This report is from today’s TNC’s Daily Open, our international markets update. TNC Daily Open keeps investors informed on everything they need to know, no matter where they are.
President Donald Trump of the United States approved a one-month tariff halt for automakers that adhere to a trilateral trade agreement between the United States, Canada, and Mexico. The White House indicated that Trump is “open” to additional tariff exclusions.
A relief bounce in U.S. stocks helped offset Tuesday’s sell-off triggered by the formal inauguration of tariffs. However, the relief might only last a short while. The Trump administration’s challenges are already causing Wall Street to factor in reduced profitability. In contrast, private businesses created fewer jobs in February than anticipated, indicating that corporate executives may be tightening their belts due to economic uncertainties.
However, according to U.S. Commerce Secretary Howard Lutnick, Trump is unrelated to any of this. In an interview with Bloomberg Television, Lutnick contended that former President Joe Biden left Trump with “a pile of poop,” arguing that “you’re looking at Biden data.”
What To Note Today
Automakers Offered Temporary Respite
On behalf of Trump, U.S. Press Secretary Karoline Leavitt said Wednesday that U.S. President Trump gave automakers a one-month exemption from his 25% tariffs on Canada and Mexico and his retaliatory duties that go into force on April 2. On the same day, Canada’s ambassador to the World Trade Organisation stated that Canada wanted to engage with the United States about “unjustified tariffs.” Go here to read the most recent Trump tariff developments.
Estimates Of Earnings Are Declining
Marc Chandler of Bannockburn Forex told reporters that “everything from tariffs to a growth slowdown to inflation, DOGE, and budget issues” is causing the stock market to begin pricing in lower earnings. Analysts typically lower their earnings estimates in the first half of the quarter. However, Pisani noted that the numbers are declining more quickly than normal.
The Markets Recover
Following Trump’s declaration that he was amenable to further tariff concessions, U.S. markets rose on Wednesday. The Dow Jones Industrial Average increased 1.14%, the S&P 500 up 1.12%, and the Nasdaq Composite increased 1.46%. The Stoxx 600 index for all of Europe increased by 0.91%. Strong German market performances and reports that the nation’s prospective coalition government will increase fiscal spending caused the DAX index to rise 3.38%.
Private Company Job Growth Slows
Seasonally adjusted numbers from ADP show that private employers gained only 77,000 new workers in February, far less than the 148,000 Dow Jones consensus estimate and far less than the upwardly corrected 186,000 in January. At a time when concerns are growing over slowing economic growth and tariff-induced inflation, the total was the lowest gain since July.
The U.S. Commerce Secretary blames Biden
U.S. Commerce Secretary Howard Lutnick made the case on Wednesday that recent poor economic data and a decline in stock prices are the fault of former President Joe Biden, not his boss, Donald Trump. In a Bloomberg Television interview, Lutnick stated, “The president talked about it last night.” “Biden left him a pile of poop,” he claimed. In December, the inflation rate was 2.9%, while the U.S. GDP grew by 2.8% over the previous year.
Investors Return To Bonds
Amid this turbulent time, bonds are becoming more popular than equities. After peaking at 4.8% in mid-January, the 10-year U.S. Treasury yield was trading at about 4.2% on Wednesday. While the S&P has decreased more than 1% this year, bond prices have risen recently since they move inversely to yields. Bonds are becoming popular among investors for these reasons.
Other Update
Friedrich Merz, Germany’s future chancellor, and other political figures unveiled proposals on Tuesday to change Germany’s debt brake, a long-standing budgetary pillar, to increase defence spending. Additionally, they unveiled a brand-new infrastructure special fund worth 500 billion euros ($535 billion).
In a report released on Wednesday, economists and analysts from Bank of America Global Research described the package as “big, bold, unexpected – a game changer for the outlook,” adding that it “meaningfully” altered the outlook for Germany’s economy.
On Wednesday, Florian Schuster-Johnson, senior economist at Dezernat Zukunft, said on CNBC’s “Street Signs Europe” that the planned special investment vehicle will likely boost Germany’s growth estimates and give markets an economic boost.
