Policymakers at the Federal Reserve (Fed), Bank of Japan (BoJ) and Bank of England (BoE) exhibited caution this week and highlighted the economic effects of global uncertainty and trade barriers. Global equity markets recovered despite continuing tariff fears. Nvidia unveiled new GPUs and data center investors, projected to have a significant market multiplier effect. Sanctions on Iranian crude and OPEC+ plans boost global crude oil price. President Putin and President Zelenskyy communicated with President Trump this week as geopolitical uncertainty persisted in Ukraine and Russia. Israel also resumed airstrikes and ground operations in Gaza this week, following the expiry of the Hamas ceasefire. In a positive development, NASA astronauts Butch Wilmore and Sunita Williams finally returned to Earth, after an extended stay of nine months at the International Space Station.

Global Updates
  • The MSCI All Country World Index rose this week bolstered by improved investor sentiments in U.S, Europe and U.K. market. The Fed’s decision to hold interest rates steady citing steady economic growth also raised investor optimism. The BoE and Riksbank also chose to hold interest rates steady due to the possibility of inflation soon. BoE’s Governor Andrew Bailey highlighted increased economic uncertainty due to global trade tensions and inflation pressures in the U.K. Chinese equities underperformed this week due to profit taking and the possibility of a market correction. 
  • The Eurozone Consumer Price Index (CPI) inflation for February came in at 2.3% year on year, lower than the initial estimate of 2.4%. On the other hand, Canada’s CPI inflation for February came in at 2.6% significantly higher than the initial estimate of 2.1%.
  • BoJ’s Governor Kazuo Ueda cited elevated global economic uncertainty and inflation resulting from U.S. tariffs as the basis for holding policy rates steady. The governor also cautioned of domestic inflation from wage growth and food costs.
  • The Hang Seng Index dipped this week due to profit taking by tech stock investors and cooling investor sentiments. Increasing Profit taking for Chinese tech stocks following upbeat earning reports, has weighed on Chinese stocks. Investor Sentiments for Chinese stocks have also waned following the prediction of a “meaningful correction” by Bank of America Securities. The market correction in U.S. markets has also reduced the ‘valuation gap’ between U.S. and Chinese tech stocks.
  • Gold continued to rise this week driven by safe-haven demand due to global uncertainty and the possibility of rate cuts later in the year. Gold prices later cooled due to an appreciating dollar and profit taking by investors.
  • OPEC+ has scheduled supply cuts for seven member nations to manage for overproduction in the context of the production hikes from April. These planned cuts will be extended till June 2026. Oil prices have recorded a second week of gains this week due to OPEC’s plan of tightening supply and U.S. sanctions on Iranian crude.
  • Nvidia CEO Jensen Huang unveiled the Blackwell Ultra GPUs at the GTC conference in San Jose. Huang also projected plans of $1 trillion in data center investments by 2028. Analysts have indicated a strong market upside from Nvidia’s plans.
  • RWE, the German developer of offshore wind farms is slashing its planned investments by $10.9 billion till 2030, due to uncertainty in U.S. energy policy under the Trump administration.
  • French aeronautics equipment manufacturer Safran is planning to sell its North American unit to satisfy regulatory concerns regarding the company’s $1.8 billion acquisition bid for Collins Aerospace’s.
U.S. Equity
  • The S&P 500 index, Dow Jones and Nasdaq indices recovered this week despite continuing trade fears. The Fed’s long-term projections for economic growth and inflation remained positive despite the possibility of short term volatility. U.S. retail sales rebounded in February growing by 0.2% following a 1.2% drop in January. Surveys indicated consumers are increasing cautious and restrained discretionary spending due to expectations of inflation and a cooling job market. 
  • The Fed chair Jerome Powell cited elevated uncertainty as the basis for keeping interest rates unchanged in the U.S. The Fed continued to project two quarter-percentage-point rate cuts by the year end to promote economic growth, despite expectations of heightened inflation from trade barriers. 
  • Accenture cited decreased government spending when reporting a lower-than-expected consulting service revenue of $8.3 billion. The company posted an EPS of $2.82 from a revenue of $16.66 billion in the fiscal second quarter. 
  • Allstate has lowered the estimated catastrophe losses for February to $92 million from the $1 billion estimate in January following the wildfires in California. 
  • Boeing stock price gained this week due to an order of 17 Boeing 737s by Japan Airlines. The company’s CFO also downplayed the possible impact of tariffs on the company.
  • Intel stock gained over the news of a reorganization of the company’s management and AI strategy by the new CEO Lip-Bu Tan. Tan seeks to improve the company’s efficiency and manufacturing.
  • Pharmaceutical company Gilead Sciences’ stock price lagged due to the decreased spending projections by the U.S. Department of Health and Human Services on HIV prevention. HIV treatments account for a large portion of the company’s revenue. 
  • Tesla’s stock price declined due to RBC Capital significantly slashing Tesla’s price target from $440 to $320 due the increased competition from BYD and concerns regarding Tesla’s autonomous driving technology. Oppenheimer has also reduced Tesla’s fiscal 2025 full-year revenue estimates by 2% to $97.9 billion due to decreased sales projections.
Fixed Income
  • The Bloomberg U.S. Aggregate Bond Index was higher this week.
  • The U.S. 10-year Treasury yield was slightly lower at 4.246% and the yield on the 2-year note dipped slightly to 3.967% over the week. 
  • The U.S. Dollar Index edged up to 104.11 this week after the Fed projected two quarter point rate cuts later in the year.

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