- Asian Stocks Edge Higher in Thin Holiday Trading: Markets Wrap
Asian stocks notched up small gains as investors largely adopted a wait-and-watch approach on tariff
negotiations before taking long-term bets. While the Nikkei-225 gauge in Japan advanced 0.6%, shares in
mainland China dipped 0.4% after the US took steps to impose levies on Chinese vessels docking at its ports.
Most of the other markets in the region are shut for the Good Friday holiday. Traders are focused more on
developments in country-specific discussions, seeking clues on how the tariffs will pan out. After the “big
progress” in the Japan-US talks, President Donald Trump said he’s “very confident” of a deal with the European
Union, without giving further details. Questions surround the status of talks after Beijing indicated Wednesday
it has several conditions for agreeing to talks with the administration. - S&P 500 ekes out a gain, Dow tumbles 500 points to post three-day losing run
The S&P 500 ticked higher in choppy trading on Thursday, but finished the holiday-shortened trading week
lower as tariffs continued to worry investors. The broad index advanced 0.13% to close at 5,282.70 after
swinging between gains and losses earlier in the session. The Nasdaq Composite inched down 0.13% to end at
16,286.45. But the Dow Jones Industrial Average shed 527.16 points, or 1.33%, to settle at 39,142.23. The 30
stock index was weighed down by a 22% decline in UnitedHealth following the insurer’s earnings miss. Both
the Dow and the Nasdaq posted three days of losses. Nvidia retreated almost 3% on Thursday, building on its
drop of nearly 7% in the previous session. The artificial intelligence darling on Tuesday disclosed a quarterly
charge of about $5.5 billion tied to exporting its H20 graphics processing units, or GPUs, to China and other
destinations due to U.S. export controls. While UnitedHealth and Nvidia weighed on the market, other well
known stocks provided upward momentum. Eli Lilly surged 14% after delivering positive trial results for a
weight-loss pill. Netflix popped 1% ahead of the streaming giant’s earnings report. - Oil prices rise more than 3% on new Iran sanctions
Oil prices rose more than 3% on Thursday after the United States imposed new sanctions to curb Iranian oil
exports, elevating supply concerns. Brent crude futures rose $2.11, or 3.2%, to close at $67.96 a barrel, and
U.S. West Texas Intermediate crude settled at $64.68 a barrel, up $2.21, or 3.54%. Both benchmarks booked
their first weekly rise in three, gaining about 5%. Thursday is the last settlement day of the week ahead of the
Easter holidays. The new sanctions on Iranian oil exports and hawkish comments on the issue from the U.S.
Treasury are increasing supply concerns and helping support crude, said UBS analyst Giovanni Staunovo. The
sanctions issued by President Donald Trump’s administration on Wednesday, including against a China-based
“teapot” oil refinery, ramp up pressure on Tehran amid talks on the country’s escalating nuclear program.
Adding to supply concerns, the Organization of the Petroleum Exporting Countries (OPEC) said on Wednesday
it had received updated plans for Iraq, Kazakhstan and other countries to make further output cuts to
compensate for pumping above quotas. - Gold’s record rally pauses as investors cash in gains
Gold prices eased on Thursday after a sharp rise in the previous session as investors booked profits ahead of a
long weekend, although softer dollar and escalating U.S.-China trade tensions kept bullion above the $3,300
per ounce level. Spot gold slipped 0.5% to $3,326.51 an ounce, after touching a record high of $3,357.40 earlier
in the session. Bullion has gained nearly 3% this week. U.S. gold futures were down 0.2% at $3,339.90. “Gold
may have a short-term pullback given its spectacular surge this week and ahead of a rare long weekend in the
markets,” said Tai Wong, an independent metals trader. “There is some risk that a trade deal could be
announced over the weekend, quite possibly with Japan. However, gold’s trajectory remains higher given the
uncertainty and deep concern that continues to worry asset markets.” Gold prices surged 3.6% on Wednesday,
driven by U.S. President Donald Trump’s order to open a probe into potential tariffs on all critical mineral
imports, in addition to reviews into pharmaceutical and chip imports. Meanwhile, Trump touted “big progress”
in tariff talks with Japan on Wednesday, in one of the first rounds of face-to-face negotiations since his barrage
of duties on global imports roiled markets and stoked recession fears. The dollar index recovered on Thursday,
but was still heading for a weekly fall. A weaker greenback makes gold less expensive for holders of other
currencies. - Trump administration announces fees on Chinese ships docking at U.S. ports
The Trump administration on Thursday announced fees on Chinese-built vessels. The U.S. government began
investigating China’s dominance in the shipbuilding industry, where it manufactures as much as 75%-80% of
fleets, during the Biden administration. Steep levies on Chinese-made ships arriving at U.S. ports have been
proposed, up to as much as $1.5 million, as part of a plan to bring more ship manufacturing back to the U.S., a
policy which has bipartisan support. - Japan inflation comes in at 3.6%, surpasses BOJ target for three straight years
Japan’s inflation grew 3.6% year on year in March, marking three straight years that the headline inflation
figure is above the Bank of Japan’s 2% target. The figure was lower than the 3.7% seen in February. The so
called “core-core” inflation rate, which strips out prices of both fresh food and energy and is closely monitored
by the BOJ, climbed to 2.9% from 2.6% in the month before. Core inflation in the country — which strips out
prices of fresh food — came in at 3.2%, in line with Reuters’ expectations. This was also compared to the 3%
climb in February. The data release comes as Japan is locked in trade talks with the U.S., with U.S. President
Donald Trump writing that “big progress” has been made. Asia’s second largest economy had been hit with
25% on auto imports effective April 3, and 25% levies on steel and aluminum came into effect on March 12.
