In an interview with CNBC, former President Donald Trump reaffirmed his support for tariffs, stating, “I’m a big believer in tariffs.”
He hinted at the possibility of reinstating duties on foreign goods if he were to be reelected for a second term, citing both economic advantages and diplomatic leverage associated with targeting imports.
“I fully believe in them economically when you’re being taken advantage of by other countries,” Trump emphasized during the “Squawk Box” interview. “Beyond the economics, it gives you power in dealing with other countries.”
Steel industry revival hailed by Trump through imposition of 25% tariffs. (Credits: Pexels)
Trump’s remarks come amid a closely contested race with President Joe Biden, with Trump poised to secure the Republican nomination given his recent victories in the primaries and the withdrawal of his opponents. The economy is anticipated to be a pivotal issue in the upcoming election.
During his tenure from 2017 to 2021, Trump implemented various tariffs on countries like China, Mexico, and the European Union. Notably, he imposed 25% tariffs on imported steel and aluminum, aiming to protect domestic industries.
Discussing China’s impact on the steel industry, Trump stated, “China was taking advantage of us on the steel. They were destroying our entire steel industry.” He highlighted the emotional response from individuals in the steel sector, expressing gratitude for his actions.
Trump singled out the Chinese automobile industry for future attention, expressing concerns about China’s dominance in the sector.
China’s dominance in the automobile sector was targeted by Trump’s proposed tariffs. (Credits: The Diplomat)
He indicated intentions to impose tariffs to encourage Chinese automakers to establish manufacturing facilities in the United States, asserting, “We want to get cars made by China in the United States using our workers.”
Despite criticism that tariffs could lead to increased prices for imported goods, Trump defended their effectiveness. He argued that tariffs would incentivize companies to relocate manufacturing operations to the United States, thereby creating job opportunities for American workers.
Critics argue that tariffs could be counterproductive, potentially contributing to inflation by raising the cost of imported goods.
However, during Trump’s presidency, inflation remained relatively subdued, with the consumer price index rising by less than 8% over four years, compared to approximately 18% under Biden’s administration.
Presumptive Republican presidential nominee Donald Trump voiced reservations on Monday regarding the proposed ban on the Chinese-owned social media app TikTok in the U.S., suggesting it could inadvertently bolster Meta’s Facebook platform.
“Without TikTok, you can make Facebook bigger, and I consider Facebook to be an enemy of the people,” Trump, who served as U.S. president from 2017 to 2021, remarked during an interview on CNBC’s “Squawk Box.”
While Trump acknowledged concerns regarding national security and data privacy associated with TikTok, he emphasized the platform’s dual nature: “There’s a lot of good and there’s a lot of bad.”
“TikTok has a considerable following, especially among young users who would feel its absence keenly,” Trump added
TikTok, owned by the Chinese tech titan ByteDance, has witnessed a meteoric rise in popularity in recent years, captivating global audiences with its bite-sized videos.
President Biden is open to signing the TikTok ban bill if passed by Congress. (Credits: Britannica)
However, this surge in prominence has also sparked regulatory apprehensions, particularly over fears that the app’s Chinese ownership could entail the sharing of user data upon Beijing’s request.
According to experts, ByteDance, like other Chinese firms, would be legally obliged to comply with such data requests under China’s National Intelligence Law of 2017, which mandates organizations and individuals to assist state intelligence efforts.
In 2020, the Trump administration endeavored, albeit unsuccessfully, to have TikTok removed from U.S. app stores due to these concerns.
Trump subsequently issued an executive order instructing ByteDance to divest TikTok within 90 days. Despite efforts that saw companies like Microsoft expressing interest in acquiring TikTok’s U.S. operations, no viable resolution materialized.
Ongoing concerns persist among U.S. lawmakers regarding TikTok, prompting renewed legislative efforts to address the app’s perceived risks. Separate bills have been proposed, advocating either the divestiture of TikTok by ByteDance or a complete ban.
President Joe Biden, who has echoed national security worries regarding TikTok, has stated his willingness to sign a bill banning the app should Congress approve it.
In contrast, former President Trump has moderated his stance, expressing apprehensions that a TikTok ban could inadvertently strengthen Facebook’s dominance.
During Monday’s interview, Trump reiterated his belief that TikTok poses a national security threat due to its Chinese ownership. However, he also redirected attention towards Facebook, highlighting similar privacy and security concerns on that platform.
“While acknowledging TikTok’s potential as a national security risk given its Chinese ownership, Trump underscored parallel issues with Facebook,” Trump acknowledged.
“If China seeks any information from TikTok, they’ll likely obtain it, posing a national security risk. However, I’m not inclined to boost Facebook’s influence. Banning TikTok could disproportionately benefit Facebook, which I believe has had a detrimental impact on our nation, particularly in the context of elections.”
Addressing Ongoing Concerns Surrounding TikTok
Ongoing concerns persist among U.S. lawmakers regarding TikTok, prompting renewed legislative efforts to address the app’s perceived risks.
Separate bills have been proposed, advocating either the divestiture of TikTok by ByteDance or a complete ban. President Joe Biden, who has echoed national security worries regarding TikTok, has stated his willingness to sign a bill banning the app should Congress approve it.
Trump warns TikTok ban could bolster Facebook, highlights national security risks and privacy issues. (Credits: Pexels)
In contrast, former President Trump has moderated his stance, expressing apprehensions that a TikTok ban could inadvertently strengthen Facebook’s dominance.
During Monday’s interview, Trump reiterated his belief that TikTok poses a national security threat due to its Chinese ownership. However, he also redirected attention towards Facebook, highlighting similar privacy and security concerns on that platform.
“While acknowledging TikTok’s potential as a national security risk given its Chinese ownership, Trump underscored parallel issues with Facebook,” Trump acknowledged.
“If China seeks any information from TikTok, they’ll likely obtain it, posing a national security risk. However, I’m not inclined to boost Facebook’s influence.
Banning TikTok could disproportionately benefit Facebook, which I believe has had a detrimental impact on our nation, particularly in the context of elections.”
