Central Bank Meetings Begin, Geopolitical Instability, Corporate News
Latest stock market news
• The US stock market was hit by a wave of sales again. And once again the "Magic Seven" was in the lead. Only XLV, XLF and XLE were neutral. The last two are cyclical and their stability suggests that they are not playing for a recession yet. The sales of XLP also indicate this.
This evening, investors hope to hear encouraging words from Powell. The "Fed Put" still lives in the hearts of investors. The "Trump Put" died earlier. We are waiting for a reaction to the Fed Chairman's speech today. A stop to QT (quantitative tightening with a reduction in the Fed balance sheet) is also possible. The currency market is still calm.
• Investor attention is likely to briefly shift from the recent focus on trade and politics to monetary policy for the remainder of the week.
The Federal Reserve will be first, followed on Thursday by the Bank of England, Sweden's Riksbank and the Swiss National Bank.
All but the SNB are expected to leave rates unchanged, as the Bank of Japan did earlier in the day. The focus will be on how far they can signal their policy intentions or their sensitivity to recent market jitters around U.S. tariffs and the prospect of slower growth.
• Ten-year Treasury yields have fallen 25 basis points since the Fed's last meeting in January, just a week after Donald Trump was inaugurated as president.
The S&P 500 is down about 7%, and gold is setting record highs almost daily, most recently at $3,038 an ounce.
Markets are pricing in a zero percent chance of a rate cut today, with a 15 percent chance of a rate cut in May and 65 percent chance of a rate cut in June.
• The Bank of Japan kept interest rates on hold in an attempt to buy time, and markets showed little reaction.
• All is not quiet on the geopolitical front. Israeli airstrikes have shattered the relative calm in the Gaza Strip, killing more than 400 people on Tuesday.
Trump's phone call with Russian President Putin resulted in an agreement to stop attacks on Ukrainian energy facilities - with the exception of the 30-day cease-fire the US is insisting on.
• Political intrigue also escalated over the high-profile sale of CK Hutchison's ports business. The company, owned by billionaire Li Ka-shing, agreed to sell assets including those near the strategic Panama Canal to a group led by BlackRock. The deal was welcomed by Trump but criticized in Chinese state media.
• Indonesian shares stabilised after Tuesday's sudden sell-off.
• Demis Hassabis, CEO of Google DeepMind, predicts that artificial general intelligence (AGI) could emerge within 5-10 years.
This is a significantly more conservative forecast compared to estimates by other market players, such as Anthropic CEO Dario Amodei, who believes AGI could emerge in as little as 2-3 years.
• Audi will cut 7,500 jobs in Germany by 2029. The cuts will be in a number of “related industries” not directly related to production. According to estimates by the dpa agency, the staff cuts could help the company save more than 1 billion euros annually.
• Siemens plans to cut more than 6,000 jobs worldwide, which would mean about 2% of the German industrial giant's total workforce would be out of work.
• Morgan Stanley plans to cut 2-3% of its 80,000 global workforce later this month, following earlier reports that Goldman Sachs plans to cut 3-5% of its staff.
• Amazon (AMZN) has begun discounting its own AI chips, competing with Nvidia (NVDA) - The Information.
• ZEEKR Intelligent Technology Holding Limited (ZK) will expand its driver assistance offerings by making advanced features available free of charge to its local customers. The strategic move is aimed at bridging the gap with industry leaders such as Tesla (TSLA), which is currently pushing its full self-driving system in China. The ZEEKR system, which uses Nvidia (NVDA) chipsets, will first be available to a pilot group before a public rollout in April.
• Tesla (TSLA) is facing a backlash from consumers in Canada after Toronto decided to exclude Tesla vehicles from ride-hailing and ride-sharing incentives due to trade tensions with the U.S.
While the financial impact on Tesla's overall revenue is minimal, the development signals potential problems for the brand in the region.
• Sarepta Therapeutics (SRPT) shares fell 27% after the death of a patient treated with the gene therapy Elevidys.
• Waymo, part of Alphabet (GOOG), has received conditional approval to expand its autonomous vehicle services in the South Bay area, including the San Francisco airport.
