(Boursier.com) — Wall Street attempted a rebound before market trading this Tuesday, with the S&P 500 gaining 0.5%, the Dow Jones 0.3% and the Nasdaq 0.6%. The markets appreciate the latest rumor concerning the Trump 2.0 administration, which could consider a very gradual increase in customs tariffs in order to limit the impact on prices. In addition, the producer price index in the United States was a rather pleasant surprise… On the Nymex, a barrel of WTI crude lost 0.7% to $76.7. An ounce of fine gold gains 0.1% to $2,668. The dollar index lost 0.3% against a basket of currencies.
The trend had been extremely feverish for several days, on fears linked to inflation and tight bond yields, accentuated by concerns relating to a possible trade war initiated by the new Trump administration. Donald Trump’s economic team would, however, discussa gradual increase in customs tariffs month after montha gradual approach aimed at increasing trading leverage while helping to avoid rising inflation, according to people familiar with the matter cited by Bloomberg. One idea involves a sliding scale of rates increasing by approximately 2% to 5% per month, and would rely on executive authorities under the ‘International Emergency Economic Powers Act’. The proposal has not yet been presented to Trump, Bloomberg’s sources said.
Advisers working on the plan include Treasury Secretary nominee Scott Bessent, Kevin Hassett, who will become director of the National Economic Council, and Stephen Miran, named to head the Council of Economic Advisers, the sources said. agency, who requested anonymity to discuss these internal deliberations.
One week before the inauguration, economists are struggling to measure the extent of customs measures and their impact on the economy and inflation. During the 2024 presidential campaign, Trump indicated his intention to impose minimum tariffs of 10 to 20 percent on all imported products, and 60 percent or more on shipments from China. Since his electoral victory in November, the media and financial markets have questioned the level of aggressiveness of these customs duties. Denying a recent press report, Trump recently clarified that the deployment of customs tariffs would be measured.
Moreover, the American producer price index for December 2024 was up 0.2% month-on-month and 3.3% year-on-yearagainst a FactSet consensus of +0.3% compared to November and +3.4% year-on-year. Excluding food and energy this time, the American ‘PPI’ for December is… stable from one month to the next and increased by 3.5% over one year, against respectively +0.2% and +3.8 % consensus.
The December consumer price index expected Wednesday at 2:30 p.m. should constitute the big economic meeting of the week. The consensus is +0.3% compared to November and +2.8% year-on-year, or +0.2% and +3.3% excluding food and energy. The New York Fed’s Empire State manufacturing index for the month of January will also be revealed at 2:30 p.m. (consensus -2). The US Department of Energy’s weekly report on domestic oil inventories, for the week ending January 10, will be revealed at 4:30 p.m. The Fed’s economic Beige Book, a summary of regional conditions, is finally due at 8 p.m. Wednesday.
On Thursday, American economic news will be busy again, with weekly unemployment claims for the week ending January 11 (2:30 p.m., consensus 214,000), retail sales for December (also 2:30 p.m., consensus +0.6% of a month on month, +0.5% excluding automobiles, +0.4% excluding automobiles and gasoline). The Philadelphia Fed manufacturing index for January will be known at the same time (consensus -4). Import and export prices for December will also be communicated at 2:30 p.m. (consensus -0.4% for import prices compared to November). Business inventories and sales, as well as the U.S. housing market index, will be announced at 4 p.m.
Finally, on Friday, operators will follow housing starts and building permits for December (2:30 p.m.), as well as American industrial production figures for the same month (3:15 p.m.).
On the Fed side, Jeffrey Schmid and John Williams speak today, while Thomas Barkin, Neel Kashkari, John Williams and Austan Goolsbee speak tomorrow. Officials of the American central bank have in recent days minimized the risk of a resurgence of inflation, still pleading for monetary easing – at an admittedly more moderate pace. According to the CME Group’s FedWatch tool, the Fed should opt for a monetary status quo at the end of the next three meetings (January, March and May), and even perhaps again in June and July. The tool indicates that rates should only fall by 25 basis points this year (probability of 40.7%), with the hypothesis of a status quo throughout the year (31.2%) being even more than possible. On the bond markets, the yield on the 10-year T-Bond remains tight at 4.79%, compared to almost 5% on the ’30-year’.
