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Globe and Mail
05-05-2025
- Business
- Globe and Mail
Stocks Set to Open Lower as Trade Concerns Resurface, Fed Meeting and Earnings in Focus
June S&P 500 E-Mini futures (ESM25) are down -0.75%, and June Nasdaq 100 E-Mini futures (NQM25) are down -1.02% this morning, pointing to a lower open on Wall Street as uncertainty about U.S. trade policy weighed on investors' risk appetite. U.S. President Donald Trump on Sunday announced a 100% tariff on foreign-produced films imported into the U.S., tempering last week's optimism about a potential easing of trade tensions. Also, President Trump stated that he had no plans to speak with his Chinese counterpart, Xi Jinping, this week, though he indicated that trade agreements with other unspecified partners could be announced as early as this week. This week, investors look ahead to the Federal Reserve's interest rate decision as well as a fresh batch of U.S. economic data and corporate earnings reports. In Friday's trading session, Wall Street's major equity averages closed higher, with the S&P 500 and Nasdaq 100 notching 5-week highs and the Dow posting a 1-month high. DexCom (DXCM) surged over +16% and was the top percentage gainer on the S&P 500 and Nasdaq 100 after the medical devices maker reported better-than-expected Q1 revenue. Also, chip stocks rallied, with Arm Holdings (ARM) climbing more than +6% and ON Semiconductor (ON) gaining over +5%. In addition, Duolingo (DUOL) soared more than +21% after the mobile learning platform posted upbeat Q1 results and raised its full-year bookings guidance. On the bearish side, Apple (AAPL) fell over -3% and was the top percentage loser on the Dow after the iPhone maker reported weaker-than-expected revenue from Greater China in FQ2. The U.S. Labor Department's report on Friday showed that nonfarm payrolls rose 177K in April, stronger than expectations of 138K. Also, U.S. April average hourly earnings rose +0.2% m/m and +3.8% y/y, weaker than expectations of +0.3% m/m and +3.9% y/y. In addition, the U.S. unemployment rate was unchanged at 4.2% in April, in line with expectations. Finally, U.S. March factory orders rose +4.3% m/m, slightly weaker than expectations of +4.4% m/m. 'A lot of people — based on Liberation Day and the events since — have forecast economic Armageddon, and every time economic Armageddon doesn't happen, it's good news. Maybe it's just too early. A lot of the phenomenon that people fear haven't really had time to sink into the data yet,' said Lawrence Creatura, a fund manager at PRSPCTV Capital LLC. The U.S. Federal Reserve's interest rate decision and Chair Jerome Powell's post-policy meeting press conference will take center stage this week. The central bank is widely expected to keep the Fed funds rate unchanged in a range of 4.25% to 4.50%, despite recent pressure from President Trump to lower interest rates. Market watchers' attention will be on any indications of whether rates might be lowered later this year to support the economy amid tariff-related pressures. The Fed is growing more concerned about economic growth and will likely 'cut interest rates as soon as it can be reasonably sure that inflation is not spiraling out of control,' according to Commerzbank analysts. First-quarter corporate earnings season continues, and investors await new reports from notable companies this week, including Advanced Micro Devices (AMD), Arm (ARM), Palantir Technologies (PLTR), Arista Networks (ANET), Uber Tech (UBER), Ford (F), Walt Disney (DIS), Applovin (APP), DoorDash (DASH), and Shopify (SHOP). According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +6.7% increase in quarterly earnings for Q1 compared to the previous year. In addition, investors will continue to monitor economic data for signs of how tariffs and the uncertainty they create are affecting economic activity. This week's noteworthy data releases include U.S. Unit Labor Costs (preliminary), Nonfarm Productivity (preliminary), Initial Jobless Claims, Wholesale Inventories, Exports, Imports, Trade Balance, and Consumer Credit. On Friday, the Fed's blackout period ends, with Fed officials Williams, Kugler, Goolsbee, Waller, and Cook set to deliver remarks. Today, investors will focus on the U.S. ISM Non-Manufacturing PMI and S&P Global Services PMI, set to be released in a couple of hours. Economists forecast the April ISM services index to be 50.2 and the S&P Global services PMI to be 51.4, compared to the previous values of 50.8 and 54.4, respectively. In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.324%, up +0.09%. The Euro Stoxx 50 Index is up +0.11% this morning as investors monitor developments on the trade front and await monetary policy decisions from several central banks in the region. U.S. President Donald Trump said he had no plans to speak with his Chinese counterpart, Xi Jinping, this week, though he signaled openness to lowering tariffs on Chinese imports to help reinvigorate trade momentum. Energy stocks underperformed on Monday as crude oil prices plunged after OPEC+ agreed to further increase output. A survey released on Monday showed that investor morale in the Eurozone rebounded more sharply than anticipated in May after Trump's tariffs led to a sharp decline in sentiment across the bloc last month. 