Morning News: March 17, 2025
Posted by Eddy Elfenbein on March 17th, 2025 at 7:02 am

China Says It Started Year on Strong Economic Footing as Trump Tariffs Hit

Xi ‘Put’ Underpins China Story as US Exceptionalism Falters

Foreign Investors Lured to High-Yielding Chinese Bank Debt

Trump Has Companies in Europe and Asia Walking a DEI Tightrope

U.S. Tariff Increases to Slow Global Economy, Boost Inflation, OECD Says

Trump’s Trade Wars Tip World to Slower Growth, Faster Inflation, OECD Says

Wall Street Braces for Oil in $60s Range on Tariff, OPEC+ Risks

El-Erian: The US Economic Outlook Is Becoming More Uncertain

Trade War With Europe Puts $9.5 Trillion at Risk, U.S. Firms Say

Trump’s Moves Are Boosting Stocks … Overseas

Bessent Not Worried About Market, Calls Corrections Healthy

An Uncertain Economic Moment Poses a Big Test for the Fed

Ride Out the Market Turmoil? Not These Investors.

Darker Than a Dark Pool? Welcome to Wall Street’s ‘Private Rooms’

Some Federal Office Leases Restored After Pushback to Musk Team’s Cuts

Social Security Employees Warn of Damage From DOGE

Gen Z’s Job Recession Needs Urgent Attention

Trump Wants to Build Homes on Federal Land. Here’s What That Would Look Like.

As Voice of America Goes Dark, Some Broadcasts Are Replaced by Music

QinetiQ’s Shares Tumble On Geopolitical Uncertainty, Contract Delays

How A.I. Companies Are Turning Into Energy Companies

WeRide Looks to Shift Into Profitability With Diversified Strategy

The Prime Suspect Behind California’s Eaton Fire: A ‘Zombie’ Power Line

Pfizer Has a New Playbook for Reviving Sales—and It’s Starting to Pay Off

They Named Their Companies Lumon. Then ‘Severance’ Aired.

Airbnb Boosts Marketing and Hiring Ahead of Push Into New Businesses

U.S. Retail Under Scrutiny

Forever 21 Operator Files for Bankruptcy

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Morning News: March 14, 2025
Posted by Eddy Elfenbein on March 14th, 2025 at 7:02 am

Japan Wage Talks Signal Another Year of Big Pay Increases

The Ukraine Ceasefire Will Test US Intentions Most of All

Trump’s ‘Golden Dome’ System Spurs Flood of Defense Industry Pitches

China Backs Iran in Nuclear Talks, Slams ‘Threat of Force’ From the West

China Is ‘Laughing’ at US Trade Wars, EU Top Diplomat Says

Five Years On, Covid-19 Pandemic Effects Linger in World Economy

Investment Bank Boom Creates More Millionaire Earners in Europe

U.K. Economy Unexpectedly Contracts, Posing New Challenge to Government

Trump Ramps Up EU Trade War With Tariff Threat on Champagne, Wine

Wine Businesses Fear Disaster in Threat of Huge Tariffs

Stocks Tumble Into Correction as Investors Sour on Trump

How Wall Street and Business Got Trump Wrong

This Stock Market Index Is Flashing a Clear Warning About the Economy

The Upside-Down Line That Tells the Story of the Stock Market Now

Here’s Where to Look for Early Signs of a Recession

Fed Expected to Cut Rates Twice This Year, Starting in September

Gold Breaks Through $3,000 as Trump Turbocharges Record Rally

Federal Budget Ax Threatens Contractors, But Could Also Be an Opportunity

What If DOGE Doesn’t Actually Save Any Money?

US Companies Tell Investors DOGE Cuts Will Ultimately Pay Off

Why I’m Feeling the A.G.I.

‘Profit-Enhancing Middlemen’ Fuel $200 Billion Health-Care Chaos

Li Auto Profit Drops Despite Record Revenue

BMW Expects Flat Earnings This Year as Headwinds Continue

Mercedes’s Most Affordable Sedan Will Be Electric

Universal Music Shares Fall After Ackman’s Pershing Decides to Cut Stake

Kering’s Shares Drop After Appointment of Demna as Gucci’s New Artistic Director

Move Over, Kids. Hasbro Wants Adults to Play.

