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Globe and Mail
08-04-2025
- Business
- Globe and Mail
Stocks Sharply Higher on Hopes for US Trade Deals
The S&P 500 Index ($SPX) (SPY) today is up +3.05%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +3.01%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +3.39%. June E-mini S&P futures (ESM25) are up +3.04%, and June E-mini Nasdaq futures (NQM25) are up +3.16%. Stock indexes today are sharply higher, recovering some of the enormous losses over the past three sessions that sent the S&P 500 falling nearly 15% from last Wednesday's close. Hopes of a tariff deal with Japan have sparked short covering in stocks after a call between President Trump and Prime Minister Ishiba late Monday spurred optimism that Japan might strike a trade deal with the US to reduce or avert a 24% levy on imports, set to come into effect Wednesday. However, tariff concerns continue after President Trump rejected a European Union (EU) proposal to drop tariffs on all bilateral trade in industrial goods with the US, meaning the 20% tariff on all EU imports is set to kick in on Wednesday. Also, China has pledged to retaliate against President Trump's latest tariff threat, which is to add 50% tariffs on all Chinese goods if it refuses to remove its 34% tariff on US goods by Wednesday. China's Ministry of Commerce said today, "The US threat to escalate tariffs on China is a mistake on top of a mistake, and if the US insists on its own way, China will fight to the end." Late Monday, Chicago Fed President Goolsbee said some business leaders expressed anxiety about the possibility that tariffs could send the economy back to the conditions of 2021 and 2022 when inflation was "raging out of control." Equity markets worldwide sank on Monday because of concern that a trade war will push the global economy into recession. The carnage in equity markets began last Wednesday when President Trump announced reciprocal tariffs that were worse than feared, raising concerns that US trade policies will push the US economy and perhaps the global economy into recession. Stock losses deepened last Friday when China retaliated against US tariffs by imposing a 34% tariff on all imports from the US starting April 10. On Monday, President Trump said, "We're not looking at a tariff pause," and "If China does not withdraw its 34% increase on tariffs to US goods by Tuesday, the US will impose additional tariffs on China of 50%, effective April 9." Last Wednesday, President Trump said the US will impose at least a 10% tariff on virtually all countries, with higher reciprocal rates on some 60 nations. The new tariffs were implemented on imports from almost all countries on Saturday, with the higher rates implemented on April 9. Specific industries, including steel and automobiles, are exempt from the new rates, and Canada and Mexico are also exempt from the new tariffs and will be subject to the previously announced 25% tariffs. However, China will be charged a 34% reciprocal tariff rate, bringing total tariffs on China up to 67%. The EU will be charged a 20% reciprocal tariff, bringing total tariffs on the EU up to 39%. Meanwhile, Japan will be charged a 24% reciprocal tariff, bringing total tariffs on Japan up to 46%. Stocks have been under pressure over the past month due to fears that US tariffs will weaken economic growth and corporate earnings. On March 4, President Trump imposed 25% tariffs on Canadian and Mexican goods and doubled the tariff on Chinese goods to 20% from 10%. Last Wednesday, President Trump signed a proclamation to implement a 25% tariff on US auto imports, effective Thursday. The tariffs will initially target vehicles fully assembled outside the US and, by May 3, will expand to include automobile parts made outside the US. Mr. Trump said the tariffs were "permanent," and he was not interested in negotiating any exceptions. The markets are discounting the chances at 27% for a -25 bp rate cut after the May 6-7 FOMC meeting, down from 30% last week. Market attention this week will focus on US trade policies and whether other nations retaliate against US tariffs. On Wednesday, the March 18-19 FOMC meeting minutes will be released. On Thursday, the March CPI is expected to ease to +2.6% y/y from 2.8% y/y in Feb, and the March CPI ex-food and energy is expected to ease to +3.0% y/y from +3.1% y/y in Feb. On Friday, the March final-demand PPI expected to climb to +3.3% y/y from +3.2% y/y in Feb, and the March PPI ex-food and energy is expected to rise to +3.6% y/y from +3.4% y/y in Feb. Finally, the University of Michigan Apr US consumer sentiment index is expected to fall to 54.0 from 57.0 in March. Q1 