Trump, however, has suspended his “reciprocal” tariffs of 24% on Japan for 90 days, leaving a baseline tariff of
10%. A strong inflation figure would allow the Bank of Japan to increase interest rates and normalize its
monetary policy. However, with tariffs from the U.S. looming, Japan’s GDP could face downward pressure, and
constrain the BOJ’s room for rate hikes. - European Central Bank cuts interest rates, warns of ‘deteriorated’ growth outlook on trade tensions
The European Central Bank made yet another 25-basis-point interest rate cut on Thursday as global tariff
turmoil has created widespread uncertainty and spurred fears about the euro zone’s economic growth.
A rate cut was fully anticipated by markets, with a roughly 94% chance of a 25-basis-point trim being priced in
ahead of the decision, according to LSEG data. The cut takes the ECB’s deposit facility rate, its key rate, to
2.25%. At its highs in mid-2023 it had been at 4%. Tariff developments in recent weeks are widely seen by
analysts and economists as a key reason for the ECB to cut interest rates. Even though many of the initial duties
imposed by the U.S., as well as retaliation measures, have been put on ice or eased, fears about how they could
affect economic growth have been rife. In its policy statement, the ECB said that the “outlook for growth has
deteriorated owing to rising trade tensions.” It added, “Increased uncertainty is likely to reduce confidence
among households and firms, and the adverse and volatile market response to the trade tensions is likely to
have a tightening impact on financing conditions.” The ECB on Thursday also said that “the disinflation process
is well on track.” “Most measures of underlying inflation suggest that inflation will settle at around the
Governing Council’s 2% medium-term target on a sustained basis.” - Netflix maintained its 2025 guidance. That may not be the sign of confidence it seems
Netflix executives messaged Thursday that all is well with the business in the face of economic turbulence. But
its full-year outlook tells a slightly more nuanced story. Netflix posted a big beat on operating margin for the
first quarter, reporting 31.7% compared with the average estimate of 28.5%, according to StreetAccount. And
it guided well above analyst estimates for the second quarter — 33.3% against an average estimate of 30%.
By its own phrasing, Netflix was “ahead” of its own guidance for the first quarter and is “tracking above the
mid-point of our 2025 revenue guidance range.” Still, Netflix declined to alter any of its longer-term projections.
That suggests Netflix isn’t quite as confident in its second half. “There’s been no material change to our overall
business outlook since our last earnings report,” Netflix wrote in its quarterly note to shareholders. U.S.
consumer sentiment is at its second-lowest level since 1952 as President Donald Trump’s new tariff policies
roil markets. Co-CEO Greg Peters noted during the company’s earnings conference call that Netflix has, in the
past, “been generally quite resilient” to economic slowdowns. Home entertainment provides a cheaper form
of leisure than most other activities. A monthly Netflix subscription with ads costs $7.99. But the question
remains how — or whether — an economic slowdown would pinch Americans’ wallets and force higher churn
among streaming subscriptions. Netflix stopped reporting quarterly subscriber numbers this quarter, so the
company will likely not detail if it sees a customer slowdown later this year beyond reporting its underlying
revenue and profit. First-quarter revenue of $10.5 billion was roughly in line with analyst expectations, while
second-quarter guidance of $11 billion is slightly above. - TSMC sticks with its revenue forecast after profit tops estimates despite Trump trade worries
Taiwan Semiconductor Manufacturing Company on Thursday maintained its annual revenue forecast after it
quarterly beat profit expectations, thanks to a continued surge in demand for AI chips. Here are TSMC’s first
quarter results versus LSEG consensus estimates: Revenue: $839.25 billion New Taiwan dollars, vs. NT$835.13
billion expected; Net income: NT$361.56 billion, vs. NT$354.14 billion. TSMC’s net income increased 60.3%
from the same period last year to NT$361.56 billion, while net revenue in the March quarter rose 41.6% to
NT$839.25 billion. TSMC’s high-performance computing division which encompasses artificial intelligence and
5G applications drove sales in the quarter, increasing 7% since the last quarter to account for 59% of total
revenue. Meanwhile, the company said advanced technologies, defined as 7-nanometer and less, accounted
for 73% of total wafer revenue. In semiconductor technology, smaller nanometer sizes signify more compact
transistor designs, which lead to greater processing power and efficiency. “Business in the fourth quarter was
impacted by smartphone seasonality, partially offset by continued growth in AI related demand,” TSMC CEO
C.C. Wei said in an earnings call. “Moving into the second quarter of 2025, we expect our business to be
supported by strong growth of our 3-nanometer and 5-nanometer technologies,” he added. As the world’s
largest contract chip manufacturer, TSMC has consistently benefited from the AI boom as it produces advanced
processors for clients such American chip designer Nvidia. However, the company faces potential headwinds
from the trade policy of U.S. President Donald Trump, who has placed broad trade tariffs on Taiwan and stricter
export controls on TSMC clients Nvidia and AMD. Semiconductor export controls could also be expanded next
month under the “AI diffusion rules” first proposed by the Biden administration, further restricting the sales of
chipmakers that use TSMC foundries. On the tariff front, Taiwan currently faces a blanket 10% levy from the
Trump administration and that could rise to 32% after the President’s 90-day pause of his “reciprocal tariffs”
ends unless it reaches a deal with the U.S. - UnitedHealth Insurance cuts outlook on care costs ‘far above’ plan
Group Inc. plunged after the company cut its earnings outlook for the year and reported first-quarter earnings
below estimates, citing heightened care needs in Medicare that were “far above” what it had planned for.
