March S&P 500 E-Mini futures (ESH25) are down -0.47%, and March Nasdaq 100 E-Mini futures (NQH25) are down -0.48% this morning, pointing to a red opening on Wall Street after U.S. Treasury Secretary Scott Bessent characterized the market’s recent slump as healthy.
Treasury Secretary Scott Bessent stated on Sunday that he isn’t concerned about the recent market slump that has erased trillions of dollars from equities. “I’ve been in the investment business for 35 years, and I can tell you that corrections are healthy, they are normal,” Bessent said on NBC’s Meet The Press. “I‘m not worried about the markets. Over the long term, if we put good tax policy in place, deregulation, and energy security, the markets will do great.” His remarks dash the hopes of those expecting U.S. President Donald Trump to take steps to mitigate the market impact of his policies. In addition, Bessent said there are “no guarantees” that the U.S. will avoid a recession.
Investor focus this week is on the Federal Reserve’s interest rate decision, a raft of U.S. economic data, and earnings reports from several high-profile companies.
In Friday’s trading session, Wall Street’s major equity averages closed sharply higher. Ulta Beauty (ULTA) surged over +13% and was the top percentage gainer on the S&P 500 after the company reported better-than-expected Q4 results. Also, the Magnificent Seven stocks advanced, with Nvidia (NVDA) climbing more than +5% to lead gainers in the Dow and Tesla (TSLA) rising over +3%. In addition, DocuSign (DOCU) gained more than +14% after the electronic signature software company posted upbeat Q4 results and gave a strong full-year billings forecast. On the bearish side, T-Mobile US (TMUS) fell more than -1% after Citigroup downgraded the stock to Neutral from Buy.
Economic data released on Friday showed that the University of Michigan’s U.S. consumer sentiment index fell to a 2-1/3 year low of 57.9 in March, weaker than expectations of 63.1. Also, the University of Michigan’s U.S. March year-ahead inflation expectations unexpectedly rose to a 2-1/3 year high of 4.9%, higher than expectations of no change at 4.3%, while 5-year implied inflation expectations unexpectedly rose to a 32-year high of 3.9%, stronger than expectations of a decline to 3.4%.
Meanwhile, a U.S. government shutdown was averted. The Senate passed a Republican spending plan on Friday by a vote of 54-46 to keep the government funded for the next six months. A White House spokesman said on Saturday that President Trump had signed it into law.
The U.S. Federal Reserve’s interest rate decision and Chair Jerome Powell’s post-policy meeting press conference will take center stage this week. The central bank is widely expected to keep the Fed funds rate unchanged in a range of 4.25% to 4.50%. The decision comes amid growing concerns about the potential damage that President Trump’s tariff policies could inflict on the economy. Market watchers will closely monitor the Fed’s quarterly “dot plot” in its Summary of Economic Projections, which shows FOMC member forecasts regarding the path of interest rates. Economists expect policymakers’ updated projections to indicate two quarter-percentage point cuts this year.
“The Fed is in a very tough spot right now, facing a more stagflationary outlook even as core inflation remains well above its medium-term target. Uncertainty around the magnitude, duration, and targets of future tariffs further complicates the monetary policy outlook. They have the potential to roil monetary policy expectations as well as financial markets,” said Scott Anderson, chief U.S. economist at BMO Capital Markets.
Market participants will also focus on a spate of economic data releases this week, including U.S. Building Permits (preliminary), Housing Starts, the Export Price Index, the Import Price Index, Industrial Production, Manufacturing Production, Crude Oil Inventories, Current Account, Initial Jobless Claims, the Philadelphia Fed Manufacturing Index, Existing Home Sales, and the Conference Board’s Leading Economic Index.
In addition, several notable companies like Nike (NKE), Micron Technology (MU), FedEx (FDX), Lennar (LEN), Accenture (ACN), and Carnival Corp. (CCL) are scheduled to release their quarterly results this week.
Notably, Nvidia CEO Jensen Huang is set to speak this week at the company’s GPU Technology Conference, commonly known as GTC, at a time when the chipmaker is under market pressure amid the tariff-driven sell-off.
Today, all eyes are focused on U.S. Retail Sales data, which is set to be released in a couple of hours. The reading will show how American consumers have fared amid a wave of headlines about potential tariffs and their impact on inflation. Economists, on average, forecast that February Retail Sales will stand at +0.6% m/m, compared to the January figure of -0.9% m/m.
Investors will also focus on U.S. Core Retail Sales data, which came in at -0.4% m/m in January. Economists expect the February figure to be +0.3% m/m.
The Empire State Manufacturing Index will be released today as well. Economists foresee this figure coming in at -1.90 in March, compared to 5.70 in February.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.286%, down -0.51%.
