The Overnight News Roundup - May 30

Your Daily Edge: Overnight Headlines for Traders, Analysts, and Market Observers

PiQ and Zack Eiseman provide you with a consolidated roundup of the overnight news that matters most to markets.

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TRADE:

• WSJ reports the White House is considering a stopgap effort to impose tariffs under a never-before-used provision, Section 122, of the Trade Act of 1974. It would allow tariffs of up to 15% for 150 days. That would then buy time for Trump to devise individualized tariffs for each major trading partner under a different provision of the same law. (WSJ)

• US President Trump responded to the trade court ruling on tariffs in a Truth post: "The ruling by the U.S. Court of International Trade is so wrong, and so political! Hopefully, the Supreme Court will reverse this horrible, Country threatening decision, QUICKLY and DECISIVELY." (Truth)

• US Treasury Secretary Bessent said trade talks with China are "a bit stalled", but expects mote talks with officials in the coming weeks. He also said that getting a deal over the finish line will likely need the direct involvement of President Trump and Chinese President Xi, saying he believes "at some point" there may be a call between the two. (Fox News)

• Bessent said that trading partners including Japan were continuing to negotiate in good faith, and there had been no change in attitudes since the court ruled against the Trump administration's latest tariffs. (Fox News)

• Japan's top tariff negotiator Akazawa said that he plans to meet Bessent and others for the next round of Japan-U.S. talks on Friday in Washington D.C. (RTRS)

• Japan's Economy, Trade and Industry Minister Yoji Muto said that a senior official will attend an energy conference in Alaska early next week, where the proposed $44 billion Alaska LNG project is expected to be discussed. (RTRS)

• JERA Co., Japan's largest LNG importer, has signaled it would consider buying LNG from the export project in Alaska. (BBG)

• Costco is taking steps to reduce its exposure to tariffs by pulling orders forward and moving the sourcing of its private-label products to the regions where they are sold. These actions have helped lower costs while also enabling it to avoid sharp price increases for consumers, Chief Executive Ron Vachris said on an analyst call. (WSJ)

• China has agreed on procedures to resume imports of Japanese seafood products, Japan's government said on Friday, marking a step towards ending a nearly two-year trade ban. (RTRS)

MACRO:

• Fed's Daly said the central bank is "resolute" on getting inflation down to the 2% goal, and the Fed's policy is in a good place to do so, noting inflation is her main focus right now. Daly said policymakers could still cut interest rates twice this year as they projected in March. (RTRS)

• Fed's Logan signaled that the Fed may need to keep rates where they are for quite some time as it waits for the data to show if Trump's mix of trade, tax and regulatory policies pushes up inflation or down on employment. (RTRS)

• The SEC dismissed its lawsuit against Binance and its billionaire founder Changpeng Zhao. (WSJ)

• Core inflation in Tokyo hit a more than two-year high in May on persistent rises in food costs, keeping the central bank under pressure to hike interest rates further, albeit factory output data also released on Friday saw a decline. (RTRS)

• BoJ Governor Ueda said in parliament that the central bank is aware that companies continue to raise wages and hike prices to pass on higher costs, but the decision to downgrade the bank's inflation forecast was due to the growth hit from trade uncertainty and the sharp fall in the price of oil. (RTRS)

• 'Tariff Turmoil Leads Global Funds to Pile Back Into Japan Stocks' Bloomberg article notes global investors have been net buyers of cash Japanese equities for the last eight consecutive weeks — the longest streak since June 2023. (BBG)

• Japanese life insurers cut protection for their foreign assets against a stronger yen to a fresh 14-year low, signaling subdued expectations of a sustained rally in the nation’s currency. (BBG)

• China's factory activity, due on Saturday, likely contracted for a second month in May, a Reuters poll showed, suggesting trade tensions with major export markets are weighing on manufacturers' minds. (RTRS)

• Chinese banks are set for a liquidity test in June as they face record debt maturities and a potential exodus from deposits. (BBG)

• BoE's Taylor has dismissed stronger than expected inflation and growth figures as he renewed his call for lower interest rates in the face of mounting pressures on the UK economy. (FT)

• BoE Governor Bailey has called on the government to “minimise the negative effects” of Brexit by seeking closer alignment with the EU. (FT)

• A gauge of UK business confidence rose to a nine-month high, climbing back to a level not seen since soon after Prime Minister Keir Starmer first took power, according to the Lloyds Business Barometer. (BBG)

• The UK government’s attempt to save £1.5bn by cutting winter fuel payments to pensioners could end up costing money after a series of offsets and U-turns, analysts have warned. (FT)

• Australian retail sales slipped unexpectedly in April as warm weather hit spending on winter clothing, while department stores suffered from a dearth of discounting events in further evidence of a cautious consumer. Meanwhile, home building approvals also fell. (RTRS)

• RBNZ's Silk said the bank needs more time to assess the impact of global trade turmoil on the local economy before deciding on the appropriate path for the Official Cash Rate. (BBG)

