Trump's tariff chaos has become even more intense. And anyone with an industry has a very difficult time deciding on long-term investment and production under such conditions.
After announcing on Friday the exclusion from the reciprocal tariffs introduced in the previous days on smartphones, computers, hard disks, processors and chips, over the weekend Trump changed his mind, saying that the suspension will only be temporary and that those products could get a special tariff once the White House completes a study on the global supply chain. All this back-and-forth does not sit well with investors who are showing their displeasure by taking the distance from dollar assets, deemed too volatile and risky: the dollar falls for the fifth straight session, Treasury yields remain at their highest, while some relief, at least temporary, is found in tech sectors in Asia.
Wall Street futures are seeing a slight rise this morning, and it will probably be Apple to benefit more. A good increase is instead expected on the European stock exchanges as investors are rebalancing portfolios, gradually moving away from dollar assets considered too volatile and risky. Watch out for BTP after S&P improved over the weekend Italy's rating.
Duties: Backtracking, then forward, maybe
On Friday, the White House announced the exclusion from the high reciprocal tariffs introduced in recent days on smartphones, computers, hard drives, processors and chips. However, already on Sunday morning, Trump's Commerce Secretary, Howard Lutnick had made clear that essential technology products from China will be subject to separate new tariffs over the next two months, along with semiconductors. Lutnick said Trump will issue “a special type of duty” on smartphones, computers and other electronic products within a month or two, together with targeted sectoral tariffs semiconductors and products pharmaceuticals. The new tariffs would not be part of Trump's so-called reciprocal tariffs, under which taxes on Chinese imports rose to 125% last week, he added. Polast night, In his now-traditional chat with reporters aboard Presidential Air One on his way back from golf, Trump added that his decisions on phones would be coming soon and that details on semiconductor tariffs would be announced next week, and said on social media that electronics products excluded from his reciprocal tariffs “are simply moving into a different tariff category” and would be scrutinized alongside semiconductors in a national security trade investigation into the sector. Trump also signaled an openness to interviews with companies on the subject of tariffs. Trump’s back-and-forth on tariffs last week triggered the wildest swings on Wall Street since the 2020 COVID pandemic. The benchmark Standard & Poor’s 500 index has fallen more than 10% since Trump took office on Jan. 20.
Dollar falls against all world currencies. Euro at 1,14 dollars
The status of the dollar as world reserve currency offers the world a strong signal of crunchToday is the fifth consecutive day of decline: the greenback has fallen below 143,00 yen and extended last week's 5% decline against the Swiss franc and the euro is touching 1,1400 dollars again. Even the Australian and New Zealand are rising against the US dollar.
Treasuries are firmer, though showing little sign of reversing last week’s surprising 50-basis-point jump in long-term yields. If sustained, this would represent a significant tightening of financial conditions and a dead weight on the housing market, adding another reason for the Fed to ease rates, even as inflation rises.
It will be interesting to see whether the New York Fed's survey of expectations inflation, due later Monday, will show the same spike seen in the University of Michigan data. March retail sales data, released Wednesday, could be positive as consumers rushed to buy cars and other goods before the tariffs went into effect. Fed Chair Powell will also have a chance to outline his outlook on Wednesday at the Economic Club of Chicago, where the question-and-answer session is expected to be lively. Markets are looking at a 20% chance of a rate cut in May, rising to nearly 80% for June. About 80 basis points of easing are expected for the year, although they were up about 130 basis points this week.
Asia, tech companies take advantage of temporary exemption from duties
In Asia, some tech companies are trying to take advantage of a tariff relief period Trump granted on Friday, only to find today that it is temporary and uncertain. Shares of major suppliers to companies like Apple have risen: Apple , the largest iPhone assembler, rose as much as 7,8% before paring gains to close up 3%. How much, a contract laptop maker closed up 5,8% and Inventec– which also makes artificial intelligence servers – grew by 4,1%.
South Korean stocks Samsung Electronics, a supplier to Apple and the second-largest smartphone supplier in the U.S. market, rose 1,5%. Shares TSMC, the world's largest contract chipmaker, closed down 2,7% despite a higher opening, while memory chipmaker SK Hynix fell by 0,5%.
European stock markets seen positively. At Piazza Affari eyes on Btp, Monte Paschi and Saipem
European stocks should open higher, EuroStoxx50 index futures +2%.
Italy. Standard and Poor's has raised Italy's rating to BBB+ from BBB, with a stable outlook. Follow the trend of BTPs
Monte dei Paschi di Siena Bank reports that “the Presidency of the Council of Ministers has resolved, in acceptance of the proposal of the Ministry of Economy and Finance, not to exercise special powers, the so-called golden power, “with reference to the public exchange offer of MPS on all ordinary shares of Mediobanca”. Norges Bank Investment Management (NBIM) intends to support the new share issue proposed by Monte dei Paschi di Siena to finance its hostile bid for rival Mediobanca. Separately, the Caltagirone group increased its stake in MPS to almost 9,9%, Corriere della Sera reported over the weekend.
BPM desk. CEO Giuseppe Castagna declared on Sunday at Corriere della Sera that the bank's board of directors will decide how to vote with its 5% stake at the MPS general meeting in relation to the capital increase. Castagna added that Banco BPM is keen to develop its relationship with MPS as the second largest distributor of Anima Holding, now that it has acquired the management company.
Eni. Mediobanca cuts target price. Kkr has completed the acquisition of a further 5% stake in Enilive, for a consideration of approximately 601 million euros.
Saipem. Mediobanca raises rating to Outperform.
Stellantis reaffirms its commitment to Italy and all its brands, including Maserati, with the United States remaining a strategic market for the group's luxury brand, despite the uncertainties generated by the measures adopted by the American administration on the subject of duties.
Tenaris. Mediobanca cuts rating to Neutral.
Unicredit. KBW raises target price to 56,9.
