Nasdaq 100 rose about 0.6%, leading S&P 500 futures higher by 0.4%, while Dow Jones Industrial Average futures edged up 0.2% on Monday morning. The agreement between the U.S. and the European Union reduces tariffs to 15% on a range of imports. The decision followed earlier threats from former President Donald Trump to impose 30% tariffs on most goods from the bloc. Pharmaceuticals and steel are excluded from the agreement. UBS Chief Economist Paul Donovan noted that the deal includes plans from the EU to invest in and purchase U.S. goods, but he said those pledges still lack formal authority. Wall Street enters this week after a strong stretch of corporate earnings and similar trade understandings recently made with Japan and Indonesia. This article first appeared on GuruFocus. 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
Yahoo
16-07-2025
- Business
- Yahoo
Inflation ticks up in June following tariffs
Inflation rose by 2.7 percent in June following warnings from economists that the cost of President Trump's tariffs would make it through value chains and start to show up in consumer prices over the summer. The Labor Department's consumer price index (CPI) rose by 0.3 percent on the month to hit an increase of 2.7 percent compared to last year. The Federal Reserve's target for inflation is 2 percent. Economists were expecting an annual rise in the June index of between 2.6 percent and 3.0 percent, so the increase is in line with their expectations. 'And so it begins?' UBS economist Paul Donovan wrote in an analysis Tuesday, noting the expectation of higher prices from tariffs and the uncertainty of when exactly they would manifest. 'Only half the expected trade tax rise has hit the economy so far. Inventory stockpiling means pre-tax items are still available. How readily US firms can pass on price increases matters,' he added. June marks the second consecutive month with a rise in the CPI, which climbed to a 2.4 percent annual increase in May from 2.3 percent in April. Though some of Trump's tariffs started earlier, his wide-ranging 'reciprocal' tariffs were announced in early April — but many of them have been paused until Aug. 1. U.S. inventories take roughly three months to clear, and there was a huge pull-ahead in orders from U.S. importers prior to the tariffs, so the April-to-July price lag confirms many economic forecasts. Trump's 'reciprocal' tariffs were initially paused until July 9, but the president extended that delay earlier this month as trade negotiations with multiple countries continue. Tentative trade deals with China, the United Kingdom and Vietnam have been announced so far. A general 10 percent tariff, along with China-specific tariffs and import taxes on automobiles and various metals, have been put in place. The Fitch ratings agency recently put the overall U.S. tariff rate at 14.1 percent, the highest level in decades. Taking out the more volatile categories of food and energy, the 'core' CPI for June increased to a 2.9 percent annual rise, up from 2.8 percent in May. Core prices, a more important measurement for the path of interest rates as set by the Federal Reserve, had been falling between January and May, making June's their first increase in four months. Shelter prices climbed 0.2 percent in June. The Labor Department said shelter was the primary factor in the monthly increase. Household furnishings and apparel, which is heavily imported in the U.S., also saw increases. The household furnishings index rose 1.0 percent in June, and apparel increased 0.4 percent. 'Import levies are slowly filtering through to core goods prices,' Principal Asset Management strategist Seema Shah wrote in a commentary. Economists expect this trend to continue. 'There is a trickle of what is likely tariff-induced inflation in some categories, particularly household appliances and furnishings. This trickle is likely to gain momentum in the coming months,' wrote Olu Sonola, head of U.S. economic research at Fitch Ratings. The uptick in inflation diminishes the odds the Federal Reserve will resume its interest rate cuts, which it paused at the beginning of this year. This is likely to exacerbate tensions between the White House and the Federal Reserve. 'A July cut is clearly off the table,' Sonola wrote. 'But the Fed will view this report as the first of three that will shape the decision on a possible rate cut in September.' Import prices have been holding steady so far this year, reaching an index level of 141.8 in May, the same number as January. The Fed has been waiting to see where exactly the cost of the tariffs within different value chains is going to be borne. It could be paid by foreign manufacturers, exporters, wholesalers or retailers, or it could be passed along to consumers. It could also simply sap wholesale demand for certain products. Inflation also recently hit an inflection point in another major price metric, the personal consumption expenditures (PCE) price index, which rose to a 2.3-percent annual increase in May from 2.2 percent in April. Updated at 9:17 a.m. EDT Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. Sign in to access your portfolio
