Politics

Harris Would Boost the Economy Say Goldman Sachs

They site Trumps Tariffs among other things for reasoning.

Some good news for the Kamala Harris campaign, while in the midst of a Presidential Election that could be most influenced by their impact on the economy… Goldman Sachs proclaims that Harris would provide the greater economic boost of the two candidates.

In a note released on Tuesday, Goldman Sachs said that the biggest boost would come in the next two years under Democratic leadership (both in the White House and Congress). Meanwhile, Goldman Sachs believes that under a Republican sweep, or even with a divided government led by Donald Trump, economic output would take a hit next year - mostly from increased tariffs on imports and tighter immigration policies.

The expectation is that Trump would increase tariffs on auto imports from China, Mexico and the European Union, which Goldman Sachs believes would raise core inflation.

The note read: "We estimate that if Trump wins in a sweep, or with divided government, the hit to growth from tariffs and tighter immigration policy would outweigh the positive fiscal impulse, resulting in a peak hit to GDP growth of -0.5pp in 2025H2 that abates in 2026."

It continued: "If Democrats sweep, new spending and expanded middle-income tax credits would slightly more than offset lower investment due to higher corporate tax rates, resulting in a very slight boost to GDP investment due to higher corporate tax rates, resulting in a very slight boost to GDP growth on average over 2025-2026."

The note also hypothesized that job growth would be stronger under a Democrat (Harris) than a Republican (Trump). 

They predicted that under Harris, job growth would be 10,000 a month higher than if Trump wins with a divided government, and 30,000 higher than with a Republican sweep.

Just one source’s opinion, but maybe one that proves vital during a tight race, where economic impact could prevail as the deciding factor come November. 

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Tech

Nvidia’s Wild Ride

The little engine that has kept the market afloat takes a hit.

It has become a rollercoaster ride for the stock market’s top dog, Nvidia. 

Part of which is due to the subpoena the company reportedly received from the Department of Justice, according to Bloomberg, as part of an antitrust investigation. This news led to a 2% drop after the company had already plunged more than 9% in regular trading this week.

With this, $279 billion of value was wiped off of Nvidia on Tuesday alone, which was the biggest one-day market capitalization drop for a U.S. stock in history! The previous record was dubiously held by Meta (parent company of Facebook), which suffered a $232 billion tumble in value in a single February day back in 2022. Ouch.

This impact was also felt throughout the chip-making world, as memory chip maker SK Hynix (which provides chips to Nvidia) slid 8%, Samsung shares closed 3.5% lower, Tokyo Electron dropped 8.5%, equipment supplier Advantest shed nearly 8%, SoftBank Group (which owns a stake in chip designer Arm) fell 7.7% and Taiwan Semiconductor Manufacturing Company (which manufactures processing units for Nvidia) declined more than 5%. Furthermore, Taiwan’s Hon Hai Precision Industry (a strategic partner of Nvidia) dropped 3% and ASML (which makes critical equipment to manufacture the chips) dropped 5%. 

You get the idea: everyone associated with Nvidia also suffered in this spiderweb of declines. The news also caused some more concern for many in regards to the actual health of the U.S. economy, after Nvidia had previously carried the stock market to great heights. Is this balking at the AI takeover? Or concerns over the U.S. economy as a whole?

Right now, Nvidia, Apple, Microsoft, Amazon and Alphabet make up more than 25% of the weight in the S&P 500 and over ⅓ of the Nasdaq 100. But even with this slide, Nvidia shares have still more than doubled in 2024 (and are up 800% since October 2022) and make up 23% of the S&P 500’s year-to-date total return. The stock still remains the best year-to-date performer in the S&P 500. But, boy, what a bad week it has been.

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Business

Nordstrom is Making Money Moves

Keeping things in the family, Nordstrom looks to go private.

The Nordstrom family is working to take the company private once again. They’re teaming up with the Mexican retail group El Puerto de Liverpool to offer $23 per share cash to take the department store retailer private, months after first expressing interest in a buyout.

