MARKET WRAPS

Stocks:

European indexes fell, in line with the global mood, as investors looked for clarity on U.S. tariffs.

Microchip bellwether ASML stock fell after it delivered underwhelming sales guidance , with the company saying tariffs have increased uncertainty in its market.

Market Insight

Bank of America's April global fund manager survey found allocation to stocks had declined 52 percentage points since February, marking the biggest 2-month drop since April 2020.

The survey showed the fourth-highest recession expectations of the past 20 years, as well as a record number of global investors intending to cut their allocation to U.S. stocks.

Recession was likely according to 42% of respondents, while the probability of a 'hard landing' surged to 49%, from 11% in March.

Stocks to Watch

Maersk shares were attractively valued despite consensus assuming unprecedented negativity in the ocean unit, Citi said, as it upgraded the company to neutral from sell and raised its target price on the stock.

The stock was cheap on many valuation metrics, and while it's not cheap using the P/E measure, this was because the outlook for ocean was challenging, it said.

U.S. Markets:

Stock futures pointed to a lower open early.

Investors turned negative on the outlook for U.S. corporate profits, again according to BofA's survey.

A net 28% of responding investors say that the outlook for U.S. profits was unfavorable, the highest print for this indicator since November 2007.

Stocks to watch

Nvidia shares slid off market, after it said it expected to write down up to $5.5 billion due to U.S. export requirements now imposed on its H20 chips for the Chinese market.

United Airlines stock rose nearly 6% after the airline presented investors with a cheery take on its latest quarter, saying that brand loyalty is a key competitive advantage amid economic uncertainty.

Interactive Brokers shares were down nearly 10% after a spike in trading volume boosted earnings at the broker, but not by as much as Wall Street hoped.

Forex:

The dollar fell on continued worries about the economic fallout for the U.S. from its trade tariffs.

"Questions are being asked about U.S. exceptionalism and credibility as a reserve currency," Jefferies said.

In the medium term, the tariffs could reduce the reliability of the U.S. and investors will look for alternative destinations, and the era of a strong dollar has peaked, it added.

Bets on a weaker dollar rose to their highest level in nearly 19 years in April, according to the BofA survey, which showed 69% of investors saw the currency as overvalued,

Some 61% of investors expected a weaker dollar in the next 12 months, the most since May 2006.

Sterling stayed lower against the euro but was higher against a weaker dollar after U.K. inflation data came in slightly below expectations.

However, the figures did little to materially shift the BOE's policy outlook, Pepperstone said, adding that a 25 bp rate cut in May remains pretty much a certainty, though the pace of easing beyond then was likely to remain gradual.

Bonds:

DZ Bank Research saw an economic upturn and a renewed focus on government debt levels pushing 10-year Bund yields up to 3% on a one-year horizon.

Treasury yields were little changed, showing further signs of stabilization.

The market was likely focused on Jerome Powell's speech at the Economic Club in Chicago, Commerzbank said.

"Besides the guidance on rates (where a probability close to 80% is discounted for a rate cut in June), the market will be looking for cues about the Fed's possibilities to deal with market turmoil."

DZ Bank expected the 10-year Treasury yield to hit 5% in 12 months' time.

"In spite of the U.S. administration's promises, the U.S. debt pile is likely to continue growing."

In the medium term, this might prompt a debate about whether the remaining AAA rating for the U.S. from Moody's Ratings is still justified, it added.

Allocation to bonds showed a record increase relative to history, and investors were overweight bonds, according to BofA's April survey.

Energy:

Oil prices slipped, pressured by uncertainty surrounding tariffs and growing concerns over the potential effect of a prolonged trade war with China on global demand.

"With volatility spiking and potential surplus looming, the oil market appears headed into a structurally fragile phase," UniCredit said.

Investors awaited clarity on the U.S. administration's next policy steps and any development in negotiations with key trading partners.

Meanwhile U.S. crude oil stocks rose by 2.4 million barrels last week, while gasoline and distillate inventories fell, according to reports citing figures from the American Petroleum Institute ahead of official EIA data.

Metals:

Gold futures rose to a new record, and ANZ said safe-haven demand for gold from the prospect of a wider trade war was accentuated by Chinese purchases, where gold-backed ETFs were picking up in demand.

Gold chart

Gold's broader uptrend remains intact, following its recent push to a new high on the daily chart , IG said.

"The 261.8% Fibonacci extension (drawn from the 2018 low to the 2020 high) points to the $3,500 level as a potential upside target to watch ahead."