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Morning News: March 13, 2025
Posted by Eddy Elfenbein on March 13th, 2025 at 7:02 am

Going Once, Going Twice: 165,000 Tons of Rice

Turkey Seeks to Extend US Sanctions Waiver to Buy Russian Gas

Europe’s Idling Factories Eye New Start in the Military

European Truck Stocks Fall After EPA Sets Rollback of Emissions Standards

Trump Vows 200% Tariff on EU Wine, Escalating Trade Tensions

Trump’s Go-To Broker Brings NYC-Style Dealmaking to a World on Edge

A Shutdown May Be Averted, But at What Cost?

Trump’s $1.4 Trillion Tariff Threat Spurs Companies to Seek Cover

An ‘Untradable’ Market: Trump Sows Profound Uncertainty for Stocks

‘Buy The Dip’ Calls Fade as Trump Selloffs Rattle Wall Street

Stagflation Trade Emerges as Rare Winner in US Stock Market Rout

Consumer Angst Is Striking All Income Levels

Tariffs Won’t Help More Men Get Jobs

How Trump’s ‘No Tax on Tips’ Could Backfire for the Working Class

Trump Cuts Could Squeeze Small Farmers and Food Banks

How Corporate America is Retreating from D.E.I.

China Cools on Musk: ‘Two Cars for the Price of One Tesla’

Tesla’s Stock Still Isn’t Cheap

Elon Musk’s Starlink Pushes Its Way Into India

Intel Names New Chief Executive Amid Turnaround Efforts

Apple Shares Are Losing Haven Allure as Headwinds Deter Bulls

Meta Turns to Its Community of Users to Police Misinformation

Accelleron Industries Exceeds $1 Billion Revenue for First Time

Mallinckrodt, Endo Merger to Create Diversified Pharmaceuticals Firm

Couche-Tard Doubles Down on Friendly Takeover of 7-Eleven Owner

Retractions, Walkouts Plague Science Journals Eager to Churn Out Research

Maker of Pokémon Go Agrees to Sell Unit to Saudi Fund

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Morning News: March 12, 2025
Posted by Eddy Elfenbein on March 12th, 2025 at 7:03 am

Major Japanese Firms Promise Big Pay Raises in Bright Sign for Economy

China Piles the Pressure on India in Its Own Backyard

As Europe Rearms, Bond Funds Are Ripping Up the Rule Book

ECB Facing ‘Exceptionally High’ Levels of Uncertainty, Lagarde Says

EU Hits Back as U.S. Steel and Aluminum Tariffs Take Effect

Wine, Soy, Refrigerators: What Products Might Be Hit by European Tariffs

Tariffs Add to Automaker Concerns About Higher Steel Costs

Why Trump Has Doubled Down on Steel and Aluminum Tariffs

Why Britain Has Not Retaliated Against Trump’s Tariffs

Trump and Musk Cuts Would Rival Thatcher’s 1980s Austerity

Ireland Kicks Off St. Patrick’s Day Festivities in U.S. With Trade Plea

Trump’s Tariffs: Where Things Stand

A Tariff Pile-On Threatens to Escalate a Global Trade War

Dudley: These Tariffs Will Be Worse Than Markets Think

Is Trump Taking a ‘Liquidationist’ Approach to the Economy?

When Economic Chaos Doesn’t Have an Endgame

Stocks Pare Losses but Investors Remain Wary of Trade Tensions

There’s No Recession Alarm in the Collective Wisdom of Markets

The Loyal Opposition Inside the S.E.C.

Trump to Announce Bowman Soon as Pick for Fed’s Top Bank Cop

US Homebuyers Confront a New Wild Card This Year: Trump

Walmart Gets an Earful From China Over Response to Trump Tariffs

Zara Parent Inditex Sales Growth Slows Amid Intense Competition

In Search of a Boring Business

‘Forced Joy’ Is a Miserable Corporate Trend

Trump, an E.V. Naysayer, Gives Tesla and Musk a White House Exhibition

Airlines Cut Forecasts, Raising an Early Alarm About Consumer Spending

To Get Big in China, N.B.A. Stars Enlist Social Media Surrogates

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CWS Market Review – March 11, 2025
Posted by Eddy Elfenbein on March 11th, 2025 at 7:12 pm

(This is the free version of CWS Market Review. If you like what you see, then please sign up for the premium newsletter for $20 per month or $200 for the whole year. If you sign up today, you can see our two reports, “Your Handy Guide to Stock Orders” and “How Not to Get Screwed on Your Mortgage.”)

