Daily News Round Up
Wednesday, 11 Jun 2025
- US-China Trade Relations Show Tentative Improvement, Boosting Risk Sentiment: Recent negotiations between the U.S. and China have yielded a framework agreement addressing key trade disputes, including rare earth export restrictions and semiconductor controls. This has spurred optimism in Asian equity markets, with rallies in Hong Kong and Shanghai, and led to a slight strengthening of the U.S. dollar. However, analysts caution that the progress may be cosmetic and dependent on final approval from Presidents Trump and Xi Jinping. (FMP) (Reuters)
- Inflationary Pressures Remain a Key Concern Despite ECB Rate Cut: While the European Central Bank recently lowered interest rates following a decline in annual inflation to 1.9%, concerns persist about future inflation, particularly in the U.S. Upcoming CPI data and the continuation of Trump-era tariffs are expected to contribute to inflationary pressures. Several analysts warn that inflation historically impacts US stocks negatively and remains a significant anxiety for investors. (WSJ) (Seeking Alpha)
- Federal Reserve Policy Expected to Remain Hawkish in Near Term: Despite calls from President Trump, Deutsche Bank analysts predict the Federal Reserve will likely hold rates steady until December 2025, with only modest cuts expected in early 2026. Strong May employment data and lingering inflationary pressures support a cautious approach, and the CME’s FedWatch Tool indicates a less than 55% probability of a rate cut in September. Further complicating matters are the ongoing trade uncertainties and their potential impact on economic growth. (FMP)
- Shifting Corporate Strategies Reflect Macroeconomic and Political Uncertainty: Multiple companies are adjusting strategies in response to economic and political factors. GM is investing in gas-powered vehicle production despite long-term EV goals, citing slowing EV demand and political shifts, while Alphabet is offering voluntary buyouts in its core Search and Ads divisions amid AI competition. These moves underscore risk aversion and a need for greater flexibility in a fluctuating environment. (FMP) (FMP)
- Sector Divergence and Relative Performance Become More Pronounced: The market is exhibiting sector divergences. While Asian equities advanced on trade optimism, Tesla experienced analyst downgrades and delivery declines, while Aptiv and BorgWarner were recommended as alternatives. Additionally, positive earnings reports from United Natural Foods were offset by a stock decline, highlighting potential disconnects between fundamentals and market sentiment. This divergence suggests increased stock-picking is crucial. (FMP) (FMP)
What happened yesterday?
Macro
Economic Growth: Market breadth and technical indicators confirm a secondary uptrend, despite sector-specific weakness in healthcare and energy due to political factors. Macroeconomic conditions remain positive, especially after Trump’s policy U-turn from economic cooling to prioritizing growth over deficit reduction. (Seeking Alpha)
Economic Growth: The World Bank sharply cut its global economic growth projection Tuesday to 2.3% in 2025. “This would mark the slowest rate of global growth since 2008, aside from outright global recessions,” the World Bank said. (CNBC)
Economic Growth: More American CEOs are optimistic about the nation’s economy ahead of July’s major trade deadline than they were during the last few months, following the beginning of President Donald Trump’s tariff wars, according to this month’s CEO Confidence Index survey from the Chief Executive Group. (Fast Company)
Inflation: The European Central Bank last week lowered its key interest rate after figures showed the annual rate of inflation fell to 1.9% in May. (WSJ)
Inflation: The European Central Bank’s latest rate cut will help inflation bounce back to its 2% goal after an expected sag over the next year and a half, the ECB’s chief economist Philip Lane said on Wednesday. (Reuters)
Inflation: Macro factors are a big driver for the world’s largest token, so today’s consumer price index report could be key for future gains. (Barrons)
Inflation: The consumer-price index for May is expected to show annual inflation edging higher; appeals court keeps tariffs in place (WSJ)
Inflation: Inflation has historically been a killer for U.S. stocks. Current anxiety about the potential for future inflation is extremely high. (Seeking Alpha)
