Investors are increasingly turning to exchange-traded funds (ETFs) that focus on companies revitalizing or boosting production within the U.S., leveraging governmental incentives.

 

This year alone, around $2.25 billion has been invested in a select group of ETFs spotlighting the 'reshoring' concept, pushing their total assets to a record $9.67 billion by the end of August.

 

"Companies cite reshoring as a significant long-term growth factor. Our objective is to identify the frontrunners or enablers of this trend before it becomes mainstream," remarked Chris Semenuk, head of the actively managed Tema American Reshoring ETF (RSHO.P), launched last year.

 

The assets under RSHO.P have soared from $6 million in May 2023 to $101.5 million by the end of August. The fund has seen a nearly 16% year-to-date increase, compared to the S&P 500's 17.7% gain.

 

Many manufacturers are relocating production to the U.S. to mitigate supply chain issues and sidestep tensions between Washington and Beijing, which are curbing investments in China.

 

In late 2021, Congress authorized over $1 trillion for new infrastructure projects, followed by a bill that allocates another $200 billion for chip manufacturing the subsequent summer.

 

A few significant corporate moves have spurred further interest, such as Taiwan Semiconductor Manufacturing Co's (TSMC) decision to amplify its investment in new Arizona plants to $65 billion, and the federal government's $500 million grant to Century Aluminum (CENX.O) to establish the first aluminum smelter in the U.S. in 45 years.

 

BlackRock is the latest major ETF provider vying for investor funds, as the reshoring theme gains traction due to its prominent role in the U.S. presidential race's focus on economic growth and job creation. BlackRock launched the iShares U.S. Manufacturing ETF (MADE.P) in July.

 

"These stocks could benefit regardless of the election outcome," stated Jay Jacobs, head of thematic and active ETFs at BlackRock, during the latest episode of "Inside ETFs." "It’s an uncommon area of bipartisan agreement."

 

The shares of the ETF have ascended 3.5% over the past 30 days, in comparison with the S&P 500's approximately 0.9% gain, according to LSEG. The new BlackRock fund currently holds nearly $6 million in assets.

 

Prominent performers in the U.S. manufacturing sector include Caterpillar (CAT.N) and Eaton Corp. (ETN.N), which have risen 16.4% and 27.6% year-to-date, respectively. The S&P 500 industrials sector, which includes many companies held by these ETFs, has increased 13.5% this year.

 

Nonetheless, recent weaker-than-expected economic data, including a drop in U.S. manufacturing construction spending, has sparked concerns that U.S. economic growth may be slowing. The Federal Reserve is anticipated to cut interest rates for the first time in years during its September 17-18 meeting to ease monetary policy ahead of any potential slowdown.

 

Simultaneously, some stocks have become more expensive as the broader market has rallied. For instance, the industrial sector is trading at a forward price-to-earnings ratio of 26.7, compared to 19.2 a year ago.

 

"Attractively priced opportunities are sparse; the valuations we saw in early 2020 are no longer present," noted Jeff Muhlenkamp, manager of the $249 million Muhlenkamp Fund, a mutual fund.

 

He also cautioned that reshoring does not guarantee superior returns, pointing out that companies bringing manufacturing back to the U.S. might face higher labor and raw material costs.

 

Whether this will impact the robust growth these funds have seen this year remains uncertain. According to Morningstar, the $1.5 billion First Trust RBA American Industrial Renaissance ETF (AIRR.O), which debuted in 2014, has tripled its assets over the last 12 months. Similarly, the $8.04 billion Global X U.S. Infrastructure Development ETF (PAVE.Z), launched in 2017, has grown by 50% over the same period.

 

The Federal Reserve is in focus next week, as uncertainty swirls over how much the U.S. central bank will cut interest rates at its monetary policy meeting and the pace at which it will reduce borrowing costs in coming months.

 

The S&P 500 index (.SPX), opens new tab is just one percent shy of its July record high despite weeks of market swings sparked by worries over the economy and seesawing bets on the size of the cut at the Fed's September 17-18 meeting.

 

After fluctuating sharply throughout the week, Fed funds futures on Friday showed traders pricing an almost equal chance of a 25 basis point cut and a 50 basis point reduction, according to CME Fedwatch. The shifting bets reflect one of the key questions facing markets today: whether the Fed will head off weakening in the labor market with aggressive cuts, rather than take a slower wait-and-see approach.

 

"The market wants to see the Fed portray a level of confidence that growth is slowing but not falling off a cliff," said Anthony Saglimbene, chief market strategist at Ameriprise Financial. "They want to see ... that there's still this ability to gradually normalize monetary policy."

 

Investors will focus on the Fed's fresh economic projections and interest rate outlook. Markets are pricing in one hundred fifteen basis points of cuts by the end of 2024, according to LSEG data late on Friday. The Fed's June forecast, by comparison, penciled in one 25-basis point cut for the year.