The stock market was hit hard yesterday. The Dow lost nearly 900 points. For the day, the S&P 500 lost 2.70%. That was the index’s largest loss for this year. It was also the third-largest daily loss in the last 2-1/2 years.

Going by intra-day levels, the S&P 500 got down to 9.7% below its intra-day high from last month. Since its peak, the S&P 500 has shed $4 trillion.

As we’ve seen in recent weeks, the selling was again mostly focused on riskier areas of the market. Value and low-volatility stocks fared much better; even so, many closed lower on the day.

The Nasdaq Composite, for example, closed down 4% yesterday. Elon Musk’s Tesla (TSLA) was also the focus of many sellers. The EV stock is now down about half in the last several weeks. The S&P 500 High Beta Index is down 17% from its peak.

The message is clear. Folks are selling risk and buying safety. For example, Bitcoin is down 30% from its January peak. I’m pleased to say that our ETF is holding up much better than the rest of the market. The last three weeks have been some of our best weeks in terms of relative performance in years.

I know it sounds odd to say that we’re doing a lot less badly than everyone else. Still, from my experience, it’s the “less badly” part that separates good investors from the rest of the pack. In a bull market, everyone looks like a genius.

It seems like all the stocks that were working so well in December are now lagging and the stocks that had been trailing in December are now the hottest places to be. As we know well, the market has a mind of its own.

The stock market was down again today. At one point, the S&P 500 was down over 1.5% but it eventually closed down 0.76%. The S&P 500 reached its lowest closing level in six months. The index is also trading below its 200-day moving average (the blue line in the chart above). That’s often been a signal of more trouble ahead. Most of the high volatility days have come when the index is below its 200-DMA.

Here’s a look at the High Beta Index:

What’s the cause for the sudden jitters in the market? The top suspect appears to be President Trump’s trade policies, or perhaps it would be more accurate to say the uncertainty surrounding President’s Trump’s trade policies. Last month, the National Federation of Independent Business’ “Uncertainty Index” rose to its second-highest level since 1973. The percentage of small businesses who say now is a good time to expand posted its largest one-month drop since Covid.

More than once, the president has reversed himself or called for delays. I suspect that investors are growing frustrated with the ad hoc nature of these tariff polices. This morning, the president said he would double that tariff on Canadian steel and aluminum.

In addition to the uncertain policy risk, there’s also been some sluggish economic news. I want to be clear that it’s hardly bad news, but the economy may not be as strong as we believed.

The February Jobs Report Was OK But Not Great

On Friday, for example, we got the employment report from February, and it was decent but below expectations.

The government said that the U.S. economy created 151,000 net new jobs last month. Wall Street had been expecting an increase of 170,000 so that’s not a huge miss. The job gains figure for January was revised down to 125,000.

Average hourly earnings rose by 0.4%. That’s not bad, but it’s not much above inflation. The unemployment rate ticked up to 4.1%.

I was curious to see if the efforts of DOGE are present yet in the data. Last month, federal government employment fell by 10,000 while overall government employment increased by 11,000. We’ll probably have a better idea next month when the March jobs report comes out.

Here are some more details:

Health care led the way in job creation, adding 52,000 jobs, about in line with its 12-month average. Other sectors posting gains included financial activities (21,000), transportation and warehousing (18,000), and social assistance (11,000). Retail posted a decline of 6,000 workers.

On wages, average hourly earnings climbed 0.3%, as expected, though the annual increase of 4% was a bit softer than the 4.2% forecast.

Some of the details don’t look so hot. For example, the labor force participation rate fell 0.2% to 62.4%. That’s the lowest level in more than two years. The broader U-6 rate rose to its highest level since October 2021.

