- Euro, Stocks Gain as Europe Seeks Ukraine Plan: Markets Wrap
The euro gained in early trading with Eastern European currencies as the region’s leaders scrambled to offer
Ukraine their support amid concerns of a US pullback. The common currency rose 0.4% against the dollar,
outperforming major peers. The Polish zloty and Romanian leu also climbed. European equity futures pointed
to a stronger open, tracking Asian stocks higher. Advances in Hong Kong were underpinned by a rally in
technology shares. Markets are starting the week with geopolitics dominating as European leaders assemble
what Britain called a “coalition of the willing” to secure Ukraine following an Oval Office clash between US
President Donald Trump and Ukrainian President Volodymyr Zelenskiy. China is also due to stage its biggest
political huddle of the year just as US tariffs threaten to test Beijing’s ability to boost economic momentum. - S&P 500 surges more than 1% Friday to end stormy February as investors look past Trump-Zelenskyy
clash
Stocks managed to rise Friday to wrap up a volatile week and a losing month for the major averages. Friday’s
trading session saw a brief pullback after President Donald Trump and Ukraine President Volodymyr
Zelenskyy clashed in the Oval Office, which raised concerns about heightened geopolitical risks. The S&P 500
added 1.59% on Friday to close at 5,954.50. The Dow Jones Industrial Average rose 601.41 points, or 1.39%,
closing at 43,840.91. The Nasdaq Composite climbed 1.63% to settle at 18,847.28. Stocks rallied sharply into
Friday’s close. Part of that could have been related to index rebalancing and other technical-buying sources.
There was a heavy imbalance to the buy side of market-on-close orders at the New York Stock Exchange.
Month to date, the Nasdaq led the way down, sliding nearly 4% in February due largely to a 3.5% drop this
week. This was the tech-heavy index’s worst month since April 2024. The S&P 500 declined roughly 1% for
the week and 1.4% in February. Meanwhile, the Dow has managed to outperform, rising about 1% in the
week. Month to date, however, the 30-stock index has dropped 1.6%. - Oil posts first monthly drop since November on tariffs, Iraq exports
Oil prices fell about 1% on Friday, posting their first monthly drop since November, as markets braced for
Washington’s new tariffs and Iraq’s decision to resume oil exports from the Kurdistan region. Uncertainty
surrounding OPEC’s production resumption plans in April and ongoing talks to end the war in Ukraine also
weighed on investor sentiment. The more active May Brent crude futures fell 86 cents, or 1.16%, to close at
$73.18 a barrel. U.S. West Texas Intermediate crude futures settled at $69.76 a barrel, down 59 cents, or
0.84%. Baghdad is set to announce the resumption of oil exports from the semi-autonomous Kurdistan region
through the Iraq-Turkey pipeline, according to an Iraqi oil ministry statement. Iraq will export 185,000 barrels
per day through state oil marketer SOMO, and that quantity will gradually increase, the ministry said.
Despite the expected announcement, eight international oil firms operating in the Kurdistan region said they
would not be resuming exports on Friday as there was no clarity on commercial agreements and guarantees
of payment for past and future exports. - Gold set to record worst week in three months on robust dollar
Gold prices fell over 1% on Friday as the dollar held close to two-week highs after U.S. inflation data came in
line with expectations, suggesting the Federal Reserve may adopt a cautious stance on additional rate cuts.
Spot gold was 1% down at $2,846.96 an ounce. Bullion has so far lost 3% for the week, its steepest weekly fall
since November. U.S. gold futures were 1.3% down at $2,858.90. The dollar index was set for a weekly gain,
making dollar-priced gold more expensive for overseas buyers. - China’s factory activity growth hits 3-month high in February, as millions return to work after holidays
China’s factory activity expanded at its fastest pace in three months to 50.8 in February, a private-sector
survey showed on Monday, as millions of migrant workers returned to work after an extended Lunar New
Year holiday. The seasonally adjusted Caixin/S&P Global manufacturing purchasing managers’ index beat
Reuters poll forecast of 50.3, also accelerating from 50.1 in January and 50.5 last December.
The private-sector manufacturing PMI has stayed above the 50 threshold that separates expansion from
contraction since last October. This private survey reading on Monday followed the official manufacturing
PMI released on Saturday, which also showed that China’s February factory activity expanded at its fastest
pace since November. The official PMI rose to 50.2 in February from 49.1 in January, according to the
National Bureau of Statistics. The non-manufacturing PMI, which includes services and construction, also
climbed to 50.4 from 50.2 in January. The figures came as economists flagged that fresh U.S. tariffs could
pressure the country’s manufacturing activity — which accounted for a quarter of China’s GDP last year —
and dent the role of exports as a key driver of growth this year. In February, new export orders grew at the
fastest rate since last April, according to the Monday survey, as “demand strengthened from foreign clients.”