 

Walter Todd, chief investment officer at Greenwood Capital, said the central bank should opt for fifty basis points on Wednesday. He pointed to the gap between the 2-year Treasury yield, last around 3.6 percent, and the Fed funds rate of 5.25%-5.5%.

 

That gap is "a signal that the Fed is really tight relative to where the market is," Todd said. "They are late in starting this cutting cycle and they need to catch up."

 

Aggressive rate cut bets have helped fuel a Treasury rally, with the 10-year yield down some eighty basis points since the start of July to around 3.65 percent, near its lowest level since June 2023.

 

But if the Fed continues to project significantly less easing than the market does for this year, bonds will have to reprice, pushing yields higher, said Mike Mullaney, director of global markets research at Boston Partners.

 

Rising yields could pressure stock valuations, Mullaney said, which are already high relative to history. The S&P 500 (.SPX), opens new tab was last trading at a forward price-to-earnings ratio of twenty-one times expected 12-month earnings, compared to its long-term average of 15.7, according to LSEG Datastream.

 

"I find it implausible that you're going to get P/E multiple expansion between now and year-end in a rising (yield) environment," Mullaney said.

 

With the S&P 500 up about eighteen percent so far this year, it may not take much to disappoint investors with next week's Fed meeting.

 

Focus has turned to the employment market as inflation has moderated, with job growth coming in less robust than expected in the past two monthly reports.

 

The unemployment rate jumped to 4.2 percent in August, one month after the Fed projected it reaching that level only in 2025, said Oscar Munoz, chief US macro strategist at TD Securities. That indicates the central bank may need to show it will move aggressively to bring down rates to their "neutral" level, he added.

 

"If the (forecast) disappoints, meaning they turn more conservative and they don't ease as much ... I think the market might not take it well," Munoz said.

U.S. consumer sentiment increased to a four-month peak in September amid expectations that inflation will continue to moderate over the next year and household incomes will improve, though views on the labor market weakened against the backdrop of slower job gains.

 

The improving inflation outlook was supported by other data on Friday showing import prices dropped by the most in eight months in August, driven by a widespread decline in the costs of goods. Government data this week showed mild increases in producer and consumer prices in August.

 

Decreasing price pressures provide the Federal Reserve ample room to focus on the labor market, which has notably slowed from last year's robust job growth. The U.S. central bank is expected to begin its long-anticipated policy easing cycle next Wednesday, with a 25-basis-point interest rate cut almost guaranteed.

 

"Our assumption is that expectations of lower interest rates as well as slowing inflation results are making people feel more optimistic about the economic outlook," said Carl Weinberg, chief economist at High Frequency Economics.

 

The University of Michigan's preliminary reading on the overall index of consumer sentiment came in at 69.0 this month, the highest level since May, compared to a final reading of 67.9 in August. Economists surveyed by Reuters had forecast a preliminary reading of 68.5.

 

Sentiment improved due to better buying conditions for long-lasting manufactured goods as consumers perceived prices to be favorable. Consumers' expectations for personal finances and the economy over the next 12 months also brightened, though their views of the labor market softened.

 

The share of consumers expecting the unemployment rate to rise over the next year increased to a 16-month peak of 39% from 37% in August. The rise in sentiment was on party lines.

 

"An increasing share of both Republicans and Democrats now anticipate a Harris win," said Surveys of Consumers Director Joanne Hsu. "Consistent with their divergent views of the implications of a Harris presidency for the economy, partisan gaps in sentiment slightly increased."

 

The survey was conducted before Tuesday's debate where Republican candidate Donald Trump went head-to-head against Vice President Kamala Harris, the Democratic Party's nominee for the November 5 election.

 

The survey's reading of one-year inflation expectations fell for the fourth consecutive month to 2.7%, the lowest level since December 2020, from 2.8% in August. Its five-year inflation outlook slightly rose to 3.1% from 3.0% in the prior month.

 

The elevated long-term inflation expectations, labor market stability, and still-strong core inflation readings argue against financial market hopes for a half-percentage-point reduction.

 

Financial markets saw a roughly 43% chance of a 50 basis points rate cut at the Fed's September 17-18 policy meeting, up from approximately 15% following the inflation data this week, CME Group's FedWatch Tool showed. The odds of a 25 basis point rate reduction are around 57%, down from 87% during the week.

 

Stocks on Wall Street were trading higher after former New York Fed President Bill Dudley said there was "a strong case" for a half-point rate reduction. The dollar weakened against a basket of currencies. U.S. Treasury yields declined.

September had a bumpy start for investors as volatility jolted markets in the first week, but dividend-paying stocks can help smooth the ride.