The yen’s ascent on Monday, that is March 11th 2024, was fueled by an upward revision in Japan’s growth figures, instigating investor optimism regarding a potential rise in interest rates this month.
The dollar experienced a decline of 0.28%, reaching 146.66 yen as the Japanese currency strengthened, briefly touching 146.54, near Friday’s five-week low of 146.48.
The surge in the yen can be attributed to a growing sentiment among Bank of Japan (BOJ) policymakers favouring the cessation of negative interest rates at their upcoming meeting on March 18-19.
Sources informed Reuters of this shift, citing expectations for substantial pay increases from major Japanese corporations. Notably, the results of the annual “shunto” wage negotiations, are set to be revealed on Wednesday.
When Might Interest Rates Change:
Speculation surrounding the possibility of ending negative rates has gained momentum, with a faction within the BOJ leaning towards this decision. The timing aligns with the upcoming policy meeting, creating anticipation among market participants.
The dollar experienced a decline of 0.28%, reaching 146.66 yen as the Japanese currency strengthened, briefly touching 146.54, near Friday’s five-week low of 146.48.
The window for change appears to be linked with the release of results from the annual wage negotiations, contributing to the broader discussion on Japan’s economic trajectory.
An upward revision to Japan’s economic growth in the last quarter helped the country avoid a technical recession. This revision further solidified the argument that the Japanese economy is robust enough to withstand a shift towards tighter monetary policy.
Lee Hardman, a currency analyst at Japanese bank MUFG, noted that the revision has instilled confidence among market participants regarding the potential exit from the current loose monetary policy settings.
Global Implications and Market Response
While the yen strengthened, the dollar index remained largely unchanged at 102.69, hovering close to the nearly two-month low of 102.33 recorded on Friday.
The monthly payroll figures signalled a cooling U.S. labour market, reinforcing expectations of a policy easing by the Federal Reserve.
The European Central Bank’ (Credits: ECB, Europa)
Current market sentiments point to June as the likely timeline for the first rate cut, with potential adjustments influenced by crucial consumer price index inflation data scheduled for release on Tuesday.
The euro exhibited stability at $1.0941 after a surge to $1.0980 on Friday, marking the first such peak since January 12. The European Central Bank’s recent decision to maintain record-high interest rates last Thursday contributed to this stability.
The bank cautiously laid the groundwork for potential rate reductions later in the year, a move that market participants are keenly monitoring.
Decades of research and studies have failed to yield authentic high-speed rail options in the United States.
In 2014, Texas Central initiated an ambitious plan to connect Dallas and Houston with a bullet train, slashing the travel time from a three-and-a-half-hour drive to a mere 90-minute train ride.
Despite facing numerous challenges and delays, the project has garnered support from key figures, including Amtrak and the U.S. government.
The Urgent Need for High-Speed Rail:
Amid the bustling growth of the Texas Triangle, encompassing the Dallas-Fort Worth metroplex and Houston, the demand for efficient transportation has never been more critical.
Congressman Seth Moulton emphasizes the limited alternatives, stating, “If you don’t build high-speed rail between Dallas and Houston, then you only have two options – expand the airport or expand the highway.”
The escalating population of Texas drivers has taken a toll on roads, leading to severe congestion and safety concerns, with commuters experiencing around 40 hours of delays each year.
Regulatory Challenges and Public Opposition:
Despite the evident need, the Texas Central project has faced repeated delays due to regulatory hurdles, environmental reviews, and property rights disputes.
the Texas Central project has faced repeated delays due to regulatory hurdles, environmental reviews, and property rights disputes. (Credits: Texas Central)
The project’s legal standing was solidified in 2022 when the Texas Supreme Court granted Texas Central the power of eminent domain.
However, this decision has sparked concerns and opposition from local landowners, such as Jody Berry, a Dallas-based farmer whose property is in the proposed alignment.
The High Cost and Global Influences:
The ambitious high-speed rail project comes with a hefty price tag, estimated at $33.6 billion, as of March 2023. Similar projects worldwide, like Japan’s Tokaido Shinkansen system, have encountered substantial cost overruns during development.
Leveraging N700 cars from the Shinkansen system, the Texas effort has garnered significant support from Japanese firms and the U.S. government.
In 2018, the Japan Bank for International Cooperation issued a $300 million loan, and in late 2023, Texas Central received a grant to explore a potential partnership with Amtrak. (Credits: JBIC)
In 2018, the Japan Bank for International Cooperation issued a $300 million loan, and in late 2023, Texas Central received a grant to explore a potential partnership with Amtrak.
Uncertain Future and Government Initiatives:
While the U.S. government, under the Biden Administration, has committed a historic $66 billion to passenger rail, uncertainties loom over publicly subsidized projects.
The California high-speed rail project, connecting Los Angeles to San Francisco, has faced significant challenges, with estimated costs soaring from $33 billion to over $100 billion amid delays and opposition from rural landowners.
Representative Troy Nehls highlights concerns about the Biden Administration’s high-speed rail aspirations, questioning customer demand, economic viability, and impacts on existing rail infrastructure.
The renowned UK-based cosmetics company, The Body Shop, has made a significant announcement regarding its North American presence, revealing the closure of all US-based operations and the initiation of store closures in Canada as part of a bankruptcy filing.
The decision comes amid challenging economic conditions, with a particular impact on traditional retailers operating in malls, catering primarily to the beleaguered middle class.
Why the Shutdown?
The company officially communicated the cessation of its US subsidiary’s operations, effective from March 1, as part of its broader strategy to navigate financial challenges.
The move is attributed to the adverse effects of high inflation experienced in recent years, which have disproportionately affected businesses like The Body Shop.
The move is attributed to the adverse effects of high inflation experienced in recent years, which have disproportionately affected businesses like The Body Shop. (Credits: Business Standard)
The company’s reliance on mall-based retail, coupled with economic hardships faced by the middle class, has contributed to the decision to shutter its operations in the United States.
When Does It Take Effect?
The cessation of operations in the United States became effective on March 1, marking a crucial milestone in The Body Shop’s strategic response to economic challenges.
Simultaneously, the company announced the immediate commencement of liquidation sales in 33 out of its 105 Canadian stores.
