ExclusiveTariff Whiplash Leads to Historic Stock Market Comeback | Business Matters (May 15)

On today's business matters, it's going to cost more to slip on a pair of Birkenstocks. The German maker of sandals and clogs announced that it plans to raise prices globally. It explained that this is to offset the impact of President Trump's 10% tariff on imports to the U.S. And the increased prices will be seen starting in July. And most shoes being sold now are shipped before tariffs went into effect. The sandal maker is also looking at ways to make its factories and logistics more efficient and reduce costs in production. Meanwhile, Dick's Sporting Goods is buying Foot Locker. The sporting goods retailer made the announcement today. And it's saying that the deal would be for about a couple billion dollars, $2.3 billion to be exact. The transaction would allow Dick's to expand outside the U.S. for the first time. It expects to operate its 2,400 stores that span 22 countries. The company will maintain the Foot Locker name and run the shoe stores as a stand-alone business. Boeing has secured a deal with Qatar for about 210 jets worth $96 billion. The White House is calling it the aircraft maker's largest-ever wide-body order. President Trump was in Doha yesterday where the sale was announced. It's part of economic deals totaling more than $243 billion between the U.S. and Qatar. This sale also comes as Qatar's prime minister dismissed controversies surrounding President Trump's plan to accept a Boeing 747-8 from Qatar to be used as Air Force One. And if you're taking Uber to work, your next ride might be cheaper. It's all thanks to a new service Uber is launching called RootShare. It's a carpool-like option aimed at budget-conscious commuters. RootShare will function somewhat like a commuter shuttle. It's going to run every 20 minutes during the peak commute hours of 6 to 10 a.m. and from 4 to 8 p.m. on weekdays. Commuters will walk a short distance to designated pickup and drop-off points. They may share rides with up to two additional passengers. The service will launch in seven major cities, including New York City, San Francisco, and Chicago, before expanding nationwide. Everything is on the table to improve safety around the Reagan Washington National Airport. That's what FAA Deputy Head of Air Traffic Control Franklin McIntosh told House representatives. He said this includes the FAA possibly banning the Pentagon from transporting government officials on routine missions around the airport. This comes after a series of incidents involving passenger jets. In January, a Black Hawk helicopter collided with an American Airlines plane near the airport, killing 67 people. The stock market is showing a dramatic shift in sentiment, as Wall Street has been following a rollercoaster of trade policy announcements from the White House. Here's more. A remarkable comeback on Wall Street. As President Trump embarked on a trade war, investors dumped U.S. assets in a rare simultaneous sell-off of both stocks and bonds. The president had announced reciprocal tariffs on all trading partners and massive tariffs on China. As this unfolded, the S&P 500 dropped 10 percent from its record high in November, in a matter of just 22 days. Then, a sudden shift. The Trump administration paused reciprocal tariffs and later reached an agreement with China. Just as quickly as it dipped, the stock market climbed in a historic rally this past month. The S&P 500 has erased all of its losses for the year and has gained nearly $8 trillion in market value since its low in early April. Forecasters have also cut back their odds of a recession. Economists at JPMorgan Chase have dialed back recession odds from 60 percent in early April to less than 50 percent now. The U.S. economy isn't out of the danger zone, though. U.S. tariffs are still high. Yale's Budget Lab has the average effective tariff rate at almost 18 percent, the highest since the 1930s. Malaysia's trade minister is more optimistic now that it will reach a trade deal with Washington to reduce tariffs. The trade minister said this after meeting with his U.S. counterpart. He said they are moving in the right direction without sharing details. He did point to the de-escalation between the U.S. and China and the reached deal between the U.S. and the U.K. Malaysia was hit with 24 percent U.S. tariffs. The Southeast Asian country officially started negotiations with Washington two weeks ago. President Trump says he's less than pleased with Apple's planned expansion into India. Apple has been attempting to build factories there to reduce reliance on Chinese manufacturing. Meanwhile, Trump says India is offering a deal of no tariffs on U.S. goods. NTV's Sean Marshall has more. President Trump says he isn't pleased with Apple CEO Tim Cook's plans to manufacture iPhones bound for the United States at newly built plants in India. Trump says that Apple can build in India to take care of India. He also says that Apple is upping their production in the United States. No response from Apple yet on the president's comments. I had a little problem with Tim Cook yesterday. I said to him, Tim, you're my friend. I treated you very good. You're coming in with $500 billion, but now I hear you're building all over India. I don't want you building in India. You can build in India if you want to take care of India, because India is the highest, one of the highest tariff nations in the world. It's very hard to sell into India. Trump's comments follow Apple's decision to shift production of iPhones sold in the United States from China to India so Apple can avoid paying higher tariffs. Apple says that tariffs could add $900 million to its costs this quarter. Cook said on a call with analysts earlier this month that he expects the majority of iPhones sold in the U.S. will have India as their country of origin. But Trump's comments don't mean India isn't attempting to get on his good side. Trump said on Thursday that India has offered to eliminate tariffs on U.S. goods as part of a potential trade deal. If that comes to pass, it could represent a significant breakthrough with an increasingly important U.S. trading partner. India's foreign minister made these comments about a possible deal. Between India and U.S., trade talks have been going on, negotiations have been going on. In fact, we have, I think a team is just going at this point. These are very complicated negotiations. They are very intricate. Nothing is decided until, you know, everything is. Apple's attempts to move some iPhone production to India is not new. The company has been building new factories in the