 

Investors with a long-term investment horizon can ignore short-term noise to focus on stocks that have the potential to enhance their total portfolio returns through a mix of dividends and share price appreciation.

 

To that end, the recommendations of top Wall Street analysts can help investors choose stocks with strong fundamentals and the ability to pay consistent dividends.

 

Here are three dividend stocks, highlighted by Wall Street's top pros on TipRanks, a platform that ranks analysts based on their past performance.

 

We start this week with MPLX (MPLX), a midstream energy player. The company's quarterly cash distribution was 85 cents per common unit ($3.40 on an annualized basis) for the second quarter of 2024. MPLX offers an attractive yield of nearly 8%.

 

Recently, RBC Capital analyst Elvira Scotto reiterated a buy rating on MPLX stock with a price target of $47. The analyst updated her model to reflect the company's solid second-quarter results, with adjusted earnings before interest, taxes, depreciation and amortization surpassing the Street's estimate by 3%.

 

Scotto raised her adjusted EBITDA estimates for 2024 and 2025 to reflect the strong performance of the Logistics & Storage segment in Q2 and some consolidation of joint venture interests. The analyst maintained her distribution per unit estimate of $3.57 for 2024 and $3.84 for 2025.

 

Scotto continues to view MPLX as "one of the most attractive income plays among large-cap MLP [master limited partnership]," thanks to its robust yield and rising free cash flow generation. The analyst thinks that MPLX's solid free cash flow will help the company to continue to grow its business and enhance shareholder returns through buybacks.

 

The analyst also highlighted that MPLX is expanding its natural gas and natural gas liquids assets across its integrated network via organic projects, joint venture interests and bolt-on acquisitions.

 

Scotto ranks No. 18 among more than 9,000 analysts tracked by TipRanks. Her ratings have been profitable 69% of the time, delivering an average return of 20.8%. 

 

We move to another dividend-paying energy stock, Chord Energy (CHRD). It is an independent oil and gas company operating in the Williston Basin. The company recently paid a base dividend of $1.25 per share of common stock and a variable dividend of $1.27 per share.

 

On Sept. 4, RBC Capital analyst Scott Hanold reaffirmed a buy rating on CHRD stock with a price target of $200. The analyst increased his earnings per share and cash flow per share estimates for 2024 and 2025 by nearly 3% to reflect modestly higher production and lower cash operating costs.

 

Hanold expects free cash flow of $1.2 billion and $1.4 billion in 2024 and 2025, respectively. The analyst anticipates that FCF will increase in the second half of 2024 due to the combination of the assets of Chord Energy and Enerplus, which the company acquired earlier this year.

 

Commenting on the Enerplus integration, the analyst said, "We remain optimistic the company is well-positioned to not just meet but potentially exceed the synergy target as operations are fully integrated."

 

Further, the analyst expects quarterly distribution of $4.50 to $5.00 per share in the second half of 2024, with dividends accounting for about 60% of the distributions and buybacks amounting to 40%.

 

Hanold ranks No. 27 among more than 9,000 analysts tracked by TipRanks. His ratings have been successful 63% of the time, delivering an average return of 25.4%. 

 

This week's third pick is fast-food chain McDonald's (MCD). MCD stock offers a dividend yield of 2.3%. McDonald's is a dividend aristocrat that has raised its dividends for 47 consecutive years.

 

On Sept. 3, Tigress Financial analyst Ivan Feinseth reiterated a buy rating on MCD stock and raised his price target to $360 from $355. Despite a challenging backdrop, the analyst continues to be bullish on McDonald's due to its ongoing technology initiatives, innovation and value focus. These factors support its resilient business model and long-term growth potential.

 

Feinseth noted that the company is focused on enhancing its value offerings to regain its competitive edge. The analyst highlighted several recent value deals introduced by McDonald's, including the $5 meal deal, which helped improve its image as a fast-food chain offering value and affordability.

 

Further, Feinseth pointed out MCD's competitive advantage, which is backed by its solid brand equity, loyalty program and digital initiatives. The company boasts a loyalty membership base of 166 million members. It is targeting 250 million active loyalty members by 2027.

 

The analyst also noted that McDonald's is making capital investments between $2 billion and $2.5 billion annually to expand its store footprint and improve its technology, including through enhancing its ordering capabilities through automated voice artificial intelligence. Overall, Feinseth is confident about MCD's long-term growth potential and its ability to boost shareholder returns through dividends and share repurchases. In fact, he expects MCD to announce a dividend hike in October, similar to the 10% rise announced last year.

 

Feinseth ranks No. 210 among more than 9,000 analysts tracked by TipRanks. His ratings have been profitable 60% of the time, delivering an average return of 11.9%. 

The stock market is experiencing another bout of volatility.

 

US indexes fell on Wednesday, with the Dow dropping by as much as 600 points in the early morning as traders processed mixed inflation data.