earnings reporting season will begin on Friday when big US banks report their results. According to data compiled by Bloomberg Intelligence, the market consensus is for Q1 year-over-year earnings growth of +6.7% for the S&P 500, down from expectations of +11.1% in early November. Full-year 2025 corporate profits for the S&P 500 are seen rising +9.4%, down from the forecast of +12.5% in early January. Overseas stock markets today are higher. The Euro Stoxx 50 is up +3.14%. China's Shanghai Composite Index closed up +1.58%. Japan's Nikkei Stock 225 closed up sharply by +6.03%. Interest Rates June 10-year T-notes (ZNM2 5) today are down -22 ticks. The 10-year T-note yield is up +6.5 to 4.249%. June T-notes today are moderately lower, and the 10-year T-note yield rose to a 1-week high of 4.258% as a recovery in global equity markets reduced safe-haven demand for government debt. Also, comments from Chicago Fed President Goolsbee weighed on T-notes when he said some business leaders expressed anxiety about the possibility that tariffs could send inflation "raging out of control." In addition, supply pressures are weighing on T-notes as the Treasury will auction $119 billion of T-notes and T-bonds this week, beginning with today's $58 billion auction of 3-year T-notes. European bond yields today are moving higher. The 10-year German bund yield is up +6.1 bp to 2.674%. The 10-year UK gilt yield is up +3.2 bp to 4.647%. ECB Governing Council member Simkus said, "I still think the ECB should cut rates this month, and then, with a lot more information in June, including more clarity on tariffs and other things, we can think about whether we should wait and see or cut again." Swaps are discounting the chances at 90% for a -25 bp rate cut by the ECB at the April 17 policy meeting. US Stock Movers The Magnificent Seven stocks today are sharply higher, a bullish factor for the broader market. Nvidia (NVDA) is up more than +7%, and Meta Platforms (META) and Tesla (TSLA) are up more than +4%. Also, Apple (AAPL), Microsoft (MSFT), (AMZN), and Alphabet (GOOGL) are up more than +3%. Health insurance stocks are soaring today after the Centers for Medicare & Medicaid Services finalized a 5.06% average increase in payments to Medicare Advantage plans from 2025 to 2026, higher than an earlier projection. As a result, Humana (HUM) is up more than +13% to lead gainers in the S&P 500, and Alignment Healthcare (ALHC) is up more than +10%. Also, UnitedHealth Group (UNH) is up more than +8% to lead gainers in the S&P 500 and Dow Jones Industrials. In addition, CVS Health Corp (CVS) is up more than +8%, and Centene (CNC) is up more than +5%. Chip makers are climbing today to boost the overall market. ARM Holdings Plc (ARM) is up more than -7%, and Micron Technology (MU), Advanced Micro Devices (AMD), and KLA Corp (KLAC) are up more than +5%. Also, Applied Materials (AMAT) and Lam Research (LRCX) are up more than +4%, and Intel (INTC), Analog Devices (ADI), and Qualcomm (QCOM) are up more than +2%. Marvell Technology (MRVL) is up more than +8% to lead gainers in the Nasdaq 100 after selling its automotive networking business to Infineon for $2.5 billion. Broadcom (AVGO) is up more than +7% after authorizing a new stock buyback program of up to $10 billion. Eli Lilly & Co (LLY) is up more than +3% after Goldman Sachs upgraded the stock to buy from neutral with a price target of $888. Teradata Corp (TDC) is up more than +3% after Morgan Stanley upgraded the stock to overweight from equal weight with a price target of $26. Range Resources (RRC) is up more than +2% after Roth Capital Partners upgraded the stock to buy from neutral with a price target of $42. Levi Strauss & Co (LEVI) is up more than +2% after reporting Q1 net revenue of $1.53 billion, up +3.2% y/y, and maintaining its full-year outlook, excluding the impact of recent tariffs. Walgreens Boots Alliance (WBA) is up more than +1% after reporting Q2 sales of $38.60 billion, better than the consensus of $38.03 billion. RPM International (RPM) is down more than -5% after reporting Q3 net sales of $1.48 billion, weaker than the consensus of $1.51 billion. AT&T (T) is down more than -1% after Citigroup cut the stock from its Focus List, citing valuation due to its recent outperformance. Virtu Financial (VIRT) is down more than -1% after Morgan Stanley downgraded the stock to underweight from equal weight with a price target of $26. Earnings Reports (4/8/2025) Aehr Test Systems (AEHR), Cal-Maine Foods Inc (CALM), Dakota Gold Corp (DC), Kura Sushi USA Inc (KRUS), Mama's Creations Inc (MAMA), PACS Group Inc (PACS), RPM International Inc (RPM), Walgreens Boots Alliance Inc (WBA), WD-40 Co (WDFC).
