MARKET WRAPS

Stocks:

European stocks were lower on Thursday, reversing course after initially tracking gains on Wall Street following the Federal Reserve interest rate decision .

Fed officials downplayed the impact of tariffs on inflation, which further boosted sentiment.

The Swiss National Bank cut rates, while Sweden's Riksbank held, with the Bank of England also expected to hold.

The U.K. central bank expects inflation to continue to slow over the next few months, but it wants to be sure it is on track and avoid lowering borrowing costs too quickly .

Meanwhile, Christine Lagarde said a rise in U.S. tariffs on imports from the European Union that was met with retaliation would weaken economic growth in the eurozone and push inflation higher .

Stocks to Watch

Lloyds Banking Group is set to see faster and more sustainable income growth than NatWest and Barclays, HSBC said, lifting the stock rating to buy from hold and its target price to 85 pence from 61 pence.

U.S. Markets:

Stock futures edged lower after Wall Street rallied following a pause by the Fed on interest rates.

Stocks to Watch

Nvidia rose 1.4% premarket. Intel was up 0.7%.

Tesla was rising 1.3%. Weeks of losses resulted in an upgrade from Cantor Fitzgerald, which raised its recommendation on Tesla to Buy from Hold, citing "material catalysts" for the stock.

Forex:

The euro edged lower after Christine Lagarde warned of weaker growth but downplayed the risk of higher inflation if Trump's plans for tariffs against the EU were met with retaliation.

Lagarde said this scenario would reduce economic growth by half a percentage point in the first year and lift inflation by the same proportion.

However, she said the inflationary impact would fade over time, signalling the ECB would not respond with higher rates.

The dollar rose as investors continued to digest the Fed's latest policy decision.

The dollar initially fell after the decision. However, Swissquote Bank said the prospect of rate cuts which would reduce the chances of recession could support the dollar.

"Right now the currency pricing is influenced by growth expectations."

HSBC Global Research said the key for the dollar is likely to rest more on how U.S. trade policy evolves, rather than monetary policy.

"For the USD, the March FOMC was sufficiently neutral not to challenge the prevailing USD bearish mood, especially with U.S. yields falling."

However, that wasn't enough to prompt sustained USD selling either, it said.

Sterling was little changed after data showed the U.K. unemployment rate remained unchanged and wage growth steadied in the three months to January, as expected.

The data came ahead of the Bank of England's interest rate decision at 1200 GMT.

"There is nothing in this data that will shift the BOE away from its current thinking about the economy, with interest rates almost certainly set to remain unchanged today," Aberdeen said.

The Swiss franc fell after the Swiss National Bank cut interest rates by 25 basis points to 0.25%.

The Swedish krona only briefly edged lower after Sweden's Riksbank kept its key policy rate at 2.25% and said rates would likely stay at this level going forward, as had been widely expected.

Energy:

Oil prices rose in early trade on signs of strong U.S. demand and Powell saying the impact of tariffs on inflation would likely be temporary.

"U.S. gasoline inventories have fallen for three consecutive weeks. They're now the lowest since early January," ING said.

The EIA also reported a 2.8 million-barrels fall in distillate fuel stocks, pointing to a healthy demand outlook in the world's top crude consumer.

Prices were also supported by escalating geopolitical risks in the Middle East, but gains were limited by global trade tariff risks and prospects of an oversupplied market.

The European gas market is about to enter its critical restocking phase after the heating season, but so far storage injection rates are lagging behind previous years, according to ANZ Research.

"Storage levels are at levels not seen since the energy crisis of 2021-22 due to strong demand during the heating season."

Metals:

Gold futures rose to near record highs, after the Fed indicated it would likely cut interest rates twice over 2025.

While lower interest rates are typically a boon for non-interest-bearing bullion, the precious metal gained on the dollar's subsequent weakening and policymakers' acknowledgment of rising inflation levels, boosting gold's safe-haven appeal.

Comex Gold futures' uptrend is still intact, according to the daily chart, RHB Retail Research said.

Despite the precious metal posting a 'Doji' candlestick that indicates neutral market sentiment on Wednesday, bullish momentum remains reflected by the upward-sloping relative strength index.

"We anticipate the positive price action to follow through for the immediate session," RHB said, and added that the precious metal is on track to test the $3,100 level.

On the downside, immediate support is at $2,900, followed by subsequent support at $2,850.

EMEA HEADLINES

Swiss Watch Exports Report a Marked Slowdown

Exports of Swiss watches slowed significantly in February, reversing the previous month's positive trend, due to declines in key markets.

