- Asian Equities Poised for Weak Open, Futures Drop: Markets Wrap
Equities and Treasury yields fell on Monday as concerns about the health of the US economy weighed on
investors’ appetite for risk. A gauge of Asian shares dropped as equity futures contracts for the S&P 500
declined 0.4% and those for the tech-heavy Nasdaq 100 also fell. Treasury yields slipped across maturities as
investors sought the safety of fixed income assets. The shift toward havens lifted both the yen and the Swiss
franc, while a gauge of the dollar held just shy of its lowest since November as confidence in further US
economic outperformance faltered. Gold inched up, while oil fell to near the lowest since September as weak
economic data from China compounded a dour outlook for demand. Tariffs on major trading partners, a
higher unemployment rate and federal workforce job cuts are raising the prospect of a slowdown in growth
in the world’s largest economy after outperforming China and Europe for months. Bond traders are signaling
an increasing risk that the US economy will stall, while President Donald Trump said the economy faces “a
period of transition.” - S&P 500 closes higher in volatile trading Friday, but index posts worst week since September
The S&P 500 regained some ground on Friday, but the index still posted its worst week in several months as
the salvo of trade policy actions unnerved investors. The broad index rose 0.55% to 5,770.20, while the
Nasdaq Composite gained 0.7% to 18,196.22. The Dow Jones Industrial Average added 222.64 points, or
0.52%, to end at 42,801.72. Friday saw volatile trading, with the Dow falling more than 400 points at session
lows before an afternoon rally. The S&P 500 and Nasdaq both fell more than 1% at their worst points in the
trading day. Despite Friday’s recovery, the S&P 500 notched its worst week since September with a loss of
3.1%. The Dow, meanwhile, fell 2.4% this week. The Nasdaq Composite slid 3.5% on the week, during which it
had entered correction territory, which means the tech-heavy index finished a session 10% off its recent high. - Oil prices decline as investors continue to fret over tariff impact
Oil prices fell on Monday as concern about the impact of U.S. import tariffs on global economic growth and
fuel demand, as well as rising output from OPEC+ producers, cooled investor appetite for riskier assets.
Brent crude fell 25 cents, or 0.4%, to $70.11 a barrel by 0037 GMT after settling up 90 cents on Friday.
U.S. West Texas Intermediate crude was at $66.76 a barrel, down 28 cents, or 0.4%, after closing 68 cents
higher in the previous trading session. WTI declined for a seventh successive week, the longest losing streak
since November 2023, while Brent was down for a third consecutive week after U.S. President Donald
Trump imposed then delayed tariffs on its key oil suppliers Canada and Mexico while raising taxes on Chinese
goods. China retaliated against the U.S. and Canada with tariffs on agricultural products. - Gold edges higher on dollar weakness, safe-haven flows
Gold prices inched higher on Monday, supported by a weaker dollar and safe-haven flows amid fears of a
global trade conflict, while investors awaited further signals to gauge the U.S. Federal Reserve’s interest rate
stance. Spot gold was up 0.1% at $2,912.79 an ounce, as of 0243 GMT, while U.S. gold futures rose 0.2% to
$2,919.40. The dollar index hovered near a four-month low hit last week, making greenback-priced gold less
expensive for overseas buyers. “There are mounting downside risks to growth, while U.S. foreign policy is
also a source of uncertainty, boosting the appeal for gold,” Capital.com’s financial market analyst Kyle Rodda
said. “I think $3,000 is a level we’ll breach soon – probably in the next couple of months at the latest.”
U.S. President Donald Trump declined to predict whether the U.S. could face a recession amid stock market
concerns about his tariff actions on Mexico, Canada and China over fentanyl. Seesaw tariff announcements
have unnerved Wall Street as investors say flip-flopping moves by the Trump administration to roll back
levies on trading partners are causing confusion rather than bringing relief. Trump imposed new 25%
tariffs on imports from Mexico and Canada last Tuesday, along with fresh duties on Chinese goods.
He later exempted many imports from Mexico and some from Canada from those tariffs for a month,
creating uncertainty in the markets and fanning worries about U.S. inflation and growth. Tariffs have been a
key concern for investors, with many believing that they can harm economic growth and be inflationary.