Inflation: Key readings on inflation combined with two critical Treasury auctions this week will test the battered bond market. The Bureau of Labor Statistics releases separate inflation readings for May — consumer prices on Wednesday, then producer prices on Thursday. (CNBC)
Interest Rates: Deutsche Bank analysts predict the Federal Reserve will hold rates steady, not resuming rate cuts until December 2025, with two further reductions expected in early 2026, aiming for a neutral level of 3.625%. Currently, the Fed holds rates at 4.25% to 4.5%. The CME’s FedWatch Tool indicates a 54.7% probability of a rate cut in September. President Donald Trump’s tariff policies are creating uncertainty and could raise consumer prices and slow economic growth, complicating the inflation outlook, though strong May employment data suggests economic resilience. Policy patience remains the Fed’s guiding strategy, with upcoming inflation reports being closely monitored. (FMP)
Interest Rates: Major central banks face significant unrealized and realized losses from quantitative easing as rising bond yields erode the value of their bond portfolios. Operating losses and duration mismatches have impaired the financial strength of the Fed, ECB, BOJ, and BOE, threatening their independence and credibility. (Seeking Alpha)
International relations: Bitcoin prices hovered at $109,559.20 on Wednesday, just shy of its record high of $112,000, following a rally on Tuesday fueled by a tentative trade framework between the United States and China. The framework addresses China’s restrictions on rare earth exports and U.S. export controls on semiconductors. U.S. Commerce Secretary Howard Lutnick stated these disputes were “resolved.” Traders are awaiting final approval from Presidents Donald Trump and Xi Jinping and concrete details of the deal. Investors are also watching the upcoming release of the U.S. Consumer Price Index (CPI) data, anticipating a potential Federal Reserve easing of interest rates later in the year. Institutional interest and legislative momentum for digital asset integration remain strong, and long-term holders and funds continue to accumulate Bitcoin. (FMP)
International relations: Stock markets and the U.S. dollar were cautiously higher on Wednesday following vague but optimistic headlines from U.S.-China trade talks. Negotiators agreed on a framework deal, with restrictions on rare earth exports from China resolved. Final approval requires agreement from Trump and Xi Jinping. A federal appeals court allowed Trump’s sweeping tariffs to remain active, despite a previous trade court ruling to block them. Markets are awaiting U.S. CPI data, expected to be released soon, to assess whether tariffs are pushing consumer prices higher and to evaluate import-led inflation. The U.S. dollar held firm, and bond yields remained flat ahead of a Treasury auction. Investors are seeking concrete implementation steps, inflation data, and a clearer Federal Reserve policy path before shifting to riskier assets. (FMP)
International relations: On Tuesday, the U.S. Court of Appeals for the Federal Circuit ruled in favor of the White House, granting a short-term stay that allows President Donald Trump’s tariffs to remain in place. Several small businesses had sued, alleging the tariffs exceeded executive authority and caused economic harm. The ruling does not affect tariffs on steel and aluminum. The tariffs, referred to as “liberation day” duties, are impacting input costs, supply chains, and profit margins for businesses. Economists warn the tariffs, intended to reduce the U.S. trade deficit, could trigger a trade war. A 90-day postponement window for trade negotiations closes in July, after which the full tariff package could be automatically reimposed. Market activity reflects uncertainty, particularly in consumer electronics, industrials, and small-cap importers, with spikes in trading volumes preceding market moves. Analysts are monitoring employment numbers, trade balances, and corporate earnings for economic indicators, with data points like import/export prices and GDP revisions signaling potential fallout. The tariffs are expected to remain a significant driver of market sentiment and economic strategy through 2025. (FMP)