'This is remarkable, as it shows that investors have largely abandoned the recession fears they expressed last month,' said Sentix in a statement. Meanwhile, investors are awaiting the Bank of England's monetary policy decision on Thursday. The BoE is widely expected to lower its benchmark rate by 25 basis points to 4.25% amid recent softer inflation data and falling energy prices. Investors will also focus on the monetary policy decisions from Norges Bank and Riksbank on Thursday. In corporate news, Erste Group Bank AG ( climbed over +5% after the Austrian lender agreed to buy around a 49% stake in Poland-based Santander Bank Polska and 50% of Polish asset manager Santander TFI. Eurozone's Sentix Investor Confidence Index was released today. Eurozone May Sentix Investor Confidence Index came in at -8.1, stronger than expectations of -14.9. Financial markets in Japan and China were closed for holidays. China's Shanghai Composite Index was closed today for the Labor Day holiday. Mainland China's financial markets will reopen on Tuesday. Japan's Nikkei 225 Stock Index was closed today for the Children's Day holiday. Financial markets in Japan will remain closed on Tuesday in observance of Greenery Day. The markets will reopen on Wednesday. Pre-Market U.S. Stock Movers Berkshire Hathaway (BRK.A) dropped more than -2% in pre-market trading after legendary investor Warren Buffett said he would step down as CEO of the conglomerate at the end of the year. Netflix (NFLX) slumped over -3% and Walt Disney (DIS) fell more than -1% in pre-market trading after President Trump on Sunday announced a 100% tariff on foreign-produced films imported into the U.S. Energy stocks are falling in pre-market trading, with the price of WTI crude down more than -2% after OPEC+ agreed to further increase output. Exxon Mobil (XOM), Devon Energy (DVN), Occidental Petroleum (OXY), and Schlumberger (SLB) are down more than -2%. Microsoft (MSFT) slid over -1% in pre-market trading after Phillip Securities downgraded the stock to Accumulate from Buy. You can see more pre-market stock movers here Today's U.S. Earnings Spotlight: Monday - May 5th Palantir (PLTR), Vertex (VRTX), Williams (WMB), CRH (CRH), Realty Income (O), Cummins (CMI), Ford Motor (F), Diamondback (FANG), Ares Management (ARES), BioNTech (BNTX), Tyson Foods (TSN), Zimmer Biomet (ZBH), Coterra Energy (CTRA), Loews (L), ON Semiconductor (ON), Clorox (CLX), Corebridge Financial (CRBG), Sun (SUI), Aecom Technology (ACM), CNA Financial (CNA), Neurocrine (NBIX), BWX Tech (BWXT), Bellring (BRBR), Hims Hers Health (HIMS), TIM Participacoes (TIMB), Henry Schein (HSIC), Fabrinet (FN), Corcept (CORT), Regal Beloit (RRX), Bright Horizons (BFAM), Vornado (VNO), Lattice (LSCC), TG (TGTX), JBTMarel (JBTM), Viper Energy Ut (VNOM), Axsome Therapeutics Inc (AXSM), Air Lease (AL), Mattel (MAT), Celanese (CE), Sterling Construction (STRL), Sterling Construction (STRL), Inspire Medical Systems (INSP), One Gas Inc (OGS), Paymentus (PAY), Mueller Water Products (MWA), Cabot Corp (CBT), Sabra (SBRA), Palomar (PLMR), Kilroy (KRC), Golub (GBDC), Freshpet Inc (FRPT), Matson (MATX), Inter Parfums (IPAR), Primoris (PRIM), National Health Investors (NHI), Dorman (DORM), Otter Tail (OTTR), Black Stone Minerals (BSM), National Storage Affiliates Trust (NSA), IAC/InterActiveCorp (IAC), Titan America (TTAM), Twist Bioscience (TWST), Recursion Pharmaceuticals (RXRX), Certara (CERT), Park Hotels & Resorts (PK), Tidewater (TDW), Addus (ADUS), Crescent Energy (CRGY), BioCryst (BCRX), Atlas Energy Solutions (AESI), Upwork (UPWK), Playa Hotels & Resorts (PLYA).
Globe and Mail
02-05-2025
- Business
- Globe and Mail
Stock Index Futures Gain on U.S.-China Trade Optimism, Jobs Report in Focus
June S&P 500 E-Mini futures (ESM25) are up +0.44%, and June Nasdaq 100 E-Mini futures (NQM25) are up +0.30% this morning as sentiment got a boost after China said it is assessing the possibility of trade talks with the U.S., with the focus now shifting to the key U.S. payrolls report. China's Commerce Ministry stated on Friday that it had observed senior U.S. officials repeatedly voicing their readiness to engage with Beijing on tariffs, and called on Washington to demonstrate 'sincerity' toward China. 'The U.S. has recently sent messages to China through relevant parties, hoping to start talks with China. China is currently evaluating this,' the ministry added. However, disappointing earnings from Apple and Amazon limited gains in stock index futures. Apple (AAPL) fell over -2% in pre-market trading after the iPhone maker reported weaker-than-expected FQ2 sales in China. Also, (AMZN) slid more than -2% in pre-market trading after the world's largest online retailer provided a below-consensus Q2 operating income forecast. In yesterday's trading session, Wall Street's major indices closed in the green, with the S&P 500 and Dow notching 4-week highs and the Nasdaq 100 posting a 5-week high. Microsoft (MSFT) surged over +7% and was the top percentage gainer on the Dow after the world's largest software maker reported stronger-than-expected FQ3 results and provided an upbeat FQ4 revenue growth forecast for the Azure cloud unit. Also, Meta Platforms (META) climbed more than +4% after the maker of Facebook and Instagram posted upbeat Q1 results. In addition, Nvidia (NVDA) gained over +2% after Bloomberg reported that the U.S. was considering a possible relaxation of restrictions on the chipmaker's sales to the United Arab Emirates. On the bearish side, Becton Dickinson & Co. (BDX) tumbled more than -18% and was the top percentage loser on the S&P 500 after cutting its annual adjusted EPS guidance. Also, Qualcomm (QCOM) slumped over -8% and was the top percentage loser on the Nasdaq 100 after the mobile chip designer provided a tepid FQ3 revenue forecast. Economic data released on Thursday showed that the U.S. ISM manufacturing index fell to a 5-month low of 48.7 in April, though it came in above expectations of 48.0. Also, U.S. March construction spending unexpectedly fell -0.5% m/m, weaker than expectations of +0.2% m/m and the largest decline in 6 months. In addition, the number of Americans filing for initial jobless claims in the past week rose +18K to a 2-month high of 241K, compared with the 224K expected. Meanwhile, U.S. rate futures have priced in a 93.2% probability of no rate change and a 6.8% chance of a 25 basis point rate cut at next week's FOMC meeting. On the earnings front, notable companies like Exxon Mobil (XOM), Chevron (CVX), Cigna (CI), and Apollo Global Management (APO) are slated to release their quarterly results today. According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +6.7% increase