Globe and Mail
02-04-2025
- Business
- Globe and Mail
Stocks Rebound Ahead of President Trump's Tariff Plans
The S&P 500 Index ($SPX) (SPY) Wednesday closed up +0.67%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up +0.56%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.75%. June E-mini S&P futures (ESM25) are up +0.69%, and June E-mini Nasdaq futures (NQM25) are up +0.77%. Stock indexes recovered from early losses and moved higher on Wednesday as better-than-expected US economic news sparked short covering in equities. The US labor market showed hiring picked up last month after the Mar ADP employment change rose +155,000, stronger than expectations of +120,000. Also, Feb factory orders rose +0.6% m/m, stronger than expectations of +0.5% m/m. Some strength in megacap technology stocks also supported gains in the broader market Wednesday as Tesla jumped more than +5% after Politico reported that Elon Musk would soon step back from his work for the Trump administration and focus on his businesses in the coming weeks. Also, rose +2% after the New York Times reported that the company made an offer to buy TikTok in the US. On Wednesday, stocks initially opened lower as the markets awaited President Trump's tariff announcement. President Trump will announce the details of the reciprocal tariffs late today after the markets close Wednesday at 4 pm EST, and they will take immediate effect, according to a White House spokesperson. Several proposals are said to be under consideration, including a tired tariff system with a set of flat rates for countries, as well as a more customized reciprocal plan. US MBA mortgage applications fell -1.6% in the week ended March 28, with the purchase mortgage sub-index up +1.5% and the refinancing mortgage sub-index down -5.6%. The average 30-year fixed rate mortgage fell -1 bp to 6.70% from 6.71% in the prior week. Stocks have been under pressure over the past month due to fears that US tariffs will weaken economic growth and corporate earnings. On March 4, President Trump imposed 25% tariffs on Canadian and Mexican goods and doubled the tariff on Chinese goods to 20% from 10%. On March 8, Mr. Trump reiterated that he would impose reciprocal tariffs and additional sector-specific tariffs on foreign nations on April 2. Last Wednesday, President Trump signed a proclamation to implement a 25% tariff on US auto imports, effective April 3. The tariffs will initially target vehicles fully assembled outside the US and, by May 3, will expand to include automobile parts made outside the US. Mr. Trump said the tariffs were 'permanent,' and he was not interested in negotiating any exceptions. Market attention this week will include the announcement of President Trump's tariff plans after the markets close on Wednesday. Thursday's March ISM services index (expected to fall -0.5 to 53.0), and on Friday March nonfarm payrolls are expected to increase by +138,000, and the March unemployment rate is expected unchanged at 4.1%. Also, March average hourly earnings are expected +0.3% m/m and +4.0% y/y, unchanged from February. Finally, on Friday, Fed Chair Powell is scheduled to speak to the Society for Advancing Business Editing and Writing Conference on the economic outlook. The markets are discounting the chances at 16% for a -25 bp rate cut after the May 6-7 FOMC meeting. Overseas stock markets on Wednesday settled mixed. The Euro Stoxx 50 closed down -0.31%. China's Shanghai Composite Index closed up +0.05%. Japan's Nikkei Stock 225 recovered from a 6-1/2 month low and closed up +0.28%. Interest Rates June 10-year T-notes (ZNM2 5) Wednesday closed down -9 ticks. The 10-year T-note yield rose +2.1 bp to 4.192%. June T-notes on Wednesday