All Posts in "George"

China’s imports tumble as demand skids, trade war heats up

BEIJING (Reuters) -China’s imports unexpectedly shrank over the January-February period, while exports lost momentum, as escalating tariff pressures from the United States cast a shadow over the recovery in the world’s second-largest economy. The first two months of the year saw the opening salvo of a renewed U.S.-China trade war, with U.S. President Donald Trump imposing an extra 10% levy on Chinese goods, arguing Beijing had not done enough to stem the flow of the deadly opioid fentanyl. That called time on exporters’ efforts to front-load shipments ahead of the curbs while production also slowed as Chinese workers downed tools for the Lunar New Year festival. Analysts say the slump in imports signals Beijing has begun scaling back purchases of key commodities, as it prepares for four more years of gruelling trade tensions with the second Trump administration. “The drop in imports is seen across grains, iron ore and crude oil, and could be related to China’s own consideration of building strategic reserves,” said Xu Tianchen, senior economist at the Economist Intelligence Unit. “China may have imported too many of them in 2024, and needs to scale back the purchase volume,” he added. “This is certainly true for iron ore, as steel production clearly exceeds what is needed by the economy.” Export momentum had up until now been a bright spot for an economy otherwise struggling with weak household and business confidence caused by a prolonged property market debt crisis. Imports fell 8.4% year-on-year, customs data showed on Friday, missing the 1% growth forecast in a Reuters poll of economists and a 1% uptick in December. Exports from the largest manufacturing nation rose just 2.3% over the same period, missing expectations for a 5% increase and slowing from December’s 10.7% gain. China’s customs agency publishes combined January and February trade data to smooth out distortions caused by the shifting timing of the Lunar New Year, which fell between January 28 and February 4 this year. “(Slowing exports) may be partly due to the slowdown of export front loading, which was strong late last year to avoid the trade war,” said Zhang Zhiwei, chief economist at Pinpoint Asset Management. “The sharp decline of imports may reflect both weak domestic demand as well as a decline in imports for processing trade,” he added. “The damage of higher U.S. tariffs on China’s goods will likely show up next month.” Imports by state-owned enterprises shrank 20.6% compared with a 2.7% rise among private firms, the customs data showed, suggesting the world’s largest commodities importer is relying more on stockpiles, given the dominant role of state-backed buyers. China’s crude oil imports fell an annual 5% in the first two months of the year, as tougher U.S. sanctions on ships carrying Russian and Iranian oil took effect. Meanwhile, China saw rare earths imports plunge 24.1% and its copper imports fall 7.2% over the same period. Iron ore imports fell 8.4% over the same period, curbed by weather-related disruptions in major producer Australia. BIGGER PROBLEMS The January-February period ended with Chinese producers anticipating a second wave of U.S. tariffs and Chinese countermeasures, which materialised on March 4, when Trump doubled tariffs on China to 20%. That prompted Beijing to slap 10%-15% retaliatory levies on U.S. agriculture exports and restrictions on 25 U.S. firms just minutes after Trump’s tariffs went into effect. Chinese policymakers have vowed to prioritise boosting consumption and domestic demand over 2025, which Chinese Premier Li Qiang on Wednesday described as “insufficient” and “weak” as he announced an economic growth target of “around 5%” for 2025. “It’s likely that imports will remain soft this year unless we see a stronger than anticipated rebound of consumption and private investment this year,” said Lynn Song, chief economist for Greater China at ING. “It’s likely that after driving growth in 2024, the external environment will be less supportive this year, which puts more pressure on policymakers to improve domestic demand to achieve this year’s 5% growth target,” he added. Chinese officials on Thursday left the door open to further interest rate cuts and another injection of liquidity into the financial system through further reductions in the amount banks are required to hold in reserve. With sluggish household demand and property sector woes weighing on growth, Chinese officials must find alternative export markets for its sprawling industrial sector to ward off deflation. China’s implied GDP deflator is expected at -0.1% in 2025, negative for a third year in a row, which would be the country’s longest deflationary streak since Mao Zedong’s Great Leap Forward in the early 1960s.
George by — March 08, 2025 By George in Business News
February jobs report: US labor market adds 151,000 jobs, unemployment rate ticks up to 4.1%