• BYD shares hit a record high after introducing new fast-charging technology and a stock incentive plan for employees.
The company's "Super e-Platform" can charge at a peak rate of 1,000 kilowatts, positioning BYD as a formidable competitor in the electric vehicle market.
BYD's market cap jumped to $162 billion, making it worth more than Volkswagen, Ford and GM combined.
• NIO (NIO) is collaborating with Contemporary Amperex Technology (CATL) to develop the new energy vehicle industry.
The collaboration aims to develop a comprehensive battery swapping network and establish national standards for battery technology in China, improving the efficiency and cost-effectiveness of electric vehicles.
• Alphabet (GOOG) announced it will acquire cybersecurity startup Wiz for $32 billion to bolster its cloud security offerings. The acquisition combines Wiz's security platform with Google's cloud infrastructure.
• Xiaomi reported quarterly revenue of $15 billion, beating estimates. The Chinese tech giant also raised its 2025 electric vehicle shipment target to 350,000.
The company's shares have responded by rising 6.34% since the start of the session.
• Adobe (ADBE) Launches AI Agents for Online Marketing Tools Adobe said Tuesday it is launching artificial intelligence "agents" that brands can use to help consumers navigate their websites.
• Oracle (ORCL) is considering a proposal to sell TiKTok's U.S. operations that would include security guarantees and a small stake in the new U.S. entity.
• Kennedy Jr.'s next targets are infant formula companies. He plans to meet Tuesday with executives from companies that make infant formula in the United States, according to people familiar with the roundtable.
• Shares of BigBear.ai (BBAI) fell 15% yesterday after the AI software provider said it would take longer to file its 2024 annual report and that it would restate several years of reporting.
• PLTR shares fell 4% yesterday. Jefferies analysts reiterated their Underperform rating on the data analytics company's stock as Palantir's valuation raises concerns.
• UBS raises gold price forecast to $3,200.
• Standard Chartered has sharply reduced its Ethereum forecast for 2025 - from $10,000 to $4,000.
• Acting SEC Commissioner Mark Ueda said the commission is considering revising or rolling back Biden-era rules,
including those on crypto assets. Those measures were put in place to protect investors, but they have made it harder for crypto companies to operate and limited access for institutional players.
• 99% of crypto investors lose to Bitcoin - simply holding BTC is more profitable than trying to beat it. Former Binance CEO CZ said that only 1% of market participants are able to earn more than simply holding Bitcoin. To get into this elite club, you need not just knowledge, but incredible efforts.
• Peter Schiff:
- Gold above $3,000 while the US dollar declines as foreign central banks continue to sell dollars to buy gold.
- Foreign stock markets rise while US stocks decline as investors continue to sell US stocks to buy foreign ones. Next move will be selling Bitcoin to buy gold.
• CryptoQuant CEO writes that Bitcoin's bull cycle is technically over. "6 to 12 months of bearish or sideways price action is expected."
• Long-term holders have been actively buying BTC since the end of February. Almost 170,000 BTC were purchased in a month - Glassnode.
• BlackRock, Superstate and Centrifuge to split $1 billion in RWA assets of decentralized lending platform Spark (formerly MakerDAO)
Crypto companies are seeking banking status under the Trump administration, hoping for faster approval of licenses that regulators have previously been reluctant to grant - Reuters
• Final European inflation data is due to be released ahead of the Fed meeting.
Earnings reports are due from financial firms in London, with Tencent and Ping An in focus as China markets rally.
Key events that could impact markets on Wednesday:
- Earnings: Tencent, Ping An, Hargreaves Lansdown, Prudential, M&G.
- Economy: Eurozone final CPI.
- Politics: Federal Reserve policy decision.
Current Fundamental Reviews
• Eurozone Trade Activity and Consumer Sentiment Indicators:
- Trade Balance (Jan) 1.00 bln (expected 14.00 bln / previous 15.50 bln).
- ZEW Economic Sentiment 51.6 (expected 43.6 / previous 24.2).
CANADA Consumer Inflation (February).
CPI 2.6% y/y (expected +2.1% / previously +1.9%).
Core CPI 2.7% y/y (previously +2.1%).