The household survey showed a loss of 588,000 jobs. The number of folks who have part-time work but are looking for full-time jobs rose by 460,000 to 4.9 million.

The Atlanta Fed’s GDPNow model currently expects Q1 GDP to shrink at a 2.4% rate. Polymarket, which lets investors buy futures on real world events, now sees a 41% chance of a recession this year.

One effect of this jobs report may be a more active Federal Reserve. Futures traders now expect three rate cuts this year whereas it was only two a few weeks ago.

The next test for the market will come tomorrow with the February CPI report. Wall Street expects an increase of 0.3% for both the core and headline rates. The 12-month rate is expected to be 3.2% for the core rate and 2.9% for the headline rate. Tomorrow’s report will be too soon to show any impact from the trade policies.

Time for SAIC to Shine?

Next week, one of our Buy List stocks, Science Applications International (SAIC), is due to report its earnings. I highlight SAIC because it’s put up good results in recent quarters, but their stock has not done well.

In September, SAIC reported Q2 earnings of $2.05 per share. That was a 20-cent beat. Then in December, it reported Q3 earnings of $2.61 per share. That was a 44-cent beat.

Yet the stock started to fall since election day. In November, SAIC was as high as $156 per share. It recently dropped to $95 per share.

I assume that investors are nervous that its contracts will come under the DOGE knife. I’m not so sure of that. SAIC does a lot of private sector business, and it works with many foreign governments. Also, most of the company’s defense contracts are on high-tech systems which often help the Pentagon save money.

In December, SAIC’s board of directors authorized a buyback of $1.2 billion. That’s a strong show of confidence. At the end of last quarter, SAIC’s estimated backlog was approximately $22.4 billion.

SAIC also raised its guidance. The company sees its full-year earnings ranging between $8.50 and $8.65 per share. That’s a big increase over the previous guidance range of $8.10 to $8.30 per share. SAIC also narrowed its revenue range to between $7.425 and $7.475 billion.

For the year so far, SAIC has made $6.56 per share. That means the guidance implies Q4 earnings of $1.94 to $2.09 per share. Last Friday, the stock rose nearly 9% in trading. I think there’s a good chance we’ll see an upside surprise.

That’s all for now. There will be no newsletter next week. I’m going to be at the Future Proof Citywide investment conference in Miami Beach. If you’re around, please come by to say hello. It should be a lot of fun. We’ll be at booth #116.

– Eddy

Morning News: March 11, 2025
Posted by Eddy Elfenbein on March 11th, 2025 at 7:05 am

Japan’s Economy Grew More Slowly Than Initially Estimated in Final Quarter of 2024

Putin’s Faced Some Tough US Presidents. Not This One.

Sahm: The War on Government Statistics Has Quietly Begun

Wall Street’s Epic Swoon Wipes out Trump Bump

Treasuries Hold Gains in Wake of Stock Slide With Data in Focus

Traders Search for Havens as US Stock Selloff Rattles Nerves

Citi Downgrades US Stocks While Wall Street Set to Pause Selloff

Billionaires at Trump’s Swearing-In Have Since Lost $209 Billion

Wall Street Fears Trump Will Wreck the Soft Landing

Regret Over ‘Recession We Had to Have’ Looms as Lesson for Trump

Consumers Keep Bailing Out the Economy. Now They Might Be Maxed Out.

First Inflation, Now Tariffs: Low-Income Americans Can’t Catch a Break

Trump Has Said ‘No Exceptions’ to His Tariffs. Will That Last?

Tariff Turmoil Leaves US Factories Paying More for Metal Than Overseas Rivals

No Reprieve From Steel Tariffs in Sight Despite Lobbying Efforts

Builders Stockpile Lumber, Swap Out Materials to Work Around Tariffs

Solar Energy, Criticized by Trump, Claims Big U.S. Gain in 2024

Handouts Aren’t the Answer to US Shipbuilding Woes

Musk Says Entitlements ‘Big One’ to Cut in Trump’s DOGE Push

Bad Day for X and Tesla Prompts Concern About Musk’s Distractions

Bank of America Eliminates Some Investment Banking Roles

Private Credit Pioneer Dragged Down by Insults and Indecision

Dell, HPE Deal With the Uncertainty of an Ever-Changing Tariff Picture

Nissan Replaces CEO After Failed Honda Merger

Bags Will No Longer Fly Free on Southwest Airlines

Unilever to Speed Up Sale of Food Brands, CEO Says

How America Got Hooked on H Mart

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Morning News: March 10, 2025
Posted by Eddy Elfenbein on March 10th, 2025 at 7:06 am