The stronger external demand for Chinese manufactured goods could be due to U.S. importers continuing to
front-run tariffs in anticipation of even higher levies, Zichun, Huang, China economist at Capital Economics,
said in a note. U.S. President Donald Trump last week announced to impose additional 10% tariffs on Chinese
goods — on top of the 10% he levied on China on Feb. 4. Trump had threated 60% tariffs on China on his
campaign trail. - Trump signals U.S. and U.K. could reach ‘real trade deal’ without tariffs
U.S. President Donald Trump signaled the U.K. could broker a “real trade deal” and escape tariffs amid
ongoing negotiations sweetened by British Prime Minister Keir Starmer’s Thursday visit to the White House.
When asked during a joint press briefing whether Starmer had convinced Trump to avoid additional levies on
Britain, Trump said, “He tried! He was working hard, I’ll tell you that. He earned whatever the hell they pay
him over there. But, he tried. I think there is a very good chance that in the case of these two great friendly
countries, I think we could end up with a real trade deal that … where the tariffs wouldn’t be necessary. We’ll
see.” The Washington leader stressed that he was “very receptive” to the overtures of Starmer — whom he
repeatedly lauded as “very, very special person” and a “very tough” negotiator — and noted that the two
countries could arrive at “a deal that could be terrific.” “I think we’ll have something, maybe even, in terms of
possibilities, agreed to very shortly,” Trump said. Yet Trump and Starmer’s comments on a potential deal
“could mean anything,” at this point, Stefan Koopman, senior market economist at Rabobank, said in a note
on Friday. “It most likely points to some arrangement to avoid tariffs and increase cooperation in certain
sectors,” he added. “At the very least, it kicks the can down the road and saves the UK from tariffs. For today,
at least,” Koopman said. - European leaders race to craft plan to save Zelenskyy, US support
UK Prime Minister Keir Starmer and other European leaders used a security summit in London to
demonstrate broad support for Ukraine. Behind the scenes, though, they were scrambling to get Volodymyr
Zelenskyy back to the table with US President Donald Trump. From Starmer to his Italian counterpart Giorgia
Meloni and French President Emmanuel Macron, leaders spent the weekend in a diplomatic whirlwind as
they tried to fix last week’s disastrous clash at the White House. They also fast-tracked efforts to improve
their own defense capabilities in the wake of the falling out and Trump’s direct outreach to Russian President
Vladimir Putin to end the war in Ukraine. Their hope is that the campaign, which coalesced on Sunday inside
the gilded Victorian halls of Lancaster House, would persuade Trump to stay engaged with Europe and
Ukraine before his peace talks with Putin advance further. Macron told Le Figaro newspaper after the
gathering that some nations wanted a one-month truce in Ukraine so negotiations on peacekeeping
deployments can play out. A British official said there hasn’t been any agreement on a timeline for a
ceasefire. The UK and France were seeking to build what Starmer called a “coalition of the willing” to
participate in peacekeeping forces and help reassure Kyiv about the durability of any peace. The two
longtime US allies aim to take the “Europe-plus” grouping, including non-EU states potentially including
Canada, to Trump in coming days to get his buy-in, according to European officials familiar with the plan. - German inflation stays unchanged at hotter-than-expected 2.8% in February
German annual inflation came in at an unchanged but higher-than-expected 2.8% in February, provisional
data from statistics agency Destatis showed Friday. The print is harmonized across the euro area for
comparability. The February print compares to a 2.7% estimate from economists surveyed by Reuters.
The January harmonized annual inflation reading had also come in at 2.8%, which was already unchanged
from December. On a monthly basis, harmonized inflation rose 0.6%, according to the preliminary data from
Destatis. So-called core inflation, which strips out food and energy costs, came in at 2.6%, down from the
2.9% reading of January. Deutsche Bank Research economist Sebastian Becker on Friday described the lower
core inflation reading as positive and noted that the print is expected to keep falling as wage growth eases
and the broader economy remains muted. The closely watched services inflation print also eased, coming in
at 3.8% in February, after hitting 4% in the previous month. Despite the decline, the services reading was a
“drop of bitterness” in the Friday data, as the fall was smaller than anticipated, Becker said according to a
CNBC translation. German inflation had fallen below the 2% European Central Bank target in September last
year, but re-accelerated after and has remained above the crucial mark for five months in a row now.
