- Stocks Gain With Futures After Tariff-Led Swings: Markets Wrap
Stock markets staged a relief rally after US Commerce Secretary Howard Lutnick said the Trump
administration may walk back some tariffs. Hong Kong shares led the gains as China’s economic growth
target spurred bets of more stimulus. Traders are wading through a slew of news, with Beijing’s annual work
report, Lutnick’s hints of a tariff compromise with Canada and Mexico, and Germany’s plan to boost defense
spending all impacting markets. Both US and European equity-index futures gained as President Donald
Trump defended his economic plans, while a regional Asian gauge rebounded. Treasuries held Tuesday’s
declines and the dollar strengthened against all the Group-of-10 currencies. Chinese shares in Hong Kong
outperformed after the National People’s Congress in Beijing set an economic growth target of about 5% for
2025, a third straight year it has maintained that goal. Given the broadening global uncertainty on tariffs and
geopolitics, economists expect Chinese officials to add stimulus. - Dow tumbles again, loses more than 1,300 points in two days as Trump ignites trade war
The Dow Jones Industrial Average tumbled for a second day as President Donald Trump’s tariffs left investors
fearful of potential shockwaves for the economy. The blue-chip average dropped 670.25 points, or 1.55%,
building on Monday’s plunge of nearly 650 points. The Dow ended the session at 42,520.99. The S&P 500
dropped 1.22% and closed at 5,778.15 after notching its worst day of the year in the prior session. The
Nasdaq Composite lost 0.35% and finished at 18,285.16. At their worst levels, the Dow fell more than 840
points and the S&P 500 slid 2%. The Nasdaq had dropped more than 2% at its lowest and at points flirted
with correction territory, a term that refers to an index falling 10% from a recent high. More than 4 out of 5
S&P 500 stocks ended the day lower. Some investors scooped up shares like Nvidia that have been battered
this year. - Oil falls as OPEC+ plans to raise output, U.S. tariffs hammer sentiment
Oil prices fell for a third session on Wednesday as plans by major producers to raise output in April combined
with concerns U.S. tariffs on Canada, Mexico and China will slow economic and fuel demand growth
hammered investor sentiment. Brent futures eased 15 cents lower to $70.89 a barrel at 0200 GMT. In the
previous session, the contract fell to as low as $69.75, its lowest since September 11, and settled at their
lowest since that day as well. U.S. West Texas Intermediate (WTI) crude fell 40 cents a barrel, or 0.6%, at
$67.86 after settling at its lowest since December. Prices fell to as low as $66.77 in the previous session, the
lowest since November 18. The “OPEC+ decision to start increasing production again is a materially bearish
development, loosening markets at a time that U.S. macro data are starting to soften,” analysts at Citi said in
a note. The Organization of the Petroleum Exporting Countries and its allies including Russia, a group known
as OPEC+, decided on Monday to increase output for the first time since 2022. The group will make a small
increase of 138,000 barrels per day from April, the first step in planned monthly increases to unwind its
nearly 6 million bpd of cuts, equal to nearly 6% of global demand. A 25% tariff on all imports from Mexico, a
10% tariff on Canadian energy and a doubling of duties on Chinese goods to 20% came into effect on
Tuesday. The Trump administration also imposed 25% tariffs on all other Canadian imports. - Gold eases as Treasury yields, dollar rise; markets gauge Trump tariffs
Gold edged lower on Wednesday as a firmer U.S. dollar and Treasury yields pressured the yellow metal, while
markets continued to track the possible impact of fresh U.S. tariffs. Spot gold fell 0.3% to $2,909.86 an ounce
as of 0327 GMT after rising nearly 1% on Tuesday, while U.S. gold futures were steady at $2,920.70.