country and hiring staff. In February, Apple announced a $500 billion plan to expand its U.S. facilities over the next four years, creating 20,000 jobs in the process. Those investments include growing production for Mac Pro computers in Texas. Sean Marshall on TD News. And now a warning for anyone who bought a faucet on Amazon. The U.S. Consumer Product Safety Commission has issued an alert for several Chinese-made models. The federal agency says the faucets were tested and found to contain lead that leached into the water. It reached levels that can be potentially dangerous to young children. The products in the alert include KZH, CINEL, and Rainsworth bathroom faucets, and the Vesla home kitchen faucet. The CPSC says to immediately stop using the faucets and to get rid of them. The federal agency said this was part of an enforcement sweep targeting Chinese-made faucets. Also said it contacted the Chinese firms to issue recalls. But none had agreed to do so. European tech regulators have charged TikTok with breaching EU online content rules. Chinese owner ByteDance is at risk of a fine amounting to 6% of its global revenue. The European Commission said it sent its preliminary findings to TikTok following an investigation launched last year. The EU executive says TikTok has failed to comply with the Digital Services Act. The act requires online platforms to do more to tackle illegal and harmful content. It also requires companies to provide information on advertisements. TikTok faces a second investigation into its management of risks related to elections. Telegram said it removed two sprawling digital black markets operating on its chat app. Both of the black markets operate in the Chinese language. Xinbi Guarantee and Huiwan Guarantee are markets known for serving cybercriminals and scammers. They appear to be now inactive. Blockchain research firm Elliptic said the two markets had collectively facilitated more than $35 billion in transactions since 2021, many multiples higher than other black markets. The firm said in a statement that this is a big blow for online fraudsters who relied on these markets for stolen data. Money laundering services and telecoms infrastructure. Earlier this month, the U.S. moved to bar the Huiwan Group from the U.S. financial system. Treasury Secretary Scott Besson has stated that the Huiwan Group was the marketplace of choice for malicious cyber actors. Apartment owners at a luxury New York skyscraper are suing the building's developers. This is the high-rise at 432 Park Avenue on Manhattan's Billionaire's Row, built in 2015. Apartment owners accused the developers of, quote, far-reaching fraud. They claim structurally significant defects were hidden, including thousands of severe cracks on the tower's facade. The building's condo board says that damage led to flooding and impacted the value of their multimillion-dollar properties. The board accuses real estate firm CIM Group of failing to disclose the extent of damage. The lawsuit also names architecture and engineering companies involved in the project. Condo owners are collectively seeking more than $165 million in damages. Both CIM Group and SLCE Architects released statements denying the claims and saying they're asking to have the complaint dismissed. Child care is getting more and more expensive, with the cost of child care increasing by 29 percent from 2020 to 2024. That's according to a report by Child Care Aware of America. Last year, the national average of child care was just over $13,000. A report from the Centers for Disease Control and Prevention shows the fertility rate in the U.S. is near a record low. A government agency said this year a drop in the birth rate is one of the possible impacts of rising health care and child care costs. White House aides are considering financial incentives for women to give birth, including a proposal for a $5,000 baby bonus. Backlash from baristas over new dress code. Starbucks now requires employees to wear a solid black shirt and khaki black or blue denim bottoms under their green aprons. This went into effect Monday at company-operated and licensed stores in the U.S. and Canada. Starbucks Workers United says this sparked a strike at 75 stores in the U.S. with more than 1,000 protesting the new policy. The union argues that dress code should be part of collective bargaining. Starbucks said it would give workers two free black shirts. It also said the strike was having limited impact since more than 99 percent of its stores are open and serving customers. Your favorite tequila may not be as pure as you think. A class action lawsuit accuses beverage company Diageo of false labeling on the tequila brands Casamigos and Don Julio. The bottles are labeled as 100% agave. But the $5 million suit says that's not actually true, alleging neither tequila meets the regulatory requirements to carry such a label in the U.S. and Mexico. Diageo denies the allegations and says its tequilas are certified by the proper authorities. And expect to see higher prices at Walmart. The retail giant is warning that it does plan to raise prices on some items. Walmart's CEO says the scope of the tariffs won't allow the company to absorb all the effects. In prepared remarks for an earnings call today, he said the retailer would do its best to keep prices as low as possible. The world's largest retailer says price hikes are likely to begin later this month. Every product entering the U.S. is subject to a 10% tariff. Most items from China face a 30% levy. Netflix is going on the east coast and going big. The streaming giant has officially started working on a new mega-studio in a push to boost film production in the U.S. Netflix launched a $1 billion studio project in New Jersey aimed at boosting U.S. film production. The massive complex will feature 12 sound stages and create thousands of construction and production jobs. In a recent social media post, President Trump said the film industry was dying. The studio is set to open by 2028 as leaders push for tax incentives to keep film jobs on American soil. And on to markets. Wall Street ended mixed today with Cisco Systems rising after boosting its annual forecast thanks to AI demand, while UnitedHealth plunged to a 5-year low following a report of an investigation that the company said it hadn't been notified by prosecutors. Walmart dipped after warning it could raise prices due to tariffs, despite beating Q1 sales expectations. It declined to offer a Q2 profit outlook, reflecting broader corporate caution amid trade tensions. Amazon also dropped pressuring the Nasdaq. With that, everything on business matters today.