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US stock futures tumble as officials offer no respite from tariffs

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3 weeks ago

April 6, 2025

US stock futures tumble as officials offer no respite from tariffs

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US stock-index futures dropped sharply on Sunday after the Trump administration indicated that sweeping tariffs would be kept in place despite fears they could induce a global economic recession.

Contracts tracking the blue-chip S&P 500 fell 3.8 per cent and those for the tech-heavy Nasdaq 100 slid 4.6 per cent. Trading activity is typically light early in the Asian morning, which can exacerbate volatility.

The declines come after more than $5tn was erased from the S&P 500 on Thursday and Friday at the end of its worst week since the onset of the pandemic in 2020. Donald Trump’s move to upend the global trade order by implementing huge levies on US imports has deepened concerns about the trajectory of the world’s economy. China announced retaliatory duties on Friday of 34 per cent.

Commodities also sustained heavy losses in early trading Sunday night, with West Texas Intermediate, the US benchmark, falling 3.4 per cent to $59.90 a barrel — below the price needed by most shale producers to break even. International marker Brent dropped 3.1 per cent to $63.53.

Copper, widely seen as a proxy for the global economy because of its industrial uses, fell more than 5 per cent to $4.14 a pound in US trading.

Over the weekend, Trump’s Treasury secretary Scott Bessent dismissed the “short-term” market reaction to the president’s aggressive tariffs, telling NBC that the White House will “hold the course”.

“Our trading partners have taken advantage of us,” Bessent said on Sunday. Asked whether Trump’s tariffs were negotiable, he said: “We’re going to have to see what [other] countries offer and whether it’s believable”.

His comments followed a warning from Federal Reserve chair Jay Powell that the tariffs would stoke “higher inflation and slower growth”.

JPMorgan economists said on Friday they expected the world’s biggest economy to contract 0.3 per cent this year “under the weight of tariffs”. They had previously forecast US growth of 1.3 per cent.

Some investors worry stocks will continue to slide until Trump indicates that his tariffs will be less aggressive.

Activist investor Bill Ackman, who vocally backed Trump during the election campaign, posted on X that “massive and disproportionate tariffs” risked “destroying confidence in our country as a trading partner, as a place to do business, and as a market to invest capital.”

He urged Trump to call “time out” on Monday.

“Alternatively, we are heading for a self-induced, economic nuclear winter, and we should start hunkering down,” he wrote.

Dec Mullarkey, managing director at SLC Management, said: “Uncertainty is the big word right now and we’re not even at peak policy uncertainty yet.”

Banks and technology stocks were among those hardest hit last week as the dollar sank against other major currencies, and Treasury yields, which move inversely to prices, tumbled as investors rushed into perceived safe haven assets. European and Asian equities markets also fell sharply, while commodities including copper and oil dropped on fears of a global trade war.

Friday marked the fifth largest session of “active net reductions” by investors since 2010, according to Morgan Stanley, with equity long-short funds responsible for 80 per cent of the net selling.

The S&P 500’s more than 10 per cent decline over Thursday and Friday is only the fourth time in the past 85 years — after the 1987 crash, in 2008 during the financial crisis and in early 2020 — that the index has fallen so far, so fast, according to Deutsche Bank.

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UBS reaps trading windfall from market turmoil

Published

1 hour ago

April 30, 2025

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UBS reaps trading windfall from market turmoil

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UBS has become the latest bank to reap a windfall from the market turmoil unleashed by Donald Trump’s tariffs, as its traders helped power the Swiss lender to better than expected first-quarter profits.

Revenues at its markets business surged 32 per cent to $2.5bn in the quarter, after Trump’s aggressive trade war triggered volatility across global stock and currency markets.

Trump’s erratic tariff policy since his return to the White House has helped propel trading revenues at big banks in Europe and on Wall Street, as investors contend with the fallout from his effort to reshape the global trading order.

UBS reported net profit of $1.7bn in the quarter, surpassing the $1.3bn forecast by analysts, but down from $1.8bn in the same period a year ago. Revenues were flat at $12.6bn.

Revenues at its investment banking division climbed 16 per cent to $3.3bn in the quarter.

Its global wealth management division attracted $32bn in new assets in the period, with the unit’s pre-tax profit of $1.4bn driven by higher fees.

Chief executive Sergio Ermotti said: “The power and scale of our diversified global franchise, coupled with our continued focus on clients, drove strong business momentum in the quarter and net new inflows in our asset-gathering businesses.”

Ermotti, who returned to lead the bank’s integration of former rival Credit Suisse in 2023, said the process was “on track”. UBS is in the midst of switching more than 1mn Swiss retail clients on to its systems, one of the most complicated parts of the integration.

“As we start to execute on the next critical phase of integration, I remain pleased with the substantial progress we have made so far,” Ermotti said.