The February jobs report out Friday offered few surprises for investors, with job gains increasing slightly and the unemployment rate rising to 4.1% amid heightened investor fears over the trajectory of the US labor market and the broader economy. Data from the Bureau of Labor Statistics released Friday showed 151,000 new jobs were created in February, less than the 160,000 expected by economists but more than the 125,000 seen in January. The unemployment rate rose to 4.1% from 4% in the prior month. January’s monthly job gains were revised lower from a previous reading of 143,000. With the Department of Government Efficiency’s (DOGE) job cuts in focus, federal government employment declined by 10,000 in February. RSM chief economist Joe Brusuelas told Yahoo Finance the February jobs report was a “Goldilocks” print. “We know that over the next three to six months, we’re going to see some of the disruptive effects in Washington start to show up in both the economy and in the labor market,” Brusuelas said. “But for now, what this tells us is that we really only need to add about 100,000 to 150,000 jobs a month to keep employment stable. That’s exactly what happened.” Wage growth, an important measure for gauging inflation pressures, rose 4% over the prior year in February, down from the 4.1% seen in January. On a monthly basis, wages increased 0.3%, below the 0.4% seen the prior month. Meanwhile, the labor force participation rate fell to 62.4% from the 62.6% seen in January. “The upshot is that the labour market remains in decent shape and should be able to weather the DOGE-related cull of federal government employees, although we will have to wait until next month to assess the damage,” Capital Economics North America economist Thomas Ryan wrote in a note to clients. The report comes during a week full of whipsaw market action, as investors have digested a string of weaker-than-expected economic data and a consistent flow of tariff headlines from President Trump that have muddled the growth outlook. On Thursday, the Nasdaq Composite (^IXIC) officially entered a correction, as the index is now more than 10% off its mid-December record close, while the S&P 500 (^GSPC) closed at its lowest level of the year. Market bets on Federal Reserve interest cuts moved little following Friday’s release while the three major stock indexes were up slightly. Investors are still pricing in three interest rate cuts for this year, above the range of one or two seen last month, per Bloomberg Data.
George by — March 08, 2025 By George in Business News
US labor market steady, tariffs and federal government layoffs a risk to outlook

WASHINGTON, March 6 (Reuters) – The number of Americans filing new applications for unemployment benefits fell more than expected last week, suggesting that the labor market remained stable in February, though turbulence lies ahead from tariffs on imports and deep government spending cuts.

That was flagged by other data on Thursday showing layoffs announced by U.S.-based employers jumped in February to levels not seen since the last two recessions amid mass federal government job cuts, canceled contracts and fears of trade wars.

“Evidence is mounting that elevated uncertainty about the outlook for federal policies and still-tight monetary policy is pushing redundancies higher,” said Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics.
Initial claims for state unemployment benefits dropped 21,000 to a seasonally adjusted 221,000 for the week ended March 1, the Labor Department said. Economists polled by Reuters had forecast 235,000 claims for the latest week.
The decline reversed the prior week’s surge, which had lifted claims to a two-month high and was blamed on snowstorms and difficulties adjusting the data for seasonal fluctuations around the Presidents Day holiday.
A separate unemployment compensation for federal employees (UCFE) program, which is reported with a one-week lag, showed applications rising to a four-year high of 1,634 from only 614 during the week ending February 15.
Tech billionaire Elon Musk’s Department of Government Efficiency, or DOGE, has fired probationary federal government workers. President Donald Trump has described the federal government as bloated and wasteful.
Shows jobless claims by former federal workers
Shows jobless claims by former federal workers
Global outplacement firm Challenger, Gray & Christmas said it had tracked 62,242 announced job cuts by the federal government from 17 different agencies in February. Most of the layoffs have been in Washington D.C., which has lost 61,795 jobs so far this year compared to only 60 in 2024.
Contractors have also been caught in the DOGE crossfire, extending the job losses to the private sector.
Challenger said the “DOGE impact” was blamed for 63,583 of the announced 172,017 layoffs last month.
Challenger Gray layoffs and jobless claims
Challenger Gray layoffs and jobless claims
For now, the overall labor market continues to plod along.
The Federal Reserve’s “Beige Book” report on Wednesday described employment as having “nudged slightly higher on balance” since mid-January. Labor market stability is critical to the U.S. central bank’s ability to keep interest rates unchanged while policymakers monitor the economic impact of tariffs and an immigration crackdown.
The Fed left its benchmark overnight interest rate unchanged in the 4.25%-4.50% range in January, having reduced it by 100 basis points since September, when it embarked on its policy easing cycle. The policy rate was hiked by 5.25 percentage points in 2022 and 2023 to tame inflation.
The number of people receiving benefits after an initial week of aid, a proxy for hiring, advanced 42,000 to a seasonally adjusted 1.897 million during the week ending February 22, the claims report showed.
Stocks on Wall Street traded lower. The dollar slipped against a basket of currencies. U.S. Treasury yields rose.

