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Most Trump tariffs ruled illegal by appeals court

The United States Court of Appeals for the Federal Circuit, which handles appeals for the Court of International Trade, has ruled against President Trump and his administration on tariffs levied against other countries.

The president’s tariffs were launched under the International Emergency Economic Powers Act, but the courts majority was in agreement with the lower court that the act does not in fact give the president the authority to implement the tariffs in the manner that he did.

However, the court permitted the tariffs to stay in place until mid-October, allowing for a request for an appeal to reach the Supreme Court.

“We agree that IEEPA’s grant of presidential authority to regulate imports does not authorize the tariffs imposed by the Executive Orders, we affirm,” the court wrote in a 7-4 decision.

Tariffs have been a major narrative driving markets over the past several months, and the decision is a legal blow to a signature element of the president’s economic policy.

The tariffs rejected by the ruling include the 10% charge placed on imports from almost all countries, as well as additional tariffs imposed on countries the president deemed to have unfair trade restrictions, and charges put in place on goods imported from Canada, China, and Mexico.

The president’s tariffs were launched under the International Emergency Economic Powers Act, but the courts majority was in agreement with the lower court that the act does not in fact give the president the authority to implement the tariffs in the manner that he did.

However, the court permitted the tariffs to stay in place until mid-October, allowing for a request for an appeal to reach the Supreme Court.

“We agree that IEEPA’s grant of presidential authority to regulate imports does not authorize the tariffs imposed by the Executive Orders, we affirm,” the court wrote in a 7-4 decision.

Tariffs have been a major narrative driving markets over the past several months, and the decision is a legal blow to a signature element of the president’s economic policy.

The tariffs rejected by the ruling include the 10% charge placed on imports from almost all countries, as well as additional tariffs imposed on countries the president deemed to have unfair trade restrictions, and charges put in place on goods imported from Canada, China, and Mexico.

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American Eagle posts stronger-than-expected Q4 earnings and revenue

If American Eagle has seen farther, it is by standing on the shoulders of Sydney Sweeney.

The jeans seller posted adjusted earnings of $0.84 per share, ahead of the $0.71 expected by analysts polled by FactSet. It booked $1.76 billion in fourth-quarter revenue, versus the $1.74 billion consensus.

Shares initially climbed more than 5% after-hours before paring gains to about 2%.

“Compelling new product collections, supported by fresh marketing campaigns, led to higher demand trends in the quarter,” said CEO Jay Schottenstein.

American Eagle said it’s expecting same-store sales to grow by high single digits in the first quarter.

Marketing controversy has proved to be a powerful mover of denim for AE. In its third-quarter earnings call in December, AE said its partnership with Sydney Sweeney — together with a Travis Kelce partnership — had garnered more than 44 billion impressions. The retailer hit meme stock status last July when it initially launched its “Sydney Sweeney has great jeans” campaign.

As of Wednesday’s close, American Eagle shares had climbed 120% since the Sweeney ad first landed.

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Investors are itching to buy the dip in memory stocks

The intense drubbing in South Korean stocks, with the benchmark Korean index (KOSPI) falling nearly 20% in its first two trading days of the week following a Monday holiday, represented a serious threat to the hottest AI trade: memory stocks.

South Korea’s market is dominated by two high-bandwidth memory giants: SK Hynix and Samsung.

After Tuesday’s tumble, US investors seemingly said enough is enough: it’s a buy-the-dip opportunity.

US memory stocks like Micron, Sandisk, Western Digital, and Seagate Technology Holdings are posting massive gains on the day. The advance comes amid positive commentary at a Morgan Stanley conference on demand for memory chips.

Even more interestingly, the iShares MSCI South Korea ETF is up big today despite the KOSPI falling 12% overnight, its largest drop on record. The ETF’s outperformance of the South Korean equity gauge is the largest since 2008, as the global financial crisis raged.

The daily performance of these two can differ materially since they trade at different times and don’t track precisely the same things. US investors are making the bet that a potential break in this momentum trade and the potential for an unwind of retail leverage in South Korean markets be damned, big drops in memory stocks are meant to be bought.

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