Trump Tariffs Crash Markets, Indexes, Oil, Bonds, Corporate and Fundamental News
Latest stock market news
• Trump is introducing higher import duties on goods from China, Canada and Mexico from today, and this news has disrupted the bullish plans of investors in the stock market. Stock indices fell by an average of 2%. Only the defensive sectors XLP, XLV, XLU were in the green. Although in the latter, AI energy shares fell.
AI shares, led by NVDA, fell especially sharply yesterday.
Crypto also collapsed, giving up all the growth of the weekend. People need not words, but actions. Bitcoin is already below $84 thousand, and ETH is testing $2000.
Euro quotes rose against the backdrop of rising yields on Eurozone government bonds. And the latter fell in price in anticipation of large-scale fiscal stimuli in the EU for its defense and stagnant economy.
• Europe is waking up to new US tariffs on imports from Canada, Mexico and China, underlining Donald Trump's threat to impose tariffs on the EU too. Trump appeared to take a harder line, saying his neighbours to the north and south had "no room left" for talks that would further delay the 25% tax after a one-month grace period.
China has been hit with an extra 10% tariff, doubling the duties imposed just a month ago. The measures came into effect at 05:01 GMT.
The markets' reaction was swift and decisive: selling stocks and buying bonds.
After Wall Street plunged on Monday, stocks in Asia began to sell off and European stock futures fell about 1%.
Meanwhile, yields on U.S. Treasury bonds fell to their lowest since October during Tokyo trading hours.
Crude oil prices have fallen to a three-month low, and a further fall of about 30 cents in Brent crude would extend that low by another two months.
• Trump's trade policies will not only significantly slow global growth, but will also be a self-inflicted wound at a time when the US economy looks increasingly vulnerable.
Bets on further Federal Reserve easing continue to rise. Traders are now pricing in three quarter-percentage-point rate cuts this year, up from just two just days ago, and are leaning toward just one cut a month ago.
This is keeping a lid on the dollar's gains, in contrast to the previous trend when Trump's protectionist policies strengthened the currency.
• The euro and sterling remain firm against the US dollar amid pan-European efforts to reach a peace deal in Ukraine, even as Washington appears to be moving closer to Moscow.
• The safe-haven yen is rising, nearing a five-month peak on Tuesday. Japan has become the latest country to be potentially hit with tariffs, with Trump saying Monday he criticised unnamed Japanese "leaders" in a phone call for "killing their currency".
Causing some confusion, Japanese Prime Minister Shigeru Ishiba said on Tuesday that he had not discussed currency policy with Trump.
• Trump's threats to impose tariffs are becoming reality with increasing speed, and last week he said that 25% tariffs were looming on European "cars and everything else." Washington is due to impose so-called "reciprocal" tariffs on April 2, in addition to those already in place.
This may all turn out to be more of a negotiating tactic than a new reality of global trade, and some investors and analysts certainly share that view.
• Mimura (Japanese Ministry of Finance):
- Positive factors in the economy include high corporate investment and growth in tourism;
- Not only large companies, but also small and medium-sized companies expect significant wage increases;
- Weak yen increases inflation due to higher import costs;
- Exchange rate raises concerns about real incomes.
• On Sunday’s crypto hype: “Nothing new, just talk. Let me know when Congress approves borrowing or raising the price of gold. Without it, they don’t have the money to buy Bitcoin and alts,” Arthur Hayes.
President Donald Trump’s goal of creating a strategic crypto reserve has a major problem.
Any attempt would likely require Congress to pass legislation, and Republican-led efforts in red states to create a similar fund have been failing.
• Record outflow from BTC ETFs.
Over the week, outflow from spot Bitcoin ETFs amounted to $2.61 billion.
US crypto-related stocks gave up all of the morning’s gains and ended the day in the red.
Strategy (MSTR) -2%.
CleanSpark (CLSK) -2.5%.
Riot Platforms (RIOT) -4.5%.
MARA Holdings (MARA) -1%.
Coinbase (COIN) -4.6%.
• Binance to delist USDT and other stablecoins in Europe via MiCA. Binance announced that it will delist all stablecoin trading pairs in the European Economic Area (EEA) that are not MiCA-compliant starting March 31. The
delisted pairs include USDT, FDUSD, TUSD, USDP, DAI, AEUR, UST, $USTC, and PAXG.
Binance recommends converting these assets to MiCA-compliant stablecoins - USDC, EURI, or euro (EUR).
• Cryptocurrency exchange Kraken says the SEC has agreed to drop its lawsuit against the crypto exchange. No admission of guilt, no payment of fines, and no change in the company's business.
• OPEC+ will continue to increase oil production in April.
• The likelihood of creating a national bitcoin reserve in the United States in 2025 has increased from 42% to 63% - Polymarket.
• Prada moves closer to buying Versace from Capri Holdings for €1.5 billion - Bloomberg
CPRI shares +4%.
• Shares in European defence companies rose on concerns that the EU will have to increase military spending.
Shares in (RHMDE) Rheinmetall jumped 18% in Frankfurt, (BA.L) BAE Systems climbed 14% in London and (LDO.MI) Leonardo climbed 15% in Milan.
• BofA warns that long gold positions are at risk from potential stop-loss orders in algorithmic funds (CTAs).