RECORD HIGH TRADE DEFICIT

The federal government layoffs are not expected to show up in February’s employment report, due on Friday, as the layoffs happened outside the survey week.
But the hiring and funding freezes could have an impact on government and contractor employment.
Nonfarm payrolls likely increased by 160,000 jobs after rising 143,000 in January, a Reuters survey showed. The unemployment rate is forecast unchanged at 4.0%.
A third report from the Commerce Department’s Bureau of Economic Analysis showed the trade deficit widened 34.0% to an all-time high of $131.4 billion in January as businesses rushed to bring in merchandise ahead of import duties.
The percentage change was the largest since March 2015 and put trade on track to subtract from gross domestic product in the first quarter. Trump this week slapped a new 25% tariff on imports from Mexico and Canada and doubled duties on Chinese goods to 20%, triggering a trade war.
The goods trade deficit with Canada hit a record high in January. The gap widened further with China and rose slightly with Mexico. On Thursday, Trump said Mexico won’t be required to pay tariffs on any goods that fall under the United States-Mexico-Canada Agreement on trade until April 2, as the administration’s trade policy continues to evolve.
Trade balance imports from Canada, China, Mexico
Trade balance imports from Canada, China, Mexico
Imports soared 10.0%, the most since July 2020, to $401.2 billion. Goods imports increased a record 12.3% to an all-time high of $329.5 billion.
They were driven by a $23.1 billion increase in imports of industrial supplies and materials, mostly reflecting finished metal shapes, probably gold.
There were large increases in consumer goods imports like pharmaceutical preparations, cell phones and other household goods. Imports of capital goods including computers, computer accessories and telecommunications equipment also rose. Imports of services climbed $0.4 billion to $71.7 billion.
Exports rose 1.2% to $269.8 billion. Goods exports increased 1.6% to $172.8 billion, boosted by capital goods like civilian aircraft and engines as well as semiconductors and computers. Consumer goods also rose, driven by pharmaceutical preparations and jewelry. But exports of other goods dropped $1.3 billion.
Food exports fell $1.0 billion amid a decline in soybeans. Exports of services increased $0.6 billion to $97.0 billion.
The inflation-adjusted goods trade deficit shot up 27.5% to a record $142.9 billion. This deterioration and decline in consumer spending in January have raised the risk of a contraction in GDP in the first quarter.
But some economists still expect moderate growth, arguing that gold accounted for much of the surge in imports.
Mining.com reported in January traders in London were rushing to ship gold to the U.S. to avoid tariff risks and capture premium prices. Gold imports, not intended for official reserve purposes, are excluded from national accounts.
The Atlanta Federal Reserve is currently forecasting GDP declining at a 2.8% annualized rate this quarter. The economy grew at a 2.3% rate in the October-December quarter.
“Trade will very likely stay in the spotlight this year,” said Oren Klachkin, financial markets economist at Nationwide.
George by — March 07, 2025 By George in World News
US trade deficit hits record high in January on imports surge

WASHINGTON, March 6 (Reuters) – The U.S. trade deficit widened to a record high in January amid front-loading of imports ahead of tariffs, suggesting that trade could be a drag on economic growth in the first quarter.

The trade gap surged 34.0% to an all-time high of $131.4 billion from a revised $98.1 billion in December, the Commerce Department’s Bureau of Economic Analysis (BEA) said on Thursday. The percentage change was the largest since March 2015.

Economists polled by Reuters had forecast the trade deficit soaring to $127.4 billion from the previously reported $98.4 billion in December. President Donald Trump this week slapped a new 25% tariff on imports from Mexico and Canada and doubled duties on Chinese goods to 20%, triggering a trade war.
Imports soared 10.0%, the most since July 2020, to $401.2 billion. Goods imports increased a record 12.3% to an all-time high of $329.5 billion.
They were driven by a $23.1 billion increase in imports of industrial supplies and materials, mostly reflecting finished metal shapes, which are probably gold.
Consumer goods imports rose $6.0 billion, boosted by pharmaceutical preparations, cell phones and other household goods. Imports of capital goods increased $4.6 billion amid rises in computers, computer accessories and telecommunications equipment.
Imports of services rose $0.4 billion to $71.7 billion, lifted by rises in charges for the use of intellectual property and other business services. But travel service imports decreased.
Exports rose 1.2% to $269.8 billion. Goods exports increased 1.6% to $172.8 billion, boosted by a $4.2 billion rise in capital goods that reflected civilian aircraft, semiconductors, computers and civilian aircraft engines. Consumer goods exports increased $1.7 billion, driven by pharmaceutical preparations and jewelry. But exports of other goods dropped $1.3 billion.
Food exports decreased $1.0 billion, pulled down by a $0.8 billion drop in soybeans. Exports of services increased $0.6 billion to $97.0 billion amid gains in financial, telecommunications, computer and information as well as other business and transport services. But exports of government goods and services decreased $0.3 billion.
The deterioration in the trade deficit and drop in consumer spending in January have raised the risk of a contraction in gross domestic product in the first quarter. But some economists still expect moderate growth this quarter, arguing that gold, mostly from Europe, accounted for much of the surge in imports.
The increase in gold imports was seen related to fears of tariffs on the precious metal.
“Most gold imports into the U.S. are unrelated to U.S. production or consumption and instead fluctuate based on demand from gold market participants, so the BEA excludes them altogether from the national accounts,” Goldman Sachs said in a note.
The Atlanta Federal Reserve is currently forecasting GDP declining at a 2.8% annualized rate this quarter. The economy grew at a 2.3% in the October-December quarter.
George by — March 07, 2025 By George in World News
Asian Stocks, Bitcoin Drop on Souring Sentiment: Markets Wrap