Total exports of Swiss timepieces dropped 8.2% to 1.98 billion Swiss francs ($2.26 billion) in February compared with the prior-year period, according to data from the Federation of the Swiss Watch Industry, known as FH. The overall decrease for the first two months of 2025 was of 2.4%.

Hold the Obituary: Europe Comes to Life as U.S. Stumbles

At the World Economic Forum in Davos two months ago, the mood around Europe was funereal. Its economy and markets had underperformed the U.S. for years. Now a newly inaugurated President Trump promised to sledgehammer Europe with tariffs while juicing U.S. growth with lower taxes, less regulation and cheaper energy.

As usual, the Davos consensus got it wrong. Since then, the moods across the Atlantic have switched places. European stocks are up nicely, while the American market has had a correction (a 10% drop). On Wednesday, Federal Reserve officials revised their outlook for inflation up and for growth down. The dollar, which shot up after Trump was elected, has sunk.

Hapag-Lloyd Expects Earnings to Sink This Year in Stormy Market Conditions

Hapag-Lloyd expects significantly lower earnings this year amid a fragile economic and geopolitical climate, with continuing tensions in the Middle East and escalating trade disputes from U.S. tariffs and countermeasures from export nations.

The German shipping company, the world's fifth-largest container line by capacity, expects to report earnings before interest, tax, depreciation and amortization of between 2.4 billion and 3.9 billion euros ($2.62 billion-$4.25 billion) in 2025, with earnings before interest and tax of between zero and 1.5 billion euros.

RWE Raises Dividend After Earnings Declined But Beat Expectations

RWE raised its dividend after its 2024 earnings fell but beat analysts' expectations.

The German energy company said it achieved 2.32 billion euros ($2.53 billion) in adjusted net profit for last year, compared with 4.1 billion euros a year prior.

GLOBAL NEWS

Tariffs Are a Risk for Midsize Businesses, and Their Lenders

With the S&P 500 having entered correction territory, big-company stocks are pricing in the potential effects of policies such as tariffs in real time. But for a lot of investors, that isn't where their exposure ends.

Many big and small investors have in recent years gotten into funds that lend to middle-market private companies. So those investors need to size up their risks in that market, too.

A Housing Expert Sizes Up the Outlook for Home Sales, Mortgage Rates, and Tariff Impacts

After three straight years of declining sales, the U.S. housing market is emerging from a cold winter into an uncertain spring. House prices are still expensive, mortgage rates are still high, and buyers, sellers, and builders all are struggling to understand how the Trump administration's trade, immigration, and regulatory policies will change the landscape, literally and figuratively. Meanwhile, the historically important spring selling season is about to start.

Barron's recently checked in with Robert Dietz, chief economist at the National Association of Home Builders, to get a read on the housing industry's anxieties and opportunities. What do tariffs mean for housing costs? Where are mortgage rates heading? And will supply stay constrained? You'll find Dietz's answers to these and other questions in the edited interview that follows.

Bye America, Buy Canadian: Consumers, Retailers Change Tack to Counter Tariff Stresses

OTTAWA-Canadian consumers are responding to U.S. tariffs and presidential musings of annexation with a "Buy Canadian" movement that retailers and producers are swiftly embracing.

Prominent maple leaves now line grocery-store aisles, "Made in Canada" labels stand out on packaging and social media buzzes with suggestions for Canadian alternatives to American staples. The shift offers a salve for an economy bracing for a hit to American demand, and hope that a more domestic-focused consumer base could offer longer-term benefits.

Trump Floats Idea of U.S. Owning Ukrainian Power Plants as He Pushes Cease-Fire

President Trump raised the possibility that the U.S. would acquire Ukrainian power plants, including nuclear facilities, calling it the "best protection for that infrastructure," as the White House tries to jump-start talks to halt the Ukraine-Russia war.

Trump's proposal during a phone call Wednesday with Ukrainian President Volodymyr Zelensky is a new twist in peace efforts, which included a still-unsigned deal that would give the U.S. rights to hundreds of billions of dollars of rare-earth minerals.

Trump Officials Circulate Plan That Would Overhaul USAID

The Trump administration is crafting plans to reorganize the U.S. Agency for International Development, which had been dismantled by Elon Musk's Department of Government Efficiency, according to a memo detailing the plans.

The agency would be renamed the U.S. Agency for International Humanitarian Assistance and fall under the control of the State Department to help enhance national security and counter adversaries like China, according to the memo, viewed by The Wall Street Journal. USAID had long operated as an independent agency with its own administrator.

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This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

March 20, 2025 06:29 ET (10:29 GMT)

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