International relations: Asian equities advanced on Wednesday, driven by optimism stemming from a preliminary U.S.-China trade framework agreed upon in London. China’s CSI 300 rose 1%, the Shanghai Composite climbed 0.7%, and Hong Kong’s Hang Seng increased by 0.9%, extending Tuesday’s gains. South Korea’s KOSPI surged 0.6% to an 11-month high, with SK Hynix up 3%. Japan’s Nikkei 225 gained 0.4%, while the TOPIX index was flat. Australia’s ASX 200 rose 0.3%, with Johns Lyng Group Ltd soaring 20%. Singapore’s Straits Times Index fell 0.4%, and India’s Gift Nifty Futures dipped 0.1% after a flat Tuesday. Investors are awaiting U.S. Consumer Price Index (CPI) data. (FMP)
International relations: Following trade negotiations in London on Wednesday, the U.S. dollar and Chinese yuan remained largely unchanged. A framework was agreed upon to resolve China’s rare earth export restrictions and ease select U.S. tech export curbs, mirroring a truce reached in Geneva last month. Approval from President Biden and President Xi is required for the framework to proceed. The Euro is down 0.08% to $1.1416, the Yen is steady at 145.05, the Onshore Yuan is flat at 7.1867, and the Offshore Yuan is slightly weaker at 7.1875, near two-week lows. Analysts noted that improving trade relations typically weaken the dollar, but recent trends suggest a potential shift, with investors potentially buying dollars and rotating into U.S. equities. (FMP)
International relations: Markets eye US CPI and ECB comments as DAX falters on tariff rulings and vague US-China trade progress. Forecast eyes 23,750 near-term risk. (FXEmpire)
International relations: Negotiators said the two governments would stick to a previous truce and reduce tensions that had escalated in recent weeks between the world’s largest economies. (NYTimes)
International relations: The U.S. and China have reached consensus on trade, representatives from both sides said after high-level talks in London, according to an NBC transcript. (CNBC)
International relations: The widely-followed investor noted that foreigners invested in the United States could be holding back on committing more capital due to geopolitical concern. (CNBC)
International relations: Moelis’ incoming CEO Navid Mahmoodzadegan told investors on Tuesday that he is optimistic about the dealmaking environment, as confidence returns following a pause in April triggered by U.S. tariff threats. (Reuters)
International relations: Stocks stood flat to modestly higher as investors focused on U.S.-China trade talks and data showing a modest recovery in sentiment at smaller U.S. businesses. (WSJ)
International relations: Any progress is likely to be cosmetic, failing to go to the heart of structural issues, and thus prone to further setbacks. (Barrons)
Policy: Ten deals were announced in May, bringing the total for the first five months of 2025 to 56, which is equal to the number announced during the same period in 2024. Coming into the year, hopes were high that bank M&A would accelerate, with President Donald Trump’s administration expected to pursue more economic friendly policies and deregulation. (Seeking Alpha)
Policy: An extension of the 2017 tax cuts, trade deals, and rate cuts would all send stocks to record highs, says Bellwether Wealth. It’s a big ask, however. (Barrons)
Policy: Despite calls from Trump, current economic data doesn’t justify a Fed rate cut; inflation and employment remain within acceptable bounds. Cutting rates now could backfire, raising long-term yields and worsening inflation, which would hurt rather than help the economy. (Seeking Alpha)
Policy: Deficit will have a minimal near-term impact on the Treasury market, in our opinion. The Treasury market’s strength is its size, depth, and diversified pool of investors. (ETF Trends)
Trade: The S&P 500 climbed 0.3% on Tuesday amid optimism regarding U.S.-China trade negotiations, the first major engagement since May when both nations agreed to temporarily reduce tariffs. Talks focus on rare earth mineral export limits and advanced chip technology restrictions. Citi strategists project the Federal Reserve will maintain interest rates at 4.25%-4.5% through July, then initiate four 25-basis point reductions over the next year, totaling 125 basis points by March. JM Smucker Company (NYSE:SJM) shares fell sharply due to weaker-than-expected earnings, citing trade tensions and rising input costs. Apple (NASDAQ:AAPL) shares rose slightly after its Worldwide Developers Conference, introducing AI-powered features like live phone call translations. Import prices have edged up, potentially reinforcing inflationary pressure ahead of Wednesday’s Consumer Price Index (CPI) release. (FMP)