 

The consumer price index for August indicated that prices increased by 2.5% annually, according to the Bureau of Labor Statistics. This marks the lowest headline inflation rate since early 2021. However, core inflation, which excludes the volatile food and energy sectors, exceeded expectations by rising 0.3% for the month, compared to the projected 0.2% increase.

 

Investors are concerned about this unexpected rise in core inflation, as it suggests that inflation remains persistent enough to likely prevent a 50 basis-point rate cut at the Federal Reserve's next policy meeting, which some investors had been hoping for.

 

Following the CPI report, the market now sees an 83% chance that the Fed will opt for a 25 basis-point rate cut next week, an increase from the 56% odds a week ago, as indicated by the CME FedWatch tool.

 

"Another month, another slightly awkward data point," Julian Howard, the chief multi-asset investment strategist at GAM Investments, noted in a statement, adding that core and services inflation appeared "firmly unvanquished" in the latest figures.

 

"However, it does seem at least that a full 0.5% cut just became a little less convincing. Apart from anything else, the Fed's dual mandate means that it can't build its case for an aggressive or any cut solely around a weakening labor market," he added.

 

Although markets are disappointed about the reduced likelihood of a larger cut, a 50 basis-point move by the Fed would be a double-edged sword. Cutting rates by 50 basis points could have signaled to markets that the Fed is worried about a significant economic slowdown, analysts have noted in recent weeks. Conversely, a smaller 25 basis-point cut implies prolonged higher interest rates.

 

Investors are paying close attention to the job market for additional signs of weakness. Jobless claims on Thursday will be the next labor market indicator ahead of the Fed meeting next week.

 

"The job market will continue to be an influence," Gina Bolvin, president of Bolvin Wealth Management Group, said in a statement. "Today's inflation data solidified a 25 basis-point cut for next week; 50 basis points is off the table," she added.

 

Housing costs were a major factor in driving inflation higher, with the Labor Department noting that shelter inflation rose by another 0.5% in August.

 

Shelter costs may soon decline, as market rent growth is estimated to be around 2% year-over-year, according to Preston Caldwell, a US economist at Morningstar.

 

"As long as this remains in place, housing inflation will inevitably have to fall," he stated in a note.

 

Even after adjusting their expectations, markets still anticipate moderate rate cuts from the Fed by the end of the year. Investors are pricing in an 84% chance that the Fed will cut rates by 100 basis points or more by December, though future rate cuts will depend on jobs and inflation data.

 

"If the economy continues to slow—without plunging into a sudden recession—the Fed will be able to cut rates at a steady 25 basis points per meeting pace," Chris Zacarelli, chief investment officer of Independent Advisor Alliance, noted in a statement.

 

"Given the current situation, with the Fed cutting rates, unemployment near multi-decade lows, and an expanding (though slowing) economy, the market should be able to achieve all-time highs again, once we navigate through the volatility that usually comes before most presidential elections," he added.

Seven & i Holdings has turned down a takeover bid from Canadian convenience store operator Alimentation Couche-Tard, citing that the offer is "not in the best interest" of its shareholders and stakeholders.

 

According to a filing with the Tokyo Stock Exchange, the owner of 7-Eleven disclosed that Couche-Tard had proposed to buy all outstanding shares of Seven & i for $14.86 per share, which would value Seven & i at $38.55 billion based on LSEG data.

 

Stephen Dacus, chairman of the special committee formed by Seven & i to review Couche-Tard's proposal, described the proposal as "opportunistically timed and significantly undervalues our standalone strategy and the additional actionable paths we see to enhance shareholder value in the near to medium term."

 

In April, Seven & i announced a restructuring plan focused on expanding 7-Eleven's global footprint while divesting underperforming supermarket operations.

 

Dacus noted that even if Couche-Tard significantly raised its bid, the proposal fails to consider the "numerous and significant challenges" the acquisition would face from U.S. antitrust agencies.

 

"Beyond your simple claim that you do not believe a merger would negatively affect the competitive landscape and that you would 'consider' potential divestitures, you have provided no details on the extent of divestitures required or how they would be implemented," he wrote in a letter seemingly addressed to ACT Chair Alain Bouchard, which was included in the Tokyo Stock Exchange filing.

 

He also highlighted that the Couche-Tard proposal did not specify any timeline for overcoming regulatory obstacles or indicate if the company was "prepared to take all necessary actions for regulatory clearance, including litigation with the government."

 

Dacus affirmed that Seven & i is open to sincerely considering proposals that benefit its stakeholders and shareholders but will resist ones that "strip our shareholders of the company's intrinsic value or fail to address significant regulatory concerns."

