- Asian Stocks Jittery as Tariff Concerns Mount: Markets Wrap
Asian stocks stumbled on Friday, in the wake of ominous signals from US corporate earnings and a series of
central bank meetings that raised more questions than answers for the global economy. Hong Kong shares
faced heavy selling pressure, with a gauge of technology stocks in the city sliding around 3% after a recent
rally. A broader index of Chinese stocks listed in the financial hub headed for its steepest two-day drop since
November. Shares in Indonesia and Taiwan also fell, although those in Japan edged higher. US futures were
largely steady. Equity investors in Asia are confronting an increasingly cloudy outlook for the global economy,
as tariff fears and corporate earnings weigh on sentiment. US President Donald Trump said both broad
reciprocal tariffs and certain additional sector-specific tariffs would come into force on April 2, a major risk
for the global economy. - S&P 500 closes lower Thursday as Wall Street’s comeback attempt falters
The S&P 500 slipped on Thursday as uncertainty around the U.S. economy continued to weigh on equities,
thwarting the market’s attempts at recovery from a monthlong rout. The broad market index pulled back
0.22% to close at 5,662.89. The Nasdaq Composite slid 0.33% to end the day at 17,691.63, weighed down by
losses in Apple and Alphabet. The Dow Jones Industrial Average inched down 11.31 points, or 0.03%, and
closed at 41,953.32. - Oil set for weekly gain on Iran sanctions, OPEC+ plan to rein in overproduction
Oil prices rose in early Asian trading on Friday, and were set for their second consecutive weekly gains, after
fresh U.S. sanctions on Iran and a new OPEC+ plan for seven members to cut output raised bets on tightening
supply. Brent crude futures climbed 42 cents, or 0.6%, to $72.40 per barrel by 0026 GMT. U.S. West Texas
Intermediate crude futures were up 45 cents, or 0.6%, to $68.52 a barrel. On a weekly basis, both Brent and
WTI were on track to rise about 2%, their biggest weekly gains since the first week of 2025. The United States
Treasury on Thursday announced new Iran-related sanctions, which for the first time targeted an
independent Chinese refiner among other entities and vessels involved in supplying Iranian crude oil to
China. That marked Washington’s fourth round of sanctions against Iran since U.S. President Donald Trump in
February vowed to reimpose a “maximum pressure” campaign on Tehran, pledging to drive the
country’s oil exports to zero. Analysts at ANZ Bank said they expect a 1 million barrels per day (bpd) reduction
in Iranian crude oil exports because of tighter sanctions. Vessel tracking service Kpler pegged Iranian
crude oil exports at over 1.8 million bpd in February, cautioning that the masking of Iranian vessel activity
due to sanctions could lead to revisions to those numbers. Oil prices were also supported by a new OPEC+
plan announced Thursday for seven members to further cut output to make up for producing more than
agreed levels. The plan would represent monthly cuts of between 189,000 bpd and 435,000 bpd, and will last
until June 2026. The plan will buffer all the supply increments that OPEC+ had previously announced will take
effect from next month, Kpler’s head of Middle East energy Amena Bakr said in a post on social media service
X. - Gold pauses for breath after record run on safe-haven demand
Gold prices eased on Thursday after hitting a record high earlier in the session, but retained a bullish outlook
driven by potential rate cuts signalled by the Federal Reserve and continuing geopolitical and economic
uncertainties. Spot gold was down 0.3% at $3,038.79 an ounce by 11:38 a.m. EDT (1538 GMT) due to profit
taking, after hitting a record high of $3,057.21. U.S. gold futures settled 0.1% higher at $3,043.80 per ounce.
“Speculators are trying to take advantage of the market and take some profit off the table … I think anytime
gold sets a high, we see a little bit of resistance,” said Alex Ebkarian, chief operating officer at Allegiance
Gold. “Gold is not even acting as a safe-haven asset yet to retail investors because technically we’re not in a
recession. We are seeing the slowdown in the economy and that could very well create a further uncertainty
and more desire for safe-haven assets.” Federal Reserve Chair Jerome Powell said on Wednesday that
Trump’s initial policies, including extensive import tariffs, may have slowed U.S. economic growth and
increased inflation. Trump, meanwhile, criticized the Fed’s decision to hold rates, despite projections for two
quarter-percentage-point rate cuts by year-end due to weakening economic growth and higher inflation.
