Early Look

Monday, March 31, 2025

U.S. futures are picking up where markets left off on Friday, deeply in the “red” as momentum for the last 6 weeks remain sharply to the downside led by weakness in technology/consumer discretionary the most, but still generally broad based as investors’ fears about a recession/stagflation grows by the week. The U.S. stock market tumbled Friday, booking weekly losses as investors fretted over the potential for tariffs to weigh on consumer spending and weaken the economy. The Dow Jones Industrial Average closed -1.7% lower, while the S&P 500 dropped -2% and the technology-heavy Nasdaq Composite lost -2.7%, falling for the 5^th time in the last 6 weeks. Stock-market volatility climbed Friday as traders parsed fresh economic reports showing core inflation rose in February more than forecast and that consumer sentiment slumped in March amid worries that tariffs will increase inflation. Investors expect that President Donald Trump will reveal his plan for reciprocal tariffs on April 2, an announcement he refers to as “Liberation Day.” Trump has already promised tariffs on imports from countries that charge levies on U.S. products starting Wednesday, and 25% tariffs on cars and auto parts made overseas, starting Thursday. The S&P 500 and Nasdaq both come into the week down 7 of the last 9 weeks as the market hates uncertainty, and it is at a peak right now as no one has any idea what will happen with tariffs. In Asian markets, The Nikkei Index tumbled -1,500 points or 4% to settle at 35,617, the Shanghai Index dropped -15 points to 3,335, and the Hang Seng Index fell -152 points to 23,426. In Europe, the German DAX is tumbling over -400 points or 1.8% to 22,056, while the FTSE 100 is down -100 points to 8,557. Sentiment is bleak right now and this weekend Goldman Sachs strategists don’t see things improving much this year. David Kostin cut his S&P target for a second time this month and now expects the benchmark to end the year at around 5,700 points, implying a gain of just 2% from Friday’s close.

• The Dow Jones Industrial Average fell -715.80 points, or 1.69%, to 41.583.90
• The Nasdaq Composite plunged -481.04 points, or 2.70%, to 17,322.99
• The Russell 2000 Index declined -42.42 points, or 2.05% to 2,023.27

• Earnings After the Close: BW BNGO CTSO DARE PRGS PVH REKR TTGT VNRX WRAP

• China Caixin Manufacturing PMI for March

• Marine Le Pen was convicted of embezzlement and given an election ban by Paris judges; gets 5-year electoral ban applicable immediately; barred from 2027 presidential run by French court
• The Japanese yen briefly strengthens below 149-handle against the dollar as Nikkei 225 slumps as much as 4.3% amid concerns about tariffs and economic slowdown. Kospi index sheds 3% and Taiex plunges almost 3.5%. Hong Kong and China indexes also sharply lower.

• Harley-Davidson (HOG) has said its products are afflicted by unfair trade policies and if the European Union implements a 50% retaliatory tariff on its motorcycles in April, prices could reach astounding heights in the company’s second-largest market by sales – WSJ.

• Honeywell International’s (HON) goal is to take Quantinuum public within the next two years, according to a person with direct knowledge of the matter, Barron’s reported. While Honeywell is aiming to take the quantum-computing company public between the end of 2026 and sometime in 2027, this timeline is subject to change and depends on market conditions https://tinyurl.com/2f4dndct
• U.S. Steel (X) downgraded to Market Perform from Outperform at BMO Capital saying the current share price nearing fair fundamental value while upgraded Steel Dynamics (STLD) to Outperform saying the company’s product portfolio is relatively well-positioned to benefit from President Donald Trump’s expanded tariffs.

• LPL Financial (LPLA) to acquire Commonwealth Financial Network which supports ~2,900 independent advisors managing ~$285B in assets for about $2.7B in cash.
• PNC Financial (PNC) upgraded to Buy from Hold at HSBC.

• Waters Corp. (WAT) was upgraded to Overweight at Keybanc with $460 tgt saying building upon the themes discussed at its Investor Day, they come away with increased confidence that the Company’s exposure to pharma/biotech manufacturing can drive outperformance relative to peers.

• Renesas Electronics, Sumco, Tokyo Electron among semiconductor companies were among the biggest losers in Japan, where the Nikkei 225 slumped. In Taiwan, Foxconn and TSMC dropped.