Early Look

Monday, March 10, 2025

US stock futures fall solidly overnight as investors remain concerned about macro issues (tariffs, inflation, interest rates) ahead of a busy week of economic data, headlined by a report on inflation (CPI Wednesday and PPI on Thursday). Recession fears arising for the US economy after President Donald Trump said he hates “to predict things” when asked if a recession was coming (Barron’s). S&P and Nasdaq futures are down over 1% after U.S. stock markets sunk again last week, kicking off the new month where February concluded as the S&P 500 and Nasdaq Composite posted their third straight week of losses, longest losing streak since mid-July-early August. The S&P 500 registered its biggest weekly percentage decline since September down -3.08% while Nasdaq down -3.45%, Dow down -2.37% and the Russell 2000 was -3.89%. The week also saw the Nasdaq enter “correction” territory, defined as a 10% pullback from its recent highs (in mid-December), while the S&P 500 dropped below its pivotal 200 day moving average (dma) both Thursday and Friday before settling just above the end the week. Smallcap Russell 2000 is down nearly 15% from its all-time highs and is down nearly 7% for the year.

Lots of important data this week as investors get to digest the February CPI/PPI data as well as JOLTs, University of Michigan Sentiment/Inflation Expectations as well as the NY Fed 1-year Inflation expectations. Headline CPI is expected to fall to 2.9% y/y from 3% and Core to drop 0.1% to 3.2%. Oil prices are little changed but remain under pressure this month as U.S. import tariff concerns raise fears for global economic growth, exacerbated by planned OPEC+ output hikes. Bitcoin prices hit lows just above $80,000 overnight, down -5% as risk assets under pressure. The dollar index (DXY), a measure of the greenback against a basket of peers, is down -0.23% to 103.60, down 2.6% over the past five days and has dropped 4% in the past month. In Asian markets, The Nikkei Index gained 141 points to 37,028, the Shanghai Index dipped -6 points to 3,366, and the Hang Seng Index fell -447 points to 23,783. In Europe, the German DAX is down -187 points to 22,821, while the FTSE 100 is down -37 points to 8,642.

Several S&P index announcements were made late Friday afternoon:

1) Palantir Technologies Inc. (PLTR), Intuitive Surgical Inc. (ISRG) and ServiceNow Inc. (NOW) will replace Dow Inc. (DOW), Kraft Heinz Company (KHC) and Ford Motor Co. (F) in the S&P 100, respectively. All companies being removed from the S&P 100 will remain in the S&P 500.

2) DoorDash Inc. (DASH), S&P MidCap 400 constituents TKO Group Holdings Inc. (TKO), Williams-Sonoma Inc. (WSM) and Expand Energy Corp. (EXE) will replace BorgWarner Inc. (BWA), Teleflex Inc. (TFX), Celanese Corp. (CE) and FMC Corp. (FMC) in the S&P 500 respectively.

3) S&P SmallCap 600 constituents VF Corp. (VFC), Alaska Air Group Inc. (ALK) and Hims & Hers Health Inc. (HIMS), will replace TKO Group Holdings, Williams-Sonoma and Expand Energy in the S&P MidCap 400 respectively. Teleflex, Celanese, FMC and BorgWarner will replace VF, Alaska Air Group, Hims & Hers Health, and Ambac Financial Group Inc. (AMBC) in the S&P SmallCap 600, respectively.

4) S&P SmallCap 600 constituents Bath & Body Works Inc. (BBWI), ATI Inc. (ATI) and EchoStar Corp. (SATS) will replace The Chemours Co. (CC), Teradata Corp. (TDC) and Neogen Corp. (NEOG) in the S&P MidCap 400 respectively. Chemours, Teradata and Neogen will replace Bath & Body Works, ATI and EchoStar in the S&P SmallCap 600 respectively.