German Industrial Production Rose at Start of 2025 as Tariff Threats Loom

Mark Carney Wins Canada Liberal Contest, Will Succeed Trudeau in Days

China’s Tariffs on U.S. Agricultural Products Take Effect

Tariff Wars Are Often Short. Their Legacies Aren’t.

Who Likes Tariffs? Some U.S. Industries Are Eager for Them.

The Fed’s Fixation on a 2% Inflation Target Is Risky

Morgan Stanley Joins Chorus of Volatility Warnings on US Stocks

Is the Bull Market in ‘Detox’ or Melting Down?

Treasuries Gain as Trump Transition Talk Fuels Recession Angst

Trump Declines to Rule Out Recession

One of Wall Street’s Biggest Bulls Now Says a Flash Crash Can’t Be Ruled Out

Trump’s Dealmaking Is All About Him

Stalled Audits and a Skeleton Staff: Inside Trump’s War on the I.R.S.

Swiss Bank J. Safra Sarasin to Buy Majority Stake in Saxo Bank For $1.2 Billion

Wealthiest Colleges Fight to Protect Their Riches From Taxation

Rocket to Buy Redfin in $1.75 Billion All-Stock Deal

DOGE’s Push for Americans’ Data Meets Mixed Response From Judges

A Chill Sets In for Undocumented Workers, and Those Who Hire Them

St. Louis Wants Immigrants. Trump’s Crackdown Could Get in the Way.

How Natural Gas Became America’s Most Important Export

Report Supports Case for Rio Tinto Unification in Australia, Palliser Says

Whitecap Resources, Veren to Merge in a $10.4 Billion All-Share Deal

TSMC’s Sales Quicken in First Two Months in Upbeat Note for AI

Novo Nordisk Shares Fall After Latest CagriSema Obesity Drug Trial Results

Why the Obesity Drug Revolution Is a Work in Progress

Disney’s Parks Chief Sees Fortnite as Key to Its Future

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Morning News: March 7, 2025
Posted by Eddy Elfenbein on March 7th, 2025 at 7:02 am

Big Oil Butts Heads With Refiners Over Biofuels

Fighting Climate Without US Dollars

China’s Export Growth Disappoints Amid Trade Tensions

Deepfakes of Singapore PM Used to Sell Crypto, Residency Program

Eurozone Grew More Strongly Than Thought at End of 2024

German Factory Orders Slump Again as Hopes Grow for Stimulus to Counter Tariff Threat

Trading Floors Laud New European Era as Germany Set to Spend

China Blasts Trump’s ‘Two-Faced Acts’, Calls US Tariffs ‘Evil’

Trump and Xi’s Dueling Models for Tech Supremacy

Big Chunk of North American Trade Remains Exposed to Tariffs

A Tariff Tantrum

Tariffs by Whim Keep Allies Off Balance, but Do the Same to Markets

Tariff Anxiety and the Dilemma of Forecasting

Commerce Secretary Lutnick Says the Darndest Things

Peter Thiel’s Deep Ties to Trump’s Top Ranks

Trump’s Policies Have Shaken a Once-Solid Economic Outlook

America Is Finding Out It’s Very Difficult to Import Eggs

The Recession Trade Is Back on Wall Street

Junior Bankers Say Grunt Work Matters Even With AI Taking On the Tasks They Hate

Harnessing the Financial Power of Women

Secretive Hedge Fund QRT Adds Another $5 Billion to Its Assets

As Layoffs Continue, Federal Workers Face Sluggish Job Market

Private Prisons Are Ramping Up Detention of Immigrants and Cashing In

How Public Shaming Helped Create a Promising US Housing Program

Walgreens to Be Bought by Private Equity Firm in $10 Billion Deal

Women’s Soccer League Signs Sponsorship With ‘Gen Z Whisperer’ Alex Cooper

A Cheeto Shaped Like a Pokémon Was a Treasure in Need of Protection

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Morning News: March 6, 2025
Posted by Eddy Elfenbein on March 6th, 2025 at 7:04 am