Benchmark 10-year U.S. Treasury yield rebounded from an over four-month low hit in the previous session,
decreasing non-yielding gold’s appeal, while the dollar index also firmed. “The move lower has been very
modest so far in APAC trade and probably says more about the markets digesting the prior day’s sharper rally
than any new catalyst that has only just emerged to pressure gold,” said Ilya Spivak, head of global macro at
Tastylive. Higher Treasury yields and a slight recovery from the U.S. dollar may be pressure prices, Spivak
said. U.S. President Donald Trump’s new 25% tariffs on imports from Mexico and Canada took effect on
Tuesday, along with a doubling of duties on Chinese goods to 20%, sparking trade wars that could slam
economic growth and lift prices for Americans still smarting from years of high inflation. In
response, China and Canada retaliated with their own set of tariffs on a range of U.S. goods, with Mexico
expected to respond on Sunday. Trump’s policies, widely seen as likely to stoke economic uncertainty, have
helped safe-haven bullion rise over 10% so far this year. - China targets ‘around 5%’ growth in 2025 and lays out stimulus measures as trade worries mount
China on Wednesday set its GDP growth target for 2025 at “around 5%” and laid out stimulus measures to
boost its economy amid escalating trade tensions with the U.S. Beijing raised its budget deficit target to
“around 4%” of GDP from 3% last year, according to the official report, as the country’s top legislative body
held its annual meeting. The 4% deficit would mark the highest on record going back to 2010, according to
data accessed via Wind Information. The prior high was 3.6% in 2020, the data showed. The government
report outlined plans to issue 1.3 trillion yuan ($178.9 billion) in ultra-long-term special treasury bonds in
2025, 300 billion yuan more than last year. Another 500 billion yuan worth of special treasury bonds will be
issued to support large state-owned commercial banks. The widened fiscal package also includes the issuance
of 4.4 trillion yuan of local government special-purpose bonds this year to help ease their financing strains.
In an implicit acknowledgement of sluggish domestic demand, Beijing revised down its annual consumer
price inflation target to “around 2%” — the lowest in more than two decades — from 3% or higher in prior
years, according to the Asia Society Policy Institute. The new inflation goal would act more as a ceiling than a
target to be realized. Consumer prices climbed just 0.2% in 2024 and 2023, while producer prices
have declined for over two years. While emphasizing boosting domestic consumption as a top priority, Beijing
vowed to expand the consumer goods trade-in program with an additional 300 billion yuan in ultra long
special treasury bonds. Officials who drafted the work report told the press Wednesday that external
uncertainties were growing, and that the 5% GDP target would require “very arduous work” to
achieve, according to a CNBC translation of their statement in Chinese. - Trump says the U.S. will take control of Greenland ‘one way or the other’
President Donald Trump said Tuesday that the United States would take control of Greenland “one way or
the other,” escalating months of increasingly aggressive rhetoric towards the self-governing Danish territory.
Addressing a joint session of Congress in Washington, Trump said he had “a message tonight for the
incredible people of Greenland.” “We strongly support your right to determine your own future, and if you
choose, we welcome you into the United States of America,” he said about halfway through his 90-minute
speech. Trump also pledged to Greenlanders that America would “keep you safe, we will make you rich, and
together, we will take Greenland to heights like you have never thought possible before.” But in between the
warm wishes Trump’s tone shifted, as he again made the case to Americans that U.S. control of the ice
covered Arctic landmass was crucial to their national security. - Australia reports fourth-quarter GDP growth of 1.3%, supported by exports
Australia’s economy expanded 1.3% year on year in the fourth quarter, accelerating for the first time since
September 2023. The GDP growth beat expectations of a 1.2% rise from economists polled by Reuters, and
also surpassed the 1.1% climb expected by the Reserve Bank of Australia. The country’s statistics bureau said
that growth was “modest” but broad-based, adding that “both public and private expenditure contributed to
the growth, supported by an increase in exports of goods and services.” On a quarter-on-quarter basis, GDP
rose 0.6%, beating expectations of a 0.5% rise from a Reuters poll and marking its fastest growth since the
third quarter of 2022. The data comes after Australia’s central bank slashed benchmark rates in its monetary
policy meeting last month, marking its first cut in over four years, amid economic sluggishness and easing
inflation. In its Statement on Monetary Policy released last month, the RBA said GDP growth in Australia is
expected to pick up over 2025, with private demand expected to grow on the back of an increase in
household consumption. The RBA has forecast a GDP growth rate of 2.4% and 2.3% for 2025 and 2026,
respectively. Headline inflation is expected to climb to 3.7% at the end of 2025, while dropping to 2.8% by the
end of 2026, according to the statement. These figures are based on expectations that the RBA’s benchmark
policy rate — or “cash rate” as it is known in Australia — will drop to 3.6% by Dec. 2025, and 3.5% by Dec.