Despite these closures, all Canadian locations are expected to remain operational for the time being, indicating a phased approach to restructuring in the region.
The Canadian market is not exempt from the repercussions of The Body Shop’s financial woes.
With 33 stores in Canada entering into liquidation sales, customers will have the opportunity to avail themselves of discounted products as the company seeks to manage its inventory.
The Canadian market is not exempt from the repercussions of The Body Shop’s financial woes.
The decision to halt online sales via Canada’s e-commerce store adds another layer to the restructuring process, indicating a comprehensive reevaluation of the company’s retail strategy in the region.
Challenges Faced by Traditional Retailers
The broader economic context, characterized by high inflation rates in recent years, has proven particularly challenging for traditional retailers like The Body Shop.
Operating predominantly in malls, the company faced the brunt of shifting consumer behaviour and the economic struggles of the middle class, further compounded by the rise of e-commerce.
The bankruptcy filing underscores the need for adaptability in the retail sector, with a focus on addressing changing consumer preferences and economic challenges.
European markets witnessed a downtrend on Monday, March 11th 2024, marking the commencement of the new trading week with a negative tone.
This decline followed a similar trend in the Asia-Pacific region overnight, setting a cautious tone for investors.
The Stoxx 600 index, a broad representation of European equities, provisionally closed down by 0.4%. Also, most sectors concluded the session in negative territory, contributing to the subdued market sentiment.
Technology Sector Leads Losses
Among the various sectors, technology stocks took a significant hit, experiencing a decline of 2.1%. This downturn in the technology sector played a pivotal role in the market decline.
Investors appeared to be cautious, possibly responding to specific industry-related concerns or broader economic uncertainties. The 2.1% drop in technology stocks underscored the sensitivity of this sector to market dynamics.
Selective Positive Movement in Food and Beverage Stocks
Contrary to the broader negative trend, food and beverage stocks managed to buck the trend by adding 0.3%.
The market downturn on Monday emphasized the interconnectedness of global financial markets. (Credits: TIM)
This nuanced movement could be attributed to specific factors influencing the food and beverage industry, such as changes in consumer preferences, global supply chain dynamics, or individual company performance.
Despite the market decline, this positive movement in food and beverage stocks provided a glimpse of resilience within the broader market fluctuations.
Specific Stock Movements Contribute to Market Dynamics
Austria’s Raiffeisen Bank witnessed a substantial decline, with its shares closing 7.4% lower. This decline was fueled by growing concerns among investors regarding potential U.S. sanctions.
The apprehension stemmed from the bank’s alleged business dealings with Russia, prompting investors to react cautiously.
The 7.4% drop in Raiffeisen Bank shares reflected the market’s responsiveness to geopolitical tensions and the potential impact on financial institutions.
Telecom Italia faced a decline of 4.4%, triggered by recent analyst reports. Analysts had expressed concerns last week about the anticipated debt level following the sale of its fixed-line network, stating that it exceeded expectations.
Telecom Italia faced a decline of 4.4%, triggered by recent analyst reports (Credits: ET Telecom)
Investor confidence wavered in response to the perceived financial implications of the network sale. The 4.4% slide in Telecom Italia’s shares exemplified how market sentiments can be influenced by specific company-related developments and analysts’ assessments.
When the Markets React: Timing and Impact
The market downturn on Monday, March 11th 2024, emphasized the interconnectedness of global financial markets.
The decline in European markets mirrored earlier trends in the Asia-Pacific region, illustrating how events in one part of the world can reverberate across international markets.
The timing of these reactions is crucial, as investors seek to navigate uncertainties and make informed decisions in a rapidly changing financial landscape.
The negative start to the trading week also highlighted the prevailing cautiousness among investors. Global economic dynamics, geopolitical tensions, and company-specific developments all contribute to the intricate tapestry of market sentiment.
Understanding the ‘when’ of market movements becomes essential for investors as they strive to decipher the underlying reasons and anticipate future trends.
The future of artificial intelligence (AI) holds immense financial promise, with Tasha Keeney, the director of investment analysis and institutional strategies at Ark Invest, projecting a staggering $28 trillion opportunity.
Keeney has set her sights on the equity market capitalization linked to innovation, estimating a meteoric rise to $220 trillion by the end of the decade, predominantly propelled by advancements in AI technologies.
According to Keeney’s projections, the AI-induced financial boom is expected to unfold by the end of this decade.
By leveraging AI technologies, various sectors are poised for substantial growth, contributing to a significant shift in market dynamics.
The timeline is crucial for investors looking to capitalize on emerging opportunities and position themselves strategically in the evolving landscape.
Key Sectors to Benefit from the AI Surge
Keeney has meticulously identified key sectors that are set to reap the benefits of the impending AI revolution. These sectors encompass a wide range of innovations, including autonomous vehicles, drones, robotics, energy storage, 3D printing, and space exploration.
The $28 Trillion AI Opportunity by 2030 (Credits: TechCrunch)
Ark Invest, renowned for its focus on innovation, has strategically positioned itself in these sectors through its Ark Autonomous Tech & Robotics ETF (ARKQ), indicating a bullish outlook on the transformative potential of AI.
Why Autonomous Cars and Tesla are Central to the AI Boom
Autonomous cars, a prominent player in the impending AI boom, are already navigating major cities worldwide.
Keeney envisions a significant scaling up of autonomous vehicles within the next decade, estimating the enterprise value of this opportunity to be an astonishing $28 trillion.
Tesla, with its continuous advancements in self-driving technology, stands out as a key player in this field.
Autonomous cars, a prominent player in the impending AI boom, are already navigating major cities worldwide. (Credits: IBM)
Despite a marginal 1.8% decrease in Tesla’s shares over the past year, Ark Invest maintains a target price of $200, emphasizing the enduring potential of the company.
The Role of Drone Technology in the AI Revolution
Keeney also sheds light on the pivotal role of drone technology in the AI revolution, emphasizing its importance not only in the military but also across various industries.
Drones are positioned as a transformative force, contributing to efficiency and innovation in diverse sectors. The growing significance of drone technology underscores the broader impact of AI on reshaping traditional industries and fostering new opportunities.
