- Global Bond Selloff Ramps Up, Asian Shares Gain: Markets Wrap
A global bond selloff accelerated in Asia on Thursday, pushing Japanese benchmark yields to the highest in
more than a decade after heavy selling in German bunds spread across fixed income markets. Asian stocks
were buoyed by a delay to some US tariffs on Mexico and Canada. Japan’s 10-year yield touched 1.5% for the
first time since June 2009, as the country manages rising inflation and higher borrowing costs. Treasuries fell,
pushing the US 10-year yield higher for a third day to trade around 4.3%. Bonds in Australia and New Zealand
also saw their yields surge around 10 basis points. Bund futures extended Wednesday’s decline. The moves
show how geopolitical volatility over the past few weeks that includes fraying US support for Ukraine and
whipsawing news on tariffs has impacted financial markets as traders gauge the impact on growth and
inflation. Also weighing on the fixed-income markets is Germany’s historic plan to ramp up spending with
Chancellor-in-waiting Friedrich Merz declaring his country would do “whatever it takes” to defend itself. - Dow closes nearly 500 points higher, S&P 500 surges over 1% on hopes for Trump tariff concessions
Stocks rose on Wednesday, staging a recovery rally after back-to-back losses as investors hoped that an
exemption for automakers to President Donald Trump’s controversial tariffs opened the floodgates for more
concessions. The Dow Jones Industrial Average rebounded 485.60 points, or 1.14%, to finish at 43,006.59,
regaining ground after plunging more than 1,300 points over the last two sessions. The S&P 500 added 1.12%
to 5,842.63, while the Nasdaq Composite climbed 1.46% to 18,552.73. - Oil falls for third day, down more than 2% on OPEC+ output increase, Trump tariffs
Oil prices declined for a third session on Wednesday, as investors worried about OPEC+ plans to proceed with
output increases in April, and U.S. President Donald Trump’s tariffs on Canada, China and Mexico escalated
trade tensions. Brent futures fell $1.80, or 2.53%, to $69.24 a barrel. U.S. West Texas Intermediate (WTI)
crude declined $2.05, or 3%, to $66.21 a barrel. Prices pared some losses after hitting multi-year lows earlier
in the session – Brent sank to $68.33, its lowest since December 2021, and U.S. crude futures touched $65.22,
its lowest since May 2023. They recovered slightly after the U.S. Commerce Department chief, Howard
Lutnick, said Trump would make the final decision on whether to grant any relief to certain industries on
Bloomberg TV. While Lutnick said the 25% tariff levied on Canada and Mexico would remain, the relief under
consideration would eliminate the 10% tariff on Canadian energy imports, such as crude oil and gasoline,
which comply with the rules of origin under the U.S.-Mexico-Canada Agreement, a source familiar with the
discussions said. U.S. crude stockpiles rose more than expected last week amid seasonal refinery
maintenance, while gasoline and distillate inventories fell due to a hike in exports, the Energy Information
Administration said. Crude inventories rose by 3.6 million barrels to 433.8 million barrels in the week, the EIA
said, far exceeding analysts’ expectations in a Reuters poll for a 341,000-barrel rise.
Brent fell more than $2 after the data was released. - Gold rises on weaker dollar, investors eye U.S. jobs data
Gold prices rose on Wednesday, supported by a weaker dollar, as investors awaited the release of the U.S.