South Korea Inflation Moderates in February

China Says It Has ‘Ample’ Policy Tools to Spur Growth

Europe Tackles Its Orban Problem After Trump Rips Up Ukraine Aid

Euro’s Rally Vindicates Banks Betting Against Parity With Dollar

Eurozone’s Retail Sector Continued to Struggle at Start of 2025

ECB Cuts Key Deposit Rate by 25 Basis Points to 2.50%

Germany’s Shock Turns to Anger — and Animal Spirits

Germany, Once a Beacon of Frugality, Jolts Europe With Planned Spending Splurge

Worst German Bond Rout Since 1990 Sparks Global Debt Selloff

Many Chinese See a Cultural Revolution in America

Trump to Delay Canada, Mexico Tariffs on Autos for One Month

Tariff Whiplash Spooks U.S. Consumers

Who’s Got Trump’s Ear on Tariffs?

The Case Against Tariffs Is Getting Stronger

Walmart Asks Chinese Suppliers for Major Price Cuts on Trump Tariffs

Trump’s Cuts to Federal Work Force Push Out Young Employees

MAGA Wants to End Capitalism as We Know It

A $1.5 Billion Hack: How the Biggest Crypto Heist in History Went Down

F.D.A. Nominee to Face Grilling Over Cutbacks and Policy Shifts

Federal Grant Program Opens Door to Elon Musk’s Starlink

Canada’s Anti-Musk Pivot Hits Starlink’s Second-Biggest Market

China’s New AI Tools Ignite Stock Market Frenzy as Alibaba Soars

An All-American Finance Empire Drew Billions—and a Regulator’s Attention

7-Eleven to Split U.S. Stores and Buy Back Shares to Prevent Takeover

Wendy’s Sets Long-Term Financial Targets Ahead of Investor Day

Macy’s Sees Sales Dropping Again This Year

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Morning News: March 5, 2025
Posted by Eddy Elfenbein on March 5th, 2025 at 7:09 am

Ukraine’s DTEK in Talks With U.S. Suppliers to Boost Gas Supply to Europe, CEO Says

Trump Hails Tariffs as US Economy Barrels Into Trade Wars

Trump Celebrates His Disruption but Slides Over Its Costs

A Speech Long on Gloating, Short on Plans

Trump’s Trade War Could Be His Biggest Economic Gamble

Gaming Out Trump’s Next Tariff Moves

Tariffs Add a New Shock to Food Supply Chains

How Uncertainty From Trump’s Tariffs Is Rippling Through the Economy

The Two-Headed Monster Stalking the Economy Has a Name: Stagflation

Traders Watch for Trump Put After Lutnick Hints at Relief

US Mortgage Rates Near Three-Month Low in Boost to Demand

Mexico’s Secret Weapon in Trade War? Its Popular President

Canada and China Retaliate Against U.S. Tariffs, Which Trudeau Derides as ‘Dumb’

China Sets Strong Growth Target as It Hits Back at U.S. Tariffs

China Sets 2025 Growth Target at About 5% Despite Looming Trade Tensions

Xi’s Growth Goal Will Need Big Stimulus If Trade War Escalates

Beijing Ramps Up Efforts For Tech Independence

Judge Denies Musk’s Request to Block OpenAI’s For-Profit Plan

How Elon Musk Muscled His Way Into the FAA

Tesla Sales Plunge in Germany, Reflecting Broader Slump in Europe

Bayer Warns of Lower Earnings as Turnaround Continues

Goldman Wins Rare Solo Role on Blockbuster $19 Billion Port Deal

Phillips 66 Pushes Back Against Activist Elliott in Board Fight

McDonald’s Gives Its Restaurants an AI Makeover

KKR, Walmart to Sell Japan Supermarket Chain Seiyu for $2.5 Billion

Concert Ticket Prices Are Soaring, and Busting Gen Z’s Budgets

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