Mid-Morning Look

Tuesday, March 18, 2025

After posting its first 2-day win streak in roughly a month on Monday, the S&P 500 (SPX) tumbles 1% on the open, down nearly 100 points from its high seen just minutes before the close yesterday as geopolitical tensions rise amid tariff headlines, and investors remain concerned about slowing US growth/higher inflation. Tech has been the biggest drag for markets in 2025 (after leading in 2023 and 2024) as the QQQ already the 10th daily decline of -1.5% or worse this year with today’s drop (AMZN, GOOGL, NVDA, META, TSLA tumble again). Markets awaiting headlines related to Trump/Putin as the two leaders are expected to speak today about Ukraine situation. U.S. economic data was stronger than expected for a change, with February Housing Starts coming in well above consensus estimates and prior month figures, while both import and export prices showed a jump this month/prior month and topped expectations. The data bounced Treasury yields and the dollar. Asian markets higher overnight for a third straight session with Hong Kong up nearly 2.5% and Japan up over 1% while European markets stronger, as investors sell the US and buy overseas. After a brief bounce on Friday and some small carryover yesterday, stock markets are back to downward momentum as every bounce met with accelerating selling pressure. Energy, Healthcare and REITs hold up well while Technology Communication Services and Consumer Discretionary down sharply on day (and year).

On Wednesday, the Federal Reserve will announce its interest-rate decision, followed by a press conference from Fed Chair Jerome Powell. The Fed will release a new policy statement at 2 p.m. et on Wednesday and though the central bank is expected to leave its benchmark overnight interest rate unchanged in the 4.25%-4.50% range, it will also issue new economic projections from policymakers that will give an idea of how they feel President Trump’s policies will affect economic growth, inflation and unemployment, and how interest rates may need to change as a result. U.S Treasury Secretary Bessent says on April 2, each country will get a tariff number; says for some countries, April 2 tariff may be low; says reciprocal tariffs won’t be automatic 25% plus 25%; says 15% of countries to make up bulk of tariffs.

• Feb import prices +0.4%, above consensus (-0.1%) and vs Jan +0.4% (prev +0.3%), while February export prices rose +0.1% vs. consensus (-0.2%) and vs Jan +1.3% (prev +1.3%); Feb year-over-year import prices +2.0%, export prices +2.1% and Feb non-petroleum import prices +0.4%, year-over-year +2.1%.
• February Industrial production rose +0.7%, topping consensus +0.2% and was above January +0.3%; Feb mining output +2.8%; Feb capacity utilization rate 78.2% above consensus 77.8% and vs Jan 77.7%; Feb manufacturing output +0.9% (consensus +0.3%) vs Jan +0.1% (previous -0.1%); cap use 77.0% vs Jan 76.4%.

• In Gas & Coal: Stephens upgraded CNX to Overweight from Equal Weight and raised price target to $48, raising its net asset value (NAV) estimate 37% to $48 based on recent 2025-2027 NYMEX strip prices and the company’s year-end 2024 proved reserve report and upgraded EQT to Overweight (tgt to $59 from $41) and raised its NAV estimate 44% to $59 based on recent 2025-2027 NYMEX strip prices. Coal names ARLP, BTU, CNX, HCC shares were active after Trump’s post last night: “I am authorizing my Administration to immediately begin producing Energy with BEAUTIFUL, CLEAN COAL.”
• In Retail: RL was upgraded to Buy from Neutral at Goldman Sachs as believes improving execution and momentum within the company’s brand elevation strategy will drive additional market share capture opportunities and margin expansion. In Broadline/Hardline retail: The Financial Times reported COST is reportedly pushing suppliers in mainland China to lower prices in response to higher U.S. tariffs, adding pressure to manufacturers already operating on thin margins. Walmart and other retailers have made similar demands, according to suppliers.

• HROW +23%; after posting strong 4Q preliminary results as revenues of $65M-$67M beat consensus ($58.4M) and co sees 2025 revenue over $280M vs. consensus ($281.2M).
• NEM +1%; along with gains in GOLD, GFI and other gold miners as the group outperforms with gold prices hitting new all-time highs above $3,047 an ounce today.
• NIO +2%; as announced its partnership with CATL to establish a battery swapping network for cars. CATL will support NIO in developing the battery swapping network while the battery giant’s Choco-Swap technical standards and network will be introduced to Firefly-branded newly developed models
• RL +3%; was upgraded to Buy from Neutral at Goldman Sachs as believes improving execution and momentum within the company’s brand elevation strategy will drive additional market share capture opportunities and margin expansion.
• WTW +2%; upgraded to Buy from Neutral at UBS and raised tgt to $395 from $344 as sees continued multiple expansion for WTW relative to the insurance brokerage group.

• COIN -4%; as crypto space slides with Bitcoin down over 3% as MSTR, MARA, HUT, IREN others tumble.
• ETR -2%; as announced 15.569M share Spot Secondary priced at $83.50 ($1.3B offering).
• GOOGL -3%; announced it has signed a definitive agreement to acquire Wiz, a leading cloud security platform headquartered in New York, for $32B, subject to closing adjustments, in an all-cash transaction.
• NVDA -3%; sliding ahead of its GTC event today/this week.
• SRPT -22%; shares tumbled after death of patient with Duchenne muscular dystrophy (DMD) that passed away following treatment with ELEVIDYS, having suffered acute liver failure. https://tinyurl.com/5deupucj
• TSLA -6%; after China’s BYD Co. unveiled a line-up of electric vehicles that it says can charge almost as fast as it takes to refuel a regular car.