The German data arrives ahead of the consumer price index print for the euro zone on Monday and the latest
ECB decision later next week. The central bank in January cut interest rates for the fifth time since starting to
ease monetary policy last summer and markets are widely pricing in another trim on Thursday. - Fed’s favorite core inflation measure hits 2.6% in January, as expected
Inflation eased slightly in January as worries accelerated over President Donald Trump’s tariff plans,
according to a Commerce Department report Friday. The personal consumption expenditures price index, the
Federal Reserve’s preferred inflation measure, increased 0.3% for the month and showed a 2.5% annual rate.
Excluding food and energy, core PCE also rose 0.3% for the month and was at 2.6% annually. Fed officials
more closely follow the core measure as a better indicator of longer-term trends. - India’s Q3FY25 GDP growth at 6.2%; economy to expand at 6.5% in FY25
India’s economy grew by 6.2% in the October-December quarter (FY25), recovering from a seven-quarter
low, but still falling short of last year’s growth and facing increasing challenges amid the looming threat of a
US tariff war. A CNBC-TV18 poll had estimated India’s Q3 GDP growth at 6.2%. According to the latest data
released by the Ministry of Statistics on February 28, the growth in India’s gross domestic product (GDP) was
higher than the revised 5.6% growth for the July-September 2024 period, but lower than the Reserve Bank of
India’s (RBI) estimate of 6.8% for the quarter. For the full 2024-25 fiscal year (April 2024 to March 2025), the
Indian government now forecasts a GDP growth rate of 6.5%, slightly above its initial estimate of 6.4%, but
below the revised 9.2% growth for 2023-24. Nevertheless, India remains on track to be the fastest-growing
major economy globally, with growth projections for the coming year staying just below 7%. The gross value
added (GVA) stood at 6.2%, slightly below the poll estimate of 6.3%. On a yearly basis, GVA growth was lower
than 6.8% YoY but higher than 5.6% in Q2FY25. Experts had projected GDP growth to recover to around 6.3%
in Q3FY25, driven by increased government spending, up from 5.4% in the previous quarter. Their estimates
ranged between 5.8% and 6.5%. In nominal terms, GDP, which accounts for inflation, expanded by 9.9% in Q3
FY25. According to Chief Economic Adviser V Anantha Nageswaran, India’s economic momentum is expected
to persist, supported by a strong rebound in exports and increasing government and private spending and
the Mahakumbh effect. These factors are anticipated to keep growth robust in the final quarter of the
financial year. - Dell Technologies shares fell 4.7% as investors remained concerned about the profitability of the
computer hardware company’s servers optimized for artificial intelligence. Analysts note gross margins as
a weak spot in an otherwise positive report
FOURTH QUARTER RESULTS: Total net revenue $23.93 billion, +7.2% y/y, estimate $24.65 billion. Adjusted
EPS $2.68 vs. $2.27 y/y, estimate $2.53. Adjusted operating income $2.67 billion, +22% y/y, estimate $2.53
billion. FIRST QUARTER FORECAST: Sees revenue $22.5 billion to $23.5 billion, estimate $23.55 billion. Sees
adjusted EPS $1.65, estimate $1.76. 2026 YEAR FORECAST: Sees revenue $101 billion to $105 billion, estimate
$103.04 billion. Sees adjusted EPS $9.30, estimate $9.24. Bloomberg Intelligence analyst Woo Jin Ho: Dell’s
forecast “includes roughly $15 billion in AI shipments, up 50%-plus from 2025, illustrating scant slowing in its
AI momentum”. The firm’s “PC rebound will be somewhat muted in 2026, we believe, given the elongated
Windows 11 upgrade cycle over the next two years”. Morgan Stanley analyst Erik Woodring (overweight, PT
$128): While Dell faces gross margin pressure, it forecast stronger-than-expected FY26 earnings per share.