(Bloomberg) — Asian stocks followed US equities lower as continual shifts in US President Donald Trump’s approach to tariffs on trade partners whipped up market uncertainty and dented confidence in the economic outlook.

Shares in Australia and Japan tumbled more than 1.5% each while a gauge of Chinese stocks in Hong Kong gained to the highest level since November 2021. An index of the dollar fell for a fifth session, its longest losing streak in almost a year. Bitcoin fell as details of a US strategic reserve underwhelmed.

Traders pointed to uncertainty over Trump’s tariffs. US stocks failed to stage a rebound even after a decision by Trump to delay levies on Mexican and Canadian goods covered by the North American trade deal, underscoring the fragile appetite for risk. Financial markets have whipsawed this week as investors deal with geopolitical uncertainty and conflicting signals from the US about the levies.

“Confusion reigns around the Trump Administration policy agenda,” said Chris Weston, head of research for Pepperstone Group. “While there are few signs of panic, funds and fast-money accounts cut equity risk.”

Wall Street strategists have been debating whether the Trump administration would be swayed on its tariff plans by a decline in equities. The thinking being that Trump will ditch policies if the stock market — which he touts as a report card — drops and rattles investors. Various firms even mapped out how much pain Trump could tolerate in the S&P 500 Index before retreating. That index level became known as “the Trump put,” in reference to a put option.

So far, Trump has given little indication he’ll change course. The president downplayed the reaction to the latest developments, saying “I’m not even looking at the market.” That followed his comments to Congress earlier this week that levies will cause “a little disturbance, but we’re OK with that. It won’t be much.”

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On Thursday, Trump delayed levies on goods covered by the North American trade deal from the two countries until April 2. Later comments from Treasury Secretary Scott Bessent all but confirmed tariffs will be coming. Bessent rejected the idea that tariff hikes will ignite a new wave of inflation, and suggested that the Federal Reserve ought to view them as having a one-time impact.

European stocks have advanced almost 10% this year, as rate cuts and Germany’s plan to raise defense spending boost the market. Meanwhile, a gauge of Chinese stocks listed in Hong Kong has surged almost 23% so far this year on optimism over the nation’s artificial-intelligence adoption drive and expected stimulus from Beijing.

Bitcoin fell after details of a US cryptocurrency reserve emerged and indicated the government will use digital assets forfeited as part of criminal or civil proceedings.

US equity-index futures rose Friday after US chipmaker Broadcom Inc.’s upbeat revenue forecast reassured investors that spending on artificial-intelligence computing remained ongoing, pushing its shares around 13% higher in after-market trading.

The post-hours rally spread to tech companies that were among the hardest hit on Thursday. Nvidia Corp. and Marvell Technology Inc., which plunged during the main session as its outlook disappointed investors, rose after the closing bell.

Treasuries were slightly higher Friday after a muted session on Thursday. The Mexican peso and the Canadian dollar rose on news of the potential tariff reprieve. Australian and New Zealand yields fell early Friday.

In Asia, China’s central government has ample fiscal policy tools and space to respond to possible domestic and external challenges, Finance Minister Lan Fo’an said Thursday on the sidelines of the annual legislative session. The People’s Bank of China will implement a moderately loose monetary policy, Governor Pan Gongsheng said, repeating an earlier pledge to cut interest rates and lower the reserve requirement ratio for lenders at “an appropriate time.”

China’s exports reached a record so far this year as higher US tariffs, and the threat of more to come, drove frontloading of shipments.

Upcoming US nonfarm payrolls data on Friday may help traders identify the path ahead for interest rates, as they grapple with the impact of rocky geopolitics, the impact of tariffs on global growth and the outlook for inflation.

Friday’s report from the Bureau of Labor Statistics will provide an update for Fed officials about momentum in the labor market that’s been the key support — at least until January — of household spending and the economy.

Fed Chair Jerome Powell is slated to speak at a monetary policy forum Friday afternoon. Policymakers next meet March 18-19 and they’re expected to hold interest rates steady as they gauge the labor market and inflation trends as well as recent government policy shifts.

Meanwhile, Fed Reserve Governor Christopher Waller said he wouldn’t support lowering interest rates in March, but sees room to cut two, or possibly three, times this year.