EMEA HEADLINES

Heineken Tops Revenue View, Reaffirms Outlook Amid Tariff Concerns

Heineken reported revenue growth that beat market expectations and confirmed its full-year guidance, but warned of a volatile consumer and geopolitical backdrop amid tariff uncertainty.

The Dutch brewer said Wednesday that recent tariff adjustments and potential increases heighten uncertainty and might weigh on consumers. In the first quarter, before U.S. President Trump unveiled the bulk of his sweeping tariff plans, higher sales volumes of Heineken's premium beer brands and price increases helped it post an organic revenue increase that defied expectations of a decline.

Rio Tinto Iron Ore Shipments Drop Sharply Due to Cyclones

Iron-ore shipments from Rio Tinto's massive Australian mining operations are likely to fall at the lower end of the miner's estimates this year, following disruptions from four cyclones in recent months.

The miner, which generates the bulk of its profits by extracting the steelmaking ingredient in Australia's remote Pilbara region, said Wednesday that it shipped 70.7 million metric tons of iron ore from those operations in the three months through March.

EQT Says Its Portfolio Has Limited Direct Tariff Exposure, But Sees Impact on Exit Plans

STOCKHOLM-EQT said its portfolio has limited direct exposure to tariffs, but the recent deterioration in market conditions will inevitably impact its exit agenda this year.

However, the Swedish private-equity company said Wednesday it can afford to be patient.

Nordea Backs Guidance After Earnings Beat

Nordea Bank backed its guidance after reporting better-than-expected earnings.

The Helsinki-based bank on Wednesday posted net profit attributable to shareholders of 1.21 billion euros ($1.37 billion) for the first quarter, down slightly from 1.34 billion euros a year earlier, as net interest income fell 6.4% to 1.83 billion euros.

GLOBAL NEWS

U.S. Plans to Use Tariff Negotiations to Isolate China

The Trump administration plans to use ongoing tariff negotiations to pressure U.S. trading partners to limit their dealings with China, according to people with knowledge of the conversations.

The idea is to extract commitments from U.S. trading partners to isolate China's economy in exchange for reductions in trade and tariff barriers imposed by the White House. U.S. officials plan to use negotiations with more than 70 nations to ask them to disallow China to ship goods through their countries, prevent Chinese firms from locating in their territories to avoid U.S. tariffs, and not absorb China's cheap industrial goods into their economies.

China's Economy Grew Before Tariffs Kicked In

SINGAPORE--China's economy got a boost in the first quarter from a rush of exports to the U.S. ahead of stiff new tariffs, but growth is set to slow as the trade war between Washington and Beijing heats up.

How serious that slowdown will get depends on how successful Chinese exporters are at finding new markets for goods shut out of the U.S. by sky-high new tariffs. It also depends on how big a boost to spending Beijing can generate at home to offset weakness overseas.

Has the VIX peaked? 'Acute phase' of selloff in stocks may be done, says Bespoke.

Stock-market volatility has seen outsized swings up and down this month, as investors contend with uncertain negotiations around the "reciprocal" tariffs announced by White House on April 2.

"We think it's safe to say that the acute phase of the selloff is over," said Bespoke Investment Group, in a note after the U.S. stock market closed Tuesday. The firm cited a third straight day of declines for the Cboe Volatility Index - Wall Street's so-called fear gauge that trades under the ticker symbol VIX - and noted that it dipped below 30 during Tuesday's trading session.

Trump and Judiciary in Escalating Standoff Over Wrongfully Deported Migrant

GREENBELT, Md.-The Trump administration is setting up the biggest test yet of judges' authority to rein in its actions, as it skirts court orders that it facilitate the return of a migrant deported in error to a Salvadoran maximum-security prison.

Tensions escalated Tuesday in a federal court hearing in Greenbelt, Md., where a federal judge expressed frustration at how little had been done to help bring back the migrant, Kilmar Abrego Garcia, despite a series of orders-including from the Supreme Court-to facilitate his return.

Trump Signs Executive Order on Drug Pricing

President Trump signed an executive order Tuesday that he said would lower prescription drug prices for many Americans, including people on Medicare.

The order resurrected some policies from Trump's first administration, such as a mandate to community health centers to provide insulin and injectable epinephrine at discounted rates to uninsured and some low-income patients. The Biden administration rescinded this rule in 2021, saying it would be excessively burdensome to health centers.

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(END) Dow Jones Newswires

April 16, 2025 05:19 ET (09:19 GMT)

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