US equity futures are higher, rebounding from the biggest selloff since last September (and since 2022 for the Nasdaq) with both tech and small caps outperforming as Trump is set to meet with top business executives later in the day, and many speculate that he will address the recent stock market plunge (the mere confirmation should sends stocks higher according to Goldman's Delta One team). As of 8:00am ET, S&P futures are up 0.4%, while Nasdaq futures gain 0.6% after plunging 4% on Monday, with all Mag7 names (ex AAPL) higher premarket with Semis, Financials, and Int’l Equity ADRs also poised to outperform. The JPM Trading Desk says it likes participating in this bounce higher but warns that it may be short-lived unless trade policy is crystallized (well, duh). Delta’s earnings (and now American's this morning) calling out uncertainty for hitting guidance may increase expectations for Trump to establish the "Trump Put" in Equity markets. Trump may also visit China in April, according to press reports, potentially to do a trade deal as a second summit in the US in June is also in discussion. Bond yields are higher as the yield curve twists flatter and the USE slides again, helping US stock futures in their attempt to rebound after Monday’s slump. Commodity prices are strong across all 3 complexes with precious metals the standout, as gold storms back over $2900. Today’s macro data focus is on JOLTS data and Small Business Optimism which slumped to 100.7 from 102.8, the lowest since Trump won the election (future hiring plans are a leading indicator for NFP).
In premarket trading, Delta Air Lines shares tumbled 11% after the airline cut its adjusted earnings per share guidance for the first quarter, sending shock waves across the sector (United Airlines -8.0%, American Airlines -6.5%). Tesla is leading premarket gains among the Magnificent Seven stocks, with the EV maker set to rebound after a 15% rout on Monday. The slide came as investors dumped last year’s biggest winners amid growing fears that the economy is headed for a recession (Tesla +3.2%, Nvidia +0.84%, Meta +0.8%, Amazon +0.5%, Alphabet +0.3%, Microsoft -0.1%, Apple -0.3%). Here are some other notable premarket movers:
The latest company results hinted at slowing profits earnings. Delta Air Lines shares tumbled as much as 11% in US premarket trading after a a deep cut to profit expectations. The news hit peers United Airlines Holdings Inc. and American Airlines Group Inc., and also weighed on European airlines. Sofware firm Oracle Corp. slipped after its results missed estimates.
The selloff in US stocks, particularly in the tech sector, has been accompanied by shift in investor perception on Europe and China, especially after Germany’s pledge to embark on large-scale defense spending. “The news flow from the US economy is likely to undershoot the rest of the world in coming months,” Citigroup strategists wrote. They downgraded their view on US stocks to neutral from overweight, ditching a position they had held since October 2023. Earlier, HSBC strategists also cut their view on US stocks, raising their European equity rating instead.
Meanwhile, Trump’s meeting with the Washington-based Business Roundtable will include CEOs from around the country, including the bosses of Wall Street lenders, Bloomberg reported. Given the increasingly uncertain outlook for the US economy and trade war concerns, investors will watch for any signals from Trump on the likelihood of tariff-policy shifts or support for equity markets.
“What is being questioned in the market is US exceptionalism,” said Aneeka Gupta, head of macroeconomic research at Wisdom Tree UK Ltd. “When Trump came back into the White House, the focus on was on the positive impact of his policies, but now the market is really drilling down into the negatives.”
European stocks retreated for a fourth straight session as worries about a faltering US economy fueled a global selloff, with the region’s travel and airline stocks sliding after US airline Delta cut its 1Q profit expectations. Travel and health care underperformed, pulling the Stoxx 600 down by about 0.2%. The DAX outperformed regional peers, adding 0.6%, after Bloomberg reported that Germany’s Greens are ready to negotiate and are hoping for an agreement by the end of this week in a dispute over defense spending. Here are the biggest movers Tuesday:
Earlier in the session, Asian stocks also slumped, taking cues from the tech-led sell-off stateside. Nikkei 225 retreated following disappointing Household Spending and revised Q4 GDP data from Japan. Hang Seng and Shanghai Comp conformed to the negativity amid light catalysts and as the NPC concludes today. ASX 200 was dragged lower by underperformance in tech and with most sectors in the red aside from energy and some defensives, while improved consumer confidence and mixed business surveys did little to inspire a rebound.
In FX, the Bloomberg Dollar Spot index fell 0.3%. The haven FX rally falters, as JPY and CHF flip to be the weakest performers in G-10 FX. NOK and SEK outperform. The euro was the biggest gainer, strengthening 0.6% as German lawmakers are expected to reach an agreement over additional spending.
In rates, Treasuries drop with the 10-year yield rising 4bps to 4.24% ahead of US job openings and layoffs data. German bond yields rise across the curve, led by the 10-year. Comparable gilts are little changed. Peripheral spreads tighten to Germany with the 10y BTP/Bund narrowing 2.7bps to 110.4bps.
In commodites, crude futures advance. WTI drifts 1% higher to near $67. Most base metals trade in the green. Spot gold rises roughly $25 to trade near $2,914/oz. Spot silver gains 1.4% near $33. Bitcoin rebounds, climbing above $81,000.
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APAC stocks took their cues from the tech-led sell-off stateside after the Nasdaq suffered its worst day since 2022 amid recession fears and tariff-related concerns. ASX 200 was dragged lower by underperformance in tech and with most sectors in the red aside from energy and some defensives, while improved consumer confidence and mixed business surveys did little to inspire a rebound. Nikkei 225 retreated following disappointing Household Spending and revised Q4 GDP data from Japan. Hang Seng and Shanghai Comp conformed to the negativity amid light catalysts and as the NPC concludes today.
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European bourses are mixed, with price action fairly rangebound thus far. The DAX 40 (+0.7%) outperforms, as the region reacts to optimism surrounding German defence spending plans, whilst the FTSE 100 (-0.1%) is a little lower. European sectors are mixed; Real Estate is propped up by post-earning strength in Persimmon (+4.2%); Autos benefits from post-earning strength in Volkswagen (+2.5%) which reported robust FY results, but its guidance was not so optimistic. Travel & Leisure is the clear underperformer, as the sector reacts to Delta Airlines (-10% pre-market) cutting guidance, amid weak demand.
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DB's Jim Reid concludes the overnight wrap