There is an old saying that when the United States sneezes, the world catches a cold. But this is evidently not true if the illness is a self-inflicted wound: in fact, the Asian market and the European one are little moved compared to the losses of more than 2% seen on Wall Street.
While the light remains on duty war, the markets are becoming more and more worried Trump's attacks on Fed independence, increasing the investor confidence in the United States which in fact continue to come out from dollar assets to Europe and Asia. The dollar hit another 10-year low on the Swiss franc at 0,8842, bringing losses since “tariff day” to more than 8%. The euro he jumped above $1,1500 and the dollar is testing the 140,00 bulwark yen. The 10-year Treasury yields rose to 4,41%, extending the recent jump in forward risk. Gold record close to $3.500
Flight from US dollar assets to Europe and Asia
Distrust towards the United States continues to grow, fueled by trade policy of Trump that began on April 2, to which is now added theAttack on Fed Chairman Powell for not cutting rates as quickly as he would have liked.
Money fleeing US assets It has been directed partly towards Europe and partly towards Asia: according to the data LSEG, investors bought a net $11 billion in European equity funds and $3,6 billion in Asian equity funds in the week ended April 16, while equity funds US recorded an outflow of $10,6 billion. During the first two weeks of April, it is at Financial Times that investors from Japan have sold more than $20 billion in foreign bonds, following the strong impact on markets caused by the new tariffs announced by US President Trump. It is one of the largest outflows in a two-week period since records began in 2005, theFT.
Fear also strikes the US Treasury securities that continue to be sold. If Trump were to consider ousting Powell and appointing a loyalist, the idea of, say, replacing Treasuries with zero-coupon perpetual bonds might not seem so far-fetched, some dealers say.
Wall Street Crashes After Trump-Powell Clashes. Today It's Tesla's Turn
US stocks suffered sharp losses yesterday, as US President Donald Trump continued to attack Federal Reserve Chairman Jerome Powell, pushing investors to worry about the independence of the central bank, as they grapple with the effects of the current and unpredictable trade war.
All three major indexes fell more than 2%, with the “Magnificent Seven” group seeing the biggest losses, especially in the technology-dominated Nasdaq.
Yesterday Trump intensified his criticism of Powell, saying the U.S. economy is set to slow “unless Mr. Too Late, a big loser, lowers interest rates NOW,” in a bellicose post on Truth Social that raised concerns about the Fed’s autonomy. It’s also counterproductive for Trump, as the Fed may now be less willing to cut rates for fear of being perceived as bowing to political pressure. It’s unclear whether he has the power to fire the president, but just seeing the central bank’s independence threatened is another blow to the investor confidence in the United States. There are at least five Fed Speakers on the agenda today and it will be interesting to see how they handle this thorny political issue.
The Dow Jones Industrial Average fell 2,48% to 38.170,41, the S&P 500 lost 2,36% to 5.158,20 and the Nasdaq Composite lost 2,55% to 15.870,90. All 11 major sectors of the S&P 500 ended in negative territory.
La first quarter earnings season comes to a head this week, with dozens of closely watched companies set to report results. Of the 59 companies that have reported results so far, 68% have beaten Wall Street expectations, according to LSEG data. Analysts are forecasting first-quarter earnings growth for the S&P 500 at 8,1% year-over-year, down from the 12,2% growth forecast at the start of the quarter, according to LSEG.
Notable achievements scheduled for this week include members of the Magnificent Seven, Tesla and Alfabet (Google) and a number of high-profile industrialists including Boeing, Northrop Grumman, Lockheed Martin and 3M. The heavyweight of artificial intelligence Nvidia fell 4,5% after Reuters reported that Huawei Technologies plans to begin mass shipments of an advanced AI chip to customers in China as early as next month. Tesla fell 5,8% after Reuters reported that the launch of the scaled-down Model Y had been delayed. It has lost 44% since the beginning of the year.
U.S. stock index futures rebounded overnight, S&P500 up 0,4%.
Asia-Pacific stocks move little
Asia-Pacific stocks were little changed in the wake of a dismal session on Wall Street, with investors still anxious about US President Donald Trump's trade tariffs, while China continues to push back. The trade rift between China and the US has deepened after Beijing warned other countries against making deals with the US at China's expense, fueling a spiralling tariff war between the world's two largest economies.
CSI 300, Shanghai Composite, Hang Seng by Hong Kong hover around parity. E-commerce stocks JD.com and Meituan fell by more than -6% each, amid growing signs of stiff competition in the food delivery sector.
