📆 Wednesday, February 19
► European markets were muted, as Trump’s new tariff threats and geopolitical concerns weighed on sentiment. The Stoxx 600 is little changed (- 0.1%), however we see the index up 10% year-to-date. In corporate news, Glencore (-6.7%) fell sharply on weaker earnings, while HSBC (+0.6%) saw gains on a profit beat but trimmed most of them. Dutch multinational conglomerate Koninklijke Philips (-11%) fell sharply following disappointing earnings. Trump proposed a 25% tariff on automobile, semiconductor, and pharmaceutical imports, adding to market uncertainty. German elections on Sunday and the exclusion of European officials from U.S.-Russia “peace” talks created further unease. UK inflation rose to 3% in January, above expectations, briefly boosting the pound before it pared gains. Bond yields edged higher, with Germany’s 10-year yield higher sitting at 2.53% (+ 3 bps), while the UK’s 10-year yield at 4.61% (+ 5 bps).
► U.S. markets steadied after hitting a record high on Tuesday, before turning cautious ahead of the FOMC minutes release today. The S&P 500 hit an all-time high, crossing $51 trillion in total market cap, with utilities, financials, and in particular energy stocks leading gains. Nasdaq posted modest increases, as investors brushed off Trump’s new tariff threats and focused on earnings and AI-driven optimism. Trump’s tariff plans added uncertainty, as he proposed a 25% levy (on automobile, semiconductor & pharmaceutical imports), set to take effect as soon as April 2. The potential impact on inflation and trade relations has made investors more cautious, especially ahead of the Fed’s January meeting minutes release later today. Treasury yields are slightly up, with the 10-year yield at 4.56% (+ 2 bps), while the USD held firm. Fed Governor Christopher Waller reinforced a “wait-and-see” stance on rate cuts, emphasizing that inflation progress is still needed before monetary easing.
► Asian markets were mixed, with China rebounding but Japan struggling on weak economic data. Shanghai’s Composite rose 0.81%, lifted still by the DeepSeek AI enthusiasm and tech optimism after President Xi met with Alibaba’s Jack Ma. However, Baidu (-7.3%) fell after a revenue decline, pressuring Hong Kong’s Hang Seng Index (-0.14%). Japan’s Nikkei fell 0.34% as machinery orders unexpectedly declined and a trade deficit widened. New Zealand’s central bank cut rates by 50 bps to 3.75%, sending the NZD lower.
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