Recession fears send US stocks reeling, corporate and geopolitical news
Latest stock market news
• Recession fears have crushed the US stock market. Investors have seen just two such Mondays in all of 2024 and just one in 2023.
“The stock market during Trump 2.0 looks very different than the stock market during the early days of Trump 1.0.” - Bespoke.
Trump’s first 50 days: Stocks are off to their worst start to a presidential term since 2009.
The Nasdaq 100 has had its worst day since the 2022 bear market.
The VIX volatility index has reached its highest since August last year.
Bitcoin below $80K.
Congress is voting on the budget today. Republican votes may not be enough, and a government shutdown may be added to the general problems of the US. For now, the Polymarket betting market estimates the chances of a government shutdown are low - 29%.
• U.S. stocks have finally caught up with what currency and bond markets have been saying for weeks: a slowdown is coming. The Nasdaq's 4% drop was the sharpest in two and a half years. Bond yields have fallen sharply, and markets are now pricing in a roughly 50/50 chance of a Fed rate cut in May.
Tesla shares have fallen by half from their post-election peak, and the dollar, which had been rising in anticipation of Donald Trump's policies, has now begun to fall after he imposed tariffs on his neighbors.
The so-called "Trump trade" is in full retreat, and the "Trump put," or expectation that he might be sensitive to a stock market decline, is nowhere in sight.
Citi downgraded its U.S. asset allocation recommendation, cutting its rating on stocks from "overweight" to "neutral" after the market close, saying it was unclear for at least the next few months whether the U.S. economy could continue to outperform its peers.
• Asian markets have done their best to stabilize the situation, helped a little by the fact that there are countries outside the US that could benefit from any repatriation flows of sold US assets.
Shares in Tokyo, Seoul, Hong Kong and Sydney had bounced back from their early lows by midday, but the mood was skittish. U.S. stock futures also fell early in trade and, while recovering their losses, are struggling to move above the flat level.
Currency markets were quiet. The yen had been rising for weeks and hit a fresh five-month peak in Asia, although some dealers noted that stocks were catching up with the dollar/yen move, not the other way around.
• The euro also reacted weakly to a pledge by Germany's Greens to block plans to increase military spending, possibly pending a compromise deal.
• Launch of digital euro. ECB President Christine Lagarde said the EU plans to launch a digital euro (CBDC) by October this year.
• Ford (F) to invest €4.4bn in debt-laden German subsidiary - FT
• Trump: In talks with four potential buyers for TikTok. Donald Trump says all four potential buyers are “good” and a quick deal is “possible.”
• The threat of US tariffs has prompted a sharp rise in orders for electronics chips from Taiwanese makers MediaTek, Novatek, Realtek and Elan Micro.
• Spain's second-largest bank BBVA has received approval to trade BTC and ETH.
- The approval comes as part of the European Markets in Crypto-Assets (MiCA) regulation comes into force.
- The move completes BBVA's multi-year move to enter the crypto market, which had been planned since 2020 but was awaiting regulatory approval.
The total crypto market cap has fallen by more than 20% in the past month - Binance Research
This was driven by rising negative sentiment, the largest hack in history (Bybit lost $1.5 billion), and a decline in memecoin activity.
• Strategy (MRST) Plans to Raise Additional $21 Billion to Buy BTC. Michael Saylor's company has filed to issue up to $21 billion in preferred shares - the funds are aimed at general corporate purposes, including a potential purchase of Bitcoin.
MSTR shares fell 17% yesterday, and the market cap fell to $62 billion. And the announcement of raising $21 billion sounds like a desperate cry of a drowning man - who will pour such money into them?
• Online trading platform Robinhood (HOOD) has agreed to pay $29.75 million to settle FINRA (U.S. financial regulator) investigations.
• Leading US banks are launching their own tokens amid a stablecoin gold rush, aiming to capture a slice of the cross-border payments market they expect to be revolutionised by digital currencies - FT
• Lockheed Martin (LMT) and RTX have strengthened their positions in the global arms market thanks to growing European demand for American fighter jets and missile systems. The surge is attributed to increased defense budgets in Europe following Russia's invasion of Ukraine.
• Novo Nordisk (NVO) shares fell 9% after announcing that its obesity drug CagriSema led to a 15.7% weight loss in a clinical trial for patients with type 2 diabetes. Despite meeting its primary endpoint, the study found that fewer than two-thirds of participants were taking the highest dose of the drug after 68 weeks, hurting investor confidence.
• Taiwan Semiconductor Manufacturing (TSM) reported a 43% year-on-year increase in revenue in February 2025, driven by AI demand.
However, revenue was down 11.3% from the previous month. TSMC's sales reflect the health of the semiconductor sector, as US export controls on AI chips are seen as manageable, according to TSMC CEO C.C. Wei.
• Rocket Cos. (RKT) agreed to acquire Redfin (RDFN) in a $1.75 billion deal, combining the leading brokerage website with the largest mortgage lender.
Redfin shares rose 68% in pre-money trading, while Rocket shares fell 15%. The acquisition expands Rocket's real estate services.
