Stock market morning correction after a fall, political agreements, company news and geopolitics
Latest stock market news
• The US stock market fell more than a percent to new lows for the year yesterday as investors reacted to Trump's new tariff threats. But futures are up 1% this morning. Chinese stocks are also up. Bitcoin is still hovering around $82,000.
• Global stocks got some much-needed relief on Friday after a week of severe turmoil, putting trade war worries aside for now as top US Senate Democrat Chuck Schumer signalled his party would provide the votes to prevent a government shutdown.
Traders responded quickly with stock futures rising, with Nasdaq futures jumping more than 1% and S&P 500 futures up 0.8%, a relatively big move for Asian hours.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 1%.
Europe also looks set for a strong open, with EUROSTOXX 50 futures up 0.3% and DAX futures up 0.5%.
The market's sensitivity to news that rarely caused a stir in the past is a sign of how jittery investors have become.
“If you’re already in a haunted house and you’re already scared, any little mouse is going to scare you,” says Vishnu Varathan, head of macro research for Asia (excluding Japan) at Mizuho. Markets have generally been unfazed by headlines about the U.S. government shutdown in recent years, as lawmakers routinely pass stopgap spending bills to keep the government running while they wrap up their work.
However, by the end of the week, global markets were gripped by fears of a looming US recession and an escalation of the global trade war.
• Traders in London will wake up to the release of UK economic growth estimates for January, due early in Europe. The economy is expected to have expanded 0.1% month-on-month, down slightly from 0.4% in December.
It is worth noting that the UK's relatively balanced approach to trade disputes with the US and the generally balanced trade position between the two countries have benefited the pound, which has confidently demonstrated growth for the second week in a row.
• In the US, the University of Michigan consumer surveys will be a key event on Friday, given how US President Donald Trump's tariff sanctions are unsettling both businesses and consumers.
• Chinese stocks have become an unexpected haven for global investors seeking protection from uncertainty in the United States.
Hong Kong's Hang Seng index has risen 17% since Trump returned to the White House in January, compared with a roughly 9% drop in the S&P 500.
Shares in mainland China and Hong Kong jumped again on Friday, led by consumer stocks, after a northern Chinese city announced plans to boost the birth rate. Investors are also eyeing a press conference next Monday by Chinese officials from the top planning agency and elsewhere on additional measures to boost domestic consumption.
• US Treasury Secretary Bessent: We're focused on the real economy. Not worried about a little volatility for a few weeks.
• Apple urges 1.4 billion iPhone users to update their devices after critical vulnerability found in smartphones, - Daily Mail.
• China has held discussions with Walmart (WMT) executives over complaints that it is pressuring suppliers.
The retailer is pressuring Chinese suppliers to lower prices to offset the cost of U.S. tariffs.
• New US regulations could allow banks to become validators on blockchain networks, increasing the risks of centralization in PoS networks
such as Ethereum and Solana and could reduce the profitability of staking by making it harder for smaller market participants.
• Major US packaged food makers have asked Trump to lift tariffs on cocoa, coffee, spices and tropical fruits, Reuters
PepsiCo, Conagra and JM Smucker have called for tariff exemptions on ingredients that are not made in the US.
• Trump will meet with top U.S. oil and gas executives at the White House next week to discuss tariffs, trade and LNG exports.
• LVMH shares are falling amid potential 200% tariffs on all wines and champagnes that Trump has threatened to impose.
He has said he will unless the EU lifts the whiskey tariff.
LVMH makes Moet, Veuve Clicquot, Dom Pérignon and other spirits. The company has already been hit by bans from China.
• China could also significantly increase copper imports - RTRS. Earlier reports said the US could increase copper imports by 50-100% in the coming months amid Trump's plans to impose tariffs on it.
Copper prices could rise to $10,000 before tariffs kick in - Citi.
• Tesla (TSLA) is reportedly partnering with Baidu to improve its ADAS system in China.
• China unveiled Zuchongzhi-3, the world's most powerful quantum supercomputer, which is a "quadrillion" times faster than classical ones.
• Chinese equities, emerging market debt received strong inflows in February, the IIF said.
Foreigners added nearly $16 billion to their emerging market portfolios in February, with investors pouring money into Chinese equities as well as debt.
• Rheinmetall outperforms Volkswagen, becoming more valuable to reach a market capitalization of €56.2 billion.
Military spending in Europe is rising, which has led to a record increase in Rheinmetall shares of more than 12 times since 2022.