Bitcoin prices soared to a record high above $72,000 following a landmark decision by the UK Financial Conduct Authority (FCA), allowing exchanges to list cryptocurrency-linked exchange-traded products (ETNs) for the first time.
This move is seen as a significant step for the crypto market, mirroring recent developments in the United States where regulators approved spot bitcoin exchange-traded funds.
Why the FCA Decision Matters?
The FCA’s decision is pivotal as it opens the door for recognized investment exchanges to establish a UK-listed market segment specifically for crypto-backed ETNs.
However, the FCA emphasizes that only professional investors will have the ability to purchase these ETNs, reinforcing its stance that crypto assets are high-risk and largely unregulated, unsuitable for retail consumers.
The regulatory framework mandates exchanges to implement robust controls to ensure orderly trading and provide adequate protection for professional investors.
The FCA’s decision is pivotal as it opens the door for recognized investment exchanges (Credits: FCA)
Compliance with the UK’s listings regime, including issuing prospectuses and ongoing disclosures, is a prerequisite for exchanges seeking approval.
Market Reaction and Bitcoin’s Surge:
Bitcoin’s price surged over 3%, reaching $72,211.51, a fresh all-time high, shortly after the FCA’s announcement. However, it experienced a slight pullback, settling below $71,530.13 by 7:15 a.m. ET. Ether also saw a positive response, climbing over 2% to $4,041.23.
The London Stock Exchange promptly acknowledged the FCA’s decision and announced its acceptance of applications for the admission of bitcoin and ether ETNs from the second quarter of this year.
Institutional Impact and Bitcoin Bulls:
Unlike exchange-traded funds (ETFs), which are funds holding assets, ETNs are unsecured debt securities issued by banks and are linked to market indices or benchmarks.
Bitcoin advocates argue that the FCA’s move will encourage increased institutional investment in cryptocurrencies, positively influencing prices as more substantial capital flows into the market.
ETNs are unsecured debt securities issued by banks and are linked to market indices or benchmarks. (Credits: FCA)
This decision is noteworthy, considering the FCA’s previous reluctance, as in 2020, it banned the sale of crypto-linked ETNs and derivatives to retail consumers, citing concerns about extreme price volatility and financial crime.
The FCA remains steadfast in its belief that crypto ETNs and derivatives are unsuitable for retail consumers due to the inherent risks.
The FCA’s decision to permit crypto-linked bitcoin ETNs marks a significant development in the regulatory landscape, aligning the UK with the evolving global trend of embracing cryptocurrencies within the financial system.
As institutional interest in digital assets continues to grow, this decision is anticipated to have a positive impact on the broader cryptocurrency market.
Proclaiming that “I’m a big believer in tariffs,” former President Donald Trump hinted at the possibility of reinstating duties on foreign goods if reelected.
Trump emphasized the dual benefits, both economic and political, that tariffs can bring when strategically employed against countries perceived to be taking advantage of the United States.
“I’m a big believer in tariffs,” Trump asserted, underscoring his economic rationale: “I fully believe in them economically when you’re being taken advantage of by other countries.”
Beyond the economic implications, Trump sees tariffs as a tool that empowers the U.S. in its diplomatic relations, offering leverage when engaging with other nations.
The Political Landscape:
These statements come against the backdrop of a closely contested race in the polls between Trump and President Joe Biden.
Having secured victories in the recent Republican primaries and with no opponents left, Trump appears poised to become the party’s nominee.
The upcoming election is poised to be heavily influenced by economic policies, making Trump’s stance on tariffs a key focal point of discussion.
The upcoming election is poised to be heavily influenced by economic policies, making Trump’s stance on tariffs a key focal point of discussion.
During his previous term from 2017-21, Trump implemented a series of tariffs targeting various countries, including China, Mexico, and the European Union.
Also, a 25% duty was imposed on imported steel and aluminium, reflecting his commitment to reshaping international trade dynamics.
When Tariffs Were Implemented:
Trump’s tariff strategy unfolded throughout his administration, reflecting a proactive approach to addressing what he perceived as unfair trade practices.
From 2017 to 2021, the U.S. engaged in tariff disputes with major trading partners, resulting in a complex web of economic policies and negotiations.
Trump sees tariffs as a tool that empowers the U.S. in its diplomatic relations, offering leverage when engaging with other nations.
The imposition of a 25% tariff on imported steel and aluminium exemplified Trump’s commitment to protecting domestic industries. This move aimed to level the playing field and curb what he saw as the negative impact of cheap imports on American businesses.
The Impact of Tariffs:
Beyond the economic realm, Trump highlighted the political advantages of tariffs, asserting that they provide a strategic edge in diplomatic negotiations. The ability to wield tariffs as a bargaining chip allows the U.S. to assert its interests and influence international agreements.
As the election approaches, Trump’s stance on tariffs adds a layer of complexity to the discourse surrounding economic policies.
Supporters applaud his efforts to prioritize domestic industries, while critics argue that tariffs can lead to retaliatory measures and disrupt global trade stability.
In a remarkable turn of events, the cryptocurrency market experienced a surge in tandem with Bitcoin’s remarkable ascent to a fresh record high, surpassing the $71,000 mark.
Among the beneficiaries of this bullish momentum were crypto-related stocks such as Coinbase and Microstrategy, which witnessed gains of approximately 6% and 8%, respectively.
Marathon Digital, another player in the crypto space, also saw a commendable 6% rise. The rally in these stocks underscores the growing investor interest in the crypto sector as digital assets continue to capture the financial spotlight.
The surge in Coinbase and Microstrategy stocks can be attributed to the soaring value of Bitcoin, which acts as a bellwether for the entire cryptocurrency market.
Coinbase, a leading cryptocurrency exchange, stands to benefit from increased trading activity and transaction volumes.
Microstrategy, known for its significant Bitcoin holdings, experiences a boost in valuation as the cryptocurrency’s price climbs higher, amplifying the company’s market value.