• ServiceNow (NOW) is closing in on a significant acquisition of AI company Moveworks, potentially valued at $3 billion.
The deal would expand ServiceNow's capabilities in artificial intelligence, and Moveworks is known for its AI agent assistant used by large enterprises. The acquisition is expected to be announced soon, pending final negotiations.
• XPeng (XPEV) plans to mass-produce flying cars by 2026, marking a major milestone in the auto industry
The announcement initially sent XPeng's stock price up 7% before sending the overall market lower. The company aims to integrate AI with vehicle control systems to improve safety and enhance user experience.
• Tesla (TSLA) shares fell 15%, wiping out post-election gains as demand concerns continue.
From its mid-December peak, TSLA is down 55%.
• BioNTech (BNTX) shares fell 3% as sales outlook disappoints. The COVID-19 vaccine maker's soft outlook offset better-than-expected quarterly results.
• U.S. oil and gas producers are unlikely to increase spending this year, and any increases in production will come primarily from efficiency gains rather than new drilling, Baker Hughes CEO said.
The world has reached 'peak oil trade' - Jeff Currie of Carlisle University (Bloomberg) -
International trade in fossil fuels peaked in 2017 and has been on a downward trend as countries seeking energy security accelerate investment in renewables and nuclear power.
• SMCI shares fall 3.6% in after-market trading, tracking NVDA's 2% decline.
• ORCL shares are down 3% in post-market trading after the report. The company's revenue grew 6% y/y, below expectations. However, the company boasted a large order book of $130 billion, which will give them revenue growth in 2026 of 15%.
• DAL shares fall 11% in post-market trading after the report. The company sees a drop in demand.
• The sharp decline in the US stock market has weighed on brokerage stocks. IBKR fell 13% yesterday (the biggest drop since 2009!), HOOD by 20%, SCHW by 5%.
• Farmers have put plans and investments on hold due to Trump's freeze on USDA spending.
• IBM wins UK lawsuit against LzLabs over mainframe technology theft.
• HSBC downgrades US stocks, eyes European stock gains
• Liverpool sign multi-year deal with Adidas to replace Nike.
• Morning meeting: Trump chaos drives central banks into shadows
• China's Full Truck Alliance eyeing Hong Kong listing and strong growth in 2025, says executive
• Spanish fashion company Mango's sales grew 8% in 2024.
• India's IndusInd Bank said its net worth would be hit 2.35% due to account mismatches.
• HEDGE FLOW Hedge funds short Chinese stocks for fourth week as DeepSeek optimism fades.
• JPMorgan joins Goldman in raising eurozone economic growth forecast for 2025
• Activist investor Mantle Ridge is acquiring a stake in Cognizant worth more than $1 billion, the WSJ reports.
• US regulator allows banks to engage in certain types of cryptocurrency activities.
• Robinhood to pay $29.75 million to end US regulator probes
• Sources say Canadian company RBC is laying off some employees after a segment reorganization.
• Blackstone raises $8 billion for new real estate bond fund as sector burgeons in recovery
Key events that could impact markets on Tuesday:
- Earnings: Volkswagen, TP ICAP.
- Economy: US Jolts.
Current Fundamental Reviews
• Xi Jinping and Donald Trump may meet in China in April, - South China Morning Post, citing sources./ A very unlikely event.
• After a six-week review, we are formally canceling 83% of USAID programs, - US Secretary of State Marco Rubio. "The 5,200 contracts now being canceled spent tens of billions of dollars in ways that did not serve (and in some cases harmed) the core national interests of the United States.
• Democrats may vote against the Republican plan to prevent a US shutdown. If the measures cannot be agreed upon in time, the shutdown could happen as early as March 15 - BBG.
• White House Economic Adviser Gassett: I expected a weak first quarter due to Biden's 'legacy' and the temporary impact of Trump's tariffs.
However, talk of a recession is exaggerated - I expect the first quarter to still show modest growth.
The economy will accelerate in the second quarter due to tax cuts.
• The Greens refuse to support the CDU/CSU and SPD in the Bundestag vote on easing the "debt brake".
The party said it is ready to approve a separate decision on strengthening Germany's defense capability - but not under the current conditions for a special infrastructure fund, which is also planned by the conservatives and socialists.
• China's state nuclear power company says the country could have an "artificial sun" by 2050,
as it prepares to use nuclear fusion to generate energy by that date.
• Tensions have risen between Israel and the US after Washington's secret talks with Hamas - Bloomberg.
Israeli officials are unhappy with the talks, saying Hamas is a terrorist organization whose words cannot be trusted.
• Treasury Secretary Bessent on Stock Market: Growth Didn't Save Democrats
The stock market has risen 20% for two years in a row, but voters have not appreciated the Biden administration's successes - Democrats have lost.
Bessent predicts inflation will fall to the Fed's 2% target despite Trump's tariffs.
• NY Fed: Concerns about outlook rise amid stable inflation expectations.
Americans grew more concerned about the economic outlook in February, even though their expectations for future inflation patterns changed little, a report said Monday.