Australia’s S&P/ASX 200 stock index fell 1.02% after the data release, while the Aussie dollar weakened
to trade at 0.6250 against the greenback. - ‘Tariff taskforce’: Pharma firms scramble to prepare even as Trump levies risk flouting WTO rules
Europe’s pharmaceutical firms are rushing to prepare for the potential fallout of U.S. import duties, with
some forming “tariff taskforces,” even as analysts warn that levies on the sector could break global trade
rules. Fresenius Medical Care says that it has installed its first-ever “tariff taskforce” to manage uncertainty
surrounding U.S. President Donald Trump’s proposed trade charges, with some production likely to be
directly impacted. “Clearly we’re looking at what happens to the tariffs in Europe and what also happens to
tariffs [on] medical equipment,” CEO Helen Giza told CNBC’s “Squawk Box Europe” last week. “The escalation
and speed of this, with the executive orders, is something we assembled pretty quickly,” Giza said of the
taskforce. President Trump on Wednesday signaled that the European Union may be next to face sweeping
25% tariffs on its exports to the U.S., mirroring similar threats toward Canada and Mexico. It came a week
after Trump said he was considering a flat charge of around 25% on all pharmaceutical, auto and chip
imports. The suggestion has prompted concern from some analysts, who say that such duties on the pharma
industry would mark an infringement of rules set by the World Trade Organization — which counts the U.S.
as a member. - Target (NYSE:TGT) Q4 Earnings Decline With US$30.9B Sales and US$1.1B Net Income
Following Target’s (NYSE:TGT) recent fourth-quarter earnings report showcasing a 3% decrease in sales and a
20% drop in net income, the company’s shares fell 4% over the past week. The decline in share price reflects
not only Target’s underperformance but also broader market concerns, as major indices like the S&P 500 and
Nasdaq faced declines due to new tariffs imposed by the U.S. These tariffs, with their resultant investor fears
of inflation and global trade disruptions, further compounded the pressures on Target’s stock. Despite the
company’s efforts to drive growth through new collaborations, such as its partnerships with Warby Parker
and Champion, these initiatives did not offset the immediate negative sentiment surrounding the earnings
announcement. The challenging economic conditions, combined with increased tariffs, likely played a
significant role in Target’s share price movement amidst the market’s overall 2.5% weekly decline. Over the
last five years, Target’s total shareholder return was 30.68%, reflecting both stock price appreciation and
dividends paid. This return came despite TGT’s earnings having declined by 0.3% annually during this period,
highlighting a mixed fundamental performance. The company’s return on equity, skewed by high debt levels,
appears robust at 30.16%, yet this positive indicator requires cautious interpretation considering the debt.
Additionally, Target is perceived as undervalued, with a share price of US$120.76 compared to an estimated
fair value of US$258.49, indicating potential growth perceptions. - Shares of European energy companies drop as much as 3.3% Tuesday to an end-January low, as oil
slides on OPEC+’s plans to increase production, as well as concerns around the Trump administration’s
trade tariffs
Brent crude futures are down as much as 1.4%, at lowest since October. European oil names decline; BP
drops as much as 4.3%, Shell as much as 3.5%, TotalEnergies -3.6%, Eni -3.7%, Equinor -4%, Repsol -2.1%. Oil
extended losses from the lowest in almost three months as US tariffs on trading partners including China took
effect, while OPEC+ signaled plans to revive halted production. Oil Pushes Lower on Trump’s Tariffs, OPEC+
Plans to Hike Output. The surprise call to proceed with plans to start boosting production by 138,000 barrels
a day in April vs expectations of another delay, followed by a series of monthly hikes, combined with US
tariffs and the risk of widening trade wars are now “a major overhang on oil price”. - Albertsons Cos. shares fall as much as 4.8%, the most intraday since Dec. 10, after the grocery operator
said Chief Operations Officer Susan Morris will lead the company after Chief Executive Officer Vivek
Sankaran retires, effective May 1
Telsey Advisory Group analyst Joseph Feldman views Morris as ready to be CEO, though “some investors
wanted to see Vivek Sankaran stick around longer after the merger with Kroger being blocked by the FTC”. In
addition, “investors always want some reassurance that CFO Sharon McCollam, who is one of the best in
retail and well-liked, will stick around,” he writes to Bloomberg News. Rates outperform with PT $26. “ACI is
at a pivotal turning point, in our view, following the merger termination with KR, so the timing of this
leadership transition appears logical to us,” Oppenheimer analyst Rupesh Parikh writes in a note to clients.