in quarterly earnings for Q1 compared to the previous year. Today, all eyes are focused on the U.S. monthly payroll report, which is set to be released in a couple of hours. Economists, on average, forecast that April Nonfarm Payrolls will come in at 138K, compared to the March figure of 228K. U.S. Average Hourly Earnings data will also be closely watched today. Economists expect April figures to be +0.3% m/m and +3.9% y/y, compared to the previous numbers of +0.3% m/m and +3.8% y/y. U.S. Factory Orders data will be released today. Economists foresee this figure coming in at +4.4% m/m in March, compared to the previous number of +0.6% m/m. The U.S. Unemployment Rate will be reported today as well. Economists forecast that this figure will remain steady at 4.2% in April. In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.202%, down -0.69%. The Euro Stoxx 50 Index is up +1.35% this morning as signs of a possible easing in U.S.-China trade tensions boosted sentiment, while investors digest a wave of corporate earnings reports and key economic data from the region. Mining and bank stocks led the gains on Friday. The benchmark index is on track to end the week higher. Preliminary data from Eurostat released on Friday showed that the Eurozone's headline inflation remained slightly above the European Central Bank's target in April, while underlying inflation picked up more than expected, likely causing concern among some ECB policymakers. Separately, a survey showed that Eurozone manufacturing output expanded at the quickest rate in just over three years in April, despite overall factory activity staying in contraction territory, as the region's three largest economies showed signs of improvement. In corporate news, Shell Plc ( rose over +3% after the oil major posted better-than-expected Q1 profit and announced a $3.5 billion share buyback. Also, Danske Bank A/S ( gained more than +2% after Denmark's biggest lender reported stronger-than-expected Q1 profit and reaffirmed its full-year profit guidance. In addition, Airbus SE ( climbed over +4% after the planemaker posted upbeat quarterly results and reaffirmed its full-year guidance. Eurozone's Manufacturing PMI, Eurozone's CPI (preliminary), Eurozone's Core CPI (preliminary), and Eurozone's Unemployment Rate were released today. Eurozone April Manufacturing PMI stood at 49.0, stronger than expectations of 48.7. Eurozone April CPI came in at +2.2% y/y, stronger than expectations of +2.1% y/y. Eurozone April Core CPI arrived at +2.7% y/y, stronger than expectations of +2.5% y/y. Eurozone March Unemployment Rate was 6.2%, weaker than expectations of 6.1%. Japan's Nikkei 225 Stock Index (NIK) closed up +1.04%, while mainland China's financial markets were closed for a holiday. Japan's Nikkei 225 Stock Index closed higher today on positive comments from the nation's chief trade negotiator. A weaker yen also boosted appetite for Japanese stocks. In addition, optimism surrounding potential trade talks between China and the U.S. bolstered sentiment across the region. Pharmaceutical and chemical stocks led the gains on Friday. The benchmark index posted its seventh consecutive session of gains, marking its longest winning streak since August 2023. It also notched a third consecutive weekly gain. Japan's top trade representative, Ryosei Akazawa, stated on Thursday that he aims to reach a trade agreement with the U.S. in June, with the high-stakes bilateral talks anticipated to speed up in mid-May. His remarks followed the conclusion of the latest round of talks in Washington. Meanwhile, Japan's Finance Minister Katsunobu Kato said the country's U.S. Treasury holdings could be a card in its trade talks with Washington. 'Whether or not we use that card is a different decision,' he added. On the economic front, government data released on Friday showed that Japan's unemployment rate unexpectedly edged up in March. In corporate news, Yamato Holdings climbed over +5% after the package delivery services provider issued strong full-year operating profit guidance. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +1.87% to 26.74. The Japanese March Unemployment Rate was 2.5%, weaker than expectations of 2.4%. China's Shanghai Composite Index was closed today for the Labor Day holiday. Mainland China's financial markets will reopen on Tuesday, May 6th. Pre-Market U.S. Stock Movers Apple (AAPL) fell over -2% in pre-market trading after the iPhone maker reported weaker-than-expected FQ2 sales in China. (AMZN) slid more than -2% in pre-market trading after the world's largest online retailer provided a below-consensus Q2 operating income forecast. Atlassian (TEAM) tumbled over -16% in pre-market trading after the collaboration and productivity software firm issued weak FQ4 revenue guidance. Reddit (RDDT) climbed more than +8% in pre-market trading after the company posted upbeat Q1 results and gave strong Q2 revenue guidance. Block (XYZ) plummeted over -21% in pre-market trading after the digital-payments company reported weaker-than-expected Q1 results and cut its full-year gross profit guidance. You can see more pre-market stock movers here Today's U.S. Earnings Spotlight: Friday - May 2nd Exxon Mobil (XOM), Chevron (CVX), Eaton (ETN), Cigna (CI), Apollo Global Management (APO), Natwest Group (NWG), Imperial Oil (IMO), DuPont De Nemours (DD), Cboe Global (CBOE), T Rowe (TROW), Brookfield Renewable (BEP), Westlake Chemical (WLK), Magna Intl (MGA), Franklin Resources (BEN), nVent Electric (NVT), The AES (AES), Fluor (FLR), United States Cellular (USM), Brookfield Business (BBU), Madison Square Garden Sports (MSGS), Piper Sandler (PIPR), Telephone&Data Systems (TDS), Cinemark (CNK), Brightspring Health Services (BTSG), Atmus Filtration Tech (ATMU), The Wendy's Co (WEN), Amneal Pharma (AMRX), Terex (TEX), Arbor (ABR), Criteo Sa (CRTO), Patria Investments (PAX), Perella Weinberg Partners (PWP), WisdomTree (WT), Xenia Hotels & Resorts (XHR), Interface (TILE).