• Consumer confidence in New Zealand fell in May, with stubbornly high inflation expectations holding back purchasers, ANZ-Roy Morgan data showed. (RTRS)

• Swedish output unexpectedly contracted at the beginning the year, breaking a two-quarter streak of expansion due mainly to subdued investments. (BBG)

• South Korea’s largest pension fund plans to buy more foreign stocks, just as a “sell America” trend fueled by the Trump administration’s tariff agenda begins to take hold. (BBG)

• India has agreed to exempt Saudi Arabia's sovereign wealth fund from a set of foreign portfolio investment rules to attract capital flows and strengthen financial ties between the two nations, according to Reuters sources. (RTRS)

• Nigeria cracks down on ‘spraying’ money at parties to defend currency. (FT)

• The world’s biggest maker of stainless steel has suspended some production lines in Indonesia, in a bid to support prices as sluggish demand and trade uncertainty weigh on the market. (BBG)

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GEOPOLITICS:

• Trump's envoy to Ukraine, Keith Kellogg, said Russia's concern over the eastward enlargement of NATO was fair and the United States did not want to see Ukraine in the U.S.-led military alliance. (RTRS)

• Many in Israel worry the Trump administration won’t stick to its red line on enrichment in its enthusiasm to reach a deal with Iran. (WSJ)

• Saudi Arabia's defence minister warned Iran last month to take Trump's offer to negotiate a nuclear agreement seriously because it presents a way to avoid the risk of war with Israel.

• The US plans to ramp up weapons sales to Taipei to a level exceeding Trump's first term as part of an effort to deter China as it intensifies military pressure on the democratic island, according to two U.S. officials cited by Reuters. (RTRS)

• India is engaging with manufacturers from at least three other countries for jointly making fighter jet engines, expanding its defense partnerships beyond the US as it seeks to close capability gaps amid rising regional tensions. (BBG)

EQUITIES:

• FT reports China’s biggest technology companies have begun the long and difficult process of switching their development of AI to homegrown chips, as they contend with a dwindling stockpile of Nvidia processors and tightening US export controls. (FT)

• Shipments of Nvidia GB300-based servers are planned for the August-September time frame, said Wiwynn President William Lin, adding the pace at which Nvidia rolls out new products is so fast, neither supply chain partners nor clients can keep up, but “no one dares” fall behind.

• Dell Technologies reported fiscal first-quarter earnings that missed Wall Street expectations, but the company beat on revenue and offered a stronger-than-expected forecast for the current quarter on strong AI demand. (CNBC)

• Marvell Technology forecast second-quarter revenue above Wall Street estimates, betting on strong demand for its custom chips powering AI workloads in data centers. However, its consumer and industrial end markets remained weak. (RTRS)

• Microsoft touted its progress selling AI tools to corporate customers during a companywide town hall on Thursday, including a major deal with Barclays. (BBG)

• Synopsys suspended its annual and quarterly forecasts just a day after issuing them, as new U.S. export restrictions on China cast uncertainty over its ability to sell chip design software in the key market. (RTRS)

• Microchip Technology raised the low ends of its sales and earnings guidance for its fiscal first quarter, thanks to higher-than-expected bookings. (WSJ)

• Archer Daniels Midland is exploiting a loophole in UK green regulations to claim a double subsidy on the production of biofuels, according to its British competitors cited by the FT. (FT)

• 'Gap shares plummet as retailer says tariffs could cost between $100 million and $150 million' CNBC article cites CEO Richard Dickson saying the Co. plans to diversify its supply chain and reduce its exposure to China and that it isn’t planning for “meaningful” price increases. (CNBC)

• American Eagle Outfitters reported quarterly earnings that missed expectations, reflecting a $75 million write-down in spring and summer merchandise. (CNBC)

• Ulta Beauty raised its full-year outlook after posting higher-than-expected first-quarter sales as consumers keep spending on beauty products despite concerns they would pull back on discretionary purchases. (WSJ)

• The EU is launching a new age verification app in July, establishing a tool that will potentially allow for tighter enforcement of rules requiring online platforms to protect minors online. (FT)

• Enterprise Products Partners said its ethane and butane exports could be hurt by a U.S. Department of Commerce requirement that it apply for a license to export to China. (RTRS)

• SK Hynix is facing margin pressure on its latest memory chips in the works (HBM4) due to limited ability to pass on the higher production costs to TSMC. (ZDNet)

• Nomura Holdings, Japan's largest investment bank and brokerage, is committed to growing its business in the United States despite recent market volatility, its chief executive said. (RTRS)

• Nippon Steel plans to invest over 860 billion yen ($5.98 billion) to introduce electric furnaces at its three domestic plants to reduce carbon emissions, public broadcaster NHK said. (RTRS)

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That's all for today's digest. Happy trading, and keep it tight!

Team PiQ & IAN!