Traders are pricing in 69 basis points of easing this year from the Fed — at least two rate reductions of 25 bps
each, with a cut in July fully priced in — LSEG data showed. “In our bull case, we see gold prices reaching
$3,500 per ounce by year-end, underpinned by much higher hedging/investment demand on fears of US hard
landing/stagflation,” analysts at Citi said in a note. At least 91 Palestinians were killed and dozens wounded
in Gaza airstrikes after Israel resumed bombing, ending a two-month ceasefire, said the enclave’s health
ministry. Gold acts as a hedge against uncertainty and tends to do well in a low-interest-rate environment.
Spot silver fell 1.2% to $33.41 an ounce, platinum fell 1.1% to $982.0. Palladium slipped 1.3% to $946.5. - Bank of England holds interest rates at 4.5% as governor warns of uncertainty
The Bank of England has held interest rates at 4.5%, in a widely-expected move. Governor Andrew Bailey says
“there’s a lot of uncertainty at the moment”, but interest rates remain on a “gradually declining path”. In its
summary, the Bank’s rate-setting committee says “global trade policy uncertainty has intensified” after the
US imposed new trade tariffs. The base rate was cut from 4.75% to 4.5% in February, having fallen from a
peak of 5.25% last year. - Japan core inflation rose 3% in February, bolstering expectations of interest rate hikes
Japan’s core inflation beat expectations and came in at 3% in February, government data showed on Friday,
bolstering the case for further interest rate hikes. The core inflation figure — which excludes prices of fresh
food — was higher than expectations of 2.9%, according to economists polled by Reuters, but lower than
January’s figure of 3.2%. Headline inflation rose 3.7% year on year in February, easing from a two-year high of
4% seen last month. - Elon Musk’s Starlink gets access to India, but its success rests on two billionaires
Elon Musk’s SpaceX has announced deals with the two dominant players in Indian telecom – Reliance’s Jio
and Airtel – that will roll out Starlink internet services across India. Sources close to New Delhi say Musk’s
relationship with U.S. President Donald Trump and influential role in the White House no doubt incentivized
the Indian government to reevaluate a Starlink deal. But challenges remain. Starlink still needs to get past
several regulatory hurdles and acquire a communications license which the Indian government is currently
reviewing. - Nike expects sales will plunge in current quarter as it faces tariffs, sliding consumer confidence
Nike on Thursday warned that sales will drop by a double digit percentage in its current quarter as the
sneaker giant contends with new tariffs, sliding consumer confidence and a slower than expected
turnaround. In a conference call with analysts, finance chief Matt Friend said Nike expects its sales decline in
the fiscal fourth quarter, which is set to end in May, to be at the “low end” of the “mid-teens range.” It also
anticipates its gross margin will fall between 4 and 5 percentage points as it ramps up efforts to liquidate
excess inventory and stale styles that are no longer resonating with consumers — a process it expects to
continue into fiscal 2026. “We believe that the fourth quarter will reflect the largest impact from our …
actions, and that the headwinds to revenue and gross margin will begin to moderate from there,” said Friend.
“We are also navigating through several external factors that create uncertainty in the current operating
environment, including geopolitical dynamics, new tariffs, volatile foreign exchange rates and tax regulations,
as well as the impact of this uncertainty and other macro factors on consumer confidence.” The guidance is
far worse than analysts had expected. Consensus estimates from LSEG show Wall Street had expected sales
to be down 11.4% in the current quarter. Shares fell more than 4% in extended trading and are down more
than 5% year to date, as of Thursday’s close. Beyond guidance, Nike beat Wall Street’s expectations in its
fiscal third quarter. Here’s how the company performed during the quarter, compared with estimates from
analysts polled by LSEG: Earnings per share: 54 cents vs. 29 cents estimated; Revenue: $11.27 billion vs.