Investors now await U.S. Consumer Price Index (CPI) data on Wednesday and Producer Price Index (PPI) data
on Thursday. Gold is seen as a hedge against political risks and inflation, but higher interest rates dull the
non-yielding asset’s allure. Spot silver fell 0.3% to $32.42 an ounce, platinum was steady at $962.55,
and palladium lost 0.4% to $944.73. - Trump says US economy in ‘transition’ as trade war escalates
US President Donald Trump has refused to say whether the US economy is facing a recession or price rises in
the wake of his administration’s flip-flopping on tariff threats against some of its closest trading partners.
Asked if he was expecting a recession this year, Trump said there was a “period of transition” taking place.
Commerce Secretary Howard Lutnick, however, insisted there would be no contraction in the world’s largest
economy, while acknowledging that the price of some goods may rise. It comes after a volatile week for US
financial markets as investors grappled with uncertainty from his administration’s U-turn on some key parts
of its aggressive trade policies. New tit-for-tat tariffs from China, which target some US farm products, came
into effect on Monday. Speaking to Fox News in an interview broadcast on Sunday but recorded on Thursday,
Trump responded to a question about a recession: “I hate to predict things like that. There is a period of
transition because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing.” - US Inflation Set to Stay Sticky as Tariff Risk Looms
US consumer prices probably rose in February at a pace that illustrates plodding progress on inflation for
Federal Reserve officials. They may be content to remain on the sidelines to assess a policy whirlwind from
the Trump administration. Bureau of Labor Statistics figures on Wednesday are projected to show that the
consumer price index minus food and energy climbed 0.3%, based on the median estimate of economists
surveyed by Bloomberg. While less than January’s 0.4% gain in January, the magnitude of the increase leaves
annual price growth elevated. The so-called core CPI probably rose 3.2% from February last year. The data
will inform the Fed’s preferred price gauge, which isn’t due until after the March 18-19 policy meeting.
Interest-rate setters — now in a blackout period ahead of that gathering — have an inflation goal of 2%.
The latest snapshot of price pressures follows a February jobs report that showed steady payrolls growth
tempered by hints of underlying cracks in the labor market. The broader economy is also displaying signs of
softening, reflecting weaker consumer spending, sentiment and homebuilding at the start of the year. - Bitcoin falls over 5% as volatility continues after Trump’s bitcoin reserve plan
Bitcoin fell on Monday as volatility in the price of the world’s largest cryptocurrency continues following
an executive order signed by President Donald Trump to create a strategic bitcoin reserve for the United
States. Bitcoin was trading at $81,712, down over 5% but off earlier lows, at 9:42 a.m. Singapore time,
according to Coin Metrics. The reserve will be funded by coins that have been seized in criminal and civil
forfeiture cases and there are no plans for the U.S. government to buy more bitcoin. After the strategic
reserve announcement last Thursday, crypto prices declined as investors were disappointed it wasn’t a more
aggressive program. Other cryptocurrency prices also dropped on Monday. Both ether and XRP were down
about 7.5% at around 9:43 a.m. Singapore time. Some investors, however, said the move to establish a
reserve was bullish in the long-term. “I absolutely think the market has this wrong,” Matt Hougan, chief
investment officer at Bitwise Asset Management, told CNBC’s “Squawk Box Asia” on Monday. “The market is
short-term disappointed” that the government didn’t say it was immediately going to start acquiring 100,000
or 200,000 bitcoin, he added. Hougan pointed towards comments on X from White House Crypto and AI Czar
David Sacks, who said the U.S. would look for “budget-neutral strategies for acquiring additional bitcoin,
provided that those strategies have no incremental costs on American taxpayers.” - China calls for ‘peaceful coexistence’ with the U.S. despite differences
China’s Minister of Foreign Affairs Wang Yi struck a more conciliatory tone on U.S. relations during a high
profile press conference on Friday. While Wang said the U.S. should not impose “arbitrary tariffs” or return
goodwill with hostility, he emphasized that the two countries would both be part of the world for a long time,
requiring “peaceful coexistence.” His comments came shortly after China hit back against U.S. President
Donald Trump’s mounting trade tariffs. - China to impose retaliatory tariffs on some Canadian products as trade war heats up
China on Saturday announced plans to impose a 100% tariff on Canadian rapeseed oil, oil cakes and peas,