Coinbase, a leading cryptocurrency exchange, stands to benefit from increased trading activity and transaction volumes. (Credits: Coinbase)
Additionally, the positive sentiment surrounding Marathon Digital reflects the broader market’s confidence in crypto-related assets as blockchain technology and digital currencies become increasingly integrated into mainstream finance.
Why did these stocks experience such notable gains?
The answer lies in the heightened interest and acceptance of cryptocurrencies as a legitimate asset class.
Institutional investors and traditional financial institutions are gradually embracing digital currencies, contributing to the surge in demand for crypto-related stocks.
As Bitcoin continues to set new records, it catalyzes the entire crypto ecosystem, propelling related companies to new heights.
The timing of this surge is crucial, considering the ongoing evolution of the crypto landscape. With regulatory developments, technological advancements, and broader market trends, the cryptocurrency market is maturing.
The surge in these stocks is not merely a short-term market anomaly; rather, it reflects a broader shift in investor sentiment towards the long-term viability of cryptocurrencies and their associated businesses.
Duolingo: JPMorgan Initiates Coverage with Overweight Rating
Duolingo, the online learning platform, witnessed a modest 1% increase in its share price following JPMorgan’s initiation of coverage with an overweight rating.
Crypto Stocks Soar to New Heights as Bitcoin Breaks Records
JPMorgan’s decision to initiate coverage on Duolingo raises the question of “why” the bank is optimistic about the online learning platform.
The answer lies in Duolingo’s unique position in the growing online education sector, coupled with the bank’s belief in the company’s potential for substantial revenue growth.
As the demand for online education continues to rise, Duolingo stands out as a player capable of capitalizing on this trend, making it an attractive investment opportunity.
The timing of JPMorgan’s coverage initiation aligns with the broader narrative of the evolving education landscape.
As digital learning becomes increasingly prevalent, Duolingo’s innovative approach to language education positions it favourably for sustained growth.
JPMorgan’s overweight rating signals confidence in Duolingo’s ability to outperform market expectations and capitalize on the expanding online education market.
Spot gold took a momentary pause from its record-breaking rally on Monday, holding steady at $2,177.71 per ounce, while *U.S. gold futures* saw a slight uptick of 0.03%, reaching $2,185.10.
This respite follows a remarkable surge in gold prices driven by a cooling U.S. labour market and statements from the Federal Reserve. Traders are now eagerly anticipating the upcoming U.S. inflation report, seeking fresh insights into the potential timing of interest rate cuts.
Gold reached an all-time high of $2,194.99 on Friday, March 8th, marking the fourth consecutive day of record peaks, spurred by indications of a slowdown in the U.S. labour market.
Analysts note a surge in demand for gold, emphasizing that the market is currently unfavourable for short positions, especially as traders anticipate Federal Reserve cuts.
The trajectory of gold prices, however, appears poised to consolidate at elevated levels
According to City Index senior analyst Matt Simpson, “With large speculators having increased net-long exposure at their fastest weekly pace in 3.5 years last Tuesday, gold is clearly in demand and not a market to short for any length of time whilst traders expect Fed cuts.”
The Role of CPI Data in Gold’s Trajectory
In the week ending March 5, COMEX gold speculators boosted their net long positions significantly, adding 63,018 contracts to reach a total of 131,060, as revealed by Friday’s data.
The trajectory of gold prices, however, appears poised to consolidate at elevated levels pending the release of Consumer Price Inflation (CPI) data for February, scheduled for Tuesday.
Analysts believe this report is a pivotal factor influencing gold prices this week, especially since the Federal Reserve is currently in a blackout period.
Simpson asserts, “Prices will simply consolidate at lofty levels heading into consumer price inflation, or CPI, data for February, due on Tuesday, as that is likely the single biggest driver of gold prices this week, given that the Fed are now in a blackout period.”
Federal Reserve’s Stance and Rate Cut Confidence
The potential for an early rate cut gains traction if the CPI print indicates a cooler reading, providing support for gold prices.
Presently, traders are factoring in three to four quarter-point (25 bps) U.S. rate cuts
Federal Reserve Chair Powell conveyed increased confidence in the possibility of rate cuts in the coming months during his Congressional testimony last week.
Presently, traders are factoring in three to four quarter-point (25 bps) U.S. rate cuts, with a 75% likelihood of the first cut occurring in June, according to LSEG’s interest rate probability app.
The allure of non-yielding bullion is further enhanced by lower interest rates, explaining the continued appeal of gold amidst the current economic landscape.
U.S. stocks experienced a decline on Monday, 11th March 2024, further extending losses from the previous week. The Dow Jones Industrial Average witnessed a setback of 75 points, equivalent to a 0.2% drop, while the S&P 500 and Nasdaq Composite both exhibited a similar 0.2% decline.
Technology stocks were among the losers, with Nvidia retreating approximately 1%, marking a notable continuation of its downward trend since late May.
Simultaneously, Super Micro Computer, an AI-focused stock, faced a substantial decrease of more than 6%. Meta, the parent company of Facebook, also grappled with a decline exceeding 4%.
Preparation for Inflation Data and Tech Sector Struggles
Investors are bracing for the release of crucial economic indicators, specifically February’s consumer and producer price indexes scheduled for Tuesday and Thursday, respectively.
These reports are anticipated to provide significant insights into the current economic landscape and will be closely monitored by market participants.
The Federal Reserve (Credits: Federal Reserve Board)
The focus on these indicators intensifies as they represent some of the final major economic reports before the Federal Reserve leaders gather for their March policy meeting.
The importance of these reports is heightened following Friday’s release of the February jobs report, which left investors with mixed signals regarding the Federal Reserve’s potential actions.
Mixed Signals from February Jobs Report
The February jobs report presented a nuanced picture, creating uncertainty among investors about the Federal Reserve’s future policy decisions.
While the U.S. economy added more jobs than economists had predicted, a simultaneous increase in the unemployment rate and lighter-than-expected wage growth added complexity to the interpretation.
These signals have prompted speculation about when the Federal Reserve might initiate interest rate cuts. Mike Dickson, Head of Research at Horizon Investments, expressed caution, stating, “We aren’t counting on the Fed to cut rates at its meeting later this month.”
