Today's Update 04-02-2025
Key Points and Metrics
Key Points and Metrics:
U.S. Economic Data:
US Factory Orders MoM:
Actual: 0.6%
Forecast: 0.5%
Previous: 1.7%
US Core Durable Goods Orders Revised:
Actual: 0.7%
Forecast: 0.7%
Previous: 0.7%
US Durable Goods Orders Revised:
Actual: 1%
Forecast: 0.9%
Previous: 0.9%
ADP Employment Change (March):
Actual: 155,000 jobs added
Forecast: 120,000
Previous: 77,000 (Revised to 84,000)
Tesla Inc. (TSLA) Q1 Deliveries and Production:
Total Production: 362,615 vehicles (Estimate: 412,148)
Total Deliveries: 336,681 vehicles (Estimate: 390,343)
Model 3/Y Production: 345,454 vehicles (Estimate: 400,777)
Model 3/Y Deliveries: 323,800 vehicles (Estimate: 381,536)
Other Models Production: 17,161 vehicles (Estimate: 17,630)
Other Models Deliveries: 12,881 vehicles (Estimate: 16,335)
Notes: Ramp-up of the new Model Y continues to progress well.
Energy Sector:
WTI Crude Oil:
Prices weakened following Iran's announcement regarding nuclear talks.
Iran Nuclear Talks:
Iran expressed readiness for indirect nuclear negotiations with the U.S.
EU Energy Policy:
EU nations are seeking options to maintain gas storage flexibility for 2025.
Discussions involve potentially adjusting gas storage targets for greater flexibility.
Central Bank Statements:
European Central Bank (ECB):
Holzmann: Interest rates are at a neutral level; no reason to adopt an accommodative stance.
Schnabel: Developments in the U.S. are significant and can influence ECB decisions.
Russian Central Bank:
Warned that U.S. trade tariff hikes and potential retaliatory measures could slow global economic growth and elevate inflation.
Anticipates that oil prices may remain lower than forecasted for several years due to decreased global demand.
NVIDIA Corporation (NVDA) and Chinese Tech Firms:
Chinese companies including ByteDance, Tencent Holdings, and Alibaba Group have collectively ordered at least $16 billion worth of NVIDIA's H20 server chips.
NVIDIA faces challenges due to the surge in orders amid trade tensions and regulatory considerations.
U.S. Political Developments:
Trade Tariffs:
Anticipation of President Trump's announcement on tariff plans, which may impact international trade dynamics.
Global stocks declined and bonds rallied ahead of the announcement.
Sanctions:
The U.S. Treasury Department announced new Russia-related sanctions.
Meetings:
President Trump scheduled to meet with Senate GOP members to discuss the tax plan.
U.S. Envoy Witkoff planned to meet Russia's Dmitriev at the White House.
International Trade:
Canada-U.S. Relations:
Ontario Premier Doug Ford advocated for a Canada-U.S. trade deal excluding Mexico.
Canada expressed willingness to remove tariffs if the U.S. reciprocates.
Market Movements:
Currencies & Indices:
The U.S. Dollar and S&P 500 experienced volatility, initially fluctuating before a weakening trend following the ADP employment report.
European stocks declined amid trade concerns, with healthcare companies among the notable losers.
Bonds:
U.S. Treasury yields remained near one-month lows in anticipation of tariff announcements.
Other Notable Events:
Pimco Outlook:
Pimco's Chief Investment Officer Ivascyn indicated the possibility of a U.S. credit rating downgrade within the year.
Bank of Japan (BoJ):
Former BoJ board member Adachi suggested a potential interest rate hike in May.
Energy Infrastructure:
Reports that EU member states are considering adjustments to gas storage regulations to allow for more flexibility in response to market conditions.
Market Metrics:
S&P 500: Showing weakness ahead of tariff announcement
10-Year Treasury Yield: Near one-month lows
Oil: WTI settled at $71.20/barrel (-0.39%), Brent at $74.49/barrel (-0.37%)
ADP Employment: Beat expectations at 155k vs 120k forecast
Tesla: Delivered 336,681 vehicles vs 390,343 expected
Final Thoughts
Markets remain on edge as President Trump prepares to announce his tariff plans today at 4:00 PM ET. The White House has confirmed these tariffs will take effect immediately upon announcement, though Trump remains open to further negotiations. Several options appear to be under consideration, including a 20% universal tariff on virtually all imports, a reciprocal plan with different tariffs for various countries, or a targeted approach affecting a subset of nations.
European officials are preparing responses, with France expecting powerful tariffs in the range of 20-25%. The uncertainty has caused economists to lower growth forecasts while central bankers weigh potential inflationary impacts. Meanwhile, economic data showed mixed signals with ADP employment numbers beating expectations while Tesla's disappointing delivery numbers highlighted ongoing challenges in the EV sector. Investors should prepare for potential market volatility as the tariff details emerge and trading partners respond.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Always do your own research and consider your financial situation before making investment decisions.
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Harry