Record rise of the European currency and fall of stock markets, corporate and geopolitical news
Latest stock market news
• The US stock market fell again yesterday. Mainly due to AAPL (-3%). But the defensive sectors XLV and XLP also fell.
However, the VIX fell a little. There is no panic in the market. And small-cap stocks even rose in price.
Bitcoin rose to $82 thousand.
Today, US inflation data. It will be volatile.
• The euro hit a five-month peak and European bourses were set to open higher on Wednesday as progress on a ceasefire in Ukraine boosted investor sentiment but concerns remained that retaliatory tariffs could trigger a recession. The US said it would resume military aid and intelligence sharing with Ukraine after Kyiv said it would accept a US ceasefire offer, although Russia has yet to respond.
Futures pointed to a strong start on Wednesday for the pan-European STOXX 600 index, which has fallen nearly 3% in the first two days of the week as recession fears gripped markets.
• Adding to market jitters over tariffs, US President Donald Trump reversed course on Tuesday afternoon, having promised just hours earlier to double duties on steel and aluminium from Canada to 50%.
Trump's 25 percent tariffs on steel and aluminum imports took effect Wednesday as previous exemptions, duty-free quotas and product exemptions expired.
The will-he-or-won't-he debate over tariffs has hit stocks, with the S&P 500 losing a staggering $4 trillion in market value since its recent peak last month. U.S. commodity futures steadied in the early hours of the Asian session.
• Trump defended his tariff measures during a meeting Tuesday with the heads of major U.S. companies and said they could be increased.
The Republican president spoke to about 100 executives at the latest Business Roundtable meeting, which included the heads of Apple, JPMorgan Chase and Walmart.
• Recession fears have prompted traders to increase bets on a Federal Reserve rate cut as markets price in 76 basis points of easing this year, putting the spotlight on U.S. inflation data due later in the day.
• Mainland Chinese investors are buying Hong Kong shares at a record pace, with a record $3.81 billion in stocks bought on Monday - CNBC
• Wall Street fears Trump will ruin the soft landing and send the economy into recession. The economic pilot has a new message: "fasten your seat belts" - WSJ.
• Alibaba (BABA) said its AI-powered search engine Accio has reached 1 million users and gained new features.
It is the world's first conversational AI for B2B search.
• Dow Jones Market Data on the U.S. stock market: U.S. stocks posted their weakest performance in the first 50 days of Trump's presidency since 2009, when President Barack Obama took office at the height of the global financial crisis.
• Foxconn has built its own AI model - WSJ The large language model was developed in-house with support from Nvidia.
The AI model, called FoxBrain, which was originally developed for use in-house, can analyze data, math, reason and generate code, the company said.
• Apple intends to radically change the interface of the iPhone, iPad and Mac - BBG.
• Former Google CEO to lead space startup. Eric Schmidt, who was Google's CEO from 2001 to 2011, has become CEO of space company Relativity Space, where he will lead the development of a reusable launch vehicle.
• European shares fall for fourth straight day European stock markets fell for a fourth straight trading session, driven mainly by a global sell-off in assets on concerns about the health of the US economy.
• McDonald's (MCD, -3%) is upgrading 43,000 restaurants and deploying AI to improve ordering and prevent equipment breakdowns, - WSJ
All this comes as McDonald's U.S. sales slowed in January, part of a broader decline in the fast-food industry.
• Musk: "There was a massive cyberattack to get Twitter/X from IP addresses located in Ukraine."
Ukraine denied any involvement in the cyberattack.
Trump: "The attacks on Tesla and car dealerships will be considered domestic terrorism.
We already know some of the culprits and we will definitely catch them."
• CoreWeave signs $11.9 billion contract with OpenAI to provide AI infrastructure for 5 years. OpenAI will receive $350 million in shares at the IPO.
CoreWeave's public offering is expected to be one of the largest this year, with an estimated valuation of $35 billion.