“If the labor market, everything, seems to be holding, then you can just kind of keep an eye on inflation,” Waller said Thursday at the Wall Street Journal CFO Network Summit. “If you think it’s moving back towards target, you can start lowering rates. I wouldn’t say at the next meeting, but could certainly see going forward.”

In commodities, oil was on track for the biggest weekly decline since October while gold was on track for a gain as traders sought havens.

Key events this week:

  • Eurozone GDP, Friday

  • US jobs report, Friday

  • Fed Chair Jerome Powell gives keynote speech at an event in New York hosted by University of Chicago Booth School of Business, Friday

  • Fed’s John Williams, Michelle Bowman and Adriana Kugler speak, Friday

Some of the main moves in markets:

Stocks

  • S&P 500 futures rose 0.3% as of 1:19 p.m. Tokyo time

  • Japan’s Topix fell 1.5%

  • Australia’s S&P/ASX 200 fell 1.8%

  • Hong Kong’s Hang Seng rose 0.6%

  • The Shanghai Composite was little changed

  • Euro Stoxx 50 futures fell 0.7%

Currencies

  • The Bloomberg Dollar Spot Index was little changed

  • The euro rose 0.2% to $1.0808

  • The Japanese yen rose 0.3% to 147.57 per dollar

  • The offshore yuan was little changed at 7.2443 per dollar

Cryptocurrencies

  • Bitcoin fell 2.9% to $87,240.54

  • Ether fell 2.8% to $2,150.98

Bonds

  • The yield on 10-year Treasuries declined three basis points to 4.25%

  • Japan’s 10-year yield was little changed at 1.510%

  • Australia’s 10-year yield declined eight basis points to 4.40%

Commodities

  • West Texas Intermediate crude was little changed

  • Spot gold fell 0.2% to $2,905.89 an ounce

This story was produced with the assistance of Bloomberg Automation.

George by — March 07, 2025 By George in Equities
Occidental Petroleum (NYSE:OXY) shareholders are still up 301% over 5 years despite pulling back 6.3% in the past week

The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But on the bright side, you can make far more than 100% on a really good stock. For example, the Occidental Petroleum Corporation (NYSE:OXY) share price has soared 286% in the last half decade. Most would be very happy with that. On the other hand, the stock price has retraced 6.3% in the last week. But this could be related to the soft market, with stocks selling off around 1.9% in the last week.

While the stock has fallen 6.3% this week, it’s worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company’s share price and its earnings per share (EPS).

During the five years of share price growth, Occidental Petroleum moved from a loss to profitability. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here. Given that the company made a profit three years ago, but not five years ago, it is worth looking at the share price returns over the last three years, too. In fact, the Occidental Petroleum stock price is 21% lower in the last three years. Meanwhile, EPS is up 3.8% per year. It would appear there’s a real mismatch between the increasing EPS and the share price, which has declined -7% a year for three years.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

Dive deeper into Occidental Petroleum’s key metrics by checking this interactive graph of Occidental Petroleum’s earnings, revenue and cash flow.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, Occidental Petroleum’s TSR for the last 5 years was 301%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

A Different Perspective

Occidental Petroleum shareholders are down 24% for the year (even including dividends), but the market itself is up 16%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 32% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Take risks, for example – Occidental Petroleum has 4 warning signs we think you should be aware of.

George by — March 07, 2025 By George in Equities
Wall Street tumbles as tariff whiplash and falling AI stocks drag Nasdaq 10% below its record