Globe and Mail
15-04-2025
- Business
- Globe and Mail
Stocks Set to Open Higher Amid Hopes for More U.S. Tariff Exemptions, Economic Data and Earnings on Tap
June S&P 500 E-Mini futures (ESM25) are up +0.33%, and June Nasdaq 100 E-Mini futures (NQM25) are up +0.25% this morning amid hopes for more U.S. tariff exemptions after President Donald Trump floated a possible pause in auto tariffs. President Trump stated on Monday that he is considering possible temporary exemptions for his tariffs on imported vehicles and parts to provide auto companies additional time to set up U.S. manufacturing. 'I'm looking at something to help car companies with it. They're switching to parts that were made in Canada, Mexico and other places, and they need a little bit of time, because they're going to make them here,' Trump told reporters in the Oval Office. At the same time, the U.S. moved ahead with plans to impose tariffs on semiconductor and pharmaceutical imports by launching trade investigations led by the Commerce Department. Investors now await U.S. economic data, quarterly reports from more big banks, and remarks from Federal Reserve officials. In yesterday's trading session, Wall Street's major indexes closed in the green. Apple (AAPL) rose over +2% following a U.S. tariff exemption for a range of consumer electronics. Also, automobile stocks gained ground after President Trump said he was 'looking at something to help some of the car companies,' with Ford (F) climbing more than +4% and General Motors (GM) rising over +3%. In addition, Palantir Technologies (PLTR) advanced more than +4% after NATO acquired an AI-powered military system from the company. On the bearish side, DaVita (DVA) slid about -3% after disclosing a ransomware incident that encrypted certain parts of its network. 'The worst may be over, but the coast is not clear. The 90-day pause on reciprocal tariffs and further concessions over the weekend lessen the near-term probability of a recession, but uncertainty remains high, the Fed is on hold, and back-end rates are a headwind,' said Michael Wilson at Morgan Stanley. Fed Governor Christopher Waller stated on Monday that he anticipates the impact of tariffs on inflation to be temporary. Still, Waller described the new tariff policy as 'one of the biggest shocks to affect the U.S. economy in many decades.' Should there be a minor tariff impact on prices, rate cuts would 'very much' be considered for the latter half of 2025, he said. Meanwhile, U.S. rate futures have priced in an 81.0% chance of no rate change and a 19.0% chance of a 25 basis point rate cut at May's monetary policy meeting. First-quarter corporate earnings season is gathering pace, with investors awaiting reports today from major U.S. banks such as Bank of America (BAC) and Citigroup (C) as well as prominent companies like Johnson & Johnson (JNJ), Interactive Brokers (IBKR), and United Airlines Holdings (UAL). According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +6.7% increase in quarterly earnings for Q1 compared to the previous year. On the economic data front, investors will focus on U.S. Export and Import Price Indexes, set to be released in a couple of hours. Economists anticipate the export price index to be +0.1% m/m and the import price index to be +0.1% m/m in March, compared to the previous figures of +0.1% m/m and +0.4% m/m, respectively. The Empire State Manufacturing Index will also be reported today. Economists foresee this figure coming in at -12.80 in April, compared to -20.00 in March. In addition, market participants will be anticipating speeches from Richmond Fed President Tom Barkin and Fed Governor Lisa Cook. In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.360%, down -0.09%. The Euro Stoxx 50 Index is up +1.22% this morning as investors digest fresh earnings and economic data as well as weigh ever-changing U.S. tariff plans. Automobile stocks led the gains on Tuesday after U.S. President Donald Trump said he is considering some short-term tariff exemptions to support car companies. At the same time, luxury stocks slumped, with Lvmh ( plunging over -6% after the group reported weaker-than-expected Q1 sales. On the economic front, data from the Office for National Statistics released on Tuesday showed that wage growth in the U.K. accelerated in the first few months of the new year, indicating that persistently high inflation will likely remain a concern for the Bank of England. Separately, the ZEW Economic Research Institute reported that German investor morale plunged in April, hitting the lowest level since July 2023 amid U.S. President Trump's tariff chaos. In addition, data showed that the Eurozone's monthly industrial production rose much more than expected in February, suggesting that firms are stockpiling imports ahead of the