Further declines could trigger more sell-offs to limit losses.
• NVIDIA (NVDA) and Broadcom (AVGO) are testing Intel's 18A manufacturing process, while some Intel (INTC) customers are seeing a six-month delay due to intellectual property qualification issues.
INTC shares are down 4%.
• Trump: TSMC plans to invest $100 billion in the US.
• Palantir Technologies (PLTR) rose 3% yesterday morning as Wedbush Securities expressed confidence that the company will win more federal deals.
Analysts say Palantir's software fits well with government efficiency initiatives, potentially increasing its presence in future federal budgets.
But the broader market's decline weighed on PLTR (-2%).
• Kroger (KR) announced the resignation of CEO Rodney McMullen following an investigation into his personal conduct.
The board of directors has appointed Ronald Sargent as interim CEO, ensuring continuity in leadership. The change does not impact the company's financial performance or operations.
• AbbVie (ABBV) has entered into a licensing agreement with Gubra A/S for an investigational obesity treatment, marking AbbVie's entry into the obesity treatment market.
The agreement includes an upfront payment of $350 million and potential milestone payments, reflecting AbbVie's commitment to expanding its treatment pipeline.
• Honda Motor (HMC) has moved its plans to build the next-generation Civic to Indiana from Mexico
to avoid future tariffs in the U.S.
• A cryptocurrency scam involving Dell (DELL) and Super Micro Computer (SMCI) servers is under investigation in Singapore. The servers, which may contain Nvidia (NVDA) chips, were likely shipped to Malaysia, raising questions about compliance with U.S. export restrictions.
• Tesla (TSLA) shares tried to rally as Morgan Stanley forecasts the stock to reach $430 on the back of artificial intelligence and robotics. Morgan Stanley's Adam Jonas thinks Tesla is the best bet for the auto sector.
But the broader market's decline weighed on TSLA (-3%).
• Asian logistics operators are leasing more warehouses in the U.S. in response to changes in e-commerce, global trade and manufacturing. Third-party logistics firms, known as 3PLs, work with online retailers and other businesses to store, package and move goods for sale.
• Sunnova (NOVA) shares plunge 64% to an all-time low. Solar energy company Sunnova Energy International said it would not be able to continue operations on a continuous basis for a year due to financial difficulties.
• Mercedes, BMW weigh sale of ride-hailing app FreeNow - Bloomberg. Mercedes-Benz Group AG and BMW AG are making a new attempt to sell their joint ride-hailing app FreeNow, people familiar with the matter said.
• T-Mobile and Perplexity announce new 'AI phone' priced under $1,000 - TechCrunch.
• Ford's (F) overall sales fell 9% in February as automakers try to cut costs amid waning interest in new vehicles.
• BYD's global electric vehicle sales jumped 56% in the first two months of this year, potentially bringing it closer to Tesla.
• Apple (AAPL) will likely show off a new M4-powered MacBook Air this week, with Tim Cook hinting at the announcement on Twitter/X.
• Drugstore chain Walgreens Boots Alliance (WBA) is close to a deal worth about $10 billion to sell itself to private equity firm Sycamore Partners. Which would then take Walgreens private and likely break it up.
WBA shares are up 5% in premarket trading. WBA's Mcap yesterday was $8.9 billion.
• OKTA shares rise 16% in premarket trading after the company gave a strong outlook.
Key events that could impact markets on Tuesday:
- Eurozone unemployment rate (January)
- New York Fed President John Williams speaks at Bloomberg Invest event
Current Fundamental Reviews
• Trump to address joint session of Congress today
Trump: 25% tariffs on Canada and Mexico and 20% on Chinese goods to go into effect Tuesday.
- Reciprocal tariffs to go into effect April 2.
- I will impose tariffs on countries that weaken their currencies, particularly China.
- I don't think China will retaliate too strongly.
- I will consider a free trade agreement with Argentina.
• Trump's special envoy at large Richard Grenell has made several unofficial visits to Switzerland to discuss the possibility of a deal on the Nord Stream 2 pipeline and Russian gas supplies to Germany - Bild.
• China's ambassador criticizes Australia's move to restrict DeepSeek - Bloomberg The move could further politicize trade and technology ties between the two countries, which have only recently stabilized their bilateral relations, the diplomat said.
• US 25% tariffs on all EU goods could cost Europe 1.5% of GDP - BBG.
Global Times: China could impose 10% tariffs on US agricultural products
in response to US tariff policy.
• Eurozone inflation figures are above expectations, although they showed a decline.
CPI = 2.4% y/y (exp. 2.3% / pop. 2.5%).
Core CPI = 2.6% y/y (exp. 2.5% / pop. 2.7%).
• US business activity indicators are mixed:
S&P Global US Manufacturing PMI 52.7 (exp. 51.6 / pop. 51.2).
• U.S. industrial production was stable in February, but the factory exit price index jumped to a near three-year high and materials took longer to arrive, suggesting import tariffs could soon hamper production
ISM Manufacturing PMI = 50.3 (exp. 50.6/pop. 50.9)
U.S. manufacturing activity neared stagnation last month as orders and employment fell, while the materials price index jumped to its highest since June 2022 amid growing concerns about tariffs.