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Investors brace for Fed’s upcoming rate decision (0:28), Taiwan dollar surges (2:08), and Tyson Foods (TSN) skips mention of tariff or economic pressures (3:50).
Transcript
Stock index futures were in the red on Monday, as investors turned their focus to the Federal Reserve’s rate cut decision slated to come this week.
S&P 500 futures (SPX) -0.9%, Nasdaq 100 futures (US100:IND) -0.9%, and Dow futures (INDU) -0.7%.
The 10-year Treasury yield (US10Y) was flat at 4.32%. The 2-year yield (US2Y) fell 2 basis points to 3.82%.
Wall Street on Friday posted its longest daily win streak in over two decades. Further signs of thawing on trade between the U.S. and China, along with a stronger-than-expected jobs report, buoyed sentiment.
“Recapping last week in detail, risk assets continued to recover, driven by more encouraging signals on tariffs as well as better than expected U.S. economic data,” Deutsche Bank’s Peter Sidorov said.
The Fed will release its interest rate decision on Wednesday. The decision comes at a time when U.S. President Donald Trump has been urging for lower rates.
Trump had, however, said he doesn’t have any intention of removing Fed Chair Jerome Powell, even as he continues to publicly criticize Powell over interest rate policy.
The Fed is widely expected to maintain current interest rates during its policy meeting this week in Washington.
“These (Fed and BoE decisions) come as markets have largely shaken off the tariff-driven stress of the past few weeks, as rising optimism on tariff de-escalation and Friday’s solid U.S. payrolls print brought the S&P 500 back above its pre-Liberation Day level,” Sidorov added.
Investors await the Fed’s Wednesday policy decision. There is little expectation of a rate change. Preliminary April employment data showed reasonable strength, although some areas of job growth (e.g., trucking) are clearly vulnerable as import volumes slow, UBS’ Paul Donovan said.
On tariffs, Trump announced a sweeping 100% tariff on all movies produced outside the U.S., citing the need to protect a “dying” American film industry.
The Taiwan dollar jumped 8% against the U.S. dollar in two days, an unprecedented surge and another sign that investor demand for the U.S. dollar is weakening amid the trade turmoil triggered by tariffs President Donald Trump announced on April 2.
Trade is crucial to Taiwan, the dominant exporter of high-end computer chips to both China and the U.S. A stronger Taiwan dollar makes the island’s products more expensive for U.S. importers, but makes U.S. exports to Taiwan less expensive.
On April 2, Trump announced a 32% tariff on Taiwanese goods.
At the same time, global investors are looking to other currencies as an alternative to the U.S. dollar, the global reserve currency that has long been seen as a so-called “safe haven.” In the past month, the Taiwan dollar has climbed 23% against the greenback.
The move in the Taiwan dollar followed the end of trade talks between the U.S. and Taiwan, Reuters reported. The sudden strength is seen as occurring with the tacit approval of its central bank, the report said.
Taiwan’s central bank said on Monday that the U.S. hasn’t pressured Taiwan to boost the value of its dollar. Rather, it attributed the volatility to foreign fund inflows and companies’ expectations of a stronger Taiwan dollar, according to the Reuters report.
The markets see it differently. “Hot money is coming into Taiwan, and the central bank is allowing it,” one Taiwanese financial industry executive told Reuters. “Many are saying that’s due to pressure from the U.S. I would say that must be the case.”
In another sign of Taiwan strengthening amid the trade turmoil, the iShares MSCI Taiwan ETF (NYSEARCA:EWT) gained 5.1% in the past month, compared with the S&P 500’s 0.3% increase.
Tyson Foods (NYSE:TSN) said it delivered another solid quarter with growth in both sales and adjusted operating income, driven by strong execution across the business. The company highlighted that its consistent focus on operational excellence, winning with customer and consumers, leveraging data and digital, and enhancing its financial strength has now resulted in four consecutive quarters of year-over-year improvements in the company’s top and adjusted bottom lines.
Revenue was flat from a year ago at $13.1 billion for the quarter that ended on March 29. Average pricing was up 2.6% during the quarter, led by an 8.2% increase in beef prices and 4.3% rise in pork prices. Volume was up in the chicken business (+2.6%), but fell in the bee, pork, prepared food, and international parts of the business.
Adjusted operating margin rose to 3.8% of sales from 3.1% a year ago. Adjusted EPS was reported at $0.92 vs. $0.82 consensus and $0.62 a year ago.
Notably, Tyson Foods (NYSE:TSN) did not mention “tariffs” or “economic pressures” with its earnings update.
“Looking ahead, our diversified multi-channel, multi-protein portfolio positions us well to capitalize on consumer demand for high-quality protein and deliver continued value to our shareholders,” stated CEO Donnie King. Tyson Foods (TSN) reaffirmed FY25 guidance for revenue growth of +0 to +1%. The Arkansas-based company expects capital expenditures between $1.0 billion and $1.2 billion for fiscal 2025. Capital expenditures were noted to include investments in profit improvement projects, as well as projects for maintenance and repair.
Shares of Tyson Foods (TSN) fell 2.3% in premarket action to $59.41 vs. the 52-week range of $53.61 to $66.88.
In other news, as we mentioned on Wall Street Brunch yesterday, big announcement shook the financial world over the weekend as investing legend Warren Buffett announced he would step down as CEO of Berkshire Hathaway.
Oil falls on OPEC+ output boost; Saudis threaten more hikes.
Companies reporting today include Palantir (PLTR) and Ford (F).
Editor’s Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.
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