NEW YORK (AP) — Wall Street’s sell-off kicked back into gear on Thursday, and a U.S. stock market rattled by the whiplash created by President Donald Trump’s tariffs and uncertainty about the economy fell sharply. The S&P 500 tumbled 1.8% to resume its slide after a mini-recovery from the prior day clawed back some of its sharp drop over recent weeks. The Dow Jones Industrial Average dropped 427 points, or 1%, and the Nasdaq composite sank 2.6% to finish more than 10% below its record set in December. Stocks fell even though President Trump offered a one-month reprieve from his 25% tariffs on many goods imported from Mexico and Canada. That’s unlike the bounce stocks got the prior day from his giving a one-month exemption specifically for automakers. All the moves keep hope alive that Trump may be using tariffs as just a tool for negotiations rather than as a permanent policy and that he may ultimately avoid a worst-case trade war that grinds down economies and sends inflation higher. But Trump is still pressing ahead with other tariffs scheduled to take effect April 2. And the growing pile of dizzying back-and-forth moves on tariffs is only amping up the uncertainty. It was just on Monday that Trump said there was “no room” left for negotiations to avert the tariffs on Mexico and Canada that took effect Tuesday. “These exemptions don’t do much to resolve the general air of uncertainty,” said Yung-Yu Ma, chief investment officer at BMO Wealth Management. “Businesses will still be cautious in the current environment until a lot more of the tariff picture is clear.” U.S. businesses are already saying they’re confronting “chaos” because of all the uncertainty coming out of Washington. while U.S. households are bracing for higher inflation because of the tariffs, which is sapping their confidence. “Much will depend on whether these new tariffs prove temporary or are toned down,” according to strategists at BNP Paribas. “But even if they are ultimately removed, we anticipate lasting damage to global economic activity.” When asked whether his delays on tariffs reflected the slump for the stock market, Trump said Thursday, “I’m not even looking at the market.” He earlier in the Oval Office blamed the falling prices on “globalist countries and companies that won’t be doing as well because we’re taking back things that have been taken from us many years ago.” Next up for Wall Street is a report coming Friday from the U.S. Labor Department on how many workers U.S. employers hired last month. A solid job market so far, along with the solid spending by U.S. households that it’s allowed, have been linchpins in preventing a recession. Economists are expecting to see an accleration in hiring for February. Some big retailers have been offering warning signals recently about how much U.S. consumers can keep spending. Macy’s on Thursday reported slightly weaker revenue for the end of 2024 than analysts expected, though its profit topped expectations. It also gave a forecast for profit in 2025 that fell short of analysts’. Its shares fell 0.7%. It was a similar story for Victoria’s Secret, which beat Wall Street’s fourth-quarter sales and profit forecasts but gave a revenue forecast for the upcoming year that fell short of analysts’ expectations. Its stock fell 8.2%. Making things worse for the U.S. stock market, some of its biggest stars are seeing their glow dim. Semiconductor companies and their suppliers were particularly heavy weights, after soaring to staggering heights because of the frenzy around artificial-intelligence technology. Marvell Technology lost nearly a fifth of its value and dropped 19.8% even though it reported results for the latest quarter that edged past analysts’ forecasts. It also said it expects revenue growth in the current quarter of more than 60% from the prior year, give or take a bit. But that wasn’t enough for investors, who have grown used to AI-related companies trouncing expectations. The poster child of the AI boom, Nvidia, fell 5.7%, while Broadcom lost 6.3% ahead of the release of its earnings report. AI superstars had been dominating Wall Street for years and helped it run to record after record. But those soaring performances, including a nearly 820% surge for Nvidia from 2023 into 2024, had critics saying prices had grown too expensive. They’re also facing threats as Chinese companies develop their own AI offerings, with DeepSeek famously saying it didn’t need to use the industry’s most expensive chips. All told, the S&P 500 fell 104.11 points to 5,738.52. The Dow Jones Industrial Average dropped 427.51 to 42,579.08. The Nasdaq composite tumbled 483.48 to 18,069.26. In stock markets abroad, indexes were mixed in Europe after the European Central Bank cut interest rates, as was widely expected. German stocks rallied 1.5% as the market continues to feel reverberations from an agreement by the two parties that will form the country’s next government to loosen constitutional limits on borrowing. It’s a major turnaround in German budget policy and opens the way for new borrowing and spending over the next decade. Stocks also rose in Asia, including jumps of 3.3% in Hong Kong and 1.2% in Shanghai. China’s commerce minister said Thursday that his country will not yield to bullying and that its economy can weather higher tariffs imposed by Trump, though he added that there are “no winners in a trade war.” In the bond market, the 10-year Treasury yield edged up to 4.29% from 4.28% late Wednesday.
George by — March 07, 2025 By George in Market Watch
Trump says he’s not even looking at stock market, tariffs will make U.S. ‘very strong’

President Donald Trump said Thursday that his administration would not consider stock market reaction when hammering out the details of its tariff policy. When asked whether the decision to pause tariffs on many products from Canada and Mexico for one month was due to the stock market, Trump said the decision had “nothing to do with the market. I’m not even looking at the market, because long term the United States will be very strong with what is happening here.” “This is very much about companies and countries that have ripped off this country, our country, our beloved United States. And they’re not going to be ripping us off any more. So, you know, I think that has an impact on the market,” the president added. Trump made the remarks in the Oval Office on Thursday at an event for signing executive orders. Trump was later asked again about the market sell-off and blamed “globalists,” a term he had used to describe companies and countries earlier in the event. “I think it’s globalists that see how rich our country’s going to be and they don’t like it. Big market out there. But again, they’ve been ripping off this country for years. And they’re going to do great — everyone’s going to do great. But we can’t let this continue to happen to America. Otherwise we’re not going to have a country any longer,” the president said. The comments come as the stock market has struggled in recent days, with the major Wall Street averages heading for a losing week. On Thursday, the Nasdaq Composite closed more than 10% below its recent high, putting the tech-heavy index into correction territory. Some on Wall Street have hoped that Trump, who was seen as friendly to business during his first term and as a candidate, would consider the stock market as something of an approval rating. This idea is sometimes called the “Trump put,” a play on options terminology that suggests the president would keep the stock market from falling too far. However, the Trump administration has continued to take an aggressive posture on trade in recent days even when it has seemingly sparked a sell-off in stocks, and Nomura economists said in a note that the reality of Trump’s first term casts doubt on the “Trump put” idea. Also on Thursday, Commerce Secretary Howard Lutnick said that Trump’s focus was broader than the daily moves of the stock market. “The president wants American growth and American prosperity, OK? And the fact that the stock market goes down half a percent or percent, it goes up half a percent or percent, that is not the driving force of our outcomes,” Lutnick said on CNBC Thursday. “The president is focused on rebuilding America, and you are going to see growth in America. … You’re going to see interest rates drop 1% or more. You’re going to see the stock market explode.”
George by — March 07, 2025 By George in Market Watch
Walgreens is going private in an up to $24 billion deal