fell from a 4-week high and closed lower, and the 10-year T-note yield rose from a 4-week low of 4.108%. T-notes on Wednesday gave up an early advance and turned lower as a slump in European government bonds sparked long liquidation in T-notes. Also, stronger-than-expected US economic reports on Mar ADP employment and Feb factory orders were bearish for T-notes. In addition, Wednesday's stock recovery curbed safe-haven demand for T-notes. T-notes on Wednesday initially moved higher on the idea that US tariffs might drive the economy into recession, prompting the Fed to continue cutting interest rates. Falling inflation expectations are also bullish for T-notes after the 10-year breakeven inflation rate on Wednesday fell to a 1-1/2 week low of 2.321%. European bond yields on Wednesday finished higher. The 10-year German bund yield rebounded from a 4-week low of 2.654% and finished up +3.4 bp to 2.721%. The 10-year UK gilt yield rose from a 1-1/2 week low of 4.591% and finished up +0.7 bp to 4.640%. ECB Governing Council member Holzmann said he's against an ECB interest rate cut at this month's policy meeting, 'as we are neutral and inflation is converging to target, there is no reason to become accommodative.' Swaps are discounting the chances at 77% for a -25 bp rate cut by the ECB at the April 17 policy meeting. US Stock Movers Tesla (TSLA) closed up more than +5% to lead gainers in the Nasdaq 100 after Politico reported that Elon Musk will soon step back from his work for the Trump administration and focus on his businesses in the coming weeks. Caesars Entertainment (CZR) closed up more than +6% to lead gainers in the S&P 500 after Raymond James added the stock to its 'Favorite' list. GE Vernova (GEV) closed up more than +5% after Susquehanna Financial initiated coverage on the stock with a positive rating and a price target of $370. DoorDash (DASH) closed up more than +3% to lead gainers in the Nasdaq 100 after Domino's Pizza said it would begin accepting orders through the company. (AMZN) closed up more than +2% after the New York Times reported that the company offered to buy TikTok in the US. Rocket Cos (RKT) closed up more than +9% after Deutsche Bank upgraded the stock to buy from hold with a price target of $16. Citizens Financial Group (CFG) closed up more than +2% after Autonomous initiated coverage on the stock with a recommendation of outperform and a price target of $50. Fiserv (FI) closed up more than +2% after Goldman Sachs upgraded the stock to buy from neutral with a price target of $260. Defensive food makers and beverage companies retreated Wednesday with a recovery in the broader market. As a result, Hershey (HSY) closed down more than -3% to lead losers in the S&P 500. Also, Mondelez International (MDLZ) closed down more than -2%, and Constellation Brands (STZ) and the Campbell's Company (CPB) closed down more than -1%. In addition, General Mills (GIS) closed down -0.89%, Conagra Brands (CAG) closed down -0.83%, and Coca-Cola (KO) closed down -0.75%. Telecommunication stocks were under pressure on Wednesday. Verizon Communications (VZ), AT&T (T), and T-Mobile US (TMUS) closed down more than -1%. nCino (NCNO) closed down more than -19% after reporting Q4 adjusted EPS of 12 cents, weaker than the consensus of 17 cents, and forecast 2026 adjusted EPS of 66 cents to 69 cents, well below the consensus of 86 cents. Deere & Co (DE) closed down more than -1% after Jeffries said Deere's second-half outlook is clouded by US trade policy and counter-tariffs on US exports to Europe would affect the company. Earnings Reports (4/3/2025) Acuity Inc (AYI), Conagra Brands Inc (CAG), Lamb Weston Holdings Inc (LW), and MSC Industrial Direct Co Inc (MSM).