Technology stocks were among the losers, with Nvidia retreating approximately 1%, marking a notable continuation of its downward trend since late May. (Credits: Nvidia)
Dickson emphasized the need for sustained decreases in core services inflation over three consecutive months, suggesting a potential timeline of June or later in 2024 for any policy adjustments.
Outlook and Anticipation for Fed Meeting
Monday’s market movement reflects the aftermath of a challenging week for major averages, evidenced by the Dow’s worst weekly performance since October.
As the market digests the forthcoming inflation data and grapples with the implications of the recent job report, investors remain cautious about the Federal Reserve’s stance.
The anticipation is heightened as market participants seek clarity on when the central bank might consider adjusting interest rates based on the evolving economic indicators.
China is actively mobilizing resources for its largest-ever chip fund, the National Integrated Circuit Industry Investment Fund, commonly known as the Big Fund.
It aims to raise over $27 billion, surpassing the 200 billion yuan of its second fund, signalling an intensified effort to bolster the country’s semiconductor capabilities.
The move comes as a strategic response to heightened US efforts to impede China’s technological progress, particularly in the fields of chips and artificial intelligence.
The Big Fund, overseen directly by China’s influential tech ministry, reflects a resurgent commitment to fostering technological advancements.
Also, the fund’s third phase underscores a shift in strategy, with a substantial portion of capital expected from local governments, their investment arms, and state-owned enterprises.
Changxin Xinqiao Memory Technologies Inc
This approach aligns with President Xi Jinping’s broader vision of pooling valuable capital across the nation for pivotal projects.
Renewed Self-Reliance Amid Global Tech Restrictions
China’s push for self-reliance gains momentum as the US encourages its allies to tighten restrictions on China’s access to semiconductor technology.
The Big Fund emerges as a pivotal player in this context, with investments from key entities such as the governments of Shanghai and other cities, China Chengtong Holdings Group, and State Development and Investment Corp.
The fund’s significance is underscored by its role as the primary vehicle providing financial aid to local chipmakers, aligning with the broader goals of the “whole nation” approach advocated by President Xi Jinping.
The Big Fund’s Strategic Vision: A Catalyst for Technological Advancement
The Big Fund, established in 2014, has played a crucial role in supporting local chipmakers, including industry giants like SMIC and Yangtze Memory Technologies Co.
Yangtze Memory Technologies Co.
Its influence extends to formal endorsements from Beijing, providing entities with enhanced credibility and facilitating access to other potential investors and policy support.
Despite operating mostly behind the scenes, the Big Fund’s impact on China’s semiconductor landscape is undeniable. It has successfully weathered challenges, including a slowdown in investments following an anti-graft probe in 2022.
The fund’s resurgence in late 2023, marked by significant investments in companies like Changxin Xinqiao Memory Technologies Inc., demonstrates its enduring commitment to driving innovation in the semiconductor sector.
President Joe Biden embarked on a journey through battleground states, commencing with a visit to Pennsylvania on Friday. His reelection campaign is poised to allocate $30 million towards advertisement expenditure as he swiftly transitions into the U.S. general election campaign following his spirited State of the Union address.
Campaign officials, briefing reporters, disclosed plans for Biden and Vice President Kamala Harris to rally Democrats across numerous states pivotal for the November 5 election showdown against Republican contender Donald Trump.
Following Pennsylvania, Biden’s itinerary includes stops in Georgia on Saturday, New Hampshire on Monday, Wisconsin on Wednesday, and Michigan on Thursday. Meanwhile, Harris is set to visit Arizona on Friday and Nevada on Saturday.
A $30 million ad buy amplifies campaign reach, targeting diverse digital platforms strategically. (Credits: Experts Equal)
According to Nielsen ratings from 14 television networks, an estimated 32.2 million viewers tuned in to watch Biden’s State of the Union speech, marking an 18% surge from the previous year’s address. However, it’s noteworthy that TV ratings may not fully encapsulate viewership on streaming services or social media platforms.
Anticipating a tightly contested race against Trump, Biden campaign officials emphasized the significance of grassroots efforts in key states crucial for accumulating the 270 electoral votes required for victory.
“We firmly believe that this race is going to be won on the ground across key states that afford multiple pathways to 270, and everything we are doing this month to kick off the general election is grounded in that premise,” remarked Biden’s campaign manager Julie Chavez Rodriguez.
In tandem with Biden’s campaign activities, cabinet officials and top aides are dispersing across various states like Ohio and Florida to advocate for the Biden agenda.
Polls indicate a tight race between Biden, 81, and Trump, 77, with a majority of voters displaying limited enthusiasm for the rematch after Biden’s victory four years ago.
Deputy campaign manager Rob Flaherty disclosed plans for a $30 million advertisement blitz over the next six weeks, surpassing the Biden campaign’s total spending in 2023. He noted that Biden’s State of the Union address on Thursday catalyzed the most substantial day of fundraising for the incumbent Democrat, although specific figures were not provided.
State of Union speech drives fundraising surge, fueling Biden’s reelection momentum.
As of last month, the campaign had amassed over $42 million in January alone, with $130 million in cash reserves for the impending general election battle.
The $30 million advertisement campaign will target voters across a diverse range of digital platforms, with a specific focus on key Democratic demographics such as Hispanics, African Americans, and Asian Americans. Additionally, ads will feature prominently on popular channels including Comedy Central and ESPN.
Biden’s Friday visit to a suburban county near Philadelphia underscored the shifting political landscape during the Trump administration. Democrats have seen a remarkable surge in voter registration in this county, from a narrow 6,665-voter advantage over Republicans in 2015 to a commanding 57,139 margin today, as per the latest state voting registration data.
To secure victory in this critical state, Biden aims to secure significant margins of victory in Philadelphia and its surrounding suburbs, mirroring the trend observed in counties like Delaware County.
President Joe Biden took decisive action on Saturday by signing a $460 billion spending bill into law, effectively sidestepping a potential partial government shutdown slated for this weekend.
The comprehensive budget deal encompasses funding for six critical sectors of government, including military and veterans affairs departments, agriculture, commerce, justice, transportation, housing and urban development, and energy.
