JP Morgan predicted fresh economic turbulence from Friday’s Supreme Court ruling nixing President Donald Trump’s emergency tariffs, warning Uncle Sam could be forced to refund as much as $200 billion to US businesses.One of the bank’s top researchers on economic policy, Michael Feroli, warned the decision could still spark heightened trade uncertainty and stunt business spending even as Trump administration officials vowed to revive the duties using other laws.“The Court’s ruling remanded this issue (of ref ...

Core Insights - Reliance, Inc. reported profits of $116.5 million or $2.22 per share for Q4 2025, an increase from $105.3 million or $1.93 per share in the same quarter last year, but fell short of the Zacks Consensus Estimate of $2.80 per share [1] - The company achieved net sales of $3,498.6 million, reflecting a year-over-year increase of approximately 11.9%, surpassing the Zacks Consensus Estimate of $3,382.4 million [1] Segment Performance - Shipments increased by 5.8% year-over-year to 1,528.7 thousand tons, exceeding the estimate of 1,522.5 thousand tons, with the average selling price per ton rising 5.6% to $2,292, above the estimate of $2,271 [2] - Demand for non-residential construction, Reliance's largest end market, strengthened compared to Q4 2024, with expectations for continued healthy demand through Q1 2026 due to investments in data centers and public infrastructure [3] - The broader manufacturing market saw improved demand year-over-year, driven by growth in military, industrial machinery, and construction machinery sectors, with expectations for continued strength in Q1 [4] - Aerospace demand increased compared to the prior-year quarter, with expectations for consistent commercial aerospace demand in Q1 due to build-rate increases [5] - Demand for automotive toll processing services remained flat year-over-year, with steady performance expected in Q1, influenced by North American trade policy [6] - The semiconductor market experienced soft demand relative to Q4 2024, with elevated inventory levels impacting activity, and these headwinds are expected to persist into Q1 [7] Financial Position - As of December 31, 2025, Reliance held $216.6 million in cash and cash equivalents, with total outstanding debt of $1.43 billion, including $277 million borrowed under a $1.5 billion revolving credit facility [8] - The company generated $276.1 million in operating cash flow during Q4, demonstrating strong cash flow generation across various market conditions [8] - Reliance repurchased approximately 716,000 shares of common stock in Q4 at an average price of $279.30 per share, totaling $200.1 million [9] Outlook - Reliance anticipates healthy demand across diverse end markets in Q1, projecting a 5% to 7% increase in tons sold from the prior quarter [12] - The average selling price per ton is expected to rise by 3% to 5% sequentially, with a modest improvement in FIFO gross profit margin anticipated [13] - The company forecasts adjusted earnings per share in the range of $4.50 to $4.70 for Q1, accounting for an estimated LIFO expense of $25 million [13] Stock Performance - Reliance's shares have gained 11.2% over the past year, compared to the industry growth of 44.8% [14]

Investment Rating - The report does not explicitly provide an investment rating for the industry. Core Insights - The global economy is expected to expand at a reasonable pace in 2026, supported by easing monetary policy, fiscal stimulus, and the ongoing AI boom, although the backdrop remains fragile and volatile due to heightened uncertainty and geopolitical risks [14][20][35]. Section Summaries Section 1: Prospects for the Global Economy in 2026 - The global economy is projected to grow at just over 3% in 2026, with the World Bank forecasting 3.1% and the IMF 3.3% [35][41]. - The US economy is expected to be the strongest performer among major advanced economies, with growth supported by fiscal stimulus and the AI boom, while growth in the UK and euro area is likely to remain sluggish [15][55]. - China is expected to moderate its growth to 4.4%, while India is projected to remain the fastest-growing major economy at 6.5% [19][69]. Section 2: Interview with Former IMF Chief Economist Ken Rogoff - Ken Rogoff describes the global economy as solid but cautions about significant uncertainty not reflected in financial markets, predicting a potential stock market fall in the next three years [20][81]. - He highlights the risks associated with President Trump's policies, particularly regarding trade and immigration, which may have long-term negative consequences for the US economy [84]. Section 3: Key Events in 2026 - Key political events include the US mid-term elections in November, which could impact President Trump's policy maneuverability [21][99]. - Developments in Europe, particularly regarding right-wing populist parties, will also be closely monitored, alongside significant elections in Japan and Brazil [102][107]. Section 4: Three Key Trends to Watch in 2026 - The report identifies three key trends: developments in AI, advanced economy bond markets, and global trade [22]. - The impact of AI on productivity and market sentiment will be crucial, as will the potential for rising government bond yields to negatively affect financial markets [22]. Section 5: Perspectives from Business Leaders - Business leaders express concerns about economic uncertainty and the need for resilience and adaptability in their respective regions [23]. - Wu Chen emphasizes a two-speed global economy, while Mike Fowler highlights the lack of a pro-business agenda in the UK [23]. Ebrima Sawaneh focuses on the importance of decarbonization and digital reliability for African economies [23].