Trade: According to Capital Economics analysts led by Jonas Goltermann, markets view trade-related risks as “pretty relaxed.” The White House delayed most tariffs until July to facilitate negotiations, following April’s unveiling of “reciprocal” tariffs across multiple countries and a subsequent market tumble in late April. The S&P 500 is currently roughly 2% below its February record high, while the Nasdaq is about 3% below its December peak. May saw the best monthly returns since November 2023, driven by upbeat earnings and subdued inflation. The deadline for re-implementation or extension of tariffs is July, posing a risk of renewed market jitters. (FMP)
Trade: U.S. importers are increasingly relying on customs brokers to keep up with President Donald Trump’s ever-changing trade policies. But booming demand for help in processing foreign goods has made these services more expensive, adding another cost to the tariff burden, industry players told Reuters. (Reuters)
Trade: Researchers are tracking the impact of tariffs on consumer prices in real time — and even as policy gets tweaked, prices are mostly heading higher. (Market Watch)
Trade: China, Mexico, the European Union, Japan, Canada and many airlines and aerospace companies worldwide urged the Trump administration not to impose new national security tariffs on imported commercial planes and parts, according to documents released Tuesday. (Reuters)
Trade: Hang Seng Index rallies as US-China trade talks ease tensions. EV and tech stocks rise while traders eye Beijing’s next move and key 24,500 level. (FXEmpire)
Trade: The appeals court’s decision delivered an important but interim victory for the Trump administration. (NYTimes)
Trade: The US Court of Appeals allows Trump’s tariffs to remain pending further arguments. The court will hear more arguments on July 31, keeping tariffs for at least two months. (Business Insider)
Trade: The court will hear fast-track oral arguments this summer. (WSJ)
Industry
Automotive: General Motors (GM) is investing $4 billion across three U.S. manufacturing facilities in response to slowing electric vehicle (EV) demand and political factors. The Orion Assembly Plant in Michigan will produce gas-powered full-size SUVs and pickup trucks starting in early 2027, shifting from its planned electric truck production. The Fairfax Plant in Kansas will build gas-powered Chevrolet Equinox alongside the all-electric Bolt by mid-2027. The Spring Hill facility in Tennessee will receive a portion of the investment for flexible production. This move aligns with intensifying political pressure and favorable tariffs, including discussions between GM CEO Mary Barra and Trump in March regarding emissions standards. President Trump is expected to sign legislation rescinding California’s 2035 zero-emission rules. GM maintains a 2035 zero-emission goal, but the investment signals a shift towards hybrid strategies. (FMP)
Automotive: With nearly 70% of global rare earth production and more than 90% of processing taking place in China, the world remains heavily reliant on the country for rare earth element supplies. Rare earth elements are a group of 17 minerals, including neodymium, dysprosium and lanthanum, which are used for various applications. (Seeking Alpha)
Banking: TFIN’s Dr. Vinay Nair says the world of finance is facing an AI day of reckoning. (CNBC)
Private Credit: The rapid growth in retail investors, who put their money into private markets, could create liquidity and asset quality risks, Moody’s Ratings warned on Tuesday, highlighting potential vulnerabilities within the private credit sector. (Reuters)
Semiconductors: Qualcomm (NASDAQ: QCOM) has opened an AI research and development centre in Hanoi, Vietnam, focusing on generative and agentic AI for smartphones, PCs, XR, automotive, and IoT. The centre supports Vietnam’s AI, semiconductor, and digital transformation strategies, and received encouragement from Vietnam’s top leader, To Lam, for further expansion of Qualcomm’s semiconductor and infrastructure operations. Investors can analyze Qualcomm’s R&D expenditure, capital spending, and revenue contributions via the Financial Growth Statement Analysis API. Analyst sentiment and ratings, including buy/hold/sell consensus, average price targets, and upside/downside potential, are available through the Company Rating API. Vietnam offers a cost-effective talent pool, aids regional supply-chain diversification, and provides government incentives, including tax breaks and infrastructure support, for semiconductor firms. (FMP)
