Stock Market Update

The S&P 500 futures are up 10 points and are trading 0.1% above fair value, the Nasdaq 100 futures are up 44 points and are trading 0.2% above fair value, and the Dow Jones Industrial Average futures are up 58 points and are trading 0.1% above fair value.

There is a bid in the futures market that has been helped by a batch of better-than-expected earnings results out of the financial sector. JPMorgan Chase (JPM), Wells Fargo (WFC), BlackRock (BLK), Morgan Stanley (MS), and Bank of New York Mellon (BK) all exceeded consensus Q1 earnings estimates.

JPMorgan Chase CEO Jamie Dimon observed that the economy is facing considerable turbulence, including geopolitics, and acknowledged that asset prices are still rather high. That view has likely tempered some of the enthusiasm for the earnings news along with the news that China is imposing a 125% tariff rate on imported goods from the U.S. and will be ignoring tariffs if the U.S. continues to impose tariffs on Chinese goods exported to the U.S.

On a related note, Reuters is reporting that U.S. chipmakers that outsource their manufacturing will be exempt from China's retaliatory tariffs. Separately, Bloomberg is reporting that Treasury Secretary Bessent will be in charge of trade negotiations to prevent higher country-specific tariffs from going into effect again. 

Today's economic calendar features the March Producer Price Index at 8:30 a.m. ET and the Preliminary April Univ. of Michigan Consumer Sentiment Report at 10:00 a.m. ET. A lot of eyes will be fixed on the inflation expectations component of that report.

In corporate news:

• Bank of New York Mellon (BK 78.01, +1.40, +1.8%): beats by $0.08, reports revs in-line
• BlackRock (BLK 885.00, +26.22, +3.1%): beats by $1.16, reports revs in-line
• Frontier Airlines (ULCC 3.66, +0.09, +2.5%): lowers guidance for Q1, unable to reaffirm FY25 guidance due to the uncertain environment, cites weakened demand in March
• JPMorgan Chase (JPM 231.28, +4.17, +1.8%): beats by $0.44, beats on revs; expects FY2025 net interest income of ~$94 bln, market dependent
• Morgan Stanley (MS 108.15, +1.57, +1.5%): beats by $0.39, beats on revs, Investment Banking revenue up 7.7%
• Wells Fargo (WFC 64.02, +0.91, +1.4%): beats by $0.16, misses on revs; expects 2025 net interest income to rise ~1% to 3% versus 2024, unchanged from prior guidance
• Stellantis (STLA 8.66, -0.25, -2.8%): Q1 shipments decline 9% yr/yr
• Accenture (ACN 285.50, +0.28, +0.1%) and Booz Allen Hamilton (BAH 105.33, -3.48, -3.2%): Secretary of Defense Pete Hegseth announces DOD will cut Accenture and Booz Allen Hamilton contracts

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended the week on a mixed note while Japan's Nikkei (-3.0%) underperformed alongside a rally in the yen. Japan's Nikkei: -3.0%, Hong Kong's Hang Seng: +1.1%, China's Shanghai Composite: +0.5%, India's Sensex: +1.8%, South Korea's Kospi: -0.5%, Australia's ASX All Ordinaries: -0.8%.
  • In economic data:
    • Japan's March M2 Money Stock 0.8% yr/yr (expected 1.2%; last 1.2%)
    • India's February Industrial Production 2.9% yr/yr (expected 4.0%; last 5.2%) and February Manufacturing Output 2.9% m/m (last 5.8%)
    • New Zealand's March Business NZ PMI 53.2 (last 54.1)
  • In news:
    • The Nikkei was down nearly 6.0% at the open but recovered some of its loss.
    • China responded once again, announcing that its tariff on imports from the U.S. will be raised to 125% after President Trump increased the tariff on imports from China to 145%.
    • China's President Xi is scheduled to visit Vietnam, Malaysia, and Cambodia between April 14 and 18, looking to discourage nations from making a trade deal with the U.S.
    • The Philippines Central Bank lowered its policy rate by 25 basis points to 5.50%, as expected.
• Major European equity markets are trading mostly lower, pressured by escalating U.S.-China trade tensions after China announced increased tariffs on U.S. goods. STOXX Europe 600: -0.2%, Germany's DAX: -1.4%, U.K.'s FTSE 100: +0.5%, France's CAC 40: -0.5%, Italy's FTSE MIB: -1.0%, Spain's IBEX 35: -0.1%.
  • In economic data:
    • Germany's final March CPI 0.3% m/m, as expected (last 0.4%); 2.2% yr/yr, as expected (last 2.3%)
    • U.K.'s February GDP 0.5% m/m (expected 0.1%; last 0.0%); 1.4% yr/yr (expected 0.9%; last 1.2%). February Construction Output 0.4% m/m (expected 0.2%; last -0.3%); 1.6% yr/yr, as expected (last 0.0%). February Industrial Production 1.5% m/m (expected 0.1%; last -0.5%); 0.1% yr/yr (expected -2.3%; last -0.5%). February Manufacturing Production 2.2% m/m (expected 0.2%; last -1.0%); 0.3% yr/yr (expected -2.4%; last -0.9%). February trade deficit GBP20.81 bln (expected deficit of GBP17.30 bln; last deficit of GBP18.22 bln)
    • Spain's final March CPI 0.1% m/m, as expected (last 0.4%); 2.3% yr/yr, as expected (last 3.0%)
    • Swiss SECO Consumer Climate -35 (expected -32; last -34)
  • In news:
    • The pan-European STOXX 600 turned negative mid-morning, reflecting investor anxiety over the ongoing trade disputes and the potential impact on global growth while the U.K.'s FTSE (+0.5%) outperforms after the release of strong growth figures for February.
    • French President Macron characterized the 90-day U.S. tariff pause as merely a "fragile pause" creating ongoing uncertainty for businesses.
    • Echoing concerns about the U.S. approach, ECB policymaker Villeroy de Galhau stated that President Trump's economic agenda represents the "wrong path." Meanwhile, ECB President Lagarde highlighted Europe's vulnerability due to reliance on U.S. and Chinese payment systems, calling for stronger European alternatives amidst the geopolitical friction. She also said that the central bank is ready to use its policy instruments, if needed.
    • The EU will negotiate the removal of tariffs on imports of Chinese electric vehicles.