implementation of tariffs in the U.S. Meanwhile, investors are awaiting the European Central Bank's rate-setting meeting on Thursday. The ECB is widely expected to lower the deposit rate by another 25 basis points to 2.25% as U.S. tariffs continue to threaten growth. In other corporate news, Telefonaktiebolaget Lm Ericsson ( climbed more than +5% after the telecoms equipment maker posted stronger-than-expected Q1 core earnings. U.K.'s Average Earnings ex Bonus, U.K.'s Unemployment Rate, France's CPI, Germany's ZEW Economic Sentiment Index, Eurozone's ZEW Economic Sentiment Index, and Eurozone's Industrial Production data were released today. U.K. Average Earnings ex Bonus stood at 5.9% in the three months to February, weaker than expectations of 6.0%. U.K. Unemployment Rate was 4.4% in the three months to February, in line with expectations. The French March CPI came in at +0.2% m/m and +0.8% y/y, in line with expectations. The German April ZEW Economic Sentiment Index arrived at -14.0, weaker than expectations of 10.6. Eurozone April ZEW Economic Sentiment Index stood at -18.5, weaker than expectations of 13.2. Eurozone February Industrial Production has been reported at +1.1% m/m and +1.2% y/y, stronger than expectations of +0.1% m/m and -0.8% y/y. Asian stock markets today settled in the green. China's Shanghai Composite Index (SHCOMP) closed up +0.15%, and Japan's Nikkei 225 Stock Index (NIK) closed up +0.84%. China's Shanghai Composite Index closed slightly higher today as investors digested the latest trade-related developments between the U.S. and China and geared up for the nation's first-quarter GDP data. Pharmaceutical and bank stocks outperformed on Tuesday. At the same time, chip stocks slumped. Sentiment remained shaky as the U.S. Commerce Department initiated a national security investigation into semiconductor imports, a sector heavily dependent on Asian, particularly Chinese, supply chains. The move could result in potential tariffs on the sector. Still, China remains unfazed by U.S. President Donald Trump's plan to impose tariffs on semiconductors and all electrical products, with customs officials stating at a press conference that 'the sky won't fall' for the country's exports. Meanwhile, Yan Wang, chief emerging markets and China strategist at Alpine Macro, said in a note, 'The U.S.-China tariff situation is highly fluid, with changes occurring almost by the hour.' There remains considerable uncertainty in the near term, so aggressive risk-taking in Chinese stocks is not warranted, he added. In other news, UBS joined a wave of China growth downgrades with the most pessimistic projection among major banks, forecasting the economy will grow only 3.4% this year as U.S. tariffs stifle exports. In corporate news, Contemporary Amperex Technology rose over +1% after reporting a 33% year-over-year increase in Q1 profit. Investor focus is now on Wednesday's release of China's first-quarter GDP data. Japan's Nikkei 225 Stock Index closed higher today as comments from U.S. President Donald Trump about potential tariff exemptions for carmakers further eased concerns about escalating trade tensions between the U.S. and its trading partners. Automobile stocks led the gains on Tuesday after Trump said he was weighing tariff exemptions on imported vehicles and auto parts. Bank stocks also gained ground. Still, caution remained as the U.S. Commerce Department initiated a national security investigation into semiconductor and pharmaceutical imports. Meanwhile, investors are looking ahead to upcoming trade talks between Washington and Tokyo, which public broadcaster NHK reported are scheduled for April 17th. Japan's top trade negotiator, Akazawa Ryosei, is set to meet with U.S. Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer later this week. In other news, Kenzo Yamamoto, the former Bank of Japan executive, said that the central bank is likely to hold off on raising interest rates for the time being due to uncertainties arising from U.S. tariffs that could hurt Japan's economy. 'They will be in a wait-and-see mode for a while,' he said in an interview Monday. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -11.46% to 34.45. Pre-Market U.S. Stock Movers Allegro Microsystems (ALGM) tumbled over -12% in pre-market trading after ON Semiconductor withdrew its $6.9 billion takeover offer. Applied Digital (APLD) plunged more than -10% in pre-market trading after reporting weaker-than-expected FQ3 revenue. Today's U.S. Earnings Spotlight: Tuesday - April 15th J&J (JNJ), Bank of America (BAC), Citigroup (C), Interactive Brokers (IBKR), PNC Financial (PNC), United Airlines Holdings (UAL), Omnicom (OMC), JB Hunt (JBHT), Albertsons (ACI), Hancock Whitney (HWC), Fulton (FULT), Equity Bancshares (EQBK), TechTarget (TTGT), Pioneer Pow (PPSI).
