Mid-Morning Look

Wednesday, March 12, 2025

U.S. stocks holding early gains (but well off the highs/near lows), trying to recover from yesterday’s pullback following a “cooler” CPI inflation reading for February, as both headline and core prices came in below the prior month and consensus readings. After inflation concerns have dominated markets for months on end, market attention (for the time being) has turned to tariffs and the economy (slowing growth fears). Since the February all-time highs for the S&P 500 (6,147.43 on 2/19), any bounce in stock markets continues to be met with strong selling pressure. There were even a few positive developments late yesterday/overnight including 1) the softer CPI readings, 2) Ukraine said it would accept the US proposal for a ceasefire; now await Russia compromise, 3) in DC, the House passed its version of the stop-gap spending bill last night that would fund the government through September. Though, a tricky vote in the Senate now looms, where it will take some Democrats crossing the aisle for the bill to pass and avoid a government shutdown. Still, markets are far from out of the woods after President Trump’s 25% tariffs on steel and aluminum imports came into force starting today, while the EU responded swiftly, saying it would impose counter tariffs on up to 26B euros ($28B) worth of U.S. goods. Canada also to announce C$29.8B in retaliatory tariffs on US in response to Trump’s steel and aluminum tariffs. In central bank news today, the Bank of Canada cut interest rates by a quarter percentage point (as expected). Bottom line, markets remain fearful, as two words that best sum up the overall weak market activity the last few weeks are “uncertainty” (impact of tariffs) and “recession” (fears).

• In Industrials Metals (NUE, STLD, X, AA, CENX): President Trump’s 25% tariffs on steel and aluminum imports came into force starting today, restoring effective global tariffs of 25% on all imports of the metals, while the EU responded swiftly, saying it would impose counter tariffs on up to 26B euros ($28B) worth of U.S. goods. Canada also to announce C$29.8B in retaliatory tariffs on US in response to Trump’s steel and aluminum tariffs.
• In Asset Managers: AB announced that preliminary assets under management decreased -0.5% to $805B during February 2025 from $809B at the end of January; APAM preliminary assets under management as of February 28, 2025, totaled $167.7B; IVZ preliminary month-end assets under management (AUM) of $1,888.6B, a decrease of 0.7% versus previous month-end.

• INTC +6%; following Reuters report that TSM has approached U.S. chipmakers NVDA, AMD and AVGO about investing in a joint venture to operate Intel’s factories. Under the proposal, TSM would manage Intel’s foundry division, but would hold a stake of no more than 50%.
• NVDA +5%; along with ARM, MU, TSM as semis among best performers early after the SOX index fell to over seven-month lows in the previous session
• RBRK +6%; upgraded from Neutral to Buy at Rosenblatt with $77 tgt ahead of Q4/FY25 results (ending January 31) on March 13th, as expected in-line to marginally better results in Q4 from Rubrik.
• SSP +22%; shares jumped after announcing a deal to refinance up to $1.3B of debt; announces a series of transactions to refinance its revolver and 2026, 2028 term loans.
• TSLA +7%; rebounding after shares were down 40% YTD and more than 52% from all-time highs as of yesterday.

• KSS -6%; extends declines after falling -24% the day prior on lower guidance.
• UAL -6%; as the weakness in airlines from Tuesday carries over following weaker outlooks and consumer demand for travel from DAL and AAL which weighed on the transport index.
• WYNN 4%; more concerns from slowing spending for consumers weighing on casinos, lodging and cruise lines.
• ZYXI -36%; following a disappointing update on the company’s Q4 earnings call that suggests a lack of visibility into its operations and business outlook; did not issue 2025 guidance and is reducing its staff by ~15%.