He’s focused on management’s ability to stabilize margins and meet longer-term targets. Rates market
perform. - Supermicro Stock Surges to Join S&P 500’s Top Performers Tuesday
Super Micro Computer’s (SMCI) stock surged to become one of the S&P 500’s top performers Tuesday, a day
after posting steep losses. The server maker’s stock jumped 8.5% to $39.14 Tuesday, making up for most of
the ground it lost Monday, when the S&P 500 experienced its biggest one-day drop of 2025. The broader
market struggled again Tuesday, as investors grappled with the potential effects of newly imposed U.S.
tariffs. Every S&P 500 sector aside from tech ended the day in the red. Supermicro shares have been
volatile over the past few months as investors waited to see whether the company would file its delayed
financial disclosures with the Securities and Exchange Commission by last week’s deadline to avoid delisting.
It did, which initially sent shares soaring, before the stock pared back some gains in the days that followed.
Supermicro’s stock added nearly 30% in 2025 so far, but has still lost more than half its value from a year ago. - CrowdStrike Stock Falls as Earnings Forecast Disappoints
CrowdStrike (CRWD) shares fell in extended trading Tuesday after the company issued an earnings forecast
that fell short of analysts’ expectations. The cybersecurity company said it anticipates adjusted net income of
$851.2 million to $883 million or $3.33 to $3.45 per share in fiscal 2026, well below the analyst consensus of
1.1 billion, or $4.23 per share, compiled by Visible Alpha. In the fourth quarter, CrowdStrike saw revenue
grow 25% year-over-year to $1.06 billion, just above analysts’ estimates. Adjusted earnings of $260.9 million,
or $1.03 per share, rose from $236.2 million, or 95 cents per share, a year earlier and beat expectations. “As
businesses of all sizes rapidly adopt AI, stopping the breach necessitates cybersecurity’s AI-native platform,”
CEO George Kurtz said in a release, adding, “we are seeing strong momentum in our Next-Gen SIEM, Cloud
Security, and Identity Protection businesses.” CrowdStrike shares fell more than 6% in after-hours trading
Tuesday following the release. They’ve gained about 14% since the start of the year through the closing bell,
after hitting a record high last month. - Sea Limited stock jumps after strong Q4 revenue beat
Sea Limited shares gained over 6% in early trading Tuesday after the Southeast Asian tech giant reported
fourth-quarter revenue that handily beat analyst expectations, driven by strong growth across its e
commerce and digital financial services segments. The Singapore-based company posted revenue of $4.95
billion for the quarter, surpassing the consensus estimate of $4.62 billion. However, adjusted earnings per
share came in at $0.39, slightly below the $0.41 analysts were expecting. Sea’s e-commerce arm Shopee saw
gross merchandise value (GMV) jump 23.5% YoY to $28.6 billion, while gross orders increased 20.1% to 3
billion. The digital financial services unit also impressed, with revenue surging 55.2% YoY to $733.3 million.
“We delivered a great 2024 with all three businesses going back to strong, double-digit growth, exceeding
our original guidance,” said Forrest Li, Sea’s Chairman and CEO. “It was also our second consecutive year of
annual positive profit, with all three of our businesses recording positive adjusted EBITDA.” For the full year
2024, Sea reported total revenue of $16.8 billion, up 28.8% YoY. The company swung to a net profit of $447.8
million, compared to $162.7 million in 2023. Looking ahead, Sea expects Shopee’s full year 2025 GMV growth
to be around 20%, with improving profitability. The company also anticipates its digital entertainment unit
Garena to grow double digits YoY in both user base and bookings in 2025.
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