The Euro Stoxx 50 Index is up +0.15% this morning, starting the new trading week on a positive note, while investors await the upcoming parliamentary vote on Germany’s crucial spending plan. Energy and healthcare stocks led the gains on Monday. Final data from the statistical office Istat released on Monday showed that Italy’s annual inflation rate was revised lower to 1.6% in February from the preliminary reading of 1.7%, though it still marked an acceleration from 1.5% in January. Meanwhile, German Chancellor-in-waiting Friedrich Merz said Friday that an agreement had been reached with the Green party on debt-financed defense and infrastructure spending. The debt reform is expected to pass in the lower house of Germany’s parliament on Tuesday and in the upper house on Friday. Investors are also awaiting the Bank of England’s monetary policy decision later in the week, with the central bank widely expected to stand pat. In corporate news, Phoenix Group Holdings Plc (PHNX.LN) climbed over +6% after the British insurer posted a better-than-expected annual adjusted operating profit. At the same time, Qinetiq Group Plc (QQ-.LN) tumbled more than -21% after the U.K. defense firm cut its full-year revenue guidance.
Italy’s CPI data was released today.
The Italian February CPI came in at +0.2% m/m and +1.6% y/y, compared to expectations of +0.2% m/m and +1.7% y/y.
Asian stock markets today settled in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.19%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.93%.
China’s Shanghai Composite Index closed slightly higher today as investors digested mixed economic data from the country and awaited more details on Beijing’s latest stimulus measures. Construction stocks outperformed on Monday. Data from the National Bureau of Statistics released on Monday showed that China’s economic activity mostly exceeded market expectations in the first two months of the year, with retail sales and industrial production beating forecasts. However, the unemployment rate unexpectedly rose to the highest level in two years in February, highlighting a pick-up in labor market pressure. Meanwhile, China unveiled a series of policies over the weekend aimed at boosting consumption, a top policy priority for Beijing. The plan comprises initiatives to enhance the capacity and willingness of households to spend in a bid to stimulate domestic demand, state media Xinhua News Agency reported Sunday, citing a statement from the State Council. It vowed to expand trade-in programs for home appliances and cars, while also pledging to stabilize the country’s stock and property markets, which influence consumer confidence. Market participants are now awaiting a key briefing scheduled for Monday afternoon, where authorities are expected to provide further details on these measures. In corporate news, Li Auto plunged over -7% in Hong Kong after the electric vehicle maker reported a drop in Q4 net income and provided weak Q1 revenue guidance.
The Chinese Industrial Production stood at +5.9% y/y in the January-February period, stronger than expectations of +5.3% y/y.
The Chinese Retail Sales came in at +4.0% y/y in the January-February period, stronger than expectations of +3.8% y/y.
The Chinese Fixed Asset Investment arrived at +4.1% y/y in the January-February period, stronger than expectations of +3.2% y/y.
The Chinese February Unemployment Rate was 5.4%, weaker than expectations of 5.1%.
Japan’s Nikkei 225 Stock Index closed higher today, hitting its highest level in more than a week. Sentiment was boosted by Wall Street’s gains on Friday and news that the U.S. Congress had passed a stopgap spending bill, averting a government shutdown. Heavy-industry stocks led the gains on Monday, with Mitsubishi Heavy Industries surging about +12% amid ongoing speculation about whether Japan will need to increase its defense spending in the future. Real estate stocks also gained ground. Meanwhile, investors are looking ahead to the Bank of Japan’s two-day policy meeting starting Tuesday. The BOJ is widely expected to keep its policy rate unchanged at 0.5%, though the board might consider a hike as early as May, depending on domestic inflation and market volatility driven by U.S. trade policy uncertainties, according to sources cited by Reuters. Investors will look for clues on the timing of the central bank’s next rate move during Governor Kazuo Ueda’s post-meeting press conference. In other news, Japanese Prime Minister Shigeru Ishiba reaffirmed on Monday that Japan is not deliberately devaluing the yen to make its exports more competitive. “We are not manipulating currency rates,” Ishiba said in a parliamentary committee. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -3.92% to 23.80.
Pre-Market U.S. Stock Movers
Netflix (NFLX) climbed more than +1% in pre-market trading after MoffettNathanson upgraded the stock to Buy from Neutral with a price target of $1,100.
Nvidia (NVDA) gained about +0.9% in pre-market trading amid enthusiasm over its annual GTC developers’ conference that kicks off today.
Norwegian Cruise Line Holdings (NCLH) advanced nearly +4% in pre-market trading after JPMorgan upgraded the stock to Overweight from Neutral with a price target of $30.
American Tower (AMT) rose more than +1% in pre-market trading after Wells Fargo upgraded the stock to Overweight from Equal Weight with a price target of $230.
Accenture (ACN) advanced about +0.6% in pre-market trading after Baird upgraded the stock to Outperform from Neutral with a price target of $390.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Monday - March 17th
Science Applications (SAIC), Getty Images Holdings (GETY), Harrow Health (HROW), Altus Power (AMPS), Diversified Energy Company (DEC), Open Lending (LPRO), Consolidated Water (CWCO), Sonida Senior Living (SNDA), Lithium Americas (LAR), Natural Gas Services (NGS), DiaMedica Therapeutics (DMAC), T1 Energy (TE), Inspired Entertainment (INSE), Niu Tech (NIU), Sangamo Therapeutics (SGMO), Protalix (PLX), Townsquare Media LLC (TSQ).