Globe and Mail
08-04-2025
- Business
- Globe and Mail
Stocks Set to Open Higher as Investors Wait for Policy Clarity
June S&P 500 E-Mini futures (ESM25) are up +1.50%, and June Nasdaq 100 E-Mini futures (NQM25) are up +1.28% this morning, pointing to a modest recovery on Wall Street as investors seek dip-buying opportunities while waiting for clarity on how U.S. President Donald Trump's trade policies will play out. President Trump made a series of remarks on Monday regarding his proposed tariffs on global trading partners. However, he provided scant detail about what he wants in return for reducing tariffs or whether he intends to offer any relief at all. In yesterday's trading session, Wall Street's main stock indexes ended mixed. Some of the Magnificent Seven stocks continued to fall, with Apple (AAPL) dropping over -3% and Tesla (TSLA) slumping more than -2%. Also, energy stocks tumbled after the price of WTI crude fell to a 4-year low, with Schlumberger (SLB) and Occidental Petroleum (OXY) sliding over -4%. In addition, Caterpillar (CAT) fell more than -2% after UBS downgraded the stock to Sell from Neutral with a price target of $243. On the bullish side, chip stocks gained ground, with Broadcom (AVGO) and Micron Technology (MU) climbing over +5%. Economic data released on Monday showed that U.S. consumer credit unexpectedly fell -$0.81B in February, weaker than expectations of +$15.20B. Fed Governor Adriana Kugler stated on Monday that President Trump's trade policy currently has more significant implications for inflation than for economic growth. Kugler said that consumers' actions to buy goods before recently announced tariffs take effect may be bolstering economic activity in early 2025, while there are indications that the trade policy changes are beginning to exert upward pressure on prices. 'The takeaway is that I view, right now, inflation as being more pressing as far as the effects of tariffs that we're already seeing,' she said. Kugler also noted that policymakers 'have to be very careful in how we navigate this period.' Chicago Fed President Austan Goolsbee said during an interview on CNN, 'The anxiety is if these tariffs are as big as what are threatened on the US side, and if there's massive retaliation, and then if there's counter retaliation again, it might send us back to the kind of conditions that we saw in '21 and '22, when inflation's raging out of control.' U.S. rate futures have priced in a 71.4% probability of no rate change and a 28.6% chance of a 25 basis point rate cut at the next FOMC meeting in May. Meanwhile, market watchers are keenly awaiting U.S. inflation data, the Fed's minutes from the March meeting, and the start of the first-quarter earnings season this week. Investors also continue to assess the potential economic impact of Trump's tariffs and remain alert for any announcements of retaliatory measures. On Friday, China retaliated against new U.S. tariffs by imposing a 34% tariff on all U.S. imports beginning April 10th. Trump on Monday threatened to slap 'ADDITIONAL Tariffs on China of 50%, effective April 9th,' if Beijing fails to retract its retaliatory tariffs by April 8th. 'For now, it looks like news out of Washington will continue to drive the market's swings, one way or the other. Some notable lows over the past few decades have been preceded by similar levels of volatility, although it's always impossible to know when prices will eventually find their bottom,' said Chris Larkin at E*Trade from Morgan Stanley. The U.S. economic data slate is largely empty on Tuesday. However, investors will focus on a speech from San Francisco Fed President Mary Daly. In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.170%, up +0.31%. The Euro Stoxx 50 Index is up +1.00% this morning, snapping a 4-day losing streak, though investor sentiment remained fragile amid ongoing tariff-related concerns. Defense and travel stocks outperformed on Tuesday. Still, trade uncertainty remained high, with European Commission President Ursula von der Leyen confirming that the European Union had proposed a 'zero-for-zero tariffs' agreement on industrial goods to Trump, which he rejected. On Monday, the European Commission proposed 25% counter-tariffs on a variety of U.S. goods as the bloc grapples with existing auto and metal duties and braces for a 20% levy on other products set to take effect Wednesday. EU finance ministers are set to discuss ways to address the anticipated hit to Europe's economic growth from U.S. tariffs later this week. In corporate news, Infineon Technologies AG ( slid nearly -1% after the German chipmaker agreed to buy Marvell Technology's automotive ethernet business for about $2.5 billion in cash. The European economic data slate is mainly empty on Tuesday. Asian stock markets today closed in the green. China's Shanghai Composite Index (SHCOMP) closed up +1.58%, and Japan's Nikkei 225 Stock Index (NIK) closed up +6.03%. China's Shanghai Composite Index ended higher today, partially recovering from yesterday's selloff as sentiment improved following the government's robust response to U.S. President Donald Trump's tariff threats. Consumer-related stocks led the gains on Tuesday. China pledged on Tuesday not to bow to 'blackmail' from the U.S. after Trump announced he would impose an additional 50% tariff on U.S. imports from the country on Wednesday, in retaliation for Beijing's move to match the duties Trump introduced last week. 'If the U.S. insists on its own way, China will fight to the end,' the Chinese Ministry of Commerce said. Meanwhile, in signs that Beijing is preparing for extended trade tensions, its state-backed funds committed to purchasing domestic equities and exchange-traded funds. Sovereign fund Central Huijin Investment, known as the 'national team,' said it has purchased China-listed stocks through exchange-traded funds and pledged to further boost its holdings to 'safeguard the smooth operation of the capital market.' Also, the People's Bank of China said it would offer support to the sovereign fund whenever needed to ensure the stability of capital markets. In addition, multiple Chinese state-owned enterprises pledged on Tuesday to ramp up their investments in shares, while numerous publicly traded companies unveiled share buyback plans to help stabilize prices. In other news, state-run broadcaster China Central Television reported on Monday that Chinese President Xi