Core Insights - The Logistics Managers' Index (LMI) indicates a significant decline in inventory levels and warehouse utilization, suggesting a shift in supply chain strategies for businesses [2][3][5] Inventory Levels - The December reading for inventory levels was recorded at 35.1, marking the fastest drawdown of goods in the history of the index, which began in late 2016 [3] - This decline in inventory levels is the most rapid in the past decade, reflecting a strategic shift by companies [1][3] Warehouse Utilization - Warehouse utilization fell to an all-time low of 42.9, indicating that businesses are actively clearing their facilities [3] - The low utilization rates suggest a move away from overstocking strategies that characterized previous years [5] Trade Policy Uncertainty - Trade policy uncertainty remains high, particularly due to pending Supreme Court rulings on IEEPA tariffs, which account for approximately $131 billion of the $253 billion in tariff revenue collected [3] - This uncertainty may be influencing businesses' decisions to delay new orders as they navigate replenishment strategies [4] Supply Chain Strategy Shift - Companies appear to be reverting to a just-in-time inventory model, moving away from the defensive over-ordering strategies seen in the past year [5] - Leaner inventories increase reliance on transportation services and their reliability, posing challenges for transportation providers who have also been managing lean operations [6]

Group 1: Market Reactions to Tariffs - The Supreme Court is currently evaluating the limits of presidential tariff power under the International Emergency Economic Powers Act (IEEPA), which could significantly impact future trade policies [2][3] - A ruling against President Trump could lead to the government refunding over $100 billion in tariff revenue, potentially disrupting existing trade agreements [3] - The market has shown extreme volatility in response to Trump's tariff announcements, with significant drops in major indices following the announcement of a minimum 10% tariff on nearly all countries, leading to a 3.5% drop in the SPDR S&P 500 ETF (SPY) and a 4.4% decline in the Invesco QQQ Trust (QQQ) [4] Group 2: Specific Tariff Announcements and Market Impact - Following the announcement of a "pause" on tariff increases, the S&P 500 surged by 9.5%, while the Dow Jones Industrial Average increased by nearly 3,000 points (7.9%) [5] - However, subsequent clarifications regarding tax rates on Chinese imports led to a reversal of gains, with the S&P 500 falling 3.5% the next day [5] - Analysts from J.P. Morgan and Goldman Sachs have indicated that tariffs are likely to increase market volatility and could lead to higher consumer prices, with the effective tariff rate expected to approach 18-20% [6] Group 3: Geopolitical Influences on Technology Sector - President Trump's restrictions on Nvidia's advanced Blackwell chips, aimed at preventing their availability to China, have created uncertainty in the tech sector [7][9] - Nvidia's stock experienced significant fluctuations, rising over 4% following speculation about potential deals, only to face volatility due to geopolitical tensions [8][9] - The tech sector remains vulnerable to trade policy changes, as evidenced by the impact of Trump's tariff announcements on technology stocks [10] Group 4: Trade Negotiations and Market Volatility - Trump's approach to trade negotiations has been characterized by simultaneous threats of new tariffs and announcements of "deals," leading to confusion and market instability [10][11] - The announcement of additional 100% tariffs on Chinese goods resulted in a 2.7% drop in the S&P 500, highlighting the immediate market impact of trade threats [10] - The subsequent framework agreement with China, which included tariff reductions, further exemplifies the unpredictable nature of Trump's trade policies [11] Group 5: Personal Feuds and Market Reactions - The public feud between President Trump and Elon Musk had a dramatic impact on Tesla's stock, which plummeted 14% following Trump's threats regarding government contracts [13] - The swift recovery of Tesla shares the following day indicates the volatility and rapid shifts in market sentiment driven by personal conflicts among high-profile figures [14] Group 6: Overall Market Environment - The current market environment under President Trump's influence is marked by extreme volatility, with policy announcements often leading to contradictory market reactions [15][16] - Analysts continue to express concerns about the risks associated with trade policy uncertainty, suggesting that investors may need to brace for ongoing unpredictability [17]