• BMW to temporarily absorb extra costs. The company has notified U.S. dealers that it will absorb increased costs over several weeks due to new tariffs on imports from Mexico.
• UiPath (PATH) shares fell 16% after Bank of America downgraded the stock due to a weaker-than-expected fiscal 2026 outlook. The downgrade was tied to macroeconomic pressures impacting the company's federal vertical, raising concerns about the broader impact on the automation software sector.
• Archer Aviation (ACHR) announced a partnership with Palantir Technologies (PLTR) to develop AI-powered aviation technologies.
The collaboration aims to expand Archer’s manufacturing capabilities and advance next-generation software solutions.
• D-Wave Quantum (QBTS) shares rose 19% yesterday. The company announced it had achieved “quantum computing supremacy” and expects first-quarter fiscal 2025 revenue to beat Wall Street estimates, highlighting strong growth in its orders.
• Spirit Airlines emerged from bankruptcy with reduced debt and increased financial flexibility. The restructuring included converting debt into equity and raising new capital, allowing the airline to improve its offerings and return to profitability. Spirit plans to relist its shares on the stock exchange soon.
• Oil slips as IEA says trade war poses risks to global demand.
In addition, OPEC+ exported a record amount of oil products, offsetting the impact of the group's oil output cuts as its members, including Saudi Arabia, seek to boost revenues and market share, according to industry data and analysts.
• American Eagle Outfitters (AEO) says consumers are scared and cutting back on spending. The company said consumers are worried about the future and gave a weaker-than-expected outlook.
• OpenAI calls on the US government to codify “fair use” for AI training.
In a proposal for the US government’s “AI Action Plan,” the Trump administration’s initiative to reform US AI policy, OpenAI calls for a US copyright strategy that would “[preserve] the ability of US AI models to train on copyrighted material.”
• Dollar's slide pauses as traders use options to bet on a rebound - Bloomberg
• Republicans Call on Fed to Change Supplemental Leverage Ratio - Bloomberg.
Republicans in the five chambers of the House of Representatives called on Federal Reserve Chairman Jerome Powell to take steps to improve liquidity in the Treasury market, including considering "targeted" changes to bank capital requirements.
• Gold has updated its historical maximum above $3000.
• Abu Dhabi-based MGX has invested $2 billion in Binance, buying a minority stake in the largest crypto exchange.
- The first institutional investment in Binance.
- The largest investment in a crypto company paid entirely in stablecoins.
- MGX is going blockchain - the investment will be part of a strategy at the intersection of AI, crypto and DeFi.
• Telegram has added trading and staking to the crypto wallet.
Now TON Space users can:
- Buy and sell cryptocurrency directly in the wallet.
- Earn money by storing assets.
• Binance Considers Justin Sun's Strategy to Address SEC Issues - WSJ. Justin Sun invested $30 million in World Liberty Financial last fall amid civil charges from the SEC. The regulator then asked the court to stay the fraud case.
Binance is considering investing in World Liberty Financial in exchange for a possible pardon for Changpeng Zhao.
• SEC delays review of spot ETF applications pending Paul Atkins' approval.
The regulator is delaying the process due to personnel changes, leaving the market in limbo.
More than 60 applications for spot crypto ETFs, including Bitcoin and Ethereum, remain pending approval.
• ULTA shares rise 6% in premarket trading after earnings. ULTA had fallen sharply ahead of the earnings, so the market ignored even the company's warnings about lower profits due to capex and cautious consumers.
• LSEG reports that the technical issue with the forex trading system in India has been resolved.
• SoFi signs up to $5 billion in credit deal as fintech lending gains momentum
• British investor Legal & General to buy more defence shares.
• BlackRock will appoint Yu Beihua as the new head of its China fund, sources say.
• Britain no longer NatWest's biggest investor after new share sale
• Citigroup plans to cut IT contractors and hire staff to improve controls.
• Generali's CEO says the insurer may buy more Italian government bonds.
• India's HDFC Life says previous data breach had "no significant impact".
• UBS is considering selling some real estate assets in its asset management unit, sources said.
• Intel shares jump 10% as new CEO Tang brings "instant credibility" to restructuring efforts.
• The Finnish government has nominated the head of the Bank of Finland for a new term.
• Blackstone will buy 40% of the shares of the Indian company Kolte-Patil Developers for $134 million.
• The French antitrust authority has approved Carrefour's acquisition of Delhaize's French business.