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Hawaii plans to increase hotel tax to help it cope with climate change

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2 hours ago

April 30, 2025

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Hawaii plans to increase hotel tax to help it cope with climate change

People are seen on the beach and in the water in front of the Kahala Hotel & Resort in Honolulu, Nov. 15, 2020.

Jennifer Sinco Kelleher/AP

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Jennifer Sinco Kelleher/AP

HONOLULU — In a first-of-its kind move, Hawaii lawmakers are ready to hike a tax imposed on travelers staying in hotels, vacation rentals and other short-term accommodations and earmark the new money for programs to cope with a warming planet.

State leaders say they’ll use the funds for projects like replenishing sand on eroding beaches, helping homeowners install hurricane clips on their roofs and removing invasive grasses like those that fueled the deadly wildfire that destroyed Lahaina two years ago.

A bill scheduled for House and Senate votes on Wednesday would add an additional 0.75% to the daily room rate tax starting Jan. 1. It’s all but certain to pass given Democrats hold supermajorities in both chambers and party leaders have agreed on the measure. Gov. Josh Green has said he would sign it into law.

Officials estimate the increase would generate $100 million in new revenue annually.

“We had a $13 billion tragedy in Maui and we lost 102 people. These kind of dollars will help us prevent that next disaster,” Green said in an interview.

Green said Hawaii was the first state in the nation to do something along these lines. Andrey Yushkov, a senior policy analyst at the Tax Foundation, a Washington, D.C.-based nonprofit organization, said he was unaware of any other state that has set aside lodging tax revenue for the purposes of environmental protection or climate change.

Adding to an already hefty taxThe increase will add to what is already a relatively large duty on short-term stays. The state’s existing 10.25% tax on daily room rates would climb to 11%. In addition, Hawaii’s counties each add their own 3% surcharge and the state and counties impose a combined 4.712% general excise tax on goods and services including hotel rooms. Together, that will make for a tax rate of nearly 19%.

The only large U.S. cities that have higher cumulative state and local lodging tax rates are Omaha, Nebraska, at 20.5%, and Cincinnati, at 19.3%, according to a 2024 report by HVS, a global hospitality consulting firm.

The governor has long said the 10 million visitors who come to Hawaii each year should help the state’s 1.4 million residents protect the environment.

Green believes travelers will be willing to pay the increased tax because doing so will enable Hawaii to “keep the beaches perfect” and preserve favorite spots like Maui’s road to Hana and the coastline along Oahu’s North Shore. After the Maui wildfire, Green said he heard from thousands of people across the country asking how they could help. This is a significant way they can, he said.

Hotel industry has mixed feelingsJerry Gibson, president of the Hawaii Hotel Alliance, which represents the state’s hotel operators, said the industry was pleased lawmakers didn’t adopt a higher increase that was initially proposed.

“I don’t think that there’s anybody in the tourism industry that says, ‘Well, let’s go out and tax more.’ No one wants to see that,” Gibson said. “But our state, at the same time, needs money.”

The silver lining, Gibson said, is that the money is supposed to beautify Hawaii’s environment. It will be worth it if that’s the case, he said.

Hawaii has long struggled to pay for the vast environmental and conservation needs of the islands, ranging from protecting coral reefs to weeding invasive plants to making sure tourists don’t harass wildlife, such as Hawaiian monk seals. The state must also maintain a large network of trails, many of which have heavier foot traffic as more travelers choose to hike on vacation.

Two years ago, lawmakers considered requiring tourists to pay for a yearlong license or pass to visit state parks and trails. Green wanted to have all visitors pay a $50 fee to enter the state, an idea lawmakers said would violate U.S. constitutional protections for free travel.

Boosting the lodging tax is their compromise solution, one made more urgent by the Maui wildfires.

A large funding gapAn advocacy group, Care for Aina Now, calculated a $561 million gap between Hawaii’s conservation funding needs and money spent each year.

Green acknowledged the revenue from the tax increase falls short of this, but said the state would issue bonds to leverage the money it raises. Most of the $100 million would go toward measures that can be handled in a one-to-two year time frame, while $10 to $15 million of it would pay for bonds supporting long-term infrastructure projects.

Kāwika Riley, a member of the governor’s Climate Advisory Team, pointed to the Hawaiian saying, “A stranger only for a day,” to explain the new tax. The adage means that a visitor should help with the work after the first day of being a guest.

“Nobody is saying that literally our visitors have to come here and start working for us. But what we are saying is that it’s important to be part of of the solution,” Riley said. “It’s important to be part of caring for the things you love.”

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Torture and Secret C.I.A. Prisons Haunt 9/11 Case in Judge’s Ruling

Published

16 hours ago

April 29, 2025

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Torture and Secret C.I.A. Prisons Haunt 9/11 Case in Judge’s Ruling

When a military judge threw out a defendant’s confession in the Sept. 11 case this month, he gave two main reasons.

The prisoner’s statements, the judge ruled, were obtained through the C.I.A.’s use of torture, including beatings and sleep deprivation.