• Oracle (ORCL, -3%) turned heads after reporting third-quarter financial results that missed expectations, but its cloud infrastructure and order strength drew praise.
Despite a 1% drop in pre-money trading, Oracle's other commitments beat estimates, and the company forecast strong revenue growth in the coming years.
• Verizon (VZ) shares fell 6.6% after its CFO warned of weakening consumer demand and intensifying competition.
The company expects tough first-quarter comparisons and churn issues to impact its advertising strategies.
• Alphabet (GOOG) is working with Kairos Power to deploy smaller nuclear reactors. The initiative aims to meet AI's growing energy needs, with the first reactor expected to be operational by 2030.
Meta Platforms (META) is testing its own AI training chip in collaboration with Taiwan Semiconductor Manufacturing (TSM).
• Viking Therapeutics (VKTX) shares experienced a pre-market rally but ended down 5% after announcing an agreement with CordenPharma to manufacture its obesity drug VK2735.
The agreement ensures future supplies of oral and injectable versions of the drug.
• Ondas Holdings (ONDS) initially rose 76% after a strategic partnership with Palantir Technologies (PLTR) but ended down 0.5%.
The partnership is aimed at improving Ondas' autonomous drone platforms using Palantir's Foundry platform.
• Asana (ASAN) fell 24% after a worse-than-expected outlook and CEO resignation.
The company's AI revenue is expected to be delayed, leading to a ratings downgrade from Oppenheimer.
• Kohl's (KSS) announced a 75% dividend cut, sending shares down 24%. The move comes amid activist-driven strategic changes aimed at increasing consumer appeal with new pricing.
• Southwest Airlines (LUV) will begin charging for checked bags for the first time in its history. The move, part of a broader strategic shift, is expected to impact customer sentiment as the airline expands its fare offerings.
• LUV shares rose 8% yesterday, while DAL and AAL shares fell 7% and 8% respectively, reflecting worsening booking trends, particularly on domestic flights.
• Lego posted record figures last year, reaching revenues of almost 10 billion euros - Bloomberg.
At the same time, sales growth of the largest toy manufacturer was 13%, despite the overall decline in the global market.
• Tariff turbulence means U.S. mills pay more for metal than foreign rivals - Bloomberg.
U.S. physical aluminum price premiums soared to a record high above $990 a metric ton on Tuesday.
• TikTok now lets parents see their teen's follower list and block access during certain hours
TikTok announced Tuesday that it is launching new features to protect teens on its app.
• Get ready to buy the dip. Even as his team raised the odds of a U.S. recession to 20% from 15%, JPMorgan Asset Management's David Lebowitz has an upbeat message for clients on Wall Street: Get ready to buy the dip.
• Nissan replaces CEO a month after Honda merger collapses. Japanese automaker Nissan Motor said Tuesday it is replacing CEO Makoto Uchida with planning chief Ivan Espinosa.
Key events that could impact markets on Wednesday:
- Possible details of the Russia-Ukraine ceasefire agreement.
- Inflation in the US.
- Possible tariff-related news.
Current Fundamental Reviews
• Japan - GDP Q4 2024 +2.2% y/y (approx. +2.8% / previously +1.4%)
Japan's GDP for Q4 came out below expectations, which complicates the Central Bank's rate forecasts - CNBC.
• Latest US labor market data:
JOLTs Job Openings = 7.740 million (exp./ 7.650 million/ pop. 7.508 million est.)
Job openings rose slightly in January, but the data overall reflect a cooling labor market, with several indicators hovering near multi-year lows.
Small Business Uncertainty About Economy Rises to Second-Highest Level Since 1973
The Trump administration's dizzying swings on tariffs are paralyzing American small businesses as they become increasingly worried about the future of the American economy.
• The U.S. House of Representatives has passed a funding bill designed to prevent the economy from shutting down in September.
Now it's up to the Senate. The bill needs the support of at least eight Democrats to pass in the Senate.