Yahoo
11-07-2025
- Business
- Yahoo
The Rise of the Everyday Millionaire, or the EMILLI
In a world where headlines often focus on the ultra-wealthy, a quieter but also profound shift is under way: the rapid ascent of the 'Everyday Millionaire,' or EMILLI. According to the 2025 edition of the UBS Global Wealth Report, this group—defined as individuals with assets between $1 million and $5 million—has grown from a niche segment to a global economic force, reshaping the landscape of personal wealth and investment. At the dawn of the millennium, there were just over 13 million EMILLIs worldwide, according to UBS Global Wealth Management. Fast forward to the end of 2024, and that number had 'skyrocketed' to nearly 52 million—a more than fourfold increase in less than a quarter-century. Even after adjusting for inflation, the number of EMILLIs has more than doubled in real terms since 2000. The collective wealth of EMILLIs is considerable. By the end of 2024, this group controlled approximately $107 trillion—over four times their total at the start of the millennium and nearly matching the $119 trillion held by those with more than $5 million in assets. The EMILLI cohort now accounts for a significant share of global wealth. This long-term trend is 'visible nearly everywhere around the globe,' UBS says. The report doesn't explicitly call out the factors underpinning the rise of the everyday millionaire, but some general explanations on a wealthier world are made in the foreword by UBS Global Wealth Management's Chief Economist Paul Donovan. 'Demographics and long-term asset price trends mean dramatic breaks in the allocation of wealth are rare,' he says. 'This report shows persistent and significant ongoing trends — the great wealth transfer, the importance ofproperty, women's increasing control of wealth, and so on. This has changed the nature of wealth over the past decades, in an evolutionary way.' The report highlights: Real Estate Appreciation: The sustained increase in real estate values across major markets is a significant driver of growing wealth. Financial Market Access: Broader access to financial markets, coupled with long-term growth in equities and mutual funds, has enabled more individuals to accumulate substantial portfolios. Entrepreneurship and Private Business: A global trend toward entrepreneurship and self-employment suggests many EMILLIs are business owners. Demographic Shifts: The ongoing 'great wealth transfer'—an estimated $83 trillion expected to change hands over the next 20–25 years—means more individuals are inheriting or receiving significant assets, often propelling them into the EMILLI bracket. While the EMILLI trend is global, its pace and character vary by region: United States: The US remains the epicenter, with the largest number of EMILLIs and a culture that encourages investment in both real estate and financial markets. Europe and Asia: Growth has been robust in Europe and parts of Asia, particularly in countries where property values have surged and financial literacy has improved. Emerging Markets: The number of EMILLIs is also rising in emerging markets, though often from a lower base and with greater reliance on real estate than on financial assets. Heterogeneous: What unites EMILLIs is not a particular lifestyle or background, but the quiet accumulation of assets over time. Wealth Distribution: As the number of EMILLIs grows, wealth is becoming more broadly distributed, though significant gaps remain between regions and within societies. The UBS report projects expects more than 5 million new millionaires globally by 2029, suggesting that the number of EMILLIs will continue to climb as well. As asset prices rise and the great wealth transfer accelerates, the Everyday Millionaire will become an even more prominent feature of the global economic landscape. For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing. This story was originally featured on 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
Bloomberg
08-07-2025
- Business
- Bloomberg
Trump Might Save Christmas With Tariff Delay, UBS's Donovan Says
Donald Trump's delay of tariff increases until Aug. 1 may have just softened the price impact for Christmas by pushing it into 2026, according to UBS Group AG Chief Economist Paul Donovan. Speaking on Bloomberg Television, he said the 10% levy affecting all trade will drive higher inflation numbers in July and August, but extra duties applied to specific countries under the US president's policies may not now affect shoppers until much later.