Following the House’s earlier passage of the bill this week, the Senate solidified the agreement with a 75 to 22 vote on Friday evening.
This development marks progress in the ongoing efforts to establish a permanent budget plan for the remainder of the fiscal year, which commenced on October 1st. The expiration of the other six appropriations bills, sustaining the remainder of the government, is slated for March 22nd.
Congress has now resorted to passing short-term spending bills for the fourth time this fiscal year, effectively preventing a government shutdown.
Democrats have been fervently advocating for the continued full funding of essential programs, including a specialized food assistance initiative for women, infants, and children.
Congress averts shutdown, securing wins for Democrats and Republicans alike. (Credits: The New Yorker)
Their efforts also yielded victories in securing rent assistance and fair compensation for infrastructure workers such as air traffic controllers and railway inspectors.
Meanwhile, Republicans perceive the initial half of the funding package as a success, citing achievements such as safeguarding veterans’ rights to own firearms and implementing funding reductions to various government agencies, including the Environmental Protection Agency, the FBI, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives.
Based in Singapore, NAV Capital Global Opportunities Fund is making significant strides in the Indian market through its NAV Capital Emerging Star Fund.
Managed by Vineet Arora, the fund, with an AUM of approximately 700 crore, primarily invests in India, with a target to reach 2,000 crore by the end of CY24.
The fund employs a sector-agnostic approach, focusing on companies demonstrating robust growth and possessing a ‘Moat.’ This diversification includes both SMEs and Mainboard companies, aligning with the fund’s investment philosophy and criteria.
Investment Rationale and Portfolio Expansion
Vineet Arora highlights the recent addition of companies like Dronacharya Aerial Innovations, Annapurna Swadisht, and EMS, among others, with the total holdings reaching 20.
Dronacharya Aerial Innovations has been added to the list of companies.(Credits: Dronacharya Aerial Innovations)
The fund aims to triple its portfolio by the end of the current calendar year, expanding from an amount of about 700 crore to 2,000 crore. Investments in entities like Felix, Fonebox Retail, Addictive Learning, Australian Premium, and Platinum Industries showcase the fund’s focus on unique ‘Moats.’
For instance, Addictive Learning’s Law Seekho platform caters to a significant user base, filling a void in the US legal sector.
Key Investment Factors
Vineet Arora emphasizes a straightforward investment strategy centred on well-managed companies offering unique products and services.
Evaluating aspects such as business models, financial health, and the competence of management, the fund’s approach mirrors that of private equity investors in public markets.
By fostering an open ecosystem for investee companies, NAV Capital encourages synergies and best practices without the constraints often associated with private equity investments.
Risk Assessment Strategies
Assessing risk factors, Vineet Arora underscores the importance of comprehensive research, balancing qualitative and quantitative assessments.
Assessing risk factors, Vineet Arora underscores the importance of comprehensive research (Credits: NAV Capital)
Managing asymmetric information risk involves in-depth sector-specific research, leveraging the expertise of the origination team and business experts.
Any company whose management is overly focused on valuation is flagged as a potential risk, reflecting NAV Capital’s commitment to thorough risk management.
Despite being a global fund, NAV Capital predominantly invests in the SME space in India. Vineet Arora dismisses concerns of overheating or liquidity shortages, emphasizing the critical role of the MSME sector in India’s journey towards a $5 trillion economy.
With a vast number of listable MSMEs and a clear need for significant capital injection, the fund sees ample room for growth in this sector, indicating that the story has only just begun.
On Sunday, 10th March 2024, India inked a landmark free trade pact with the European Free Trade Association (EFTA), encompassing Switzerland, Norway, Iceland, and Liechtenstein.
The comprehensive Trade and Investment Agreement, the result of 21 rounds of talks spanning 16 years, pledges a reduction in tariffs and heralds a substantial inflow of $100 billion in investments over the next 15 years.
India anticipates significant advantages from this pact, especially following recent agreements with the UAE and Australia.
The nation foresees increased exports of pharmaceuticals, garments, chemicals, and machinery, along with attracting investments in key sectors like automobiles, food processing, railways, and finance.
The pharmaceutical and medical devices industry within the EFTA bloc is also expected to gain substantially from this collaboration. (Credits: efta.int)
Currently, India stands as the EFTA’s fifth-largest trading partner, with a bilateral trade volume of $25 billion in 2023. Exports to the EFTA amounted to $2.8 billion, while imports reached approximately $22 billion during the same period.
Swiss Companies to Benefit:
The pact is poised to benefit Swiss manufacturers, particularly those in machinery, luxury items like watches, and transport. India has extended an invitation to Swiss transport companies to invest in its railways.
Furthermore, the agreement allows EFTA nations to export processed food and beverages, electrical machinery, and engineering products to a potential market of 1.4 billion people, all at reduced tariffs.
The pharmaceutical and medical devices industry within the EFTA bloc is also expected to gain substantially from this collaboration.
India-Swiss Relations:
India is optimistic that this pact will enhance its trade ties with Switzerland, the largest partner in the EFTA. Switzerland holds a significant position as India’s fourth-largest trading partner in Asia and the largest in South Asia.
Prime Minister Narendra Modi’s government has been deliberate in securing commitments to boost domestic industries. (Credits: TOI)
Over 300 Swiss companies, including major players like Nestle, Holcim, Sulzer, Novartis, and leading banks such as UBS, operate in India. Simultaneously, Indian IT giants like TCS, Infosys, and HCL have a notable presence in Switzerland.
Prime Minister Narendra Modi’s government, known for its cautious approach to trade negotiations, has been deliberate in securing commitments to boost domestic industries.
Despite prolonged discussions with various partners, India has been resolute in rejecting demands related to “data exclusivity” in the past, a move that safeguards the interests of its pharmaceutical sector.
The negotiations reflect India’s commitment to protecting its industry and ensuring a balanced trade environment.
Saudi Aramco, the oil giant, disclosed a significant financial development on Sunday, reporting a profit of USD 121 billion for the year 2023.
This figure represents a decline from its record-breaking 2022 profit of USD 161 billion. The company made this announcement through a filing on Riyadh’s Tadawul stock market.