Regarding the quarterly publications of companies listed on Wall Street, KB Home announced last night, while the serious things begin tomorrow with JP Morgan Chase, Wells Fargo, BlackRock, Citigroup, Charles Schwab, Kinder Morgan and Bank of New York Mellon. TSMC, UnitedHealth, Bank of America, Morgan Stanley, PNC Financial, US Bancorp, M&T Bank, JB Hunt and First Horizon, announced Thursday. Truist Financial, Schlumberger, Fastenal, State Street, Huntington Bancshares and Regions Financial, report Friday.
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Meta / Alphabet / Apple / Amazon. The European Commission is reportedly reassessing its investigations into US tech giants including Apple, Alphabet (Google) and Meta, according to the Financial Times. US tech giants have urged US President-elect Donald Trump to challenge the European Union’s regulatory oversight of them, and the implications of Trump’s election victory would have been a factor in the review without to have triggered, according to an FT source. The review could lead Brussels to reduce or change the scope of investigations and will cover all cases launched since March 2024 under the EU’s Digital Markets Regulation (DMA), according to Financial Times sources. The DMA regulation dictates to large platforms what they can and cannot do and can impose fines of up to 10% of annual turnover. It took effect in 2022 to limit the overwhelming power of big tech companies.
According to the FT, all decisions and potential fines would be suspended while the review is completed, but technical work on the cases will continue. European regulators are now awaiting political guidance to make final decisions on the Apple, Google and Meta cases, according to the FT.
Alphabet. Britain’s Competition and Markets Authority (CMA) has said it will investigate Google’s search services, using its new powers to determine their impact on consumers and businesses, including advertisers, publishers and search engines. competitors. The British antitrust regulator has new powers to examine big technologies. “Millions of people and businesses rely on Google’s search and advertising services, with 90% of searches carried out on their platform and more than 200,000 British businesses advertising there,” summarizes the head of the CMA, Sarah Cardell. “It is our duty to ensure that people benefit fully from choice and innovation in research services and get a fair deal,” insists the leader.
Chinese authorities, meanwhile, are weighing a potential option that would involve Elon Musk acquiring TikTok’s U.S. operations if the company fails to fend off a ban on the short-video app, according to people familiar with the matter cited by Bloomberg. Chinese officials would prefer TikTok to remain owned by ByteDance, and the group is challenging the looming ban with an appeal to the U.S. Supreme Court. However, the judges indicated during the proceedings on January 10 that they would uphold the law. Senior Chinese officials had already begun debating contingency plans for TikTok as part of a wide-ranging discussion about how to work with Donald Trump’s administration, one of which involves Musk, Bloomberg’s sources said , asking not to be identified.
A possible deal with one of Trump’s closest allies holds some appeal for the Chinese government, which is expected to have a say in the possible sale of TikTok, the agency sources said. Musk has already spent more than $250 million to support Trump’s re-election and has been tapped to play a leading role in improving government efficiency. According to a scenario discussed by the Chinese government, X, Musk’s platform (formerly Twitter) would take control of TikTok US…
United Rentals announced its intention to acquire its small rival H&E Equipment Services in a transaction valued at $4.8 billion. The offer presents a nice premium of more than 100% on H&E prices last night on Wall Street. Under the terms of the definitive agreement, United will acquire H&E for $92 per share in cash. The deal includes H&E’s $1.4 billion in net debt. The purchase price represents a multiple of 6.9 times Adjusted Ebitda for the 12 months ended September 30, 2024. The combination is expected to generate approximately $130 million in annualized cost synergies within 24 months of closing, primarily in the areas of overhead and business operations. The acquisition is expected to be accretive to United Rentals’ adjusted earnings per share and free cash flow generation during the first year following closing.
KB Home takes 13% before market, while the American real estate developer beat the consensus in the fourth quarter and delivered rather solid 2025 guidance. For the closed quarter, net profit represented $191 million and $2.52 per share, compared to a consensus of $2.45. Revenues were $2 billion versus the consensus of $1.99 billion. For the financial year, net profit was $655 million and revenues totaled $6.93 billion.
