Last Week's Recap
The US Market - The major indexes rallied modestly
U.S. stocks posted modest gains last week, snapping a four-week losing streak. The S&P 500 edged up 0.5%, while the Dow climbed 1.2%, though it remains below its 200-day moving average.
The Federal Reserve kept its benchmark interest rate unchanged at 4.5% for a second straight meeting. Updated projections showed 50 basis points in rate cuts this year, as GDP growth slows to 1.7%. The Fed raised its year-end forecast for unemployment to 4.4% and core inflation to 2.8%.
Federal Chair Powell's view that inflation caused by Trump tariffs will be "transitory" and he emphasized the Fed’s slower approach to reducing its balance sheet, particularly in offloading Treasurys.
Trump maintained that the tariffs implemented at the April 2 deadline will be reciprocal, saying all countries that have tariffs on U.S. goods will be charged.
The US Sectors & Stocks - TSLA bottoms out
The energy and financial sectors led the S&P 500 sectors to rebound, as they often benefit from inflation and tariff uncertainty. The Energy Select ETF (XLE) gained nearly 8% despite oil prices slipping 2% year-to-date, while the Financial Select ETF (XLF) rose more than 2%. Meanwhile, the Tech (XLK) and Consumer Discretionary (XLY) sectors remain deep in the red, down 8% and 12%, respectively.
Nvidia (NVDA) CEO Jensen Huang introduced the company's next-generation AI processor, Blackwell Ultra, and presented the product roadmap for the next three years at its GTC conference. Blackwell Ultra products are due out later this year. Jensen forecast data center capital spending doubling to $1 trillion by 2030 from 2025. However, NVDA share price lost roughly 3% during the week.
Tesla (TSLA) held a surprise all-hands company meeting late Thursday. Elon Musk took the stage to once more tout the company's long-term strategy around robotaxis, artificial intelligence and robotics, including the expected demand around Tesla's Optimus humanoid robot. Musk said Tesla expects to produce 5,000 Optimus humanoid robots in 2025 and 50,000 in 2026. While Tesla shares rebounded from recent lows, they remain down 38% year-to-date.
Nike (NKE) tumbled more than 5% after weak quarterly results and a disappointing outlook. The stock hit a 52-week low, as tariffs and softening consumer demand complicate its turnaround.
FedEx (FDX) declined 5% last week as the shipping company reported weaker-than-expected earnings and cut its full-year forecast, citing “continued weakness and uncertainty” in the U.S. industrial economy.
Micron Technology (MU) beat expectations for its fiscal second quarter thanks to strong data-center business. It also guided higher than views for fiscal Q3. However, the memory-chip maker dropped 6% last week.
Google-parent Alphabet (GOOGL) will buy the fast-growing, privately held cybersecurity firm Wiz for $32 billion cash. The Wiz deal would mark Google's biggest acquisition ever. Wiz would join Google's cloud computing business.
Intel (INTC) shares declined after a TSMC board member denied reports that the company was in talks to take over Intel’s foundry business. Earlier speculation had fueled a rally in Intel stock after reports suggested TSMC, Nvidia, AMD, and Broadcom were exploring a joint venture for the operation.
Berkshire Hathaway (BRK.B) raised its holding stakes in Japan’s largest trading houses, which were Mitsubishi Corporation, Mitsui & Co., Marubeni Corporation, Sumitomo Corporation, and Itochu Corporation.
Hong Kong Market - HSI extend losses amid geopolitical tensions
The Hong Kong stock market continued to decline, with the Hang Seng Index (HSI) slipping 1.13% for the week, following a 1.12% drop in the previous week. The market remains under pressure from global economic uncertainty and escalating geopolitical risks.
CK Hutchison (0001.HK) reported a 24% surge in earnings from its ports business, generating HK$13.1 billion. However, its $22.8 billion sale of 43 ports to BlackRock drew criticism from Beijing. The backlash has heightened geopolitical tensions.
Tencent Holdings (0700.HK) reported full-year 2024 results beating consensus. Its capital expenditures for 2024 soared to 76.7 billion CNY (up 221% YoY), with AI-related R&D investment accounting for 70.7 billion CNY. The company announced plans to repurchase at least HKD 80 billion worth of shares in 2025.
Xiaomi Group (1810.HK) posted record-breaking Q4 and full-year 2024 results, calling them the "strongest in its history." Buoyed by its performance, Xiaomi raised its 2025 delivery target for Xiaomi Auto to 350,000 units, reinforcing its aggressive push into the electric vehicle market.
Singapore Market - STI rallied 2.4%
Singapore shares rose 2.4% this week following the US Federal Reserve’s decision to hold off on interest-rate cuts on Wednesday. This move provided Asian markets with a breather and more room for certainty.
Singapore’s economy expanded by 5% year-over-year in Q4 2024, far exceeding the median forecast of 3.1%, according to data from MAS. Looking ahead, economists expect GDP to grow 3.8% in Q1 2025.
Australian Market - ASX200 rallied 1.8%
The Australian share market posted its strongest week of the year, with the ASX 200 climbing 1.8%, snapping a four-week losing streak. Gains were largely driven by supermarket stocks, which helped lift the index into positive territory.
Australia’s labor market showed signs of weakness. Net employment fell by 52,800 in February, a sharp contrast to January’s revised 30,500 gain. The drop was well below expectations for a 30,000 increase, while annual job growth slowed to 1.9% from 3.5% the previous month.
The Week Ahead
Macro Factors - Tariff Deadline; PCE
In the week, investors are bracing for a pivotal week as the Federal Reserve’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) index, takes center stage among economic releases. Meanwhile, tariffs remain a major market concern, with the April 2 deadline looming for President Donald Trump’s reciprocal trade duties.
Economists expect February’s PCE inflation to rise 2.5% year-over-year, unchanged from January, with a 0.3% month-over-month increase. Core PCE, which strips out food and energy costs, is forecast to climb 2.7% annually and 0.3% from the previous month. A hotter-than-expected reading could reignite concerns over the Federal Reserve’s rate outlook and weigh on sentiment.
Earnings season slows, but key reports from Dollar Tree (DLTR), Lululemon (LULU), and KB Home (KBH) will be closely watched. These updates will offer insights into consumer spending trends, retail performance, and the housing market, as investors gauge how different sectors are holding up amid inflation and economic uncertainty.
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