payrolls data later this week for additional insights into the Federal Reserve’s monetary policy. U.S. gold
futures rose 0.2% to $2,927.50. Spot gold rose around 0.1% to $2,919.5381 an ounce. The U.S. dollar index
fell 1.2%, hitting its lowest level since November and making dollar-priced gold less expensive for buyers
holding other currencies. “There’s still buying interest out there now… there’s going to be some measure of
caution ahead of Friday’s (payrolls data), but the underlying trend remains favorable,” said Peter Grant, vice
president and senior metals strategist at Zaner Metals. The current fair intraday bid is primarily due to dollar
weakness, Grant added. Concerns about U.S. President Donald Trump’s tariff measures have driven up the
prices of safe-haven gold to 11 record highs this year, peaking at $2,956.15 on February 24, and culminating
in an overall year-to-date gain of 11%. In an address to Congress late on Tuesday, Trump said further tariffs
would follow on April 2, including “reciprocal tariffs” and non-tariff actions aimed at balancing out years of
trade imbalances. That move would follow new 25% tariffs on most imports from Mexico and Canada that
took effect on Tuesday, along with a doubling of duties on Chinese goods to 20%. The ADP National
Employment Report revealed a slowdown in U.S. private payrolls growth in February. Economists surveyed by
Reuters are predicting U.S. nonfarm payrolls for February will show a gain of 160,000 jobs when the data is
released on Friday. - ‘Tariff war, a trade war or any other type of war’ — China says it’s ready to fight U.S. until the end
China said it was prepared to fight “any type of war” with the U.S., as President Donald Trump ratchets up
economic and political pressure on the country. “If war is what the U.S. wants, be it a tariff war, a trade war
or any other type of war, we’re ready to fight till the end,” Chinese Embassy in the U.S. said in a post on X on
Wednesday, signaling an increasingly aggressive stance toward the U.S. The remarks came as Trump’s
additional 10% tariffs on imports from China took effect Tuesday, taking the cumulative tariffs imposed in
just about a month to 20%. “If the U.S. has other agenda in mind and if harming China’s interests is what the
U.S. wants, we’re ready to fight till the end. We urge the U.S. to stop being domineering and return to the
right track of dialogue and cooperation at an early date,” a Chinese foreign ministry spokesperson said
Wednesday. In a swift retaliation to U.S. duties, Beijing announced Tuesday additional tariffs as high as 15%
on certain U.S. goods, starting from March 10 and a series of new export restrictions for designated U.S.
entities. Answering a question on the Chinese embassy’s remarks U.S. Secretary of Defense Peter Hegseth
said in an interview with Fox News Wednesday that while the U.S. was not actively seeking conflict with
China, the country is “prepared.” “We live in a dangerous world with powerful, ascendant countries with very
different ideology,” he added, “If we want to deter war with the Chinese or others, we have to be strong.”
Beijing’s tariff action to target U.S. agricultural exports reflects an attempt to trigger political pressure on
Trump from farmers, a key Republican constituency, Gabriel Wildau, managing director of Teneo said in a
note. Agricultural products are the largest U.S. exports to China, with soybeans — which Beijing hit with new
duties of 10% — being topping the list. During the last U.S.-China trade war, Chinese tariffs spurred domestic
importers to shift purchases of soybeans to Brazil and Argentina. - Europe’s battle for power spurs evolution of a new ecosystem for energy-hungry firms
Businesses are facing five to eight-year waiting times to connect to Europe’s strained grids as the emergence
of new areas of demand drives an unprecedented rise in permit requests for power. That competition is set
to continue even as high electricity prices and operational costs hamper overall power demand for the
region, leading to deindustrialization and a more fragmented market. Bottlenecks in power grids — which
transport electricity to locations such as homes and businesses — are driving shifts in the market as firms
look for alternative sources of accessing power. - European Central Bank to make ‘last easy rate cut’ as tariffs, higher fiscal spending loom
The European Central Bank is expected to cut interest rates for the second time this year at its Thursday
meeting, but disagreement among policymakers may be set to increase amid tariff uncertainty and a
potential ramp-up in regional defense spending. Markets had on Wednesday fully priced in a quarter-point
rate cut for the March meeting, taking the ECB’s key rate to 2.5% — down from its peak of 4% in the middle
of last year. A further reduction to 2% by the end of the year was also priced in. A relatively swift pace of
monetary easing has been expected over the last nine months, with euro zone headline inflation coming
in consistently below 3%, and economic growth remaining weak. The ECB’s Governing Council has almost
always made its decisions unanimously and provided relatively firm guidance of its next steps to guide
market expectations. However, the central bank now appears within touching distance of the hotly-debated
“neutral rate” at which policy is neither stimulating nor restricting the economy, when rates would be
expected to be kept on hold. Policymakers disagree on exactly where this level is, and whether rates might
need to be brought even lower than that level in response to factors such as low growth. ECB President
Christine Lagarde told CNBC in January she believed the range was between 1.75% and 2.25%, down from her
previous estimate of between 1.75% and 2.5% — but the ECB itself has not issued a firmer indication since.