Walgreens Boots Alliance is being taken private in a deal valued up to $23.7 billion, following a largely disastrous run on the public markets where its market cap has lost billions and more than 10% of its locations have closed. It brings an end to nearly 100 years as a publicly traded company. After opening its 100th store in Chicago, Walgreens went public the following year in 1927. Private equity firm Sycamore Partners agreed to pay $11.45 a share in cash, according to a statement from Walgreens. Including debt and other potential future payouts, the company said the full value of the deal could reach up to $23.7 billion. Walgreens’ (WBA) shares have lost nearly 80% of their value over the past five years, but have perked up in recent months following reports that the company was in talks to go private. Sycamore specializes in consumer and retail services, and the company said it would continue to operate under its portfolio of brands out of the Chicago area. “While we are making progress against our ambitious turnaround strategy, meaningful value creation will take time, focus and change that is better managed as a private company,” WBA CEO Tim Wentworth said in a statement Thursday. “Sycamore will provide us with the expertise and experience of a partner with a strong track record of successful retail turnarounds.” Similar to rivals CVS and Rite Aid, Walgreens has closed hundreds of stores and struggled with declining prescription reimbursements in recent years, sending its value plummeting to just around $9.5 billion from $100 billion a decade ago. Walgreens has slipped behind CVS because it’s smaller than CVS, giving it less scale to negotiate prices with insurers and other health care entities that pay for most of the prescriptions people pick up. Last October, Walgreens announced it was closing approximately 1,200 locations. About one in seven Walgreens currently open will close its doors by 2027. It currently has around 8,500 locations across the United States. Those closures represent a significant escalation from June 2024, when the company announced it was shutting 300 underperforming locations as part of a multiyear optimization program under CEO Tim Wentworth. At the time, the company had said about a quarter of Walgreens stores were unprofitable, and the chain promised “imminent” changes. Walgreens took over New York-based drugstore chain Duane Reade in 2010. In 2014, it bought the remaining 55% stake in European drug store operator Alliance Boots for $5.3 billion in cash, keeping its corporate offices in the United States. Stefano Pessina, the company’s executive chairman, remains the biggest individual shareholder with a 17% stake. As a key player in the Walgreens Alliance Boots deal, he agreed to reinvest his stake in the company. Selling to private equity “would be an elegant solution for extracting value for investors,” Neil Saunders, managing director of GlobalData, said in a December note. He added that Sycamore could sell off UK chain Boots to “maximize their return.” “Walgreens is a big company with big problems, and this would be a longer-term investment rather than a way to make a quick buck,” Saunders wrote in a note Tuesday. “Cuts would most certainly be on the agenda, but the pathway to grow would be more challenging as the healthcare, pharmacy and retail sides of the business all have inherent problems that are not easily soluble.” Walgreens’ closures come amid a difficult time for drugstore chains, which are being hammered on a few fronts. The chains have struggled in recent years because of lower reimbursement rates for prescription drugs and new competition from Amazon, causing their profits to decline. Unlike its competitors, “Walgreens did not strategically align with a payer, which could have helped to bridge its pharmacy and healthcare segments,” consulting firm West Monroe Director of Healthcare M&A Tyler Giesting said to CNN in an email. CVS had completed its acquisition of health insurer Aetna in 2018. Instead, Walgreens poured into acquisitions like clinics VillageMD, “which required major investments in real estate, technology, and skilled labor,” Giesting said. “Now, I expect there will be strong interest in Walgreens’ healthcare assets, given the increasing focus on value-based care and cost management in the industry.” The front ends of drugstores, where snacks and household staples are sold, also face pressure from larger competitors, including Target. Even Dollar General’s growth has hurt drugstore chains in rural areas. Walgreens Boots Alliance said it expects the transaction to close in the fourth quarter of 2025.
George by — March 07, 2025 By George in Business News
Gap shares spike 17% as retailer blows away expectations again, showing turnaround has staying power