$11.01 billion estimated. The company’s reported net income for the three-month period that ended Feb. 28
was $794 million, or 54 cents per share, compared with $1.17 billion, or 77 cents per share, a year earlier.
Sales dropped to $11.27 billion, down about 9% from $12.4 billion a year earlier. Like other retailers, Nike
saw strong demand in December followed by “double digit” declines in January and February. - Accenture Plc shares fell 7.3% after the consultancy said its US government work has slowed amid Elon
Musk’s cost-cutting push
The company, with nearly 800,000 employees around the world, said new procurement actions had
decreased amid President Donald Trump’s spending crackdown, hurting its sales and revenue. Accenture
Chief Executive Officer Julie Sweet said that federal services accounted for about 8% of its global revenue and
about 16% of its Americas revenue in the 2024 fiscal year. The company reported $16.7 billion of revenue in
the three months through February, a 5% increase on the prior year. Musk’s Department of Government
Efficiency has taken aim at consulting deals as an example of what the administration deems wasteful
spending. The government has told all federal agencies to review their contracts with the 10 highest-paid
consulting firms that do work with the government, including Accenture. Agencies were given until March 14
to justify their contracts with the firms, Bloomberg has reported. - US-listed shares of PDD Holdings rose 4% after the Chinese budget-shopping site reported its fourth
quarter results. While sales missed estimates for a third consecutive quarter, earnings were better than
expected
Bloomberg Intelligence: The results “reflect heightened financial risks from Temu’s growing global business,”
and “amid disruptions to both supply and demand from US tariff hikes on products made in China, PDD will
struggle to avert operating-profit declines if the revenue-growth pace stays below 25%”. Citi (neutral, PT
$125): The results are mixed, and “revenues missed, mainly attributed to lower-than-expected transaction
services revs”. Temu is “losing growth momentum and consumer mindshare in certain countries”. Jefferies
(buy, PT to $156 from $171): The report will reset expectations but show that the company’s strategy is
intact. “We believe the high base effect on earnings in 1Q is known to the street and expect earnings to enter
a more normalized stage in 2H”. FOURTH QUARTER RESULTS: Revenue 110.61 billion yuan, estimate 116.03
billion yuan. Adjusted earnings per American depositary receipts 20.15 yuan, estimate 19.68 yuan. - Darden shares rose 5.8% after management said that it’s implied fourth-quarter guidance includes
comparable sales growth above 3%, which is ahead of the consensus view of 2.3% growth
The annual forecasts also imply 4Q total sales of $3.23 billion to $3.26 billion, and adjusted EPS between
$2.88 and $2.95; which compare to consensus estimates of $3.23 billion, and $2.93. Management said 3Q
comp. sales started with a negative gap to the industry average in December, but turned positive in January
and February, with both months exceeding the industry benchmark by “well over 100 basis points,” adding
that for the first three weeks of 4Q, Darden is seeing further improvement in sales trends. After adjusting for
these impacts, Darden same-restaurant sales were +2.6% for 3Q, a sequential improvement from prior
quarters. Darden also discussed manageable inflation levels and ways it can mitigate its relatively limited
tariff exposure, stating that about 80% of its cost basket is domestically sourced. A portion of the 20% that’s
imported could “switch easily” to domestic sourcing. On the consumer, Darden says “changes in consumer
sentiment haven’t necessarily translated to material changes in consumer spending”. “As long as incomes are
going up and outpacing inflation, I think they’re likely to keep spending”. There’s been “a little bit more
pullback” in guests with incomes below $50,000. THIRD QUARTER RESULTS: Sales $3.16 billion, +6.2% y/y,
estimate $3.21 billion. Adjusted EPS from continuing operations $2.80, estimate $2.79. YEAR FORECAST: Still
sees comparable sales about +1.5%, estimate +1.29%. Sees adjusted EPS from continuing operations $9.45 to
$9.52, estimate $9.49. Still sees sales about $12.1 billion, estimate $12.09 billion. - Micron shares are up 1% afterhours after the maker of memory chips gave a strong sales forecast for
the current quarter, bolstered by demand for artificial intelligence products
Fiscal third-quarter revenue will be about $8.8 billion, the company said. That compares with an average
estimate of $8.55 billion. Profit will around $1.57 a share, excluding certain items, compared with the $1.48
expected on average. Micron is seeing strong demand for components used in data center machines that
develop and run artificial intelligence software. Its traditional markets — chips for phones and PCs — have
been weaker. But they have been showing signs of recovery. Second-quarter sales climbed 38% to $8.05
billion, Micron said. Analysts had predicted $7.91 billion. Earnings grew to $1.56, minus certain items,
topping the $1.43 prediction. “Data center revenue tripled from a year ago,” Chief Executive Officer Sanjay
Mehrotra said. “We are on track for record revenue and significantly improved profitability in fiscal 2025.”