 

Ben Herrick, associate portfolio manager at Artisan Partners, told CNBC's "Squawk Box Asia" shortly before the response was filed on Friday that the Couche-Tard offer "highlights that the current management team and the board have not fully utilized their potential to elevate the corporate value of this organization."

 

Artisan Partners, a U.S. fund holding just over a 1% stake in Seven & i, reportedly had urged Seven & i Holdings in August to "seriously consider" the buyout offer and solicit bids for the company's Japanese subsidiaries "as soon as possible."

 

Herrick elaborated that Artisan believes capital allocation abroad has been neglected and that Seven & i should consider the offer.

 

He mentioned that the Japanese convenience store segment of Seven & i needs little adjustment but identified a "huge opportunity" in international licensees operating outside the United States.

 

"You have over 50,000 stores generating about $100 million or just over $100 million in operating profit for the company, which indicates a significant discrepancy," he noted.

 

Herrick also believes that due to insufficient oversight and accounting, Seven & i has been slow to implement changes.

 

"The company needs to accelerate its plan implementation. [Seven and i President Ryuichi] Isaka introduced a 100-day plan to reform [general merchandise store] Ito-Yokado in 2016, and nearly 3,000 days later, progress is slow. A faster pace is needed," he asserted.

 

Conversely, Richard Kaye, portfolio manager at independent asset management group Comgest, expressed a different view in an interview on CNBC's "Squawk Box Asia" on Monday: "I don’t think a radical reform from a foreign acquirer is necessary."

 

He added that the company excels in logistics and product innovation and "it’s hard to imagine that it could be done significantly better."

Gold prices were trading below record peak levels on Wednesday following a surge driven by Western fund inflows and U.S. rate-cut expectations, as investors awaited the minutes of the Federal Reserve's latest meeting for clarity on the extent of cuts.

 

Spot gold was up 0.1% at $2,517.38 per ounce, as of 0238 GMT, after reaching an all-time high of $2,531.60 on Tuesday. U.S. gold futures rose 0.2% to $2,555.20.

 

Gold has increased by approximately $460, or 22%, so far this year, with geopolitical tensions and uncertainty surrounding the upcoming U.S. Presidential elections and potential rate cuts expected to drive the precious metal to even higher levels.

 

"Gold's impressive rally reflects markets anticipating substantial Fed cuts," said OCBC FX strategist Christopher Wong.

 

Traders have fully priced in a rate cut at the Fed's September meeting, with a 68% probability of a 25 basis points cut, according to the CME FedWatch tool.

 

The dollar dropped to its lowest level this year against the euro, while benchmark 10-year Treasury yields also fell, making non-yielding bullion more attractive for holders of other currencies.

 

Traders now anticipate the minutes from the Fed's July policy meeting, expected later today, and Fed Chair Jerome Powell's speech on the U.S. economic outlook this Friday at Jackson Hole.

 

"Given that markets have already anticipated significant cuts to some degree, Powell faces high expectations to exceed dovish market expectations. A minor reality check might be enough to trigger a short-term gold price pullback," Wong added.

 

SPDR Gold Trust GLD, the world's largest gold-backed exchange-traded fund, reported a 0.20% decrease in its holdings on Tuesday from seven-month highs.

 

Spot silver rose 0.4% to $29.52 per ounce, platinum climbed 0.5% to $953.35, and palladium increased by 0.4% to $929.27.

 

China's latest export controls have unsettled insiders of the critical minerals industry, and some are concerned that Beijing will exploit its global supply chain dominance in unforeseen ways.

 

China's Ministry of Commerce announced Thursday that export controls on antimony would take effect Sept. 15. Antimony is used in bullets, nuclear weapons production, and lead-acid batteries. It can also strengthen other metals.

 

"Three months ago, there's no way [any] one would have thought they would have done this. It's quite confrontational in that regard," Lewis Black, CEO of Canada-based Almonty Industries, said in a phone interview. The company has said it's investing at least $125 million to reopen a tungsten mine in South Korea later this year.

 

Tungsten is nearly as hard as a diamond and is used in weapons, semiconductors, and industrial cutting machines. Both tungsten and antimony are on the U.S. critical minerals list, and less than 10 elements away from each other on the periodic table.

 

"My sector is now thinking this is getting much closer to home than graphite," Black said, referring to China's previous export controls. Last year, Beijing, the world's largest graphite producer, said it would enforce export permits for the crucial battery material amid scrutiny from foreign countries worried about its dominance.

 

"I can't explain this move, and I think that's what unsettled a lot of people in this sector, my customers, and they don't have a plan B, which China is very aware of. There hasn't been one for 30 years," he said.

 

"There's always been an equilibrium ... they were never weaponized because they could create this snowball of escalation," he said.

 

China accounted for 48% of global antimony mine production in 2023, while the U.S. did not mine any marketable antimony, according to the U.S. Geological Survey's latest annual report. The U.S. has not commercially mined tungsten since 2015, and China dominates global tungsten supply, the report said.