adding that a 25% levy would be placed on aquatic products and pork originating in Canada. The measures
are scheduled to come into force from March 20, according to a statement from China’s Customs Tariff
Commission of the State Council. It is the latest in a series of tariff announcements by the U.S., China, Canada
and Mexico in recent months. - U.S. economy adds 151,000 jobs in February
The U.S. economy added fewer jobs than anticipated in February, but picked up compared to the previous
month, according to labor market data that could factor in to how Federal Reserve officials determine the
path ahead for interest rates. Nonfarm payrolls for the month came in at 151,000, up from a downwardly
revised reading of 125,000 in January, data from the Labor Department’s Bureau of Labor Statistics showed
on Friday. Economists had anticipated 159,000. Meanwhile, the unemployment rate was 4.1%, faster than
expectations that it would match January’s pace of 4.0%. Average hourly wage growth also rose by 0.3% on a
month-on-month basis, cooling from 0.4% and in line with projections. In a note to clients, analysts at Vital
Knowledge called the payrolls figure a “tiny boost to growth sentiment,” adding that wages and
unemployment “moved in a dovish direction.” Investors will likely be keeping an eye on remarks due later in
the day from Fed Chair Jerome Powell. Citing a relatively resilient jobs picture and uncertainty around the
inflationary impact of U.S. President Donald Trump’s trade and immigration policies, the Fed pushed pause
on a rate cutting cycle in January and indicated that it will take a wait-and-see approach to future possible
borrowing cost reductions. The jobs report, which encompasses Trump’s first full month back in office since
returning to the White House in late January, comes as economists and company executives have expressed
concerns over the impact of the president’s tariff plans on inflation and economic growth. - Kroger shares rose 4.6% after the grocer reported fourth-quarter results that were in line with its
preannouncement and gave an annual forecast range for identical store sales that topped expectations
Citi (neutral), Paul Lejuez: Lejuez says stock should trade higher on 4Q results and guidance. “Also, it’s
important to note that KR is giving guidance without a permanent CEO or CFO,” he wrote. Bloomberg
Intelligence, Jennifer Bartashus: “Kroger’s core grocery business is gaining momentum, supported by growth
in loyal households and greater digital engagement,” writes Bartashus. Gross margin this fiscal year may be
flat as investments to drive value perception offset efficiency gains. “Longer term, the company’s focus on
cost control and investments in omnichannel, private label, personalization and fresh merchandise can drive
sustainable expansion,” she adds. FOURTH QUARTER RESULTS: Adjusted EPS $1.14, estimate $1.11. Sales
$34.31 billion, estimate $34.51 billion. Identical-store sales excluding fuel +2.4%, estimate +1.95%. Gross
margin 22.7%, estimate 23%. 2026 YEAR FORECAST: Sees adjusted EPS $4.60 to $4.80, estimate $4.82. Sees
Identical-store sales excluding fuel +2% to +3%, estimate +2.11%. Sees adjusted free cash flow $2.8 billion to
$3.0 billion. Sees adjusted FIFO operating profit $4.7 billion to $4.9 billion, estimate $4.78 billion. - Tesla Stock Falls for 7th Week in a Row
Tesla shares fell 10% last week, in their seventh straight week of declines. The EV maker’s stock has lost
nearly half its value since hitting a record high in December amid worries about falling sales, tariff
uncertainty, and souring brand sentiment. The seven weeks of declines overlap with the period since
President Trump’s inauguration in January, and CEO Elon Musk’s efforts to lead the new administration’s
Department of Government Efficiency. - Nvidia sheds $1 trillion from record high market cap as market sell-off intensifies
Nvidia (NVDA) stock briefly extended its decline on Friday as the AI chip giant’s market cap losses from its
record high in January reached $1 trillion. A broader market sell-off coupled with fears of an overvaluation in
the AI trade has sent the stock tumbling more than 23% over the past two months. On Friday shares
temporarily fell to hover near $107 each, down from their record close of $149.43 on Jan. 6, when the
company’s valuation sat just north of $3.66 trillion. Nvidia’s market cap stood at $2.6 trillion during Friday’s
session as selling on Wall Street intensified. On Thursday renewed fears of an overextended AI trade surfaced
after chipmaker Marvell Technology’s (MRVL) revenue outlook failed to impress investors and semiconductor
stocks fell. “It’s been a rough year for NVDA so far. The stock (along with many of its AI-semi peers) has
suffered, battered by a storm of growth fears, supply chain noise, and tariff and regulatory risks,” Bernstein
analyst Stacy Rasgon wrote in a note to investors earlier this week. “Sentiment has clearly pivoted for now on
the AI group.”
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