The company’s high-bandwidth memory, or HBM, has become a vital piece of AI systems. Revenue from that
technology crossed $1 billion in the second quarter, Micron said, citing “strong execution and robust AI
demand.” One weak spot was the company’s gross margin. It was 37.9% in the second quarter, missing the
38.4% estimate. The forecast for the current period, roughly 36.5%, also fell short of predictions. “We’re
expecting that we’ll see margins in the fourth quarter that could be somewhat better,” Manish Bhatia,
executive vice president of global operations, said. - FedEx shares fell 5.6% afterhours after the company lowered its full-year guidance for a third
consecutive quarter as inflation and uncertain demand for shipments squeeze the parcel company’s
bottom line
Adjusted earnings are now expected to be in the range of $18 to $18.60 per share this fiscal year, below the
$18.95 average estimate. FedEx also cautioned that revenue may be slightly down versus the prior year,
compared to its previous expectation that sales would be roughly flat. Trump’s tariff proposals — including
one to revoke the so-called de minimis exemption for low-value shipments — have made package demand
and profits especially difficult for FedEx to predict, said Bloomberg Intelligence logistics analyst Lee Klaskow.
Higher-than-expected inflation in the current quarter is putting pressure on costs, FedEx Chief Executive
Officer Raj Subramaniam said. Weakness from industrial customers is weighing on its services that cater to
businesses, Chief Financial Officer John Dietrich. Volumes were also hit by the expiration of its contract to
carry packages for the US Postal Service, which was expected. - Jabil jumps on raised annual revenue outlook, Q2 results beat
Jabil Circuit Inc (NYSE:JBL) hiked its net revenue guidance for the full year and reported second-quarter
results ahead of analyst estimates, sending its shares nearly 3% higher on Thursday. The electronics
components maker reported earnings per share (EPS) of $1.94, exceeding consensus estimates of $1.83.
Revenue for the period totaled $6.73 billion, also above the $6.41 billion projected by analysts. Jabil reported
a core operating profit of $334 million, while analysts expected $315.3 million. “In Q2, we exceeded our
expectations due to continued strength in our capital equipment, cloud and data center infrastructure, and
digital commerce end-markets,” said Jabil CEO Mike Dastoor. “In my opinion, Jabil is among the best
positioned companies in the world to help customers navigate these complexities,” he added. For the third
quarter of fiscal 2025, Jabil expects EPS between $2.08 and $2.48, compared to the consensus estimate of
$2.22. Revenue is anticipated to be in the range of $6.7 billion to $7.3 billion, while analysts had forecasted
$6.74 billion. The company anticipates a core operating profit of $348 million to $408 million, exceeding the
consensus estimate of $365.7 million. For the full year, Jabil forecasts EPS of $8.95, compared to the average
analyst estimate of $8.74. The company now sees full-year revenue of $27.9 billion, up from its previous
projection of $27.3 billion and above the consensus estimate of $27.31 billion. The core operating margin is
still expected to be 5.4%, in line with the 5.39% consensus forecast.
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