Betting site Polymarket puts the odds of a government shutdown at a low 19%.
• Ontario Premier Doug Ford in Canada:
If the United States escalates, I will not hesitate to shut off all electricity [exported to the U.S.]
Trump:
Based on Ontario, Canada's 25% tariff on "electricity" coming into the United States, I have instructed my Minister of Commerce to impose an ADDITIONAL 25% tariff, up to 50%, on all STEEL and ALUMINUM SHIPPED TO THE UNITED STATES FROM CANADA...
The only thing that makes sense is for Canada to become our cherished Fifty-first state...
And your wonderful "Oh, Canada" will continue to play, but now it will represent a BIG and POWERFUL NATION within the largest country the world has ever seen!
Canada later repealed the 25% surcharge on U.S. electricity and Trump has also rescinded his threat to double tariffs.
Trump to hold working meeting with NATO Secretary General on Thursday - White House.
The FT believes that Trump will never win the Nobel Peace Prize. But he could well be a serious contender for the Charlemagne Prize, which is awarded annually for the greatest contribution to European unity.
• The EU Council proposed lifting anti-Russian sanctions from 4 people due to blackmail against Hungary, - journalist. The Council of the European Union (EU) proposed an alternative list of people from whom anti-Russian sanctions could be lifted. In exchange for extending EU sanctions against the Russian Federation, Budapest demanded that restrictions be lifted from 8 people, among whom could be oligarchs Alisher Usmanov, Mikhail Fridman and Petr Aven. In response to this, the EU Council put forward its own list - of four other sanctioned persons.
• Oil supplies from Russia to Hungary have been stopped after a Ukrainian drone attacked a measuring station of the Druzhba oil pipeline, - Szijjarto.
Hungary regards this as an "attack on its sovereignty," Szijjarto said.
Brussels is informally preparing for a scenario in which Hungary blocks the extension of anti-Russian sanctions against the EU, and the sanctions packages will cease to be in effect on March 16.
Failure to extend sanctions could effectively unfreeze up to 30% of the total volume of frozen Russian assets.
If Hungary continues to block the extension of sanctions until 15 March inclusive, it will be announced that the discussion on the final decision will be included in the agenda of the EU Council at the level of foreign ministers, which will take place on Monday, 17 March.
• Trump deported fewer migrants in February than Biden did a year earlier - NBC.
At the same time, the number of people crossing the border has decreased and the number of arrests and detentions has increased.
• Trump's trade war: Recession risks rise in US, Canada and Mexico - Reuters Recession risks continue to rise for the Mexican, Canadian and American economies amid the chaotic rollout of US tariffs, which have already created deep uncertainty for businesses and governments in Mexico, Canada and the United States.
Increasing tariffs on steel and aluminum from Canada to 50%, adding another 25% - Trump
▪️ I will soon declare a National Electricity Emergency. Canada has previously imposed tariffs on electricity for the United States;
▪️ If Canada does not repeal other outrageous tariffs, I will permanently stop car production in Canada;
▪️ We are effectively subsidizing Canada by over $200 billion a year;
▪️ The only logical way out is for Canada to become our precious state.
• The pro-Palestinian hacker group Dark Storm Team has claimed responsibility for a DDoS attack on Elon Musk's social network X.
At the same time, Musk himself stated that a "large coordinated group and/or country" was behind the "large-scale" attack. He later noted that the DDoS attack came from Ukrainian IP addresses.
• NATO urges EU and Turkey to deepen ties as US President Donald Trump's "disengagement" from European security forces Europe to rapidly "rethink" its alliances - FT
• Switzerland is losing its arms market due to a ban on resale to Ukraine. Matthias Zoller, a spokesman for the industry association Swissmem, complained that Switzerland's neutrality laws were restricting companies from signing lucrative contracts. Germany, the largest buyer of Swiss weapons, has excluded Swiss companies from some purchases, while Denmark and the Netherlands have stopped orders.