Bank of America Global Research analysts said in a Wednesday note that following this week’s meeting they
expected increased internal dispute between policymakers. - Trump exempts some automakers from Canada, Mexico tariffs for one month
U.S. President Donald Trump will exempt automakers from his punishing 25% tariffs on Canada and Mexico
for one month as long as they comply with existing free trade rules, the White House said on Wednesday, a
development that halted at least for now Wall Street’s steepest skid in nearly three months. Trump is also
open to hearing about other products that should be exempted from the tariffs, which took effect Tuesday,
the White House said. But Trump made clear he was not calling off his trade war with Canada and Mexico as
he pressures both countries to deter fentanyl smuggling. After a phone call with Canadian Prime Minister
Justin Trudeau, Trump said he was not convinced the situation had improved. “He said that it’s gotten better,
but I said, ‘That’s not good enough,'” Trump wrote on his Truth Social platform. “The call ended in a
‘somewhat’ friendly manner!” Public data shows only 0.2% of all fentanyl seized in the U.S. comes from
across the Canadian border, while the vast majority originates from the southern border. - Marvell Technology sank 14.6% in afterhours trading after delivering a revenue forecast that fell short of
the highest estimates
Sales will be about $1.88 billion in the fiscal first quarter, which runs through April, the chipmaker said.
Though that was in line with the average analyst estimate, some projections ranged as high as $2 billion.
“Investors were already very ‘skittish’ about AI names the last few weeks,” Tore Svanberg, an analyst at Stifel
Financial Corp., said. Marvell’s report “probably doesn’t help calm those nerves.” Marvell expects earnings of
56 cents to 66 cents a share in the first quarter, excluding some items. Analysts had projected 60 cents.
Earnings grew to 60 cents a share in the fourth quarter. Analysts had estimated 59 cents. Revenue rose 27%
to $1.82 billion, topping the $1.8 billion projection. Marvell has been seen as a key beneficiary of the artificial
intelligence computing build-out, and that’s ramped up expectations for the chipmaker. Three months ago,
the company delivered better-than-expected results that drove its shares to a record high. The company
provides chip design services, helping major tech customers develop their own data center semiconductors.
These so-called hyperscalers have been beefing up efforts to produce processors internally, aiming to fine
tune their computer networks for artificial intelligence software and services. Amazon.com Inc. is one of
Marvell’s largest customers. - Moderna shares rallied 15.9% after Chief Executive Officer Stephane Bancel and Board Director Paul
Sagan said they bought $6 million of stock, according to SEC filings
Bancel bought 160,314 shares for $5 million while Sagan purchased 31,620 shares for $1 million. Separately,
a court in Germany ruled that a COVID patent held by Moderna had been violated by Pfizer and BioNTech.