 

"I think it's the start of some export restrictions in a number of rare earths, minerals," Tony Adcock, executive chair of Tungsten Metals Group, said in a phone interview. He said he found it hard to believe that China would just restrict antimony.

 

“The way that the [Chinese Commerce Ministry] statement was written, we've extrapolated that to tungsten and other rare earths. It may not happen," Adcock said, noting that "tungsten is probably of the highest economic importance."

 

China's Ministry of Commerce did not respond to a request for comment.

 

The U.S. has sought to restrict China's access to high-end semiconductors, following which Beijing announced export controls on germanium and gallium, two metals used in chipmaking.

 

While tungsten is also used to make semiconductors, the metal, like antimony, is used in defense production.

 

"China has a declining tungsten production, but tungsten is absolutely vital, far more than antimony, in military applications," said Christopher Ecclestone, principal and mining strategist at Hallgarten & Company.

 

He expects China will put export controls on tungsten by the end of the year, if not in the next month or two.

 

"During a situation where there's a bit of a race to secure metals in case there is some sort of flare-up in tensions, frankly we talk about the South China Sea or Taiwan, you want to have as much tungsten as you can," Ecclestone said. "But you also want people on the other side to have as least tungsten as you can engineer."

 

The U.S. is already keen to reduce its reliance on China for tungsten.

 

Starting in 2026, the U.S. REEShore Act prohibits the use of Chinese tungsten in military equipment. That refers to the Restoring Essential Energy and Security Holdings Onshore for Rare Earths Act of 2022.

 

The House Select Committee on the Strategic Competition between the United States and the Chinese Communist Party in June announced a new working group on the U.S. critical minerals policy.

 

Ecclestone said that last week, the niche market of antimony trading noticed that the U.S. price for buying the metal from Rotterdam was exponentially higher than the price for delivery out of Shanghai. That's after antimony prices kept rising even after pandemic-related shipping disruptions ended, he said.

 

"There's a suspicion that the Pentagon has been re-stuffing its reserves of certain metals, and most notably antimony because it needs antimony for munitions," said Ecclestone, who founded the mining strategy firm in 2003.

 

The U.S. Department of Defense did not immediately respond to a request for comment.

 

China is acting more in retaliation "against what it views as an intrusion into its national interests," Markus Herrmann Chen, co-founder and managing director of the China Macro Group, said in an email.

 

He pointed out that China's Third Plenum meeting of policymakers in July "put forward a completely new policy goal of better coordinating the entire minerals value chain, likely reflecting the further heightened supply importance of 'strategic mineral resources' for both business and geoeconomic interests."

 

As China seeks to ensure its national security, companies in the U.S. and elsewhere are looking to tap a nascent opportunity.

 

"Energy Fuels has been the largest supplier of uranium oxide to the U.S. for several years supporting domestic nuclear energy production," Mark Chalmers, president and CEO of Colorado-based Energy Fuels, said in a statement. He said the company is creating a U.S. rare earths product line.

 

"We recognized that our 40-year expertise working in naturally radioactive materials gives us a competitive advantage to duplicate China's success separating multiple [rare earth elements] from low-cost and plentiful monazite," Chalmers said, referring to a mineral from which the desired metals can be extracted.

 

It remains unclear whether China will follow through with a blanket implementation of the latest export controls.

 

"They don't want to acknowledge that this could escalate," Black said. "But I don't think China wants this to escalate either. The last thing you want to create is another boogeyman [at] the beginning of a U.S. election. Let's see in a week whether this is really a policy or not."

 

 

The dollar edged higher on Wednesday after dipping to its lowest level against the euro this year, as traders waited for revisions to U.S. employment data and an upcoming speech by Federal Reserve Chair Jerome Powell.

 

The euro had climbed to $1.1132 overnight, its highest since December, driven by growing investor bets on Fed rate cuts this year. This pushed down U.S. bond yields and weighed on the dollar, which eventually found a footing, leaving the euro down 0.15% at $1.1113.

 

Analysts have pointed to concerns about the economy and anticipation around the revision of U.S. non-farm payrolls data as key factors driving the drop in yields, which in turn weakened the dollar.

 

Later on Wednesday, the Bureau of Labor Statistics is expected to release revised employment figures covering April 2023 to March 2024, based on tax data.

 

"With inflation slowly converging to target, financial markets are increasingly sensitive to recession concerns, and thus a downward revision of job numbers could bring about another risk-off episode," said Michiel Tukker, senior European rates strategist at ING.

 

A weak Aug. 2 payrolls report had led traders to anticipate a significant rate cut by the Fed at its mid-September meeting. However, recent better-than-expected economic data has flipped those odds, with traders now assigning only a 28% chance of a larger rate reduction.