In total, it would be a $3.8 billion payment to get the store back in the family’s hands. The Nordstrom family currently owns 33% of the company’s outstanding common stock and El Puerto de Liverpool owns 10% of Nordstrom stock.

The proposal states that the merger would be financed through a combination of rollover equity and cash commitments by members of the Nordstrom family and Liverpool and $250 million in new bank financing, with the existing debt held by the company to remain outstanding.

Just last week, Nordstrom had announced second quarter net earnings of $122 million and a net sales increase of 3.4%, compared to the same time a year ago. The results were greater than Wall Street expectations, as Nordstrom’s stock value is up 25% from the beginning of the year. 

Nordstrom has put its focus on improving its supply chain, as online orders are now arriving 5% faster and are featuring fewer returns. Plus, they’ve opened 11 more Nordstrom Rack stores so far this year, with the plan being to add another 11 by the end of 2024 - Nordstrom Rack net sales are up 9% this year. 

Erik B. and Peter E. Nordstrom, who are leading this charge, are fourth-generation leaders of the retailer, which was originally founded in Seattle in 1901 as a shoe store. Former chairman, Bruce Nordstrom, had just passed away in May at the age of 90.

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Economy

Jobs News Not Great

The job market shrinks.

The number of available jobs in this country shrank even more than expected in the month of July. 

It was the second straight month where job openings decreased, this time falling from 7.91 million in June to 7.67 million in July, according to new data released yesterday by the Bureau of Labor Statistics. This is the lowest number of openings since January of 2021. 

The expectation was that there would be 8.1 million jobs posted in July. Additionally, there are now 1.1 jobs available for every person looking for one, which is the slimmest ratio in more than three years (it peaked at 2.03 in March of 2022). Layoffs rose to 1.76 million, the highest level since March of 2023. 

Quit rates are at 2.1%, which is near the lowest since 2020, suggesting that people are less confident in the ability to find a job now than a few years ago.

The jobs report will be released tomorrow, which is another important piece of information, as many speculate that a rate cut from the Federal Reserve is just two weeks away. Could a weakening labor market lead to an even bigger cut? Last month’s job report showed that unemployment increased from 4.1% to 4.3%. Let’s see what tomorrow’s data brings!

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Finance

Wall Street Follows Jobs Report

Market slides with Jobs Report

The aforementioned job data led to Wall Street’s main indexes opening lower yesterday, as investors start to worry about the health of our economy and wait on more data tomorrow. 

The Dow Jones Industrial Average fell 64.87 points (0.16%), the S&P 500 opened lower by 22.3 points (0.4%), and the Nasdaq Composite dropped 120.6 points (0.7%) at the opening bell. 

Nine of 11 S&P 500 sectors were trading down, as energy and healthcare equities were the biggest droppers (meanwhile, utilities stocks lead the gainers). We’ll see if tomorrow’s data helps, or further hurts, the market.

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Sports

Curry Wants to Own An NBA Team

When he’s all done playing that is.

Steph Curry told CNBC’s Squawk on the Street that he would like to transition to an ownership role once his playing days are over, which is something LeBron James has expressed in the past, as well. Hell, when you sign a new contract that will pay you more than $62 million for one season, as Curry just did, you can start thinking about buying a professional sports team….

Curry explained that potential NBA expansion has piqued his interest, and the interest of other current players, in owning a team one day. “I think I could do a pretty good job of helping sustain how great the NBA is right now,” Curry explained. He also credited the Warriors with setting a good example for him. 

NFL Is Back Baby

The NFL kicks off tonight with the Chiefs hosting the Ravens.

The Chiefs are attempting to become the first team to ever win three straight Super Bowls, something Tom Brady or the Cowboys and Steelers dynasties could never do. 

The Ravens are 3-point underdogs tonight and Lamar Jackson is 12-0-1 against the spread as an underdog. Hmmm, just something to keep in mind.

The NFL will then play their first ever game in Brazil tomorrow - though the players have been warned to not leave their hotel. So the NFL’s putting money ahead of player safety? You don’t say! Regardless, it’s still great to have football back.

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