Shares fell 17% in trading before US markets opened. The health insurance giant said adjusted earnings in 2025
will be $26 to $26.50 a share, down from a previous range of $29.50 to $30 a share. UnitedHealth has been
rocked by turmoil since the December killing of a top executive. Still in mourning, the company faced a torrent
of vitriol on social media from people fed up with the health-care system. It’s trying to repair its image and
persuade the public that it’s part of the solution. Adjusted earnings in the first quarter were $7.20 a share, the
company said in a statement Thursday, compared with the $7.27 average analyst estimate in a Bloomberg
survey. - Novo Nordisk Stock Drops on Eli Lilly Oral Weight-Loss Drug Success, Downgrade
U.S.-listed shares of Novo Nordisk (NVO) plunged 7% in intraday trading Thursday after rival Eli Lilly (LLY)
reported positive oral weight-loss drug news and BMO cut its rating for the Danish drug developer. Eli Lilly on
Thursday released Phase 3 trial results for its oral weight-loss drug that “demonstrated statistically significant
efficacy results and a safety profile consistent with injectable GLP-1 medicines.” BMO downgraded its rating on Novo Nordisk’s stock to “market perform” from “outperform” and slashed its price target to $64 from $105. The firm said it believes “obesity competitor Lilly has made sizable advancements in its commercial and clinical portfolio, causing it to overtake Novo’s early lead.” “Key updates from Lilly’s oral GLP1, orforglipron, are likely to pressure shares, only to be compounded by what we believe to be a softer 1Q,” BMO analysts wrote. Novo Nordisk, which produces blockbuster drugs Ozempic and Wegovy, has been in a
neck-and-neck race to lead the weight-loss drug market against Mounjaro and Zepbound maker Lilly. Novo
Nordisk’s shares have lost more than half their value in the past 12 months. Eli Lilly shares rose 16% in intraday
trading to lead S&P 500 gainers. They had been slightly negative for the past year through Wednesday. - Nvidia stock falls again, market cap losses near $270 billion after Trump administration’s new export
controls
Nvidia (NVDA) stock fell nearly 3% Thursday, extending the AI chipmaker’s 7% decline the prior day after
disclosing that the US government had effectively banned exports of its chips to China. Nvidia said in a
regulatory filing late Tuesday night that it would take a $5.5 billion hit in the first quarter due to the ban on
sales of its H20 chips made specifically for the Chinese market to comply with ever-tightening US trade rules.
The stock’s drop on Thursday put Nvidia’s market cap at $2.47 trillion, according to Bloomberg data, meaning
the company has shed $266 billion since the tighter trade rules were disclosed. JPMorgan analyst Harlan Sur
said in a note late Wednesday afternoon that he estimates the change would reduce Nvidia’s full-year data
center revenue and earnings per share by 8% to 10%. In other words, Nvidia would see $15 billion to $16 billion
in lost revenue. Jefferies analyst Blayne Curtis predicted a more modest $10 billion hit to revenue. The chip
trade curbs from the Trump administration took Wall Street by surprise, given a recent report from NPR that
Trump had backed off its plans to restrict Nvidia’s H20 chips following a dinner with CEO Jensen Huang at Mar
a-Lago. JPMorgan analyst Harlan Sur said in a note late Wednesday afternoon that he estimates the change
would reduce Nvidia’s full-year data center revenue and earnings per share by 8% to 10%. In other words,
Nvidia would see $15 billion to $16 billion in lost revenue. Jefferies analyst Blayne Curtis predicted a more
modest $10 billion hit to revenue. The chip trade curbs from the Trump administration took Wall Street by
surprise, given a recent report from NPR that Trump had backed off its plans to restrict Nvidia’s H20
chips following a dinner with CEO Jensen Huang at Mar-a-Lago.
