Market Talks covering the impact of U.S. Politics and White House policies on companies and markets. Published exclusively on Dow Jones Newswires throughout the day.
0320 ET - Shares in pharmaceutical companies could come under selling pressure Monday after President Trump said he planned to cut U.S. prescription drug prices, with an announcement expected later Monday, Kathleen Brooks, research director at XTB writes. If Trump uses price caps on pharma imports rather than tariffs to reduce the cost for U.S. patients then this could have "big ramifications" for pharma companies and their profits, she says. AstraZeneca shares fall 4.2% in early trade, GSK loses 2.4% and Novo Nordisk drops 7.7%. (dominic.chopping@wsj.com)
0233 ET - The dollar rises after Treasury Secretary Scott Bessent said the U.S. made substantial progress in trade talks with Chinese officials in Geneva, Switzerland at the weekend. The U.S. and China are set to give more details on the talks Monday. Greater clarity on what the two nations have agreed will likely be needed to give markets the "required confidence to say that peak trade uncertainty and tit-for-tat tariffs are in the rear view mirror," Pepperstone strategist Michael Brown says in a note. For the time being, the prevailing uncertainty remains, meaning the dollar's current strength might not be sustained, he says. The DXY dollar index rises 0.2% to 100.574.(renae.dyer@wsj.com)
0147 ET - The improved risk sentiment from last week will likely continue following positive news on the U.S.-China trade talks over the weekend, says Danske Bank Research's Filip Andersson in a note. "The past week has to a large extent been characterized by improving risk sentiment across markets, as there have been tentative signs of de-escalation in the trade war," the co-head of fixed income and FX research says. U.S. Treasury Secretary Scott Bessent described the talks as productive. Bessent also said the U.S. will share more details on Monday. (emese.bartha@wsj.com)
0136 ET - Italian government bonds not only defended their year-to-date outperformance in the eurozone's sovereign space in April but also slightly improved it, says LBBW's Elmar Voelker in a note. The temporary risk-off wave due to U.S. President Trump's tariff shock briefly put a widening pressure on spreads of peripheral eurozone government bonds, the senior fixed-income analyst says. However, risk premiums fell back to near their annual lows in parallel with the recovery of share prices, he says. "In the case of Italy, the rapid return to the 'status quo ante' is likely to have been facilitated by a credit-rating upgrade by the S&P agency," he says. S&P Global Ratings in April upgraded Italy's credit rating to BBB+ from BBB with a stable outlook. (emese.bartha@wsj.com)
0108 ET - The feasibility of Trump's intention to cut prescription drug prices in the U.S. is uncertain, but the news is still broadly negative for India pharma, Citi analyst Vivek Agrawal says. A government directive to cut prices by 30% to 80% would usually apply to state-run healthcare systems like Medicare and Medicaid, but the scope of the potential executive order remains unclear, he writes in a note. Citi's take is that the reasons for high U.S. drug prices lie in the insurance system and partly reflect margins taken by middlemen. Simply lowering headline prices may not resolve the issue, it says. Indian firms like Sun Pharma that are exposed to the branded/specialty drug segment look most affected, and generics makers the least. Sun Pharma falls 3.1%; Aurobindo Pharma drops 2.7%.(fabiana.negrinochoa@wsj.com)
2259 ET - U.S.-China trade talks' progress is likely a potential "phase 1.5" deal that resolves the easy part of the negotiations, two economists at Citi Research say in a research report. "The Fentanyl tariffs and escalatory tariffs could be rolled back, and China is likely to make concession in reversible areas," the economists say. It now seems more likely that the U.S.'s effective tariff rate on imports from China is reduced to around 45% as "we move to the potentially hard part of the conversation," the economists add. The U.S. has imposed 145% tariffs on Chinese goods while Beijing has imposed 125% duties on American products. (ronnie.harui@wsj.com)
2037 ET - Some safe-haven assets such as gold and Treasurys weaken on signs of progress in U.S.-China trade talks that were held over the weekend. Treasury Secretary Bessent cited progress and promised more details Monday, while China said the two sides agreed to begin a formal negotiation process. "One would expect sentiment more broadly to firm," Pepperstone's Michael Brown says in an email. However, "conviction could be somewhat lacking for the time being, particularly as we await greater clarity on what exactly has been agreed," the senior research strategist adds. Spot gold is 1.3% lower at $3,283.64/oz. 10-year Treasury yield is up 4 bps at 4.4133%, according to FactSet. (ronnie.harui@wsj.com)
1958 ET - U.S.-China trade talks held over weekend appear to show substantial progress, Wedbush analysts say, citing comments from Treasury Secretary Bessent. Although the details and framework for the U.S.-China trade deal will be key and discussed Monday, "this is a huge positive in the right direction for the markets and more progress has come out of these Swiss talks than even the bulls were hoping for heading into Friday night," the analysts say. "The talks were very productive and we would expect at a minimum the 145% tariff to initially go to a much lower level with potentially a freeze on some of these China tariffs while more talks continue and a framework for a deal becomes clearer," the analysts add. (ronnie.harui@wsj.com)
(END) Dow Jones Newswires
May 12, 2025 03:20 ET (07:20 GMT)
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