Market Overview - The Dow closed higher, while the NASDAQ and S&P 500 experienced declines, particularly influenced by President Trump's comments regarding China's soybean purchases [2][4][7] - The S&P 500 closed down nearly 0.81%, while the Dow gained approximately 0.4% [4][7] Semiconductor Sector - AMD's stock rose by about 0.8% due to Oracle's investment in AI chips [4] - Broadcom's stock fell by approximately 3.5% after a previous gain following a deal with OpenAI [5] - Nvidia's stock closed down about 4.4%, unable to maintain earlier momentum [6] Transportation Sector - United Airlines' stock increased by over 4% ahead of its earnings report, following Delta's strong performance last week [6] Consumer Market - The average price of a new vehicle in the U.S. surpassed $50,000 for the first time, marking a 3.6% year-over-year increase and a 2.1% increase from August [25][26] - The rise in vehicle prices is attributed to tariffs, inflation in car parts, and the increasing popularity of higher-priced electric vehicles (EVs) [26][27] Economic Outlook - The IMF projects global growth at 3.2% for this year and 3.1% for next year, with tariffs contributing to a modest downgrade in growth expectations [34][39] - The effective tariff rate in the U.S. is close to 20%, impacting trade dynamics and supply chains [35][46] - The U.S. economy is experiencing resilience due to factors such as high labor productivity and a favorable interest rate environment [17][20]

Core Viewpoint - A bearish outlook has been issued by a top Wall Street analyst due to renewed trade tensions between the U.S. and China, indicating a potential larger-than-expected correction in U.S. equities if these tensions are not resolved [1][3]. Market Volatility - Recent weeks have seen a significant increase in volatility in U.S. stock markets, primarily driven by the escalation of the U.S.-China trade dispute, leading to the weakest index-level performance since spring [2][4]. - Aggressive selling was observed in the markets, particularly in stocks with high exposure to China, following news of China's tightening of rare earth mineral controls and a retaliatory tariff on Chinese products [2][4]. Correction Predictions - A correction in the market is deemed "overdue" due to stretched valuations, overly optimistic positioning, and unfavorable seasonal factors [3]. - If trade tensions persist into November, the S&P 500 could experience declines of 10% to 15%, with certain sectors facing even greater impacts [3]. Sector Vulnerability - The breakdown in trade talks is expected to affect specific sectors more severely, including semiconductors, quantum computing firms, and stocks with direct exposure to China [5]. - Consumer discretionary stocks are at risk due to their reliance on imports and the direct cost implications of tariffs [5]. Defensive Strategies - In light of ongoing policy uncertainty, a preference for defensive sectors such as health care and quality stocks is recommended as a hedge against potential market volatility [5].

Core Insights - Alger Weatherbie Specialized Growth Fund's second-quarter 2025 investor letter highlights the impact of trade policy uncertainty on market volatility, particularly due to President Trump's tariffs, which affected import-dependent companies [1] - The S&P 500 reached a record high by the end of Q2 2025, with a gain of 10.94%, aided by improved market sentiment following the suspension of reciprocal tariff hikes on China [1] - Class A shares of the fund outperformed the Russell 2500 Growth Index during the same period [1] Company Analysis: NeoGenomics, Inc. - NeoGenomics, Inc. is identified as a leading provider of specialty oncology lab testing services, with a focus on serving hospitals, oncologists, and pathologists [3] - The stock of NeoGenomics experienced a one-month return of 14.83%, but it has lost 45.66% of its value over the past 52 weeks, closing at $8.13 per share with a market capitalization of $1.05 billion as of September 23, 2025 [2] - Despite a revenue shortfall attributed to weakness in non-clinical segments, NeoGenomics exceeded consensus estimates for EBITDA and reaffirmed its full-year 2025 organic revenue guidance, while slightly increasing total revenue guidance due to a recent acquisition [3]

