Market Talks covering the impact of U.S. Politics and White House policies on companies and markets. Published exclusively on Dow Jones Newswires throughout the day.

1046 ET - Cannabis rescheduling by the Justice Department still seems like the most likely avenue for near-term reform of cannabis laws, even after a bipartisan group of House members reintroduced a bill that would end federal marijuana prohibition in states where it's legal, Alliance Global Partners analyst Aaron Grey says in a research note. That measure, referred to as the STATES Act, which was first introduced in 2018 but failed to gain traction, would require approval from a narrowly divided Congress, the analyst says. Rescheduling marijuana to a less-dangerous drug category wouldn't need Congressional approval, though President Trump would probably have to proactively push for it, since key members of his administration have a history of being against cannabis, including his attorney general and head of the DEA, the analyst says. (dean.seal@wsj.com)

1009 ET - Economic data points coming after Easter weekend will have important caveats, says Deutsche Bank in a research note. New home sales, existing homes sales and durable goods orders are all from March, before the April 2 tariff announcements, and the resultant market volatility. Friday's University of Michigan Consumer Survey will provide more up-to-date readings on the state of the economy, but with a catch. "The interview window for the preliminary April reading closed on the 8th, and those respondents were not able to take into account either the rollback of the country-specific tariffs or the escalation of trade tensions with China," the economists say. "Those new responses could either mitigate or exacerbate the preliminary 6.2 point plunge in sentiment from the March data," the economists add. (denny.jacob@wsj.com; @pennedbyden)

0921 ET - A bipartisan group of House members have reintroduced a bill that would end federal marijuana prohibition in states where it has been legalized, and be a breath of fresh air for the beleaguered cannabis industry. Two Republicans and one Democrat are taking another pass at the Strengthening the Tenth Amendment Through Entrusting States Act, or STATES Act, which would empower states, Washington D.C., U.S. territories and federally recognized tribal nations to determine their own individual approaches to cannabis. The STATES 2.0 Act's prospects in the narrowly divided House are hazy, though President Trump said on the campaign trail that he supported rescheduling cannabis' federal drug classification. Shares of AdvisorShares Pure US Cannabis ETF, a popular exchange-traded fund tracking marijuana stocks, closed Thursday up more than 10%. (dean.seal@wsj.com)

1840 ET [Dow Jones]--The lower levels of debt that U.S. businesses carry today, compared to the years leading to the financial crisis, are helping them avoid defaults despite higher interest rates and market volatility, Blackstone President Jonathan Gray says during an earnings call. "The reason you're not seeing, I believe, credit stress as you have in the past is because the overall system is much less leveraged," he says. He adds that the sharp rise in interest rates that began about three years ago is a case in point. "If we had said to people the Fed's going to take rates up 550 basis points you would have expected to see a pretty meaningful default cycle across noninvestment-grade credits," Gray says. "You haven't seen that." (luis.garcia@wsj.com)

1553 ET - L'Oreal is looking into the effects that retaliatory tariffs from regions such as the European Union and U.S. could have on its business and margins overall. The French beauty company manufactures around half of its products in the U.S., and most of its luxury products in North America, executives say on a call with analysts. About 30% of its products are also made in Europe, and the rest comes from Mexico or Canada and a few other parts of the world, the executives say. The company is considering raising prices for its luxury brands--one of its main growth drivers in the latest quarter--to offset tariff effects. The company took on more inventory in advance of tariffs, but the magnitude has been a bit higher than expected and any updates regarding tariffs will mainly affect second-half margins. (sabela.ojea@wsj.com; @sabelaojeaguix)

1511 ET [Dow Jones]--Nike is effectively clearing out its excess inventory, Jefferies analysts say in a research note, citing a recent trip to a New York outlet mall where store traffic was "insane." At the same time, the sportswear maker is leaning into innovation with new product launches and balancing its distribution channels. Combined, these efforts should position Nike well ahead of this year's holiday season, the analysts say. Still, the company will have to contend with tariffs, and many investors are worried that Chinese consumers will boycott U.S. brands. However, the analysts say these concerns are likely overblown. "Despite the tariff impact, we anticipate a V-shaped recovery in F'27 and recommend aggressively buying shares at these levels," the analysts write. Shares rise 4.3%. (connor.hart@wsj.com)

