Aurelia Butler

Tariff policies are expected to be a major determinant for retail stock performance, with the candidates offering divergent approaches. Former President Trump has proposed imposing tariffs of 10-20% on most imports, with specific levies on Chinese imports that could reach as high as 60%. This rhetoric has already stirred concerns across consumer companies, especially those heavily reliant on imports from China. The ability of companies to absorb or pass on these increased costs varies, making the election outcome a pivotal factor for many retail stocks.In contrast, Kamala Harris is expected to maintain policies more aligned with the Biden administration, which has already increased tariffs on select products such as steel and aluminum. The exact stance on broader tariffs remains unclear but is likely to offer more continuity than disruption. Wells Fargo analysts warn that any escalation in tariffs could further strain geopolitical relationships, particularly with China, exacerbating uncertainties for U.S. companies that depend on Chinese imports. Key retailers such as Dollar Tree (NASDAQ:DLTR) and Five Below (NASDAQ:FIVE) are noted as being particularly vulnerable due to their reliance on fixed pricing and limited ability to adjust for rising import costs.Taxes also play a crucial role in shaping the future landscape for both corporate profits and consumer spending. Trump has pledged to reduce the corporate tax rate from 21% to 20%, with an even lower 15% rate for domestic manufacturers. Harris, on the other hand, has proposed raising the corporate tax rate to 28%, a move that would unwind much of the tax relief introduced under the Trump administration’s Tax Cuts and Jobs Act. Wells Fargo analysts note that while higher taxes under Harris may pose challenges for large corporations, small businesses could benefit from her plan to expand the small business tax deduction from $5,000 to $50,000. This could potentially create competitive shifts in sectors like retail and food service.On the individual tax front, both candidates offer proposals that could impact consumer spending, particularly among lower-income households. Harris has suggested expanding the Earned Income Tax Credit and restoring elements of the American Rescue Plan’s Child Tax Credit expansion. Meanwhile, Trump has floated a range of ideas, including the removal of taxes on tips, overtime pay, and social security. Wells Fargo suggests that low-income consumers, who often have lower savings rates, would likely benefit from these proposals, driving increased spending in sectors like retail and food services. Stocks such as Walmart (NYSE:WMT) and Dollar General (NYSE:DG), which cater to lower-income consumers, could see positive outcomes if stimulus measures are enacted.Going forward, corporate tax changes could have a direct impact on stock earnings. For example, under Harris’ proposed tax increase, earnings estimates for some companies could decline by as much as 10%, while Trump’s lower corporate tax rate would provide a smaller, yet positive, boost to earnings. The outcome of the election will not only affect taxes and tariffs but also influence broader policies on housing, labor, and energy, all of which could further sway consumer spending and corporate profitability. More

Citi’s simulation specifically examines the effect of a 10 percentage point increase in tariffs on imports from several of the US’s key trading partners, including Canada, China, Japan, Mexico, Taiwan, South Korea, the UK, and the European Union. This collective group represents approximately 77% of total US imports. Although the hypothetical tariff increase aims to reduce trade imbalances, Citi’s findings suggest that the broader economic consequences are far more complex, affecting global trade flows, inflation, and long-term output levels.The immediate effect within the United States is a sharp, temporary economic slowdown. Citi projects that US output would dip by 0.7% below the baseline within six to nine months following the tariff hike.Inflation would spike, with core consumer prices increasing by 0.6%, primarily due to higher import costs. However, the Federal Reserve is expected to quickly pivot its focus to supporting growth as inflation pressures fade, allowing for a recovery. By three years after the tariff implementation, US output is projected to return to baseline levels, and the economy would eventually continue growing along its long-term trend.Outside the United States, however, the consequences appear more lasting. Global output, excluding the US, would see a permanent loss, leaving the overall global economy 0.3% smaller than it would have been without the tariffs. Growth in the rest of the world would resume roughly two years after the shock, but the output losses during that period would not be fully recovered. Notably, the global trade growth would also slow down, reflecting a less integrated global economy. This deceleration flags the broader, long-term effect of tariffs in fragmenting international trade networks.Citi’s model illustrates that while such tariffs may yield marginal improvements in the US trade balance (about 0.2% of GDP over time), the policy falls short of achieving substantial corrections in trade imbalances. This limited impact is largely offset by a stronger US dollar, which diminishes the potential gains from reduced imports. Moreover, Citi notes that the scenario analyzed does not account for retaliatory measures from other countries, which are a likely real-world consequence of such a protectionist move.  More

