US Treasury Secretary Scott Bessent Sees Financial Market Correction, Geopolitics and Corporate News
Latest stock market news
• Bessent's words plunged stock index futures into negative territory by -0.5%. Asian markets are up by an average of 1%.
Oil is rising within a percent. The currency market is neutral. Bitcoin is trading just above $83,000 - the battle between bulls and bears continues here.
• Monday's market action continued a trend of investors falling out of love with U.S. stocks and flocking instead to their European and Chinese peers. Wall Street futures slid past a wall of gains early in the day, failing to sustain last week's buying surge that has pushed all three major U.S. stock indexes higher.
The depressing turnaround in U.S. stocks on Monday may be linked to U.S. Treasury Secretary Scott Bessent's statement on Sunday that there was "no guarantee" the world's largest economy would avoid recession, just a week after U.S. President Donald Trump refused to rule out that possibility.
• Investors have sought refuge from the turbulent U.S. stock market by investing in a type of exchange-traded fund that offers a compromise - limiting potential gains in exchange for a cushion against potential losses.
• But it's a different story across the Atlantic. Investors optimistic about Germany's fiscal reset plan have poured money into European stocks, sending the continent-wide STOXX 600 index up more than 7% for the year.
Germany's DAX index is also up more than 15% so far, compared with a 4% drop in the S&P 500.
European stock futures posted another strong open on Monday, with EUROSTOXX 50 futures up 0.17% and DAX futures up 0.35%.
Germany's parliamentary budget committee on Sunday approved plans for a massive increase in government borrowing to bolster defense and boost economic growth.
The bill, which would create a 500 billion euro ($540 billion) fund for infrastructure development and change borrowing rules, will need a two-thirds majority in a parliamentary vote scheduled for Tuesday.
• A similar situation has developed in China: once-collapsed stocks have become unexpected beneficiaries of Trump's policy of sharp tariffs.
Coupled with a major rally in tech stocks following the high-profile debut of Chinese AI startup DeepSeek's R1 reasoning model, Hong Kong's Hang Seng Index, which includes many major Chinese companies, is up nearly 20% year to date.
Things are also looking up in China. Official data released on Monday showed that retail sales growth accelerated in January and February, a welcome sign for policymakers even as unemployment rose and industrial output fell.
A day earlier, the State Council unveiled what it called a “special action plan” to boost domestic consumption, including measures such as increasing household incomes and creating a childcare subsidy scheme. That, in turn, came days after the financial regulator promised to ease consumer credit quotas and lending conditions as it offers long-term support for large loans.
• Investors will be bracing for a busy week filled with policy decisions from central banks, including the Federal Reserve. The Fed is expected to keep interest rates on hold, although traders will be looking for hints of further cuts that could restore calm to markets.
• And in geopolitics, Trump said he plans to speak with Russian President Vladimir Putin on Tuesday to discuss ending the war in Ukraine.
• US Treasury Secretary Bessent:
I've been in the investment business for 35 years. And I can tell you that corrections are fine. They're healthy.
What's unhealthy is straight-line, euphoric markets... So I'm not worried about the markets. Over the long term, if we put in place good tax policies, deregulation, and energy security, the markets will be fine.
We'll have a transition. And we won't have a crisis.
Although Bessent refused to rule out a recession: "You know, there are no guarantees."
If we continued like this, I can guarantee you that we would have a financial crisis. And if we continued at this level of spending, things would be unsustainable. So we're putting -- we're resetting and putting everything on a sustainable path.
• French champagne industry horrified by US President Donald Trump's threat to impose 200 percent tariffs - France24.
• TON token soars as Durov leaves France. Telegram founder Pavel Durov has been allowed to temporarily leave France, where he is accused of multiple offenses related to aiding organized crime.
Baidu Releases Reasoning AI Model to Fight DeepSeek - Bloomberg.
• Oil below $60 threatens US production decline - Citigroup US President Donald Trump's push to boost domestic oil production and lower energy prices threatens to halt drilling.
• Market Confident: Fed to End QT by May. According to Polymarket data, the probability that the Fed will end quantitative tightening (QT) by May is estimated at 100%. This figure has increased by 50% in the last week, indicating high market confidence that QT will end soon.
The end of QT is usually taken as a signal for monetary easing, which can be positive for markets.
Wealthy investors are pouring into US stocks - BofA.
• Wealthy and large investors' inflows into U.S. stocks amounted to 2% of Bank of America's assets under management (AUM) last week. That's the third-largest amount in history.
Michael Hartnett of BofA: "Third-largest Buy-The-Dip dominance in history last week! We're calling this a correction, not a bear market in stocks. Markets stop panicking when politicians start panicking..."
• Bessent says he's not worried about the market, the correction is healthy - Bloomberg.
• The family of billionaire Porsche and Piech are exploring options to potentially reduce their stake in Volkswagen AG, according to a report in the German tabloid Bild.
• North Korea's Lazarus Group now holds 13,562 BTC worth over $1.14 billion, making it the third-largest government holder of bitcoin after the US and UK. "Thanks" to hackers.
• The Fed and the health of the U.S. economy will remain a focus for investors next week.
The central bank is expected to leave interest rates unchanged when it announces its next monetary policy decision on Wednesday. Markets will be focused on any hints about when the central bank might cut rates again.
• Retail sales data for February are due out Monday, leading the weekly round of scheduled economic data releases. On the corporate front, quarterly results from Nike (NKE), FedEx (FDX) and Micron (MU) will be closely watched after the bell on Thursday.
• Nvidia GTC 2025: GTC, Nvidia's biggest conference of the year, starts Monday and runs through Friday in San Jose.
• Chinese authorities have banned key DeepSeek engineers from leaving the country.