5) Ryman Hospitality Properties Inc. (RHP), Element Solutions Inc. (ESI), Freshpet Inc. (FRPT), WillScot Holdings Corp. (WSC), Mueller Water Products (MWA), Kratos Defense & Security Solutions Inc. (KTOS) and CleanSpark Inc. (CLSK) will replace Wabash National Corp. (WNC), Green Dot Corp. (GDOT), Fulgent Genetics Inc. (FLGT), Nabors Industries Ltd (NBR), Green Plains Inc. (GPRE), Mativ Holdings Inc. (MATV) and Hain Celestial Group Inc. (HAIN) in the S&P SmallCap 600 respectively.

• The Dow Jones Industrial Average rose 222.64 points, or 0.52%, to 42,801.72.
• The Nasdaq Composite gained 126.97 points, or 0.70%, to 18,196.22.
• The Russell 2000 Index advanced 8.93 points, or 0.43% to 2,075.48.

• Earnings After the Close: ASAN AVO FTK GAIA HPK LMB MTN NX ORCL PAY RDW

• Deutsche Bank 33rd Annual Media, Internet & Telecom Conference, 3/10-3/12 in Palm Beach, FL
• Goldman Sachs 13th Annual Latin America Financials Conference, 3/10-3/11, in London
• Loop Capital Markets Investor Conference, 3/10-3/11, in New York
• Piper Western Bank Forum, 3/10-3/11, at Ritz Carlton, Marina Del Rey Ca.

• HSBC downgrades U.S. stocks to neutral and upgrades Europe (ex-UK) to overweight citing the U.S. downgrade due to market factors pricing in a “mini earnings recession” in early 2025, while the European upgrade is driven by game-changing fiscal stimulus in the Eurozone.”

• Uber (UBER) and Lyft (LYFT) dominate ride-hailing in North America, a position that has helped them turn cash-burning operations into moneymakers. Now Bolt, an Uber rival in Europe and Africa, is trying to undercut the two ride-hailing companies in their home markets, The Information reported.
• Xpeng (XPEV) Chairman He Xiaopeng said on Saturday the company plans to mass-produce its modular flying car for the first time in 2026.
• Yum China Holdings (YUM) named Adrian Ding chief financial officer, removing the interim tag he has carried since October. Yum China on Monday said the appointment comes after a thorough search process following the resignation of its former finance chief, Andy Yeung.

• Grainger (GWW) and Fastenal (FAST) both upgraded to Outperform from Market Perform at William Blair
• Knight-Swift (KNX) upgraded to Neutral from Sell at Citigroup.
• Sherwin-Williams (SHW) downgraded to Hold from Buy at Jefferies
• Whitecap Resources (WCP.TO) said on Monday it will merge with Veren (VRN) in an all-share transaction including debt to form a $15 billion company.

• DexCom (DXCM) receives a warning letter from FDA following inspections late Friday; says doesn’t expect material impact on FY25 rev guidance.
• Nordisk (NVO) announced headline results from REDEFINE 2, a phase 3 trial in the global REDEFINE program. REDEFINE 2 is a 68-week efficacy and safety trial investigating once-weekly subcutaneous CagriSema (compared to placebo. The trial included 1,206 randomized people with obesity or overweight and type 2 diabetes and a mean baseline body weight of 102 kg. The trial achieved its primary endpoint by demonstrating a statistically significant and superior weight loss at week 68 with CagriSema versus placebo.
• Trevi Therapeutics, Inc. (TRVI), announced results from its Phase 2a RIVER trial of Haduvio for the treatment of patients with RCC (N=66). Haduvio met the primary endpoint with a statistically significant reduction in the objective 24-hour cough frequency of 67% from baseline and 57% on a placebo-adjusted basis (p<0.0001).

• DocuSign (DOCU) upgraded to Neutral from Underweight at JPMorgan.
• NVent (NVT) said it will acquire the electrical products group business of Avail Infrastructure Solutions for $975M; expects acquisition to be accretive to EPS in first year.
• Perion Network (PERI) expands share repurchase program to $125M
• Taiwan Semiconductor (TSM) February revenue rose 43% on year to NT$260.01B; February revenue fell 11% on month; January-February revenue NT$553.30b, up 39% on year.