China’s Vice Minister of Finance Liao Min also introduced about the basket of stimulus policies the world’s second largest economy rolled out recently during Friday’s meeting, the sixth of its kind, with U.S. Treasury Undersecretary Jay Shambaugh, the ministry said in a statement. Liao, in the U.S. capital for the annual meetings of the International Monetary Fund and the World Bank, also held a courtesy talk with Treasury Secretary Janet Yellen after the Economic Working Group meeting. More

WASHINGTON/TAIPEI (Reuters) -The United States has approved a potential $2 billion arms sale package to Taiwan, the Pentagon said on Friday, including the delivery for the first time to the island of an advanced air defense missile system battle tested in Ukraine.The United States is bound by law to provide Chinese-claimed Taiwan with the means to defend itself despite the lack of formal diplomatic ties, to the constant anger of Beijing.China has been stepping up military pressure against Taiwan, including holding a new round of war games around the island last week, the second time it has done so since Lai Ching-te took office as Taiwan’s president in May.The Pentagon’s Defense Security Cooperation Agency said the new sale consisted of $1.16 billion in missile systems and radar systems worth an estimated $828 million. The principal contractor for the missile system will be RTX Corp, the Pentagon said.”This proposed sale serves U.S. national, economic, and security interests by supporting the recipient’s continuing efforts to modernize its armed forces and to maintain a credible defensive capability,” it said in a statement. “The proposed sale will help improve the security of the recipient and assist in maintaining political stability, military balance, and economic progress in the region.”The missile system sale is for three National Advanced Surface-to-Air Missile System (NASAMS) medium-range air defense solutions that includes the advanced AMRAAM Extended Range surface to air missiles, it added.The NASAMS system has been battle tested in Ukraine and represents a significant increase in air defense capabilities that the United States is exporting to Taiwan as demand for the system surges.A U.S. government source told Reuters on condition of anonymity that NASAMS was a new weapon for Taiwan, with Australia and Indonesia the only others in the region currently operating it. Taiwan’s defense ministry welcomed the announcement, noting the “proven” use of NASAMS in Ukraine and saying it would help Taiwan’s air defense capabilities in the face of China’s frequent military maneuvers.Taiwan’s military is bolstering its armaments to be able to better face any attack from China, including building its own submarines to defend vital maritime supply lines.China detests Lai as a “separatist” and has rebuffed his repeated calls for talks. Lai rejects Beijing’s sovereignty claims saying only Taiwan’s people can decide their future.China’s government on Saturday kept up its attacks on Lai, denouncing comments he made on Friday on a sensitive frontline island about how no “external force” can change Taiwan’s future.”There can be no future for ‘Taiwan independence’. The future of Taiwan lies in the complete reunification of the motherland,” China’s Taiwan Affairs Office said in a statement. More

Lula underwent fresh medical exams on Friday, which showed he is in “stable” condition after a fall that caused trauma to the back of his head, requiring stitches and resulting in a small brain hemorrhage.Lula’s office said on Friday morning he would not take part in the ongoing COP16, while later in the day it told Reuters his participation at COP29 next month was also canceled.Lula had already been forced to cancel a trip to Russia for a summit of the BRICS group of major emerging markets.According to a medical report, Lula is cleared to perform his duties in Brasilia and will undergo new tests within five days. The leftist leader was scheduled to travel on Monday to Colombia. More

