Ukraine in the spotlight of financial markets, geopolitics and corporate news of companies
Stock market news
• Gains in banking and defence stocks in Europe spread to Tokyo, where shares in Mitsubishi Heavy Industries jumped 3% to hit record highs.
• The focus is on Ukraine and expectations that Europe will increase defence spending if a peace deal is struck. European futures rose slightly and pointed to a market opening near record highs reached on Monday, with the defence sector lifting broader indexes including the pan-European STOXX 600 and Germany's DAX. Arms maker Rheinmetall jumped 14%.
• US President Donald Trump has set up bilateral peace talks with Russia due to begin later on Tuesday in Saudi Arabia. British Prime Minister Keir Starmer has said he is prepared to send peacekeeping troops to Ukraine, although European leaders made no such commitments at emergency talks in Paris on Monday.
• The prospect of an end to fighting has given the euro and European stocks a nice boost and distracted attention from tariffs and interest rates. It is likely to overshadow data from Germany's ZEW survey, UK labour data and second-tier manufacturing figures due out in the US.
• Australia's central bank began its rate-cutting cycle as expected, cutting interest rates for the first time since 2020. However, the bank appeared in no rush to make further cuts, providing some support to the Australian dollar while the Australian stock market fell. Across
the Tasman Sea, New Zealand was in a slightly different situation, with a 50 basis point rate cut set for Wednesday and more than 100 basis points expected to be cut this year.
• Hong Kong shares hit their highest since October in morning trading, with tech stocks hitting three-year highs on enthusiasm after President Xi Jinping's rare meeting with business leaders on Monday. Earnings will also be in focus as Chinese search giant Baidu reports later on Tuesday and Alibaba on Thursday. Baidu shares have steadied after a sell-off in the previous session when founder Robin Li was not seen at a symposium in Beijing.
• US markets return after national holiday.
• “A peace deal between Ukraine and Russia could cause the price of Brent oil to fall by $5-$10 per barrel” - Bank of America.
• Southwest (LUV) will cut 15% of its corporate jobs (1,750 people), the first layoffs in the airline's history.
• Xiaomi to integrate DeepSeek into its OS. LLM will appear in Xiaomi's version of Siri: you can ask the voice assistant to do something, and it will forward it to DeepSeek. Tech executives say DeepSeek increases competition between China and the US, but will not hurt OpenAI - CNBC.
• By the end of 2024, twelve North American states reported holding Michael Saylor's Strategy (MSTR) shares in their pension funds and treasuries, worth a combined $330 million. Bitcoin is making its way into pension assets by hook or by crook.
• European defense stocks are rising. Rheinmetall shares rose 9% in early trading on Monday, BAE Systems rose 5% and Thales rose 4%.
• The Stoxx Europe aerospace and defense index hit its highest level in 30 years as investors bet that European governments will spend more on their defense.
• European shares rise on hopes of a ceasefire in Ukraine. The pan-European STOXX 600 index gained 0.4% on Monday, with defense and aerospace stocks soaring more than 3% to hit an all-time high.
• Crypto Czar David Sacks: “Bitcoin BTC is the first digital currency and it is an excellent store of value.”
• Tether is developing Brain OS, an open platform for enhancing intelligence. Brain OS is a decentralized, open-source platform aimed at enhancing cognitive abilities. - The goal is to enhance human intelligence to remain competitive with AI.
• OpenAI loosens censorship on ChatGPT, allowing discussion of previously banned topics - techcrunch.
• Airbus is struggling to ramp up A350 production this year. Airbus is facing persistent delays in the arrival of fuselage parts from Spirit AeroSystems, industry sources said. The delays cast doubt on Airbus' ability to ramp up production above the current pace of about six jets a month until at least the end of this year, although the company still hopes to meet its published target of 12 jets a month through 2028, they added.
• Fed's Bowman: Greater confidence in inflation decline needed before further cuts
• Musk announced that DOGE would be audited by the Securities and Exchange Commission (SEC) for fraud, abuse, and waste. DOGE asked the public to provide information about waste, fraud, and abuse to the SEC.
• Siri AI delayed again. Apple Intelligence for Siri is being delayed from April to May due to technical issues. Engineers have not yet achieved stability for the new features that are supposed to make Siri smarter.