Semiconductors: Shares of a major Chinese rare-earths company surged after it secured permits from Beijing to export to countries including the U.S., fueling optimism that tensions between Beijing and Washington are de-escalating. (Market Watch)
Corporate
Alphabet Inc: Alphabet Inc. (NASDAQ:GOOGL) is offering voluntary employee buyouts to U.S.-based workers within its Knowledge and Information organization, which includes its Search product and a significant portion of its ads operations. This program, introduced earlier this year, targets employees in the search and advertising divisions and is being extended to “several more teams.” The move comes amid rising competition from AI models like ChatGPT and a recent U.S. antitrust ruling setback that could limit Google’s ability to distribute its search services. Alphabet stock was up 0.9% on Tuesday, after earlier gains exceeded 2%. (FMP)
Apple Inc: Apple’s WWDC 2025 announcements included live phone-call translation, new developer APIs for on-device AI in iOS and macOS, and a UI refresh under the “Apple Intelligence” banner. Investor reaction was negative, with AAPL stock declining by over 17% year-to-date. Analysts labeled the event a “transition year,” highlighting incremental changes rather than major breakthroughs. Wedbush, Evercore ISI, and Barclays noted a lack of significant AI progress, while BofA acknowledged a substantive UI refresh and developer-focused AI strategy. Raymond James indicated better iPhone 16 sales in AI-supported regions, suggesting potential sustained momentum. Volume spikes were observed around WWDC, typical for gauging the tech outlook. (FMP)
GameStop: GameStop reported a 32% drop in hardware and accessories revenue in Q1. The company closed nearly 600 U.S. locations in 2024 and plans “significant” additional closures this year. Despite these declines, GameStop posted a net profit of $44.8 million, compared to a $32.3 million loss a year ago. A Q1 operating loss of $10.8 million was incurred, including $35.5 million in restructuring charges. GameStop sold Electronics Boutique Canada in early May and expects to close the sale of its French operations in FY 2025. The company is utilizing APIs for detailed financial statement analysis, including income statements, balance sheets, and cash-flow data, as well as key performance metrics such as gross margin, operating margin, return on equity (ROE), return on assets (ROA), current ratios, and quick ratios. (FMP)
J.M. Smucker: J.M. Smucker (NYSE:SJM) shares fell over 12% intra-day after issuing a disappointing earnings forecast for fiscal 2026, projecting adjusted earnings per share between $8.50 and $9.50, below the analyst consensus of $10.25. Annual net sales are expected to increase by 2% to 4%. The company anticipates free cash flow of approximately $875 million. In the fiscal fourth quarter, net sales were $2.14 billion, a 3% year-over-year decline, compared to analyst expectations of $2.18 billion. Adjusted operating income was $422.4 million, down 8.5% year-over-year, while adjusted EPS was $2.31, exceeding the $2.25 estimate but lower than last year’s $2.66. (FMP)
Kellanova (NYSE:K): Kellanova (NYSE:K) is launching limited-edition summer snacks across brands including Cheez-It, Pringles, Pop-Tarts, and Eggo. The Kellogg W K Foundation Trust recently sold 114,583 shares at approximately $81.89 each, while still holding 46.36 million shares. Kellanova’s stock currently trades at $81.48, down 0.63% today with a range of $81.40 – $81.63. The 52-week high/low is $83.22/$55.96, with a market capitalization of approximately $28.27 billion and daily trading volume of 3,233,827 shares. Net sales for 2023 were $13 billion, and the company aims to impact 4 billion people by 2030 with equitable food access initiatives. (FMP)
Lockheed Martin: The U.S. Air Force reduced its F‑35 jet order from 48 to 24 aircraft, costing $3.5 billion plus $531 million in advance procurement funds. This reduction follows a directive to slash military spending by 8% over five years. The F‑35 program, estimated at $2 trillion over its lifetime, is Lockheed Martin’s flagship project, and order cuts may compress short-term revenues, strain program margins, and pressure order book visibility. Lockheed Martin, the Pentagon’s largest defense contractor, currently faces scrutiny regarding analyst ratings, including Buy/Hold/Sell breakdowns and upside/downside potential. Despite recent cuts, Lockheed’s F‑35 backlog still represents hundreds of jets, and the company’s diversified portfolio includes missiles, satellites, and naval systems. (FMP)