1508 ET [Dow Jones]--Ally Financial expects a short-term benefit from tariffs, management said during an earnings call Thursday. Higher used-car prices from auto tariffs could benefit Ally, which finances car loans, in two ways: they could raise the value of repossessed cars, increasing Ally's revenue from loan recoveries, and they could improve lease gains, executives said. There's also a chance more shoppers will buy cars now to try to get ahead of tariffs raising prices further. Management said they are seeing somewhat higher volumes and prices already. CEO Michael Rhodes said the company's mix has less exposure to tariffs than some other lenders. Ally exited mortgage and credit-card lending at the start of 2025 to focus more on car loans. (katherine.hamilton@wsj.com)

1450 ET [Dow Jones]--Treasury yields rise Thursday, while still falling for the shortened Easter week, as Trump threatens to fire Chair Powell and calls for lower interest rates, something the Fed leader has indicated may not come soon. CME data show odds of a May cut falling to 9% from 27% a week ago, but bets on three or more this year remain high. U.S. markets will close Friday. Next week brings a string of activity, consumer sentiment and other data. The 10-year falls 0.166 percentage point this week, including today's 0.049 p.p. gain, to 4.325%. The two-year is down 0.155 p.p. for the week and up 0.011 p.p. today, at 3.794%. (paulo.trevisani@wsj.com)

1431 ET - Economic uncertainty and falling confidence overshadowed Snap-On's pivot to lower-priced tools in the U.S., but the strategy shift showed early signs of success internationally, Chief Executive Nick Pinchuk says during the analyst call. Pinchuk says the company's international tool sales rose a low-single digit percent in the quarter as its foreign customers shrugged off President Trump's recent comments regarding Greenland, Gaza and the Panama Canal as well as his changing tariff policies. "The international segment isn't worried about any of this stuff," Pinchuk said, adding their concerns may vary by country and proximity to the U.S. (kelly.cloonan@wsj.com)

1423 ET - The U.S. economy is on the precipice of going into a recession "unless policy takes a very sharp turn here pretty quickly," Moody's Mark Zandi says at an Economic Club of New York event. "There's a whole slew of economic policy that's in flux," Zandi says, adding that given the levels of uncertainty "I don't expect the Fed to move here ... for a few months." (maria.armental@wsj.com; @mjarmental)

1419 ET - Counter to what typically happens during an economic crisis, money this time around isn't flowing into the U.S., Moody's Mark Zandi says at an Economic Club of New York event. "Global investors are becoming nervous about the safe-haven status of the U.S.," Zandi says, referring to comments from the administration. "To give up that reserve currency status, that safe-haven status, in my mind is a very serious error." President Trump's lashing out at Federal Reserve Chair Jerome Powell in a social media post, he says, further dents investor confidence in the U.S. "Most investors feel, rightly so, that Central Bank independence is a cornerstone of a well-functioning market economy [and] that if setting interest rates is politicized, then ultimately that's going to end in a bad place for the economy and for them as investors," Zandi says. (maria.armental@wsj.com; @mjarmental)

1415 ET - A weakening of the dollar even as Treasury yields trend higher indicates that the U.S. is seen less and less as a safe haven for investors in turbulent times, First Eagle's Idanna Appio says. The 10-year benchmark took off on April 4, when it was at 4%, peaked at 4.5% seven days later and is now at 4.3%. During this time, the WSJ Dollar Index fell to a reading of 96 from 99. U.S. stocks were selling off as well in the period. That means investors "would rather hold more of their funds outside the U.S.," Appio says. It is unclear how long that trend will last, but "it is something that I am watching," she says. (paulo.trevisani@wsj.com; @ptrevisani)

(END) Dow Jones Newswires

April 18, 2025 10:46 ET (14:46 GMT)

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