But equally troubling to the judge was what happened to the prisoner in the years after his physical torture ended, when the agency held him in isolation and kept questioning him from 2003 to 2006.

The defendant, Ammar al-Baluchi, is accused of sending money and providing other support to some of the hijackers who carried out the terrorist attack, which killed 3,000 people. In court, Mr. Baluchi is charged as Ali Abdul Aziz Ali.

He is the nephew of Khalid Shaikh Mohammed, the man accused of masterminding the plot.

The judge, Col. Matthew N. McCall, wrote that it was easy to focus on the torture because it was “so absurdly far outside the norms of what is expected of U.S. custody preceding law enforcement questioning.”

“However,” he added, “the three and a half years of uncharged, incommunicado detention and essentially solitary confinement — all while being continually questioned and conditioned — is just as egregious” as the physical torture.

Prosecutors are preparing to appeal.

But the 111-page ruling was the latest blow to the government’s two-decade-old effort to hold death penalty trials at Guantánamo Bay by sweeping aside a legacy of state-sponsored torture.

Military judges in the two capital cases at Guantánamo have rejected the use of confessions taken from prisoners after they were in C.I.A. detention, illustrating the enduring stain of a Bush administration decision after Sept. 11, 2001, to interrogate and hide suspected members of Al Qaeda in black sites rather than use the court-monitored law enforcement system.

From his capture in Pakistan in early 2003 to his transfer to Guantánamo in 2006, Mr. Baluchi was kept out of the reach of lawyers, a court and the International Red Cross, according to evidence presented at years of pretrial hearings.

In his first days in custody, Mr. Baluchi was deprived of sleep for 82 straight hours. He was shackled at the ankles and the wrists in a way that forced him to stand, naked, with a hood on his head. He was made to fear he would be drowned in a mock waterboarding technique while he was in a dungeonlike setting in Afghanistan.

In time, he was shuttled between five overseas prisons, including in Eastern Europe. Food and clothing were used as rewards for his cooperation with C.I.A. debriefers in a program described in court by two psychologists who carried out some of the interrogations for the agency.

The judge referred to classified C.I.A. accounts showing that Mr. Baluchi was questioned about Al Qaeda and his role in the Sept. 11 attacks more than 1,000 times before he was transferred to Guantánamo. Then, in January 2007, the Bush administration adopted a concept called clean teams.

The idea was to have agents who had not been involved in previous interrogations question a suspect anew to try to obtain admissible evidence for a court case. In the case of Mr. Baluchi, three F.B.I. agents questioned him over four days at Guantánamo in January 2007, four months after he was transferred there from a black site.

The F.B.I. agents wrote a memo containing his confessions, which Judge McCall rejected on April 11 as illegally derived from torture.

Prosecutors had argued that Mr. Baluchi’s brutal interrogations lasted only a few days. For the next three years, they said, he gradually became less afraid of his captors and in time voluntarily answered questions from the C.I.A. debriefers and, later, from the F.B.I. questioners at Guantánamo.

The judge disagreed. “The goal of the program was to condition him through torture and other inhumane and coercive methods to become compliant during any government questioning,” he wrote. “The program worked.”

Uncertainty over whether the statements would be admissible was one reason the prosecutors sought to settle the case with guilty pleas in exchange for life sentences rather than through a death-penalty trial.

Mr. Baluchi and his lawyers never reached a plea agreement. But Mr. Mohammed and two other defendants did in a settlement that the Justice Department is now trying to overturn. If the courts uphold the deal and the plea goes forward, Mr. Mohammed has agreed to let prosecutors use portions of his 2007 interrogations at Guantánamo at a sentencing hearing.

Government lawyers have to meet a high bar in appealing to reinstate Mr. Baluchi’s 2007 statements. In January, the military commissions appeals court upheld a judge’s decision to throw out the same type of evidence in the U.S.S. Cole case, the longest-running capital case at Guantánamo Bay.

In it, the appellate panel endorsed the analysis of the judge in that case that the C.I.A. had “conditioned” its captives “to answer questions from United States government officials — be they debriefers, interrogators or interviewers.”

In his third month at Guantánamo, Mr. Baluchi reported to a medical staff member that guards had withheld water from him “for 48 hours because he wrote his name in his shower with steam,” the judge noted.

Court testimony showed that each former C.I.A. prisoner’s cell was equipped with an intercom and individual shower that required little contact with guards. So Mr. Baluchi was punished for writing his name in a place where only he, the guards and the prison’s surveillance system could see it.

Moves between black sites started with a cavity search, the judge said in a section that explained the process in detail. Mr. Baluchi was blindfolded, and his ears and mouth were covered to prevent him from hearing or communicating with others.

“He was diapered and then strapped into a seat or strapped to the floor like cargo for however long the flight lasted,” the judge recounted. The prisoner “did not know where he was going or how long he would have to remain in a soiled diaper.”