Jinping has urged efforts to 'fully unleash' consumption to counter the impact of tariffs. In corporate news, BYD Co. climbed over +4% in Hong Kong after the auto giant said its Q1 net income would grow 86%-118.9% year-over-year. Japan's Nikkei 225 Stock Index closed higher today following a call between Prime Minister Shigeru Ishiba and U.S. President Donald Trump, which ignited hopes for a tariff deal. The benchmark index recovered most of its previous day's losses amid optimism that Japan could secure a trade agreement with the U.S. to avoid a 24% tariff as the Wednesday deadline loomed. Trump directed two cabinet members to initiate bilateral trade discussions following a call with Ishiba. Japan looked poised to receive priority in U.S. tariff negotiations, stepping ahead of numerous nations aiming to reverse Trump's reciprocal tariffs. Electronics and financial stocks led the gains on Tuesday. Data released on Tuesday showed that the gauge for Japan's service sector fell to over a 2-1/2-year low in March. Meanwhile, Japan's finance minister, Katsunobu Kato, vowed on Tuesday to take all necessary steps to address the impact of Trump's higher tariffs, including financial support for Japanese businesses impacted by the U.S. decision. 'The finance ministry and the Financial Services Agency will conduct necessary analysis at their task force and cooperate with relevant ministries to ensure that we are fully prepared to respond to the U.S. tariff measures,' Kato said at a news conference. In other news, Reuters reported that Japan's government plans to present a nominee to parliament on Thursday for a Bank of Japan board seat that will become vacant at the end of June. In corporate news, cable maker Fujikura, a key indicator for data center investments, soared over +19% to lead gainers in the Nikkei 225. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -19.52% to 46.99. The Japanese February Current Account n.s.a. came in at 4.061T yen, stronger than expectations of 3.800T yen. The Japanese March Economy Watchers Current Index stood at 45.1, in line with expectations. Pre-Market U.S. Stock Movers Broadcom (AVGO) rose over +3% in pre-market trading after announcing up to a $10 billion share repurchase program. Levi Strauss (LEVI) surged more than +10% in pre-market trading after the apparel seller posted better-than-expected Q1 adjusted EPS and reaffirmed its full-year guidance. Health insurers Humana (HUM), CVS Health (CVS), and UnitedHealth (UNH) climbed over +5% in pre-market trading following the federal government's announcement of an estimated $25 billion increase in payments to 2026 Medicare Advantage health plans. RPM (RPM), Cal-Maine (CALM), WD-40 (WDFC), Tilray (TLRY), Kura Sushi (KRUS), Mama's Creations (MAMA), Aehr Test Systems (AEHR).
Globe and Mail
28-03-2025
- Business
- Globe and Mail
Stock Index Futures Slip on Tariff Uncertainty Ahead of U.S. PCE Inflation Data
June S&P 500 E-Mini futures (ESM25) are down -0.20%, and June Nasdaq 100 E-Mini futures (NQM25) are down -0.32% this morning as market participants remain cautious amid uncertainty surrounding U.S. tariffs while also awaiting the release of the Federal Reserve's first-line inflation gauge. Investors have been paring back risk ahead of April 2nd, when U.S. President Donald Trump is set to unveil so-called 'reciprocal tariffs' that risk escalating the trade war and hurting the global economy. Deutsche Bank analysts said in a note that there are indications investors are growing more worried about the possibility of stagflation in the U.S. due to tariffs. In yesterday's trading session, Wall Street's major indices ended lower. Automakers sank after U.S. President Donald Trump imposed a 25% tariff on auto imports starting next week, with General Motors (GM) slumping over -7% to lead losers in the S&P 500 and Ford Motor (F) falling more than -3%. Also, AppLovin (APP) plummeted over -20% and was the top percentage loser on the Nasdaq 100 after Muddy Waters Research issued a short report against the company. In addition, Advanced Micro Devices (AMD) slid more than -3% after Jefferies downgraded the stock to Hold from Buy. On the bullish side, Dollar Tree (DLTR) surged over +11% and was the top percentage gainer on the S&P 500, adding to Wednesday's +3% gain after selling its Family Dollar business to Brigade Capital Management and Macellum Capital Management for about $1 billion. The U.S. Bureau of Economic Analysis said Thursday that the Q4 GDP growth estimate was revised upward to +2.4% (q/q annualized) in its final print, stronger than expectations of no change at +2.3%. Also, the number of Americans filing for initial jobless claims in the past week unexpectedly fell -1K to 224K, compared with the 225K expected. In addition, U.S. pending home sales rose +2.0% m/m in February, stronger than expectations of +0.9% m/m. 'The monthly jobs report may paint a different picture, but [yesterday's] jobless claims number suggests the labor market is still on solid ground. For markets, though, the question is whether anything will be able to rise above the noise of the tariff story,' said Chris Larkin at E*Trade from Morgan Stanley. 'In the near-term, the most likely scenario is more choppy trading,' he added. Richmond Fed President Tom Barkin said on Thursday that swift policy changes by the Trump administration have created 'a sense of instability' among businesses, and the accompanying fall in sentiment could 'quiet demand.' With a robust labor market and inflation still running high, the Fed's 'moderately restrictive' stance is a 'good place to be,' Barkin noted. Also, Boston Fed President Susan Collins said it seems 'inevitable' that tariffs will fuel inflation, at least in the short term, adding that holding interest rates steady for an extended period is likely appropriate. Meanwhile, U.S. rate futures have priced in an 88.4% chance of no rate change and an 11.6% chance of a 25 basis point rate cut at the May FOMC meeting. Today, all eyes are focused on the U.S. core personal consumption expenditures price index, the Fed's preferred price gauge, which is set to be released in a couple of hours. Economists, on average, forecast that the core PCE price index will stand at +0.3% m/m and +2.7% y/y in February, compared to the previous figures of +0.3% m/m and +2.6% y/y. U.S. Personal Spending and Personal Income data will also be closely monitored today. Economists anticipate