Yahoo
29-06-2025
- Business
- Yahoo
Rich Americans are increasingly unaware they're classed as wealthy, say analysts—and Bain say a rise in ‘luxury shame' means they may try to hide it
EXCLUSIVE: UBS's Paul Donovan notes that many wealthy Americans don't perceive themselves as rich, leading to confusion between the reality and perception of wealth, a distortion fueled by social media. Bain & Co's Claudia D'Arpizio highlights a rise in 'luxury shame,' with consumers curbing visible status purchases and luxury brands needing to shift focus from elitism to culture and innovation as social pressures mount. In times of economic volatility, wealth is often a subject that becomes politicized. Under Trump 2.0, that means debates over who should be taxed and by how much, what constitutes 'wealthy', and how that private capital should be mobilized to address public finance concerns. The Oval Office's 'One, Big, Beautiful Bill' has divided opinion, after estimates from the Congressional Budget Office (CBO) found the policies would cost the poorest Americans roughly $1,600 a year while increasing the income of the wealthiest households by an average of $12,000 annually. This is courtesy of policy tweaks such as an increased exemption threshold for estates and gifts to $15 million, as well as changing the cap amount on deductions for state and local taxes (SALT) from $10,000 to $40,000. One issue with current debates about wealth taxes, says UBS's chief economist Paul Donovan, is that often, America's wealthier voters don't realize they are rich. Speaking on a roundtable last week, Donovan explained: 'A rather interesting issue that we're starting to see come up more and more in discussions … about things like wealth taxes and inheritance taxes is that increasingly there is a gap between the perception of wealth and the reality of wealth. 'So people will say, 'yes, we must be doing a wealth tax for millionaires, but not me, I don't count as a millionaire' when in fact, you own a two-bedroom apartment in Manhattan. You are by definition, a millionaire.' Donovan continued that social media also distorts wealth. Even if wealth inequality hasn't changed, he said, people feel worse off because of the extravagance shared online. 'As a result, people are perhaps again getting more confused between their perception of their wealth and the realities of their wealth,' Donovan added. 'Many people are wealthy but they perceive themselves as somehow being disadvantaged because they're not living the best life of a social media influencer.' With wealth becoming an increasingly divisive topic socially—with even the well-off distancing themselves from the reality of their situation—consumers are already curbing their status symbol buys and experiences. Bain&Co's spring update on the luxury sector, released last week, shows the industry's personal goods business in particular has shrunk. Claudia D'Arpizio, one of the authors of the report, tells Fortune the phrase 'luxury shame' was first coined during the 2008 financial crisis when wealth was perceived as gauche given the millions of Americans who had lost their homes and jobs. D'Arpizio added that luxury stores more widely stocked white paper bags to send consumers off with their purchases because individuals didn't want to be seen with designer carrier bags. 'In the U.S., that was self-induced; people were correcting their behaviors because they were ashamed,' D'Arpizio continued. The trend now, led by Chinese consumers, is governmental. She explained: 'This is a communist regime that pushed luxury consumption in the last 15 years when people were becoming wealthier and wealthier every year. Now that growth is slowing down, there is unemployment on the younger generations, so to prevent tension, they are trying to say to the wealthy people, 'don't show off that you are wealthy in this moment.'' This social tension is spreading West, added D'Arpizio, meaning luxury brands should focus less on the perception of being elite and more on being a bastion of culture and innovation. That being said, just because the wealthy either don't want or don't realize they are rich, that doesn't mean the engines generating their assets are moving any slower. 'There are two independent drivers that we need to consider, which have no impact on the driver of wealth growth,' Donovan said in response to a question from Fortune. 'The first of these is the rise of economic nationalism.' One need only look at Trump's America-first initiative, but Donovan added the behavior is also prevalent in nations like China. He added 'quite often there can be hostility to foreign brands, to foreign companies. That is certainly something that we have seen, for example, with European luxury brands in China.' Donovan added that a second factor shaping the wealthy's approach to consumption is that their focus is less on goods and more on fun. 'A question I'm often asked is: What does an economist mean by having fun? The answer is anything you can post about on Instagram,' Donovan tells Fortune. 'So it's foreign travel, it's meals out, it'a Taylor Swift concerts. To be fair, it is also clothing because obviously, if you're Instagramming your latest meal, you need to do so in a new outfit. 'These trends which are independent of the whole wealth creation … we've got to factor in because they can give the appearance of shame about wealth when in actual fact it's simply changing consumption patterns for other reasons.' This story was originally featured on 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