ROME/WASHINGTON (Reuters) – Leaders of the Group of Seven wealthy democracies on Friday reached consensus on delivery of some $50 billion in loans to Ukraine backed by the earnings from frozen Russian sovereign assets starting as early as December.”These loans will be serviced and repaid by future flows of extraordinary revenues stemming from the immobilization of Russian Sovereign Assets,” the G7 statement said. “Our aim is to begin disbursing the funds by the end of the year,” said the statement, which was released as global finance chiefs were meeting in Washington for the International Monetary Fund and World Bank annual meetings.An accompanying statement from G7 finance ministers said that the loans would be disbursed through a series of bilateral loans, starting as soon as Dec. 1 and continuing through the end of 2027 “in installments that will reflect Ukraine’s urgent financing needs.”Each bilateral loan would enter into force no later than June 30, 2025, which provides some timing flexibility for G7 members to arrange details. The statement announcing the principles and some technical details did not provide specific amounts for the bilateral loans but said additional details will be issued in a term sheet to be distributed in coming days.ELECTION TIMINGThe U.S. on Wednesday announced it would give Ukraine a $20 billion loan during December, timing meant to shield the loan funds from a potential claw-back should Republican presidential candidate Donald Trump win the November U.S. election. Trump has vowed to “get out” of Ukraine’s war with Russia. The next U.S. president would not take office until January.Another $20 billion loan is expected to come from the EU, home to G7 members Germany, France and Italy, with the remaining $10 billion split between Canada, Britain and Japan.”We will stand by Ukraine for as long as it takes,” the finance ministers’ statement said.The loans will be disbursed through multiple channels, including a Macro-Financial Assistance Loan from the EU, the IMF’s Multi-Donor Administered Account for Ukraine and a newly created Financial Intermediary Fund for Ukraine at the World Bank, the statement said.G7 PLEDGE Friday’s announcement of the “extraordinary revenue acceleration loans” makes good on an easement reached in June by G7 leaders during their annual summit in southern Italy to harness earnings from frozen Russian assets to aid Ukraine, a deal that left many technical details to be hammered out.Some 260 billion euros ($280.62 billion) in Russian assets such as central bank reserves were frozen under sanctions imposed following Moscow’s invasion of Ukraine in February 2022.The vast majority of those assets are held in Euroclear, a Belgium-based central securities depository, making the European Union a key player in any plan to make use of the assets.”The G7 remains steadfast in its solidarity to support Ukraine’s fight for freedom, and its recovery and reconstruction,” the G7 leaders’ statement said, adding that “time is not on (Russian) President Putin’s side.”($1 = 0.9265 euros) More

Speaking at an event hosted by Itau on the sidelines of the IMF and World Bank annual meetings, Campos Neto said worries about the U.S. inflation outlook were heightened by growing market bets that Republican Donald Trump would beat Democrat Kamala Harris.He said both U.S. campaigns include fiscal expansion elements. Proposals for protectionism and shifts in immigration policy also could have inflationary implications, he added.Regarding Brazilian inflation, he said the latest figure was marginally worse, but called the government’s announcement on Friday of lower energy tariffs in November good news that led many economists to revise estimates. Consumer prices reached 4.47% in the 12 months to mid-October, compared to a 3% official target with 1.5 percentage points tolerance margin either side. He reiterated that the country needs positive and structural fiscal developments to reverse the recent increase in risk premiums, highlighting the prospect of such announcements following municipal elections at the end of this month.According to Campos Neto, much of the risk premium in the yield curve is currently tied to fiscal concerns, but Brazil’s public accounts situation is not worse than that of many other countries, with long-term interest rates showing prices inconsistent with fundamentals.Campos Neto said the central bank remained determined to pursue its inflation target.The bank’s upcoming policy meeting is scheduled for Nov. 5-6. Economists expect an accelerated rate hike of 50 basis points, following a 25 basis-point increase in September that raised the interest rate to 10.75%. More