Nathan’s Famous: Nathan’s Famous today declared its first quarterly cash dividend for fiscal 2026 of $0.50 per share, which is payable on July 1, 2025 to shareholders of record at the close of business on June 23, 2025. (Forbes)
QuantaSing Group Limited: Citigroup’s Alice Cai set a price target of $9.52 for NASDAQ:QSG on June 10, 2025, suggesting a 5.43% upside from a then-trading price of $9.03. As of June 6, 2025, the stock was trading at $9.18, a 32.07% increase ($2.23 change) from its previous price. Today, the stock fluctuated between $7 and $9.38, with $9.38 being its yearly high and $1.47 its yearly low. Trading volume reached 4,194,707 shares. QSG’s market capitalization is approximately $469.18 million. (FMP)
Salesforce (CRM): Salesforce (NYSE: CRM) updated its Slack terms of service on May 29 to restrict third-party app access to Slack messages, enhancing data safeguards and limiting long-term indexing or copying of data. Apps can now read messages in real-time but cannot permanently store them in external databases, and search functionalities are limited due to the lack of persistent indexing. Salesforce’s financial standing remains strong, with available Balance Sheet Statements API data providing quarterly and annual snapshots of total assets vs. liabilities, shareholders’ equity trends, and liquidity ratios. The May 29 policy shift can be reviewed via the SEC Filings API, which delivers latest 8-K and 10-Q disclosures, amendments to terms of service, and related press releases. (FMP)
Tesla Inc: Wells Fargo analysts maintain an Underweight rating and a $120 price target for Tesla (TSLA), citing declining delivery trends. Global deliveries in May decreased by 23% year-over-year (y/y), with Q2 quarter-to-date (QTD) deliveries down 21% y/y. All regions—North America, Europe, and China—experienced double-digit declines, with Europe reporting the largest drop at 42% y/y in Q2 QTD. North American deliveries fell 13% QTD y/y, while China saw a 22% QTD decrease. Order pricing has remained stable over the last 12 months (LTM), but aggressive financing promotions are acting as hidden price cuts, potentially threatening Q2 margins. (FMP)
Tesla Inc: Tesla plans to launch its robotaxi service in Austin, Texas, tentatively on June 22. CEO Elon Musk emphasized a focus on safety, and footage of a driverless black Model Y SUV undergoing testing in Austin was shared. Following the announcement, Tesla shares rose 5.67% in extended trading. The move places Tesla in competition with Waymo, Cruise, and Chinese companies in the autonomous driving market. (FMP)
Tesla Inc / Aptiv / BorgWarner: JPMorgan analysts, on Tuesday, advised investors to sell Tesla (NASDAQ:TSLA) and invest in Aptiv (NYSE:APTV) and BorgWarner (NYSE:BWA). Tesla’s 2025 EPS estimates have decreased by 32% since March 25, following confirmation of 25% sectoral tariffs. Expected termination of EV subsidies could reduce Tesla’s global EBIT by up to 50%. Tesla currently has a price-to-earnings ratio of 141.2x. JPMorgan recommends Aptiv, trading at 9.3x forward P/E, and BorgWarner, at 7.6x, citing their alignment with EV transition and lower regulatory risk. (FMP)
United Natural Foods: United Natural Foods (UNFI) reported a fiscal third quarter with adjusted earnings of $0.44 per share, exceeding the $0.21 estimate. Revenue increased by 7.5% year-over-year to $8.1 billion, surpassing the $7.78 billion forecast. Adjusted EBITDA rose 20.8% year-over-year to $157 million. The company projects fiscal 2025 revenue between $31.3 billion and $31.7 billion and maintains an adjusted earnings per share forecast of $0.70 to $0.90. Despite strong results, shares fell more than 6% intra-day. (FMP)
Wells Fargo: Wells Fargo CFO Mike Santomassimo forecasts a “muted” or declining U.S. consumer loan growth for the remainder of the year. The Federal Reserve recently lifted a seven-year asset cap on Wells Fargo, totaling $1.95 trillion. Factors contributing to softening consumer loans include high interest rates, consumer debt paydowns, and potential economic headwinds from tariffs. This slowdown impacts Wells Fargo’s net interest margin and shifts growth expectations toward commercial and wealth-management divisions. Key banking ratios, including the loan-to-deposit ratio, non-performing loan ratio, and Tier 1 capital ratio, will be affected. JPMorgan CEO Jamie Dimon praised Wells Fargo’s cost management, and Wells Fargo CEO Charlie Scharf plans to focus on credit cards, wealth management, and investment banking for growth. (FMP)
