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Five things you need to know | |
| As the US has ramped up tariffs on China and offered other countries a reprieve, where are the smart opportunities for investment? Tell us in the latest MLIV Pulse survey. | |
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| Billed on Wall Street as so rock-solid safe they're risk-free, US Treasury bonds have long served as first port of call for investors during times of panic. They rallied during the global financial crisis, on 9/11 and even when America's own credit rating was cut. But now, as President Donald Trump unleashes an all-out assault on global trade, their status as the world's safe haven is increasingly coming into question. Yields, especially on longer-term debt, have surged in recent days while the dollar has plunged. Even more disconcerting is the pattern of the recent market moves. Investors have often dumped 10- and 30-year Treasuries — pushing prices down and yields up — at the very same time they frantically sold stocks, crypto and other risky assets. The inverse is also true, with Treasuries rising in unison with them. They are trading, in other words, a little like a risky asset themselves, with profound implications for the global financial system. One theory making the rounds among analysts, without hard evidence, is that sales by China may have helped fuel the recent surge in 30-year yields. Others debate whether China might turn to dumping US debt in the future as a response to the steepest American tariffs in a century. In any case, Treasuries and the dollar get their strength from "the world's perception of the competence of American fiscal and monetary management and the solidity of American political and financial institutions," said Jim Grant, founder of Grant's Interest Rate Observer. "Possibly, the world is reconsidering." —Ye Xie, Liz Capo McCormick and Michael Mackenzie | |
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- Stellantis falls 5.2% in Paris. The automaker reported a 9% drop in first-quarter shipments.
- Lucid rises 1.6%. The EV maker agreed to take over the headquarters and electric-truck factory previously belonging to the now-bankrupt Nikola.
- Recursion Pharmaceuticals soars 21% and Absci jumps 14%. Shares of companies working on biotech AI models are higher after the FDA said it plans to phase out animal testing requirements for monoclonal antibodies and other drugs, replacing them with "more effective, human-relevant methods." Watch shares of lab companies including Charles River Laboratories and LabCorp.
- Magnificent Seven stocks pare gains and some turn negative in premarket trading on Friday after China's decision to raise tariffs on all US goods. Among premarket movers: Tesla (-2.0%), Amazon, Nvidia, Meta and Apple are edging lower, while Alphabet and Microsoft are largely flat. —Subrat Patnaik
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| Forecasting corporate earnings is a maddeningly difficult task at the best of times. Now, as we report in today's Big Take, it's harder than ever: Not since the Covid-19 pandemic has there been this little clarity on what earnings will look like and how, as a result, to value stocks. One after another, CEOs have come out at the start of earnings season this week to declare they're too perplexed by the tariffs — will they take effect? If so, for how long? If so, at what rate? If so, how will other countries respond? If so, how will consumers react? — to predict what lies in store for their businesses. Delta Air Lines withdrew its full-year guidance. CarMax took down the timeline target it had set to achieve some of its financial goals. Walmart stretched the range of its estimate for profit growth. The CEO of JD warned analysts on a conference call to not even ask about tariffs — "we're not going to answer" — and Levi Strauss said its team was still trying to figure out the impact of the tariffs, some of which, like those on China, remain in place after Wednesday's pause. Analysts, of course, still have to deliver their own predictions to Wall Street. And without company guidance to inform their models, that's left many to trudge through the tariff fog on their own. There's "an information vacuum," said Michael Arone of State Street Global Advisors. "And as a result of that information vacuum, investors tend to be cautious. They're far less willing to allocate capital if they don't have the information they think they need." — Katrina Compoli, Georgie McKay and Jaewon Kang | |
One number to start your day | | 12% | | The decline in the S&P 500 since Donald Trump's inauguration | | |
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