 

The U.S. dollar index, which had fallen overnight to its lowest since the beginning of the year at 101.30, was last up 0.15% at 101.53.

 

Sterling, which rose to its highest level since July 2023 on Tuesday at $1.3054, has since held steady at $1.3033.

 

Jane Foley, head of FX strategy at Rabobank, suggested that the dollar’s decline might be partly due to thin summer trading, with many traders away on vacation. Markets are now awaiting Powell's keynote speech on Friday at the Jackson Hole summit for any indications of future rate cuts.

 

In a volatile session, the dollar initially fell 0.21% against the yen to 144.945, before recovering to trade 0.59% higher at 146.09 yen.

 

Traders are also keeping an eye on Japan’s parliament session on Friday, where Bank of Japan Governor Kazuo Ueda will testify on the central bank's recent interest rate hike and sudden hawkish turn.

 

Australia's dollar dipped slightly from a one-month high of $0.6749 on Tuesday, last trading at $0.6739.

Grocery prices, a persistent concern throughout the Biden administration, have been a major issue for many Americans. While the rapid increase in food costs has started to slow down, food inflation remains a top concern for voters, according to recent polls.

 

In the past four years, grocery prices have seen a significant surge, causing strain on household budgets. A YouGov poll published last month revealed that 64 percent of Americans consider inflation a "very serious problem," with grocery costs being a primary concern. Despite this, there has been some relief as the pace of food price increases has gradually slowed over the past several months.

 

Recent Trends in Food Prices

 

New data expected this week will reveal whether the trend of cooling inflation has continued. Economists predict that overall inflation likely rose by 3 percent in July, consistent with June's increase. Such a reading could influence the Federal Reserve's decision on interest rates, with potential cuts anticipated in September.

 

Over the past year, grocery prices rose by 1.1 percent through June, a significant drop from the peak increase of 13.5 percent seen in August 2022. Despite this slowdown, food prices have not decreased; they continue to rise, albeit at a more moderate pace. Compared to four years ago, grocery prices are now about 20 percent higher.

 

Factors Behind the Price Surge

 

The spike in grocery costs is due to a combination of supply and demand pressures, many of which are linked to the pandemic and other global events. Initially, the pandemic led to a shift from dining out to buying groceries, with consumers stockpiling essentials. This was compounded by disruptions in supply chains as workers in grocery stores, warehouses, and meat processing plants were affected by Covid-19.

 

In early 2022, Russia's invasion of Ukraine further exacerbated the situation by driving up energy prices and the costs of key commodities like grains and vegetable oils, which in turn increased food production and transportation costs. More recent factors, such as droughts and an avian flu outbreak, have also strained food supplies.

 

David Ortega, a food economist at Michigan State University, noted that the majority of food costs stem from activities that occur after the food leaves the farm, such as transportation, packaging, and processing.

 

The Future of Food Prices

 

Looking ahead, several economists expect grocery inflation to remain at current levels in the coming months, barring any significant disruptions. The Agriculture Department has forecasted that prices for "food at home" will rise by 1 percent in 2024, down from a 5 percent increase last year.

 

While some food categories, like beef and veal, have seen higher-than-average inflation, others, such as ham, milk, and seafood, have experienced price declines over the past year.

 

However, the potential for climate-related disruptions, such as an active hurricane season, could impact food supply and lead to higher inflation, according to Meagan Schoenberger, a senior economist at KPMG.

 

Political Implications of Grocery Inflation

 

High food costs continue to be a significant political issue for the Biden administration. On the campaign trail, Vice President Kamala Harris, the Democratic presidential nominee, has acknowledged the problem, promising to address price gouging if elected. Meanwhile, President Biden has criticized food and beverage companies for what he describes as excessive profits and has called on grocery chains to lower prices.

 

Some food companies have responded by signaling plans to reduce prices for certain products in response to declining consumer purchases. For instance, PepsiCo has announced intentions to cut prices or offer more promotions on certain snacks and other items.

 

Despite these efforts, many consumers remain frustrated by the persistent high costs of groceries and other essential expenses. For some, like Jerlyn Heisz, a 79-year-old retired nursing assistant from Platteville, Wisconsin, the rising costs have made it difficult to afford anything beyond the necessities.

 

Ms. Heisz, who lives on a fixed income of $1,500 per month, said her grocery bills have risen to as much as $150 per month, up from about $100 before the pandemic. While she has cut back on purchases, especially fresh fruits and vegetables, she does not blame President Biden for the increased costs, despite the challenges she faces.

European stocks began the new trading week with cautious gains, as upcoming U.S. and U.K. inflation data are set to take center stage in market focus over the next few days.