Globe and Mail
22-03-2025
- Business
- Globe and Mail
SP 500 Futures Key Levels and Analysis for the Coming Week 3/22/25
SP 500 Futures (ESM25) There are two methods we use at ONE44 to find support and resistance in the markets. The first are major Gann squares, these are the yellow horizontal lines on the chart. On the chart you can see where the market turned multiple times at these levels. The second is Fibonacci retracements and this is what most of this post will be about. There are a few basic rules when using the Fibonacci retracements with the ONE44 rules and guidelines. This is the short version. A 38.2% level keeps the trend intact and new highs/lows should follow. A 23.6% level shows the market is extremely strong, or weak. A 61.8% level can send the market 61.8% of where it just can from and cause wide swings keeping the market in a trading range. A 78.6% level can send it 78.6% of where it just came from and even be the end or start of a Bull market. ESM25 From last week, ESH25 Sunday night opened below the 5766.00 swing point for the week and it quickly got down into the next major area of support between the 5566.00 major Gann square and 23.6% back to the 2022 low at 5546.00. It did have one close below 5546.00 on Thursday only to have Friday close back above it after a $100 rally. This key area can send this market back to a new high eventually just as we thought if it held 5766.00. This has been a very large move down from the major Gann square cluster between 6102.00 to 6142.00, however holding a 23.6% retracement (2022 low) is always a very strong sign and the market can quickly get to a new high, or a good test of it, ideally that would be a 78.6% retracement. In the very big picture the long term trend will not be damaged until 38.2% of that same move is taken out and that will be the next major support area if the 5546.00 level fails to turn the market back up. Use 5546.00 as the swing point for the week. The key long term 23.6% level back to the 2022 low at 5546.00 has produced a $200 rally so far. The front contract is now June, This week it hit 38.2% at 5760.00 on the continuation chart a few times, so we will also watch what 38.2% is on the June chart. This level is 5815.00, a trade up to this area and a close back below 38.2% on the continuation chart at 5760.00 can quickly send this market back to the low. The idea of a run back at the highs from the 23.6% level at 5546.00 remains intact until this level is taken out. All of the key levels Above/Below on the continuation remain the same except for the 200 day average that is now 5781.00. Use 5546.00 as the swing point for the week again. Above it, the first test of the strength of any rally will be 38.2% back to the 2/19/25 high at 5760.00, the 200 day average is also right there at 5781.00, failing to get above this area after holding a key long term retracement (5546.00) would be a negative sign and a new low can quickly follow. The next target area is the 5993.00 major Gann square and 78.6% back to the same high at 6027.00. Below it, the long term target and long term swing point is 38.2% of the same move at 5153.50, this is also a major Gann square. Before then there are two major Gann squares to look for support and then use as the swing point when closed below at 5426.00 and 5283.75. . We have done 45 videos on how to use the Fibonacci retracements with the ONE44 rules and guidelines. These Videos are worth watching even if it is not in the market you are trading, as the ONE44 rules and guidelines are the same for every market. You will also see why we believe the Fibonacci retracements are the underlying structure of ALL markets. Here is the latest. Sign up for free updates for Gold, Crude Oil, SP 500 and Bitcoin here. ONE44 Analytics where the analysis is concise and to the point Our goal is to not only give you actionable information, but to help you understand why we think this is happening based on pure price analysis with Fibonacci retracements, that we believe are the underlying structure of all markets and Gann squares. If you like this type of analysis and trade the Grain/Livestock futures you can become a Premium Member. You can also follow us on YouTube for more examples of how to use the Fibonacci retracements with the ONE44 rules and guidelines. FULL RISK DISCLOSURE: Futures trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Commission Rule 4.41(b)(1)(I) hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. Past performance is not necessarily indicative of future results.