• Intel (INTC) could be split in two: Broadcom (AVGO) and TSMC (TSM) are considering deals that could break up the legendary chipmaker - WSJ
• Broadcom is interested in buying Intel's chip design business, but will only make a deal if it finds a partner for Intel's foundries. TSMC is currently considering buying Intel's foundries, which could dramatically change the balance of power in the semiconductor world.
• TIM launches renewable energy plant TIM Energia in partnership with Axpo Italia.
• Hopes for a ceasefire in Ukraine provide a tailwind for European markets in the shadow of tariffs.
• UK price comparison platform MONY makes big profits by controlling costs.
• Bundesbank warns Germany particularly at risk from US tariffs
• China's technological growth is based on "hot money."
• Brazil Inc is cautiously betting on improvement in Argentina under Milea.
• Standard Chartered, HKT and Animoca to form joint venture to issue Hong Kong dollar-backed stablecoin.
• German voters demand change as Europe's biggest economy stalls.
• HSBC investors back CEO's investment banking cuts
• Australia's Bendigo and Adelaide Bank fell sharply after a dismal earnings report.
• Some Indonesian lawmakers are considering removing the central bank's chief, Tempo magazine reported.
• Indonesia's INA and Japan's DBJ launch hybrid fund for mid-sized businesses.
• Australia's Westpac's first-quarter margins narrow, shares fall
• Aviva's Indian unit fined $7.5 million for fake invoice fraud, court rules
• Fund managers are increasing their stake in bitcoin ETFs, according to quarterly reports in the US.
• JPMorgan expects criticism of its DEI policies.
• Berkshire takes stake in Modelo maker Constellation; cuts BofA and Citigroup.
• Bank of America is hiring a former JPMorgan executive to strengthen the private bank, a memo says.
Key events that could impact markets on Tuesday:
- Economy: German ZEW survey, UK labor data, US Federal Reserve Bank manufacturing data
- Income: Baidu, InterContinental Hotels
Fundamental news
• The US State Department website has removed the line that Washington “DOES NOT support Taiwan independence.” At the same time, the web page still states its commitment to the “one China” policy. “We continue to have an abiding interest in peace and stability in the Taiwan Strait. We oppose any unilateral changes to the status quo by either side,” the updated version of the page states.
• US believes it only needs China to resolve Ukraine conflict - BBG "US officials told Europeans in Munich that America and China are the two great powers in the Ukraine discussions... The US will keep Europeans informed of progress, but it is not seen as a significant player."
• Elon Musk announced the discovery of the "largest fraudulent scheme" in US history. Millions of citizens over 120 years old were discovered in the country who continue to receive government payments on a regular basis, and some of them are as old as 360 years old. But for now, these are just words. We are waiting for evidence.
• Amid growing talk of an imminent end to the war, Europe is already looking at resuming large-scale purchases of Russian gas, - The Economist.
• The head of the Munich Conference, Christoph Heusgen, called the event a “nightmare” for Europe. And he burst into tears.
He noted that it showed the US’s distance under Trump and the Republicans’ caution in their statements due to fear of the president.
• Candidates for Chancellor of Germany held a "TV duel for four". Olaf Scholz (SPD), Friedrich Merz (CDU/CSU), Alice Weidel (ADN) and Robert Habeck (Greens) differed in their approaches to solving Germany's economic problems. Scholz and Habeck spoke in favor of raising taxes on the super-rich. Merz accused them of "responsibility for the largest economic crisis in Germany's post-war history". The head of the AfD spoke in favor of completely abolishing the tax on greenhouse gas emissions and the law on renewable energy. Elections in Germany are already on Sunday, February 23.
• OPEC+ producers are not considering postponing a series of monthly increases in oil supplies that are due to begin in April, said Russian Deputy Prime Minister Alexander Novak. Will oil prices still get cheaper?
• Hamas has announced its readiness to hand over control of the Gaza Strip to the Palestinian National Authority, Sky News Arabia reported.
According to the TV channel, the Palestinian radical group did so “under strong pressure from the Egyptian authorities on its delegation that arrived in Cairo.”
• Taiwan is in talks with the United States to buy American weapons, including HIMARS missiles, worth billions of dollars - Reuters.
• Chinese President Xi Jinping chaired a meeting with Alibaba co-founder Jack Ma and other prominent entrepreneurs on Monday - Bloomberg - a signal of Beijing's support for the long-marginalized private sector, now seen as key to China's economic revival. But it also signaled that big business is publicly backing Xi.