“Despite 100bps of Y/Y GM pressure, op margins will expand 40bps Y/Y as DELL drives efficiencies in its cost
base”. - Lenovo teases solar-powered and foldable screen laptops in latest concept
Lenovo on Monday showed off a laptop with a foldable screen and one that can get extra battery life from
solar power. These laptops are just concepts, meaning they are not commercially available. Lenovo, the
world’s biggest PC maker, has a history of showing off imaginative concepts with some becoming reality, so
it’s worth keeping an eye on what the Chinese technology giant is up to. For example, Lenovo previously
showed off the idea of a rollable laptop — one where the screen rolls upwards to increase the size of the
display. The company will begin selling such a laptop this year. The latest concepts were unveiled at the
Mobile World Congress trade show in Barcelona. - Super Micro stock sees nearly 30% weekly loss as AI server competition mounts
Super Micro (SMCI) stock plunged more than 26% last week, extending the stock’s long streak of volatility as
investors weigh the company’s AI-fueled growth against questionable accounting practices, growing
competition, and macroeconomic uncertainties. Super Micro stock’s drop partly erased gains from a three
week rally beginning at the start of February. That rally was fueled by the server maker’s ambitious long-term
revenue outlook and investors’ optimism that the company would mitigate the risk of a Nasdaq delisting by
submitting its delayed filings to the US Securities and Exchange Commission. Super Micro Computer makes
massive server racks designed by Nvidia (NVDA) using the chipmaker’s GPUs (graphics processing units, or AI
chips) for data centers, and that hardware is necessary to train and run artificial intelligence models. The
company was part of a group of leading AI-themed stocks that thrived as artificial intelligence went
mainstream following the launch of ChatGPT. That’s because Super Micro was an early mover in the
burgeoning market for AI servers, Wedbush analyst Matthew Bryson told Yahoo Finance. The company
partnered with Meta (META) to make the large-scale GPU servers that powered its first AI Research
SuperCluster before ChatGPT debuted, Bryson said. - Nvidia Stock Finds Support from Friday Dip-Buyers
Nvidia (NVDA) shares finished Friday higher, suggesting the stock found some support from dip-buyers after
Thursday’s sell-off. Nvidia stock ended the day up nearly 4% in recent trading after tumbling 8.5% on
Thursday. Nvidia on Wednesday reported better-than-expected quarterly results, but Wall Street
demonstrated on Thursday that’s no longer enough from its favorite AI stock. Nvidia beat revenue estimates
by the smallest amount in two years, underwhelming investors who have grown accustomed to gargantuan
beats from the AI chip leader. The results failed to revive the AI rally. High-flying, richly-priced stocks like
Palantir (PLTR), Applovin (APP), and Vistra (VST), which all soared last year on enthusiasm about their AI
fueled growth, had dropped in the recent sessions as investors have grown cautious amid a slew of economic
and political concerns. Even Friday morning, after a promising print of the Federal Reserve’s preferred
inflation measure, all three stocks slumped at the open. (They all finished the day higher, however.) AI stocks
have also been weighed down this month by lingering concerns about the impact of Chinese start
up DeepSeek’s R1 reasoning model, which its developers say operates at a far lower cost than comparable
U.S. models. R1’s success and efficiency raised concerns among investors that U.S. hyperscalers and other AI
developers could scale back their spending on Nvidia’s most advanced technology. Major tech companies
have since reiterated their commitment to spending hundreds of billions on AI infrastructure in the coming
years, but that hasn’t pulled Nvidia and other chip stocks out of their funk. - HP Stock Falls 4% on Q1 Earnings Miss, Dismal Q2 Profit Guidance
HP Inc. HPQ shares fell 3.9% during Thursday’s extended trading session after the personal computer (PC)
maker reported lower-than-expected bottom-line results for first-quarter fiscal 2025 and issued a profit
outlook for the second quarter that fell short of the Zacks Consensus Estimate. HP reported first-quarter non
GAAP earnings of 74 cents per share, missing the consensus mark by a penny. The bottom-line result declined
9% from the year-ago quarter’s earnings of 81 cents, mainly due to higher expenses, which more than offset
the benefit of higher revenues. In the trailing four quarters, HP’s earnings surpassed the Zacks Consensus
Estimate once while missing the same on three occasions, the average negative surprise being 1.16%. HPQ’s
revenues increased 2.4% year over year to $13.5 billion and were in line with the Zacks Consensus Estimate.
The year-over-year growth was primarily driven by higher Personal Systems (PS) sales, which more than
offset the negative impact of lower revenues in the Printing business. HPQ’s Q1 Top-Line Details: PS revenues
(68.1% of net revenues) came in at $9.2 billion, which improved 5% from the year-ago quarter’s figure (5% up
at constant currency or cc). The upside in this division was mainly driven by revenue growth from commercial
unit performance and market share gains in Personal Systems. HP’s total PC units sold were down 1% on a
year-over-year basis, mainly due to an 11% decrease in Consumer PS shipments, partially offset by an
increase of 6% in Commercial PS shipments. Revenues from the Commercial PS segment increased 10% year
over year, while the Consumer PS segment sales declined 7%.
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