Financial Data and Key Metrics Changes - Bookings in Q2 increased by 7% to $269 million, driven by strong capital performance and stable aftermarket demand [8] - Revenue decreased by 7% compared to the record revenue in 2024, largely due to softer capital orders [9] - Adjusted EBITDA was $52 million, down 15% from the prior year, while adjusted EPS was $2.31, down 18% [9][18] - Gross margin improved to 45.9%, up 150 basis points from 44.4% in Q2 2024, primarily due to a higher percentage of aftermarket parts [16] Business Line Data and Key Metrics Changes - Flow Control segment revenue increased by 4% to $96 million, with aftermarket revenue making up 75% of total revenue [11] - Industrial Processing segment bookings were up 9% to $105 million, but revenue decreased by 16% due to weaker capital shipments [12] - Material Handling segment bookings increased by 16% to $71 million, although revenue declined by 6% [14] Market Data and Key Metrics Changes - Overall market demand in North America was near historical highs, despite ongoing trade policy uncertainty [6] - The integration of Dynamic Ceiling Technologies is complete, expanding opportunities within the Flow Control segment [12] - The company noted that the economic environment remains uncertain, impacting capital investment activity [10] Company Strategy and Development Direction - The company aims to capitalize on strong cash flows and improve backlog, with expectations for industrial demand to strengthen in the second half of the year [15] - The acquisition of Babini is expected to enhance the company's technology offerings in dewatering equipment [15][66] - The company is focused on mitigating tariff impacts through supplier collaboration and cost-sharing strategies [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about sequential improvements in bookings and project activity in the latter half of 2025 [9][35] - The ongoing tariff uncertainties are causing customers to delay capital orders, impacting revenue recognition [26][58] - Management anticipates that the second half of the year will be stronger than the first half, with revenue guidance set at $1.02 billion to $1.04 billion for 2025 [27] Other Important Information - The company reported a significant increase in operating cash flow, up 44% to $40.5 million compared to the prior year [19] - Free cash flow increased by 58% to $36.5 million in Q2 2025 [19] - The company maintains a strong liquidity position with $162 million of borrowing capacity available [22] Q&A Session Summary Question: Expectations for sequential order improvement - Management confirmed expectations for strong third and fourth quarters, with capital orders anticipated to increase [32] Question: Sustainability of aftermarket parts revenue - Management indicated that the strong aftermarket revenue is primarily due to the age of the installed base, with a modest decline expected in Q3 [36] Question: Impact of capital equipment orders on aftermarket parts - Management expects a moderate drop in aftermarket parts as capital equipment orders increase, but overall operating rates are anticipated to rise [37] Question: Current assets and liabilities - Current assets were approximately $475 million, and current liabilities were about $200 million [41] Question: Breakdown of parts and consumables revenue - Parts and consumables made up 71% of total revenue this quarter, up from 63% last year [43] Question: Capital equipment bookings and revenue recognition - Management expects capital revenue to pick up in the back half of the year, with some projects recognized over time [44] Question: Tariff impacts on guidance - Management noted that tariff impacts have remained largely unchanged from prior forecasts, with ongoing adjustments being made [72]

Market & Trade Talk Outlook - TIAA Wealth Management manages $1.4 trillion in client assets [1] - Extending the deadline for China trade negotiations would be a positive market outcome [1] - A major deal from current China trade talks is not anticipated [2] - US trade policy uncertainty is decreasing, with European and Japanese deals setting a framework [2] - Trade truce between the US and China should hold due to economic interdependencies, despite occasional flare-ups [3] Tariff Impact & Economic Growth - Tariffs of approximately 15% are being applied to major trading partners like Europe and Japan [2] - Tariffs of 19% to 20% are being applied to other Asian countries, aimed at curbing Chinese transshipment [3] - Current tariff levels of 15% to 16% on $3.1 trillion in US imports equate to about $400 billion in taxes on businesses and consumers [5] - The economy is expected to slow down to a 1% to 1.5% growth rate due to tariffs [5] Potential Economic Offsets - The market is anticipating potential Fed rate cuts, looking past inflation and focusing on a cooling labor market [6] - Deregulation and potential rise in capital expenditures could lead to an uptick in growth next year [7] - Income tax relief to households and corporations may offset some tariff costs [7][8] - Re-industrialization and manufacturing starts in the US are rising, benefiting industrial companies [9] - Reshoring is taking place, which may not be fully factored into stock prices [10]