According to The Information, DeepSeek management, on instructions from the country's authorities, has decided that some key employees must surrender their passports.
• Musk announced that a spaceship with his humanoid robot Optimus will fly to Mars in late 2026.
According to him, if the flights with the robot go well, then spaceships with people could be sent no later than 2029.
• The quantum sector is showing a strong recovery and has almost returned to early January levels:
QBTS +41%
RGTI +23%
IONQ +14%
• BlackRock Continues to Buy BTC. BlackRock received $25M in BTC through Coinbase Prime, increasing its Bitcoin holdings to $47.47 billion.
• China to crack down on fake news in stock markets as AI fuels disinformation, state media say China's securities watchdog will step up monitoring of fake information in the stock market and work with police and cyber regulators. Will all "wrong" news be removed and sources punished?
• Best Buy is the next major retailer to create a marketplace.
• Berkshire Hathaway Director Olson to Step Down. Berkshire Hathaway said Friday that longtime director Ronald Olson will step down from the board because of a change in policy that requires directors other than Warren Buffett to retire after they turn 80.
• Vance hopes 'high-level' TikTok deal will be finalized by early April
• Intel shares were the top performer in the S&P 500 this week after the chipmaker named a new CEO amid speculation about the future of its foundry business.
• Drugmakers have agreed to participate in a second round of price talks. The price negotiation process was launched under the Inflation Reduction Act of 2022 signed by former President Joe Biden.
• World expects global coffee deficit - Reuters. Brazil, Vietnam and a number of other countries have seen crop yields fall.
Key events that could impact markets on Monday:
- A press conference in Beijing on measures to stimulate consumption, with officials including Li Chunlin of the National Development and Reform Commission.
- U.S. retail sales (February).
Current Fundamental Reviews
• Trump has brought more uncertainty to the global economy than the coronavirus pandemic did previously, the ECB said.
• The US operation against the Houthis in Yemen is only the beginning of a strategy of "maximum pressure" on Iran - US Treasury Secretary.
After a series of missile strikes by the US, the Yemeni Houthis said they were ready for peace talks with the US - Qatari TV channel Al-Araby
Yemeni Houthis claim that they attacked the US aircraft carrier Harry Truman with ballistic missiles and drones in the Red Sea.
US considering targeting Iranian naval vessels in the Red Sea that help Houthis gather intelligence - Waltz
"Iranian targets will be 'next' to be hit"
The US has no authority or mandate to dictate Iran's foreign policy because "that era ended in 1979"
Stop supporting Israel, stop killing people in Yemen - Iranian Foreign Minister Seyyed Abbas Araghchi, quoted by Anadolu
• In the capital of Greenland, Nuuku, about 1,000 local residents came out to protest against the policies of Donald Trump. The protesters were protesting against Trump's intention to annex Greenland and join the island to the United States.
• European countries are discussing the return of compulsory military service "to strengthen their defences in the face of Russian aggression", - AFP.
• A mass rally against Prime Minister Viktor Orban took place in Budapest. The protest was organized by the opposition party Tisza.
• In 2023, life expectancy in the European Union reached 81.4 years, the highest level ever recorded by Eurostat - Euractiv.
• Social networks threaten democracy, - German President Frank-Walter Steinmeier. Against the backdrop of recent events in the world, the politician called for increased regulation of the activities of Internet companies.
• The US is calling for better access to the Korean market, South Korea's trade minister said, especially in the agricultural and technology sectors.
• Xi Jinping declined invitation to visit Brussels for summit to mark 50th anniversary of China-EU diplomatic relations - Financial Times.
• China steps up criticism of Li Ka-shing's BlackRock Ports deal.
Chinese authorities stepped up pressure on CK Hutchison Holdings Ltd. over its plan to sell its stake in Panamanian ports, publishing a second newspaper commentary criticizing the deal.
• A mixed block of macroeconomic news came out of China:
China Industrial Production (YoY) +5.9% (expected +5.3% / prev.: +6.2%)
China Retail Sales (YoY) +4.0% (expected +4.0% / prev.: +3.7%)
Chinese unemployment rate 5.4% (expected 5.1% / prev.: 5.1%).
• Security advisers to the leaders of Great Britain, Germany and France have gone to Washington on an unannounced visit - Welt. The trip was organised at short notice and is taking place against the backdrop of Europe's absence from the negotiating table on ending Russia's war against Ukraine.
• Orban put forward 12 demands to the EU: among them is the absence of Ukraine from the EU. According to the Hungarian Prime Minister, Brussels must ensure equality before the law and national sovereignty for all member countries of the European Union. In addition, Orban said that Europe must end illegal migration and deport illegal immigrants from the continent.
• Biden left Trump with up to $300 billion in unpaid bills - New York Post. According to the publication, the expenses were made to ensure the victory of former US Vice President Kamala Harris in the presidential election.
• The European Commission is studying the possibility of creating its own network of military reconnaissance satellites in order to reduce dependence on the United States, said European Commissioner for Defense Andrius Kubilius.
• Europeans are unable to cope with the flow of migrants, which could lead EU countries to “civilizational suicide” - Vance. He noted that the authorities’ attempts to correct the situation are the right step, but at the same time the authorities are beginning to limit citizens’ rights to freedom of expression.
• Mass protests in Belgrade. According to some estimates, up to 1 million people took to the streets of the Serbian capital. Serbs are demanding the resignation of President Vucic.
• Merkel called on the West to take into account Russia's interests. The former German chancellor said in an interview with Berliner Zeitung that understanding the motives behind Moscow's actions is one of the key tasks of diplomacy, and politicians should take its interests into account.
• According to Google Trends, searches for the word “recession” have reached their highest level since 2022.