Is the correction over? 13/03/2025

HOT stories for today

 

US market wrap:

• The Nasdaq Composite climbed on Wednesday following a mild inflation report that alleviated economic worries, while investors seized the opportunity to buy undervalued technology stocks. The tech-focused index advanced 1.22%, the S&P 500 edged up 0.49%, whereas the Dow Jones dipped 0.20%. The consumer price index provided some relief for the stock market. Core CPI, which strips out volatile food and energy costs, increased by 0.2% for the month and 3.1% over the past year, both coming in lower than expected.
• However, trade tensions intensified as President Donald Trump’s steel and aluminum tariffs took effect on Wednesday. In response, Canada announced 25% retaliatory duties on more than $20 billion worth of U.S. goods, while the European Union pledged counter-tariffs on €26 billion ($28.33 billion) of U.S. imports starting in April. 
   

Is the correction over? 

• The answer isn’t simple, given the fragile geopolitical climate and ongoing trade tensions. However, analysts at Ned Davis Research and JPMorgan suggest the worst may be over. JPMorgan Chase & Co. indicates that the U.S. equity correction might have passed, as credit markets signal a lower recession risk. While small-cap stocks price in a 50% chance of recession, credit markets estimate only 9%-12%, according to strategists Nikolaos Panigirtzoglou and Mika Inkinen.
• Market fears of an economic slowdown have driven stocks near correction territory, with analysts from Goldman Sachs and Citigroup downgrading U.S. equities. Unpredictable trade policies and government job cuts have fueled volatility, sending the S&P 500 down nearly 9% from February highs. Despite this, markets may find support from ongoing ETF inflows and portfolio rebalancing by mutual funds, pensions, and sovereign wealth investors—potentially injecting around $135 billion. “If U.S. equity ETFs continue to see net inflows, there’s a strong chance that most of the correction is behind us,” JPMorgan noted.

 
Stocks on the move: 
      

• Adobe (ADBE) – Shares slipped around 3% after the company’s fiscal Q2 outlook failed to impress investors.
• American Eagle Outfitters (AEO) – Stock dropped 5% after weakguidance, forecasting a mid-single-digit sales decline instead of the 1.3% growth analysts expected. Despite this, earnings and same-store sales exceeded forecasts.
• Intel (INTC) – Shares jumped 11% after the company named Lip-Bu Tan as its new CEO, replacing interim co-CEOs David Zinsner and MJ Holthaus, who took over in December.
• SentinelOne (S) – The cybersecurity stock fell 15% following a disappointing Q1 revenue outlook.
• UiPath (PATH) – Shares sank 15% after projecting Q1 revenue of $330M–$335M, missing the $368M analysts expected. Q4 revenue also fell short of estimates.

Today’s action

• Asia-Pacific markets showed mixed performance on Thursday after a soft U.S. inflation report helped two of Wall Street’s three major indexes rebound from a two-day losing streak. In Japan, the Nikkei 225 remained flat, while the broader Topix index inched up 0.18% in late trading. Hong Kong’s Hang Seng Index dropped 1.20%, and China’s CSI 300 declined 0.54% amid volatile trading.
• S&P 500 futures edged higher Wednesday night after the index posted gains in an otherwise turbulent week. Futures linked to the S&P 500 rose 0.2%, Dow Jones Industrial Average futures gained 45 points (0.1%), and Nasdaq 100 futures climbed 0.2%. Investors await key economic data on Thursday, including weekly jobless claims and the February producer price index. On the corporate front, Dollar General and Ulta Beauty are set to release earnings.

Watchlist: ULTA, DG, ADBE, PATH, AEO, INTC, S, CCI, TSLA 
 

Bitcoin

• After the U.S. Consumer Price Index (CPI) rose 0.2% in February, pushing annual inflation to 2.8%, Bitcoin briefly spiked above $84,000 before retreating to around $82,800, down 0.5% in 24 hours. Ether lagged, falling 3.5% to about $1,880, with the ETH/BTC ratio plunging 67% since its November 2021 peak. Despite expectations of Federal Reserve rate cuts later this year, uncertainty persists regarding their timing and scale. Broader market sentiment remains cautious as investors weigh inflation data against macroeconomic risks.
• Abu Dhabi-based investment firm MGX has invested $2 billion in Binance, marking the first institutional placement in the crypto exchange and MGX's first digital asset-focused investment. The investment was made in stablecoins, though the specific currency was not disclosed. Binance, the world's largest crypto exchange by trading volume, handles over $20 billion in daily transactions and employs approximately 1,000 people in Abu Dhabi. Binance CEO Richard Teng previously served as the head of the Abu Dhabi Financial Services Regulatory Authority.
  Watchlist: Bitcoin: 78 000-100 000, Ethereum:1900-2600, Solana: 100-176
   

Forex

• The Japanese Yen rebounds, snapping a two-day losing streak against the USD and recovering from its weekly low. Concerns over Trump’s trade tariffs and expectations of further BoJ rate hikes support JPY, while Fed rate cut bets keep the USD near multi-month lows, limiting USD/JPY gains. The chaotic rollout of U.S. tariffs fuels demand for the safe-haven yen, while rising inflation in Japan strengthens the case for continued BoJ tightening.
• Meanwhile, EUR/USD trades lower around 1.0880 in Thursday’s Asian session as escalating U.S.-EU trade tensions pressure the Euro. Investors await key U.S. economic data, including February's PPI and weekly jobless claims, for further market direction.
  Watchlist: EUR/USD: 1.0700-1.0900, USD/JPY: 148-160
   

Basic Materials

• Gold prices rise for the third straight day, hitting a two-week high as trade tensions, Fed rate cut bets, and a weaker USD boost demand. Investors await the U.S. PPI report for further direction.
  XAU/USD climbs to $2,947 in Thursday’s Asian session, nearing its February 24 record. Concerns over the economic impact of Trump’s trade tariffs continue to support gold as a safe-haven asset.
• Meanwhile, WTI crude oil edges higher to $67.40 in early Asian trading. U.S. crude inventories rose by 1.448 million barrels last week, per the EIA. However, fears of a slowing U.S. economy and import tariffs may cap further gains. While WTI rises on tighter supplies, economic uncertainty could limit its upside.
  Watchlist: GOLD 2600-2945, US Oil: 65.00-79.00

Key Economic Events Today:

EST time
08:30 am: USD Core PPI, PPI
08:30 am: USD Unemployment Claims
01:01 pm: USD 30-y Bond Auction

Earnings

BMO (Before the US Market opens)
DG         Dollar General
FUTU     Futu Holdings Limited
WB         Weibo Corp.
AMC (After the US Market closes): DOCU, ULTA, WPM


The TEFS Analyst team wishes you a successful day!