The decline in profits is attributed to a combination of factors, including lower energy prices, reduced crude oil volumes sold, and challenges in refining and chemicals margins, as outlined in the company’s official filing.
Why Did Aramco’s Profit Decline?
The primary driver behind Aramco’s profit decline in 2023 is the substantial impact of lower crude oil prices, reduced volumes sold, and a weakening in refining and chemicals margins.
These factors collectively contributed to a USD 40 billion reduction in profit compared to the previous year. The volatility in global energy markets played a crucial role, with fluctuating prices affecting the revenue generated by the company.
Aramco’s dependency on oil prices underscores the vulnerability of its profit margins to market dynamics. (Credits: Aramco)
Aramco’s dependency on oil prices underscores the vulnerability of its profit margins to market dynamics.
How Did Lower Crude Oil Prices Affect Aramco?
The decline in Aramco’s profit is closely linked to the fluctuations in crude oil prices. The company, being a major player in the global oil market, faced the challenges posed by the downward trend in energy prices.
The reduced selling price of crude oil directly impacted Aramco’s revenue, creating a significant dent in its profitability.
As the global energy landscape evolves, Aramco grapples with the intricate balance of production costs, market demand, and geopolitical factors influencing crude oil prices.
When Did Aramco Make This Announcement?
Aramco also showed its financial results for the year 2023 on a Sunday, presenting the figures through a filing on the Tadawul stock market in Riyadh.
The decline in Aramco’s profit is closely linked to the fluctuations in crude oil prices. (Credits: Aramco)
The timing of this announcement provides investors and stakeholders with crucial insights into the company’s performance, allowing for a comprehensive understanding of the challenges and opportunities faced in the preceding year.
Aramco’s financial report for 2023 reflects the complexities and challenges inherent in the global energy market.
The decline in profits to USD 121 billion, compared to the record-setting USD 161 billion in 2022, underscores the impact of lower crude oil prices, reduced volumes sold, and weakened refining and chemicals margins.
Aramco’s ability to navigate these challenges and adapt to the evolving energy landscape will be crucial for its sustained success in the future.
At midday on Friday, 8th March 2024, the U.S. equities market presented a mixed picture as chip stocks experienced a downturn in response to less-than-optimistic outlooks from industry giants Broadcom (AVGO) and Marvell Technology (MRVL).
The Dow managed to stay in positive territory, but the S&P 500 and Nasdaq saw declines. The chip sector, a significant player in the technology-driven market, faced headwinds as investors digested the less promising forecasts.
Marvell Technology’s shares, in particular, faced a decline as the company’s guidance fell short of expectations.
Despite the soaring demand for artificial intelligence (AI) chips, other segments of Marvell’s business saw declines, contributing to the overall market unease regarding the chip industry.
General Electric Gets a Boost with Upgraded Outlook
General Electric (GE), on the other hand, witnessed a positive trajectory as JPMorgan upgraded the stock and raised its price target.
Trading View’s Report (Credits: TradingView)
This upward momentum followed the announcement from GE Aerospace, a subsidiary set to become a standalone company on April 2, revealing a planned $15 billion stock buyback.
The strategic move added buoyancy to GE shares, offering investors increased confidence in the company’s prospects.
Costco Faces Challenges, MongoDB Slips, and Commodities Show Mixed Signals
Costco Wholesale (COST) emerged as the worst-performing stock in the S&P 500, grappling with sales that fell short of forecasts. Additionally, the company did not announce any increase in its membership fees, further contributing to its stock’s decline.
MongoDB (MDB) experienced a drop in its shares after providing a weaker-than-expected outlook. The database platform provider for developers attributed the decline to a loss of business in the new fiscal year, casting shadows on its near-term prospects.
MongoDB (MDB) has experienced a drop in its shares. (Credits: MDB)
In the commodities market, oil futures faced a decline, while the price of gold continued to set record highs, highlighting the divergent trends within the broader market. The yield on the 10-year Treasury note remained relatively stable, indicating a cautious stance among investors.
The U.S. dollar saw gains against the euro but lost ground against the pound and yen. Also, most major cryptocurrencies traded higher, showcasing the continued volatility and diverse investor sentiment within the digital asset space.
In his State of the Union address, President Joe Biden hailed the strides made by his administration in tackling inflation.
“Wages keep going up and inflation keeps coming down,” Biden affirmed during his annual speech before Congress. While inflation has indeed abated and wages have seen an uptick, many households continue to grapple with the escalating cost of living.
“Factually, the president is, of course, correct,” remarked Mark Hamrick, senior economic analyst at Bankrate.com.
However, he noted, “It is difficult to tell people that inflation isn’t so bad as it was, given that it has taken about one-fifth of purchasing power away from people.”
The consumer price index, a crucial gauge of inflation, has gradually declined from its pandemic-era peak of 9.1% in June 2022 to 3.1% in January.
Wages rising, and inflation falling, yet many Americans struggle with soaring living costs.
Yet, despite these positive economic indicators, numerous Americans find themselves living paycheck to paycheck amidst soaring prices for everyday goods, with many depleting their savings and relying on credit cards to make ends meet.
Tomas Philipson, a professor of public policy studies at the University of Chicago and former acting chair of the White House Council of Economic Advisers, highlighted the disproportionate impact on lower-income families.
Moreover, he pointed out that reports indicate recent improvements in wage gains and consumer confidence have been modest.
Philipson offered a critical analogy, likening the Biden administration’s progress to a football team trailing by ten points at halftime, managing only a field goal and claiming victory.
Economists highlight disparities and last-mile challenges in Biden’s inflation narrative.
Addressing what he termed the “last mile problem,” Sung Won Sohn, a professor of finance and economics at Loyola Marymount University and chief economist at SS Economics, emphasized a lingering challenge.
While inflation remains above the Federal Reserve’s 2% annual target, overcoming the final disinflationary hurdle without dampening economic growth and risking recession presents a formidable task, according to some economists.
“Much of the decline in the inflation rate in the past came from the easing of the supply bottlenecks, which are behind us,” Sohn observed.
