Market shock from tariffs on cars and their components, gold records, geopolitics and company news
Latest stock market news
• The U.S.'s announced 25% tariff on auto imports is causing turmoil around the world, from Tokyo and Seoul to Wolfsburg and Detroit, as automakers warn of rising prices and consider shifting their production bases to cope with the shock. Shares in Japanese and South Korean automakers, the pillars of Asia's two powerful economies, fell sharply on Friday to end the week.
Nearly 3 trillion yen ($20 billion) has fallen from the market value of Japan's three biggest automakers - Toyota, Honda and Nissan - in three trading sessions this week.
Futures suggested European markets were in for a tough Friday, with the region's automakers in the spotlight. The European car and parts index was at its lowest since early December and set for a sixth straight week of losses.
US President Donald Trump's latest tariff salvo has drawn sharp criticism from politicians and industry leaders around the world. Wolfsburg, Germany-based Volkswagen said the entire auto industry and customers would have to "bear the negative consequences".
It's decision time for automakers, who must now decide whether to localize more production in the U.S., absorb the cost of tariffs, or pass those costs on to consumers.
Volvo Cars, Volkswagen Audi, Mercedes-Benz and Hyundai have already announced the transfer of part of their production.
Ferrari, which makes all its cars in Italy, said it would raise prices on some models by as much as 10%.
• Gold is rising. It seems like every major automaker faces an uncertain future. Well, almost all of them. Shares of Texas electric car maker Tesla have largely shrugged off concerns because its U.S.-market products are mostly sourced from domestic factories, with less reliance than other automakers on foreign parts.
Investors' attention now turns to the U.S. retaliatory tariffs to be announced next week, with markets seizing on Trump's suggestion that the tariffs could be soft. That leaves plenty of room for surprises, both pleasant and unpleasant.
Amid all the gloom, the rally in gold prices shows no sign of abating, breaking another record high in safe-haven flows. Gold has been comfortably above $3,000 an ounce since it breached that threshold in mid-March.
The yellow metal rose more than 17% between January and March, its best quarterly performance since 1986.
• Fed News: Boston Fed's Collins backs keeping interest rates on hold for 'longer'
St. Louis Fed's Musalem worries inflation from Trump tariffs won't be so 'temporary'
Business 'on pause' or 'paralyzed' until Washington 'fog' lifts, Richmond Fed's Barkin says
• Moody's close to downgrading US credit rating.
• Trafigura CEO suggests adapting traders' work schedules to Donald Trump's social media activities, - FT.
• OpenAI has closed shop - free users will no longer be able to use the new image generation.
The feature became so popular that it was simply disabled due to overload.
Now you will have to pay $20 for magical Ghibli-style art and other beauties.
OpenAI is approaching the completion of a $40 billion funding round led by SoftBank, which will be the largest round in history and increase the company's valuation to $300 billion.
• USDC Reaches $60B Market Cap, Surpassing Tether Circle's USDC stablecoin has reached a new all-time high, surpassing $60 billion in market cap - CoinMarketCap.
• Stablecoin Bill Is a Trump-Musk Scam Senator Elizabeth Warren has blasted the new stablecoin bill as a “Trump-Musk rip-off.”
She says the bill opens the door to financial fraud, ignores consumer protections, and favors elite interests.
• Bets on U.S. weakness fuel emerging market rally - Bloomberg
President Donald Trump said he is willing to cut tariffs on China to secure the Chinese government's support for the sale of TikTok's U.S. operations, Bloomberg reports.
• A number of Chinese companies, particularly in the IT sector, have received signals from the Chinese authorities about the possibility of resuming preparations for an IPO.
This may indicate a change in the government's attitude towards new listings on mainland Chinese exchanges, the newspaper notes. Previously, the authorities limited new placements, fearing that they could exacerbate the fall in the stock market - FT.
• Microsoft (MSFT) may create its own generative AI. Microsoft's CEO said it would complement its collaboration with OpenAI to make it easier to optimize Copilot.
• Tesla (TSLA), Rivian (RIVN) and Lucid (LCID) are the only automakers that make all of their vehicles sold in the U.S. domestically, according to BofA. “The tariffs will initially apply only to finished vehicles, but will begin May 3 to include major components — engines, transmissions, powertrains and electrical systems — with the potential to expand,” Bloomberg reported, citing a White House official.
• US copper prices rose to a record high on tariff fears, pushing the Comex-LME spread past $1,700/t, reflecting record profits from the arbitrage strategy of buying on the LME and selling on the Comex.
• Robinhood (HOOD) has unveiled an AI tool called “Cortex,” coming later this year. Cortex will provide real-time analytics, such as explanations for why stocks are moving, and will also include Trade Builder, a feature that helps turn market insights into options strategies with signals, technical analysis, and news.
These offerings aim to democratize access to premium financial services that have traditionally been reserved for the ultra-wealthy. Robinhood Strategies, a wealth management service, will be available to all Gold members with capped management fees, a competitive advantage in the fintech space.