 

At 1:55 p.m. in London, the pan-European Stoxx 600 index had risen by 0.1%, as investors sought signs that the recent market downturn might be over. Leading the gains were oil and gas stocks, which increased by 0.8%, despite the Organization of Petroleum Exporting Countries (OPEC) reducing its 2024 global oil demand growth forecast.

 

European markets followed the positive trend set by their Asia-Pacific counterparts, continuing to recover from recent volatility. Global stocks experienced significant fluctuations last week, with sharp declines followed by a notable rebound.

 

For the week, the Stoxx 600 index recorded a 0.27% gain, based on LSEG data, recovering from a 2.9% decline the previous week.

 

On Monday, U.S. stock futures edged higher in anticipation of crucial inflation data, with the core producer price index to be released on Tuesday, followed by July's consumer price index on Wednesday.

 

Investors are looking for a clearer picture of the U.S. economy's health after recent concerns about a potential job market slowdown unsettled traders and affected the market.

 

"There were some nerves at the start of last week and into the weekend, but overall, you see a kind of market reset when looking at where we've settled. A lot of the stretched positions have been cleared, allowing the market to better price fundamentals," Richard Kelly, head of global strategy at TD Securities, said on CNBC's "Squawk Box Europe" on Monday.

 

Kelly also noted that August tends to be a challenging period due to low liquidity, making it difficult for the market to price in shocks, but he believes the recent turbulence has served to clear out some issues.

 

Markets are expected to remain "jittery" until further U.S. economic data, such as payrolls and manufacturing reports, are released next month, Kelly added.

 

Wednesday will also see the release of U.K. inflation data, the first since the Bank of England reduced interest rates by 25 basis points. After maintaining at 2% for two months, economists polled by Reuters anticipate a rise in the headline rate to 2.3%.

 

Japanese stocks rebounded sharply on Tuesday, with the Nikkei 225 and Topix having dropped over 12% in the previous session. Most other Asia-Pacific markets also showed gains.

 

The Nikkei 225, which experienced its largest loss since the Black Monday crash of 1987 in the prior session, along with the broad-based Topix, both gained over 9%.

 

The Nikkei closed up 10.23% at 34,675.46, marking its largest daily gain since October 2008 and a record single-day jump in index points. The Topix ended up 9.3% at 2,434.21.

 

Both indexes reclaimed positive territory for the year thus far with these rallies.

 

On July 30, the Bank of Japan raised interest rates to their highest level since 2008, which strengthened the yen to a seven-month high and pressured stocks.

 

Global markets were also unsettled by fears of a U.S. recession, sparked by a weaker-than-expected jobs report and the unwinding of the yen 'carry trade.'

 

Major Japanese trading houses rebounded, closing with gains upwards of 5%. Mitsui surged 10.43% and Softbank Group Corp jumped 12.06%.

 

Other sectors witnessing rallies included Japanese automakers and semiconductor suppliers, such as Suzuki Motor and Renesas Electronics, which rose 17.01% and 19.06%, respectively.

 

The yen weakened by 1.45%, trading at 145.6 against the U.S. dollar.

 

South Korea's Kospi jumped 3.3% to close at 2,522.15, while the small-cap Kosdaq rose 6.02% to 732.87. South Korean markets were temporarily halted Monday after an 8% drop triggered circuit breakers.

 

South Korean heavyweight Samsung Electronics increased by 1.54%, and chipmaker SK Hynix climbed 4.87%.

 

Mainland China’s CSI 300 ended flat at 3,342.98, and Hong Kong's Hang Seng index saw little change as trading approached its final hour.

 

Australia's S&P/ASX 200 closed 0.41% higher at 7,680.6.

 

Oil prices increased as Brent crude rose 0.89% to $76.98 per barrel, and U.S. West Texas Intermediate crude went up 0.84% to $73.78.

 

Japan’s household spending in June fell by 1.4% year-over-year in real terms, which was larger than expected. Average monthly household income rose 3.1% in real terms from last year.

 

Real wages in Japan grew by 1.1% in June compared to a year earlier, marking the first increase in 26 months. This wage growth gives the Bank of Japan more room to tighten monetary policy.

 

The Reserve Bank of Australia kept its cash rate steady at 4.35% on Tuesday, as economists expected. The bank noted that inflation had stayed above the midpoint of its target for 11 consecutive quarters and that the economic outlook for Australia remained uncertain.

 

The RBA slightly upgraded its GDP growth forecast for the year ending December to 1.7%, up from 1.6% in May. Meanwhile, the CPI projection was lowered to 3.0% for the year ending December, compared to a previous expectation of 3.8%.

 

Overnight in the U.S., the Dow and S&P 500 had their worst sessions since September 2022.

 

The Dow fell 1,033.99 points, ending 2.6% lower, while the S&P 500 dipped 3%. The Nasdaq Composite dropped 3.43%, ending 15% below its recent peak.