• Trump's tariffs have led to record high prices for physical aluminum in the US market.
Key events that could impact markets on Friday:
- UK GDP estimates (January)
- UK industrial production (January)
- University of Michigan consumer surveys (March)
Current Fundamental Reviews
• Democrats ruled out supporting the Republican stopgap funding bill, which aims to extend current funding levels through the end of September.
• Elon Musk's 'streamlining' fails to stop US federal spending from hitting record high - FT
Elon Musk's hyperactive push to "improve" government efficiency failed to stop US federal spending from hitting a record $603 billion last month, new Treasury data show.
Spending was up $40 billion from the same month last year in comparable prices, or 7%.
'America will go bankrupt': Musk talks of US default
And the reason for this, according to Musk, will be the lack of budget cuts.
• Bessent: "A US government shutdown would cause major disruption."
"We are focused on the real economy and looking for long-term growth for the market and Americans, not caring about a little volatility.
" "Apart from metals and probably autos, everything else is open to tariff talks."
• Trump said the US would respond to the European Union's countermeasures against its new 25% tariffs on steel and aluminium, raising the risk of further escalation in his global trade war.
• Trump is considering annexing Greenland militarily. He is serious about expanding US territory, - WSJ.
• The United States will resume deportation flights to Venezuela on Friday, which the government halted after President Donald Trump's decision to revoke Chevron's license to drill for hydrocarbons in Venezuela.
• Turkish President Recep Tayyip Erdogan has said for the third time in two days that the country's EU membership would strengthen the union. During a press conference with Polish Prime Minister Donald Tusk, Erdogan said it was vital to accept Turkey as a full member to maintain the EU's importance and influence, Anadolu Agency reported.
• Duda called on Trump to deploy nuclear weapons in Poland to deter Russia, - FT. According to the Polish president, he recently discussed this proposal with US Special Representative Keith Kellogg.
• Hungary has threatened to block the extension of EU sanctions against 2,000 individuals from the Russian Federation unless Mikhail Fridman is removed from the sanctions list. This demand, according to the publication, is also supported by Luxembourg.
• Hungary lifted its veto on extending EU sanctions against Russia - Bloomberg. This happened after three names were removed from the list at Budapest's request. It was not specified which ones.
• Europe commits to significantly increase defense spending - NATO Secretary General Rutte. We need to produce more weapons. We are not doing enough; we are lagging behind Russia and China.
• Christian Hirte, a member of the Bundestag from the Christian Democratic Union (CDU), hired a Russian with ties to the FSB.
He was responsible for relations with the Russian opposition - Frankfurter Allgemeine.
• Fitch believes that the proposed ReArm Europe plan will reduce the EU's rating headroom, primarily due to additional debt at the EU level.
• Taiwan to tighten controls on China relations. Taiwan will introduce a new system to regulate travel to China, tighten controls on visits by Chinese citizens and adjust the structure of trade and economic relations with Beijing to reduce dependence.
• The COVID-19 pandemic most likely broke out due to a leak of the SARS-CoV-2 virus from a laboratory in Wuhan, China - the German foreign intelligence service BND. The BND came to these conclusions back in 2020, the newspapers Süddeutsche Zeitung and Zeit write.
It is noted that the Federal Chancellery commissioned the intelligence service to conduct an investigation into this, and it was the agency that subsequently classified the information it received.
• US Labor Market and Inflation Indicators
Unemployment Claims = 220K (exp. 226K / pop. 222K)
Core PPI 3.4% y/y (exp. 3.6% / pop. 3.8%)
PPI 3.2% y/y (vs. 3.6% / pop. 3.7%)
US producer prices were unchanged in February for the first time in seven months, while fewer Americans filed for unemployment benefits last week, pointing to a robust economy.
• The Bank of China has announced measures to support the economy. The regulator intends to reduce interest rates and the reserve requirement in order to create favorable monetary conditions for economic growth.
• Trump allowed a shutdown in the US this week. The responsibility for the government shutdown will fall on the Democratic Party.
Senate Democratic leader Schumer supported the budget bill.
Democrats are afraid of responsibility for the government shutdown. Which is what experts expected.
The vote on the budget will be today.
• The U.S. Postal Service plans to cut 10,000 jobs over the next 30 days and billions of dollars from its budget. Agrees to cooperate with DOGE. The USPS currently employs about 640,000 people.
• NASA scientists have found life on Mars. They discovered the remains of microorganisms in the area of an ancient dried-up lake.