China's Ministry of Commerce on Tuesday warned countries against making trade deals with the United States at Beijing's expense, accusing Washington of abusing tariffs. Amid a trade war between the world's major economies, Trump raised tariffs on China to 145 percent in early April, and China responded with a 125 percent levy on U.S. goods. Beijing has repeatedly criticized Trump's tariffs and has so far shown little openness to talks with Washington. The high U.S. tariffs threaten to impact China's export-intensive sectors, while hurting local growth.
Japan is mostly concerned about auto tariffs. The Japanese index Nikkei 225 fell 0,2%. Export-intensive sectors are under pressure from the strong yen, which has hit a seven-month high on increased demand for safe-haven assets. Japanese Prime Minister Shigeru Ishiba said on Tuesday that while the country does not intend to ditch the trade deal it reached with the United States in 2019, he expressed “grave concern” about inconsistencies between the deal and Trump’s latest round of tariffs. A particular point of concern is Trump’s 25% tariffs on all foreign automobiles, which could have a significant impact on some of Japan’s largest companies. Ishiba’s comments come as Japan prepares for trade talks with the United States. Ishiba also warned that the country would not simply give in openly during the talks.
Elsewhere in Asia, the ASX 200 Australian is unchanged ahead of the April PMI data, due out on Wednesday, while the KOSPI South Korean is up slightly ahead of first-quarter gross domestic product data, due later this week.
European stocks seen opening with modest decline. Dividend session at Piazza Affari
European stocks are seen opening lower based on indications provided by the Eurostoxx50 future at -0,60%.
The dividend season officially opens at Piazza Affari, while the Italian banking risk game continues to dominate the spotlight with the Unicredit case, after the halt imposed by the Government with the activation of the Golden Power on the takeover bid for Banco Bpm: a move that has raised criticism for the excessive rigidity of the constraints and for the contrast with the favorable opinions of the ECB and supervisory authorities. The attitude towards Bper was very different, which received the green light for the acquisition of Banca Popolare di Sondrio, without intervention by Palazzo Chigi.
The following stocks are paying dividends today: B. Mediolanum 0,63, Campari 0,065 euros, Ferrari 2,986 euros, Iveco 0,33 euros, Maire 0,356 euros, Piaggio 0,04 euros, Prysmian 0,8 euros, Stellantis 0,68 euros, Unicredit 1,4764 euros.
Stellantis and China's Leapmotor will launch a local assembly project in Malaysia, with an initial investment of 5 million euros.
Brembo inaugurated its first Brembo Inspiration Lab in Asia, in Shanghai, on April 21. It will focus on strengthening the company's capabilities in software development, artificial intelligence applications and data science, marking a further step forward in Brembo's transformation into a solution provider.
Banca MediolanumJefferies cut its rating from Buy to Hold, target 14,9 euros.
Bper-Popular Sondrio. BPER shareholders' meeting gave its green light on Friday to a capital increase of up to 981 million euros for its exchange offer for Pop Sondrio shares. The government also resolved not to exercise special powers in relation to the operation, giving an unconditional green light to the acquisition under the 'golden power' procedure.
Generali. Norges Bank Investment Management said on Friday that it will vote for the list proposed by Mediobanca for the renewal of the board of directors of the Generali Group. The Norwegian fund holds a 1,2% stake in Generali. In an interview with Il Sole 24 Ore Francesco Gaetano Caltagirone said on Sunday that the minority list presented for the board of directors of Generali “does not suggest names for the governance of the company, but is long enough to ask shareholders to block the ill-fated Natixis project”.
Understanding. S&P on Friday raised its long-term rating to 'BBB+' from 'BBB', following the upgrade of Italy's sovereign rating on April 11. The outlook is stable.
Inwit launches the first tranche of share buyback up to 300 million euros.
JuventusJeep is ready to pay nearly 25 million euros a year to bring its brand back to the black and white jersey, two sources familiar with the matter told Reuters.
Poste Italiane. Jefferies raised its target from 13,9 to 18 euros.
Prysmian. Aims to reach 55% of revenue from sustainable solutions by 2028, up from 43% in 2024.
Tenaris. Bnp starts coverage with Buy, target 18,5 euros.
Unicredit – Banco Bpm. The Council of Ministers approved on Friday with prescriptions the takeover bid for Banco Bpm. UniCredit said it will take time to assess the impact of prescriptions whose merit is unclear on the bank itself and the operation related to Banco Bpm. S&P on Friday raised its long-term rating to 'BBB+' from 'BBB', after the upgrade of Italy's sovereign rating.