Gap on Thursday posted another quarter that blew away expectations, indicating its turnaround under CEO Richard Dickson is working better – and faster – than Wall Street anticipated. Shares jumped 17% in extended trading Thursday. The apparel retailer behind Old Navy, Banana Republic, Athleta and its namesake banner beat expectations on the top and bottom lines during the all-important holiday quarter and saw comparable sales grow 3%, ahead of expectations of up 1%, according to StreetAccount. Here’s how Gap did in its fiscal fourth quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:
  • Earnings per share: 54 cents vs. 37 cents expected
  • Revenue: $4.15 billion vs. $4.07 billion expected
The company’s reported net income for the three-month period that ended Feb. 1 was $206 million, or 54 cents per share, compared with $185 million, or 49 cents per share, a year earlier. Sales dropped to $4.15 billion, down about 3% from $4.30 billion a year earlier. Like other retailers, Gap benefited from an extra selling week in the year-ago period, which negatively skewed comparisons. In the year ahead, Gap is expecting sales to grow between 1% and 2%, in line with expectations of up 1.7%, according to LSEG. For the current quarter, its guidance was slightly weaker than anticipated. It’s expecting sales to be “flat to up slightly,” compared to Wall Street estimates of up 1.5%, according to LSEG. “We’ve been operating in a highly dynamic backdrop for the last few years, and we’re expecting the same for fiscal 2025,” said Gap’s finance chief Katrina O’Connell on a call with analysts. “As a result, we’ve taken a balanced view with our guidance and remain focused on controlling the controllables.” Like other retailers caught in the midst of President Donald Trump’s trade war with China, Canada and Mexico, Gap has been working to figure out the impact new duties will have on the company. In an interview with CNBC, Dickson said less than 1% of its product comes from Canada and Mexico, combined, and less than 10% comes from China. When asked if the company will raise prices, Dickson said the “goal is to minimize the impact to the consumer.” “We’re going to be working with our suppliers. We’re looking at our cost base, and we’ll need to balance that with always protecting the structural economics of the business,” said Dickson. O’Connell added tariffs, as they stood on Thursday, were embedded into the company’s guidance and said any impact to margin is expected to be “relatively minimal.” It’s been about a year and a half since Dickson took over as Gap’s CEO. Under his direction, the company has gotten back to growth and repaired its brand image — and in fiscal 2024, delivered its highest gross margin in more than 20 years at 41.3%. The former Mattel executive, credited with reviving the Barbie empire, has brought that same prowess to revitalizing Gap’s brands. After a fourth straight quarter of strong results, it appears the strategy has staying power. Apparel from Zac Posen, Gap’s creative designer, has been worn recently by celebrities like Timothee Chalamet, and even the company’s underperforming Banana Republic brand has returned to growth. Its athleisure brand Athleta is still strugging, but the company has stabilized the bleed and it’s no longer shrinking. Here’s a closer look at how each brand performed during the quarter.

Old Navy

Gap’s largest brand by revenue saw sales of $2.2 billion, with comparable sales up 3%, topping of expectations of up 0.7%, according to StreetAccount. The brand saw strength in denim and activewear.

Gap

The namesake banner’s comparable sales grew 7%, well ahead of estimates of up 0.8%, according to StreetAccount. “Gap is back in the cultural conversation,” said Dickson on the call. “This brand was built on strong product narratives with brilliant marketing expressed through big ideas, and over the past year, each of these were reignited.” The brand’s longtime chief product officer Chris Goble left Gap in October for Dickie’s, but the company filled the position internally after he left. Dickson told CNBC in an interview that the brand has “great leadership” and is “staffed with extraordinary talent.”

Banana Republic

The safari chic, officewear brand saw comparable sales grow 4%, when analysts expected them to shrink by 1.5%, according to StreetAccount. It continued to build strength in men’s apparel but is still without a CEO. Dickson expects the company to have an update on the role “shortly.” In the year ahead, Gap will close 35 stores on a net basis, the majority of which will be Banana stores, the company said.

Athleta

The athleisure brand’s comparable sales fell 2% during the quarter after it failed to offer the right types of products necessary for its core consumer, explained Dickson. Analysts didn’t have expectations for Athleta’s comparable sales. “We certainly have entered the cultural conversation again, and it reinforces that we do believe in this brand. We have long-term opportunities, but we do have work to do to reset the brand,” said Dickson. “In the fourth quarter, very specifically, you know, we needed to do more to excite our core consumer during the holiday period, we did a good job attracting new consumers. We did a great job reactivating customers, but we lacked the depth of product interest for our core customer at that holiday time.”
George by — March 07, 2025 By George in Business News
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