- U.S. indices decline in today’s session in response to Trump’s announcement of tariffs on cars and auto parts, as well as significant economic data releases. The S&P 500 is down 0.1%, the Nasdaq 100 is losing 0.2%, and the Dow Jones is correcting by 0.3%. The S&P 500 is on track for its worst quarterly performance since Q3 2023.
- President Trump signed a proclamation implementing a 25% tariff on all foreign-made cars and light trucks effective April 3, sending shares of General Motors, Stellantis, and Ford lower. Trump also threatened "harsher punishment" against the EU and Canada if they join forces against the U.S. Moreover, the new tariffs will also apply to auto parts, despite earlier reports suggesting that only finished vehicles would be affected.
- Tesla emerged as a rare bright spot in the market, with shares rising 2% due to the company’s dominant U.S.-based manufacturing footprint. However, CEO Elon Musk warned that Tesla is "NOT unscathed," as imported parts will still be subject to tariffs, calling the cost impact "not trivial."
- U.S. Q4 GDP growth was revised upward to 2.4% annualized, from the previous estimate of 2.3%, showing economic resilience despite slowing from the 3.1% pace in Q3. A key inflation measure in the report was also revised lower.
- Treasury yields rose, with 10-year bonds gaining 2 basis points to 4.37%. A $44 billion sale of seven-year notes was weak. The bond market is signaling concerns about the inflationary impact of tariffs, with short-dated Treasuries outperforming longer ones.
- U.S. home sales data showed a higher-than-expected monthly increase. In February, home sales in the U.S. rose 2%, compared to forecasts of 1%.
- The weekly jobless claims report met expectations, with the number of claims rising by 224K, versus the expected 225K.
- Gold futures hit their 17th record high of the year today, rising 1.2% to $3,056, as trade war fears intensified. Bank of America raised its price target to $3,500 from $3,000, while JPMorgan analysts speculate about a potential surge to $4,000.
- Shares of Advanced Micro Devices (AMD) fell over 3% after Jefferies downgraded the stock from "buy" to "hold," citing concerns about its competitiveness against Nvidia in technological capabilities.
- GameStop announced plans to sell $1.3 billion in convertible bonds to finance Bitcoin purchases, following board approval to add Bitcoin as a treasury reserve asset.
- The U.S. dollar index is down 0.2% today, while the euro is strengthening by 0.4%, extending its year-to-date gain to over 4%. Bank of America noted that the "selective implementation of growth-friendly U.S. policies has led to a significant underestimation of growth-positive factors for EUR/USD."
- CoreWeave, an AI cloud service provider and Nvidia partner, is struggling with its initial public offering (IPO), cutting its share price to $40, down from the original range of $47-$55. Nvidia is supporting the IPO with a $250 million order.
- Hedge funds are increasing their short positions in stocks, with Nvidia, AMD, and Tesla as their top three targets, according to Morgan Stanley. Wednesday marked the third-largest single-stock selling day by hedge funds this year, led by the technology sector.
- Shares of Novo Nordisk have fallen 25% in March, marking their biggest monthly drop since 2002, as investors worry that the obesity drug market pioneer is losing its edge to U.S. rival Eli Lilly, whose Zepbound prescriptions now outpace Wegovy sales.
- The EIA natural gas storage report showed a larger-than-expected increase in inventories, with a weekly build of 37 billion cubic feet, versus the forecast of 25 billion cubic feet. Gas inventories have begun rising in the second half of March, against five-year trends. Despite this, natural gas futures are attempting to break out of the downtrend, rising more than 2% today.
- Oil prices remain relatively stable, with Brent crude holding near $73 per barrel. Citigroup analysts recommend "gradually hedging against downside risks," forecasting that the trading range will shift lower to $60-$75 through 2025. WTI crude futures are up 0.3%, trading around $70 per barrel.
- Cryptocurrencies lack strong bullish momentum today – Bitcoin remains around $86,800, while Ethereum trades near $2,000 per coin.
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