It looks like the tariffs have so far triggered inflation in the target countries, not in the US itself.
• US industrial production (February) +0.7% m/m (expected +0.2% / previously +0.3%).
• The EU earned almost 155 billion euros from the export of passenger cars.
In 2024, 7% fewer cars were exported from EU factories than in 2023.
• Treasury Secretary Bessent on tariffs:
- For some countries, the tariff that goes into effect on April 2 may be low;
- Each country will get its own tariff verdict on April 2;
- Reciprocal tariffs will not automatically be 25% + 25%;
- 15% of countries will bear the bulk of the tariffs;
- Tariffs may be in addition to duties on steel and aluminum;
- Trump asked me to review the U.S. sanctions regime.
• Trump team explores simplified tariff plan - WSJ The Trump administration is locked in a heated debate over how to align U.S. tariffs with those of other countries as it tries to meet the president's April 2 deadline. An idea to divide countries into three groups with different tariffs was considered but rejected. Now Trump's team is looking at how to set individual rates for each trading partner, but the process remains complex and uncertain.
• On Tuesday, the international rating agency Fitch lowered its forecast for US GDP growth in 2025 from 2.1% to 1.7% and in 2026 from 1.7% to 1.5%. The reason for the revision was the “global trade war” started by Donald Trump, which will also lead to a slowdown in global economic growth.
More from the assessments:
- Fiscal stimulus in China and Germany will cushion the impact of US tariffs;
- Tariff shock will push US inflation higher, so the Fed will likely delay further easing until Q4;
- The US-Canada trade war and additional sanctions on Russia and Iran will increase oil market volatility;
- Tariffs on Canada could widen spreads between Canadian and US price benchmarks and impact US refining margins.
• Trump plans to cut the IRS workforce by 25%.
• The US has officially begun requesting egg supplies from Germany - Der Spiegel. The Trump administration has unveiled a plan to develop federal lands to help solve the 7 million-home deficit in the US.
• Israel resumed hostilities against Hamas, launching massive airstrikes on Gaza on the night of March 18. The IDF says it targeted Hamas commanders and infrastructure. Hamas accuses Israel of violating the ceasefire, and Israel accuses Hamas of refusing to release hostages.
• Hungary is looking for allies to convince conservatives in the United States to begin the process of dismantling a united Europe, - Polish Foreign Minister Radoslaw Sikorski in an interview with the Onet portal.
• The Baltic States and Poland have announced their withdrawal from the convention banning anti-personnel mines. This is necessary due to the military threat from the Russian Federation, which did not join the convention at the time, the statement said.
• Annalena Baerbock may be nominated for the post of President of the UN General Assembly. The dpa agency writes that Baerbock, who holds the post of Foreign Minister in the outgoing German government, will be elected by the General Assembly to this post in June and will begin her duties in September. According to internal discussions at the UN, the election of Annalena Baerbock is considered a formality, dpa notes, citing sources in German government circles.
• The international community will allocate 5.8 billion euros for the reconstruction of Syria. Of this amount, 4.2 billion euros will be transferred to Syria in the form of grants, and 1.6 billion euros in the form of loans, said Vice President of the European Commission Dubravka Šuica. Germany will provide 300 million euros, which will go to support the population of Syria and Syrian refugees in neighboring countries.
• India is buying French Rafale to replace its aging fleet of Russian MiGs. France has already overtaken Russia to become the world's second-largest arms exporter, behind only the US, while Russia's share is falling.
• The Bundestag supported the reform of Germany's "debt brake". The old composition of the German Bundestag held a vote on the reform of the "debt brake", enshrined in Article 109 of the Basic Law of the Federal Republic of Germany. A two-thirds majority was obtained to introduce the necessary amendments. The reform will allow for the allocation of hundreds of billions of euros to strengthen defense and upgrade infrastructure.
• Much of China's investment is money flowing out of the country.
According to the Rhodium Group, much of China's official completed outward investment is actually "phantom foreign direct investment" - Chinese companies leaving their earnings outside China while pretending to be making FDI.
The Bank of Japan predictably left its policy rate at 0.5%.