February Personal Spending to be +0.5% m/m and Personal Income to be +0.4% m/m, compared to January's figures of -0.2% m/m and +0.9% m/m, respectively. The University of Michigan's U.S. Consumer Sentiment Index will be released today as well. Economists estimate this figure at 57.9 in March, compared to 64.7 in February. In addition, market participants will be anticipating a speech from Atlanta Fed President Raphael Bostic. In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.339%, down -0.69%. The Euro Stoxx 50 Index is down -0.28% this morning as investors digest a slew of economic data from the region as well as the Trump administration's latest tariffs. Technology stocks lost ground on Friday. The benchmark index is on track to end the week lower. Data from the Office for National Statistics released on Friday showed that British monthly retail sales unexpectedly grew in February, supported by increased spending on clothing and stronger demand for gold jewelry. Separately, a survey showed that German consumer sentiment improved marginally heading into April. In addition, preliminary data from the statistics agency Insee showed that France's annual inflation rate remained unchanged at 0.8% in March. Meanwhile, investor sentiment remains subdued after U.S. President Donald Trump announced a 25% tariff on auto imports, set to take effect next week. The European Union is also bracing for Trump's reciprocal tariffs, set to be announced next week, and is considering deploying one of its strongest trade-policy tools, the so-called anti-coercion instrument, as a potential retaliatory measure. In corporate news, Ubisoft ( climbed over +9% after the French video game company announced it had established a subsidiary that will receive a 1.16 billion euro ($1.25 billion) investment from China's Tencent. U.K.'s GDP, U.K.'s Retail Sales, France's CPI (preliminary), Germany's Germany's GfK Consumer Climate Index, Germany's Unemployment Change, Germany's Unemployment Rate, and Spain's CPI (preliminary) data were released today. U.K. GDP has been reported at +0.1% q/q and +1.5% y/y in the fourth quarter, compared to expectations of +0.1% q/q and +1.4% y/y. U.K. February Retail Sales came in at +1.0% m/m and +2.2% y/y, stronger than expectations of -0.3% m/m and +0.5% y/y. The French March CPI arrived at +0.2% m/m, weaker than expectations of +0.3% m/m. The German April GfK Consumer Climate Index stood at -24.5, weaker than expectations of -22.6. The German March Unemployment Change came in at 26K, weaker than expectations of 10K. The German March Unemployment Rate was 6.3%, weaker than expectations of 6.2%. The Spanish March CPI arrived at +2.3% y/y, weaker than expectations of +2.6% y/y. Asian stock markets today settled in the red. China's Shanghai Composite Index (SHCOMP) closed down -0.67%, and Japan's Nikkei 225 Stock Index (NIK) closed down -1.80%. China's Shanghai Composite Index closed lower today as concerns over upcoming U.S. tariffs and an escalating trade war weighed on investor risk appetite. Consumer and energy stocks led the declines on Friday. The benchmark index ended the week flat. Having digested U.S. President Donald Trump's 25% tariffs on car imports, investors are now gearing up for the implementation of so-called 'reciprocal tariffs' on April 2nd. Meanwhile, Trump's auto and reciprocal tariffs will come on top of the 20% levies already imposed on Chinese goods, further escalating trade tensions. Still, the U.S. president said earlier this week that China could receive a tariff reduction as part of a deal to sell ByteDance's social video platform TikTok to an American company. Morgan Stanley analysts, led by Laura Wang, said in a note on Friday that sentiment toward mainland Chinese stocks cooled with lower trading volumes. 'We expect higher volatility amid tariff uncertainty but believe green shoots on earnings and liquidity warrant further index upside towards year-end,' they said. Investor focus is also on China's official manufacturing PMI reading for March, scheduled for release on Monday. Activity in China's huge manufacturing sector likely grew in March despite U.S. tariff headwinds, partly due to Beijing's stimulus efforts. In corporate news, Nio plunged over -7% in Hong Kong following the electric vehicle maker's $518 million share placement. Japan's Nikkei 225 Stock Index closed sharply lower today, hitting a 2-week low as worries about the potential impact of U.S. President Donald Trump's tariffs dampened sentiment. Also, Japanese equities slumped partly because Friday marked the ex-dividend date for most companies at the fiscal year-end. Automobile stocks led the declines on Friday, extending yesterday's losses after President Trump announced a 25% tariff on U.S. auto imports. Financial stocks also underperformed. The benchmark index posted a weekly loss. Government data released on Friday showed that core consumer inflation in Japan's capital accelerated in March due to rising food prices, keeping the Bank of Japan on course for gradual interest rate increases. Meanwhile, a summary of opinions from the Bank of Japan's March meeting released on Friday revealed that policymakers were divided this month over how soon to raise interest rates again, with some emphasizing domestic inflationary pressures and others highlighting uncertainty surrounding the U.S. tariff policy. 'The bank will need to be particularly cautious when considering the timing for raising the policy interest rate,' the summary quoted one board member as saying. In other news, Japan's Prime Minister Shigeru Ishiba said on Friday that President Trump's decision to impose an additional 25% tariff on U.S. auto imports could severely affect the Japanese economy, and he vowed to take measures to safeguard the country's industries and jobs. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +2.24% to 22.35. The Japanese March Tokyo Core CPI came in at +2.4% y/y, stronger than expectations of +2.2% y/y. Pre-Market U.S. Stock Movers Lululemon Athletica (LULU) plunged over -10% in pre-market trading after the yogawear brand reported weaker-than-expected Q4 comparable sales and issued disappointing FY25 guidance. Argan (AGX) surged more than +12% in pre-market trading after reporting better-than-expected Q4 results. Today's U.S. Earnings Spotlight: Friday - March 28th SBC Medical Holdings (SBC), Humacyte (HUMA), China Automotive (CAAS), So-Young (SY).