• US robotics companies call for national strategy, with central office involved,
to compete with China.
• European stock markets fall on Trump car tariffs
- Germany's DAX down 0.8%
- Britain's FTSE 100 down 0.6%
- France's CAC 40 down 0.5%
- Spain's IBEX 35 down 0.4%
- Italy's FTSE MIB down 0.4%
Ferrari to raise prices 10% to offset Trump's tariff
• Neobank Revolut has released a mobile client for its Revolut X exchange.
The app is available to users from the UK and the European Economic Area (EEA). The app allows trading 220 crypto assets in pairs with the US dollar, euro and pound. As at the launch stage, the commission for makers will be 0%, for takers - 0.09%.
• Goldman Sachs raised its year-end gold price forecast to $3,300 an ounce, citing stronger-than-expected central bank demand for the precious metal and a steady influx of funds into gold-backed ETFs.
• Space X attracted investment from China through offshore companies - ProPublica. The company allows buying shares through the Cayman Islands.
• Nvidia (NVDA) is reportedly closing in on a deal to acquire Lepton AI, a startup that specializes in leasing servers powered by Nvidia chips. The acquisition would strengthen Nvidia's position in the cloud and enterprise software market, putting it in direct competition with major cloud providers like Amazon and Google.
• Amid ongoing trade tensions, Stanley Black & Decker (SWK) faces potential challenges due to its high reliance on imported goods from China and Mexico.
• Deutsche Bank has labeled SWK as a "catalyst" idea for selling, expecting a short-term decline in the stock in the near future. The escalation of the trade war adds uncertainty to SWK's outlook.
• TD Synnex (SNX) Shares Slip on Rising Costs: IT solutions company TD Synnex missed its quarterly profit and sales forecasts due to rising costs.
• Jefferies (JEF) shares slip as company blames weak results on geopolitics. Jefferies missed quarterly earnings and revenue forecasts.
• Petco (WOOF) shares jumped Thursday after the pet supplies retailer released better-than-expected adjusted earnings guidance for fiscal 2025.
• SailPoint (SAIL) share price drop 'hard to explain' after IPO earnings, CEO says. He says demand remains very strong.
• CoreWeave (CRWV) is pricing its IPO at a discounted price of $40 per share, raising $1.5 billion. The AI cloud company originally planned to sell shares at between $47 and $55.
CoreWeave also cut the number of shares it was offering to 37.5 million from 49 million.
• LULU shares fall 10% after report. The company beat expectations, but slightly lowered its sales forecast.
• Markets were volatile in some areas yesterday. Semiconductors remain under pressure.
People are nervous about Trump's tariffs.
US Treasuries fell slightly after Moody's warned of a downgrade of the US credit rating.
• Key events that could impact markets on Friday:
- Economic events: UK Q4 GDP data, UK retail sales for February, French inflation data for March, German employment data for March, Eurozone sentiment survey data for March
Current Fundamental Reviews
• IMF: Incoming US data signal economic slowdown after strong 2024.
But US recession not in baseline forecast.
• US Macroeconomic Data
US - GDP (Q4 2024) = +2.4% q\q (exp. +2.3% / previous +3.1%)
US - Initial Jobless Claims = 224K (approx. 225K / previously 225K)
US - Trade Balance (February) = -$147.91B (approx. -$134.6B / previously -$155.57B)
US - Pending Home Sales (February) = +2% m/m (exp. +0.9% / previously -4.6%)
US Consumer Sentiment Falls to 12-Year Low on Trade War Worries
Inflation Expectations Rise Sharply, Conference Board Reports
• Washington told EU to prepare for more tariffs before any talks, - Reuters
• Macron: We have no right to confiscate frozen Russian assets. There is no legal basis for confiscating frozen Russian assets; their fate will be decided within the framework of negotiations on the restoration of Ukraine.
• Europe will definitely not ease sanctions against Russia until July, despite Moscow’s demands for a ceasefire in the Black Sea - Euractiv.
• The EU is outraged that Russia and the US are discussing the restoration of Nord Stream without their participation - Politico.
Since March 26, ports in EU countries have been prohibited from providing transshipment services for liquefied natural gas (LNG) produced in the Russian Federation.
The relevant sanctions were adopted last year, but a deferment of execution was granted until March 26, 2025, for contracts concluded before June 25, 2024.
• German politicians are calling on the European Union to respond decisively to the 25 percent tariffs on car imports announced by Donald Trump - DW.
• North Korea has flown its first AWACS (reconnaissance) aircraft, based on the Ilyushin Il-76, for the first time.
Kim Jong-un said the new aircraft would be key to tracking threats and gathering intelligence.
• Panama to deregister more than 100 tankers linked to Russia - Bloomberg The move, part of a pledge last year to punish blacklisted vessels, could result in up to $2 million in lost revenue.
• The U.S. Department of Health and Human Services is planning significant cuts at several agencies, including the FDA and the CDC.
The cuts are expected to affect about 10,000 full-time workers. The restructuring reflects a broader trend of staff reductions at the department since the start of President Trump's second term.