The court said both Pfizer and BioNTech will be required to provide information on earnings that derived
from the use of the patent in question, which will then be used to determine how much they’ll have to
compensate Moderna. The ruling is subject to appeal. - Victoria’s Secret (NYSE:VSCO) Exceeds Q4 Expectations But Stock Drops
Intimatewear and beauty retailer Victoria’s Secret (NYSE:VSCO) announced better-than-expected revenue in
Q4 CY2024, with sales up 1.1% year on year to $2.11 billion. On the other hand, next quarter’s revenue
guidance of $1.32 billion was less impressive, coming in 5.3% below analysts’ estimates. Its non-GAAP profit
of $2.60 per share was 13.2% above analysts’ consensus estimates. Victoria’s Secret (VSCO) Q4 CY2024
Highlights: Revenue: $2.11 billion vs analyst estimates of $2.08 billion (1.1% year-on-year growth, 1% beat);
Adjusted EPS: $2.60 vs analyst estimates of $2.30 (13.2% beat); Adjusted Operating Income: $299.3 million vs
analyst estimates of $268.4 million (14.2% margin, 11.5% beat); Management’s revenue guidance for the
upcoming financial year 2025 is $6.25 billion at the midpoint, missing analyst estimates by 1.3% and implying
0.3% growth (vs 0.9% in FY2024); Operating Margin: 12.7%, in line with the same quarter last year;
Locations: 1,387 at quarter end, up from 1,370 in the same quarter last year; Same-Store Sales rose 5% year
on year (-6% in the same quarter last year); Market Capitalization: $1.84 billion. “I am pleased with the
strength of our fourth quarter holiday results, which saw sales up in both our Victoria’s Secret and PINK
brands and our powerhouse Beauty business. Sales increased across most major merchandise categories, in
our stores and digital channels, and in both our North America and International businesses. We won in the
big moments of the quarter and gained more than our fair share of the traffic in the mall and online. The
teams focused on execution and drove healthy margins, controlled costs, and managed inventory levels
extremely well in a highly competitive and promotional holiday environment,” said VS&Co CEO Hillary Super. - MongoDB (NASDAQ:MDB) Exceeds Q4 Expectations But Stock Drops 12.4%
Database software company MongoDB (MDB) beat Wall Street’s revenue expectations in Q4 CY2024, with
sales up 19.7% year on year to $548.4 million. The company expects next quarter’s revenue to be around
$526.5 million, close to analysts’ estimates. Its non-GAAP profit of $1.28 per share was 91.1% above analysts’
consensus estimates. MongoDB (MDB) Q4 CY2024 Highlights: Revenue: $548.4 million vs analyst estimates of
$519.1 million (19.7% year-on-year growth, 5.6% beat); Adjusted EPS: $1.28 vs analyst estimates of $0.67
(91.1% beat); Adjusted Operating Income: $112.5 million vs analyst estimates of $58 million (20.5% margin,
93.9% beat); Management’s revenue guidance for the upcoming financial year 2026 is $2.26 billion at the
midpoint, missing analyst estimates by 2.8% and implying 12.6% growth (vs 19.3% in FY2025); Adjusted EPS
guidance for the upcoming financial year 2026 is $2.53 at the midpoint, missing analyst estimates by 25.4%;
Operating Margin: -3.4%, up from -15.5% in the same quarter last year; Free Cash Flow Margin: 4.2%, down
from 6.5% in the previous quarter; Customers: 54,500, up from 52,600 in the previous quarter;
Billings: $603.4 million at quarter end, up 17.2% year on year; Market Capitalization: $18.94 billion.
“MongoDB delivered a strong end to fiscal 2025 with 24% Atlas revenue growth and significant margin
expansion. Atlas consumption in the quarter was better than expected and we continue to see good
performance in new workload wins due to the flexibility, scalability and performance of the MongoDB
platform. In fiscal year 2026 we expect to see stable consumption growth in Atlas, our main growth driver,”
said Dev Ittycheria, President and Chief Executive Officer of MongoDB. - Abercrombie & Fitch Stock Plunges as Outlook Underwhelms
Abercrombie & Fitch shares sank Wednesday after the apparel retailer’s current-quarter profit and full-year
sales forecasts disappointed investors. The company sees first-quarter earnings per share between $1.25 and
$1.45, well below Visible Alpha consensus of $2.01. Abercrombie & Fitch is forecasting fiscal 2025 sales to
rise between 3% and 5%, below estimates of 5.65% growth.
