Stocks in reverse amid auto tariffs

When U.S. President Donald Trump won the 2024 presidential election in November last year, markets were in a relatively buoyant mood.

Talk of deregulation and tax cuts drove consumer sentiment, while easing inflation led investors to believe multiple Fed rate cuts would come, boosting the stock market. 

Now, there seems to have been a stark reversal in expectations. Trump’s tariff announcements and, sometimes, walking back on the threats have sent markets on a rollercoaster ride.

This comes as investors are anxious about how his retaliatory tariffs will affect the broader U.S. economy, which is already showing some signs of weakness. 

The specter of a recession looms large, like the sword of Damocles over the stock market. The question is, will the sword actually cut market returns, and if so, when?

— Lim Hui Jie

China’s Xi meets with global execs 
Chinese President Xi Jinping on Friday met with global executives and made a case for investing in the country, as Beijing focuses on reaching out to businesses amid escalating trade tensions with the United States. Xi emphasized that China was a safe and stable place for foreign companies. “To invest in China is to invest in tomorrow,” he said in Mandarin translated by CNBC. 

China looks to deepen ties with Central Asia amid trade tensions
The escalating trade war with the U.S. has propelled Beijing to further expand its ties with Central Asia, analysts say, as state-backed firms look to substitute U.S. imports and reroute exports. China has established itself as a leading trade partner and top foreign investor to the five Central Asian nations, namely, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan.

Asia auto shares fall for second straight day
Shares of Asia’s major automakers slipped for a second straight day as investors continue to weigh the new auto tariffs imposed by Trump. Japanese automakers Toyota and Honda fell 4.53% and 4.88%, respectively. Nissan, which has three plants in Mexico, declined 3.9%. South Korea’s Kia Motors, which has a manufacturing plant in Mexico, traded 2.66% lower, while Hyundai Motor fell 3.53%.

Australia calls general election on May 3 
Australian Prime Minister Anthony Albanese on Friday called a national election on May 3, kicking off a five-week campaign in the lead-up to polling day as the center-left government seeks a second three-year term. Albanese’s Labor Party won a majority at the last federal election in 2022, ending nine years of Liberal-National coalition rule, but opinion polls currently indicate the Labor party is currently running neck-and-neck with the conservative Liberal-National coalition.

Trump threatens ‘far larger’ tariffs on EU and Canada
Trump has threatened to impose “far larger” tariffs on the European Union and Canada if they work together to combat trade tariffs. “If the European Union works with Canada in order to do economic harm to the USA, large scale Tariffs, far larger than currently planned, will be placed on them both in order to protect the best friend that each of those two countries has ever had!,” Trump said in a Truth Social update on Thursday.

Dow sees back-to-back losses
All three major U.S. stock indexes fell on Thursday as investors weighed the latest tariff-related news from Trump, including new tariffs aimed at foreign automakers. The Dow Jones Industrial Average dropped 0.37%, while the S&P 500 declined 0.33% and the Nasdaq Composite slid 0.53%. Shares of several automakers declined after Trump announced 25% tariffs on “all cars that are not made in the United States,” which will go into effect on April 2. General Motors pulled back more than 7%, while Ford slipped nearly 4%. Over in Asia, markets also mostly retreated, with Japan’s Nikkei 225 losing over 2%.

[PRO] Buying Nvidia is a ‘particularly attractive opportunity,’ 
There is an end in sight to Nvidia’s recent rough patch, and that means now could be a plump buying opportunity for shares of the artificial intelligence darling, according to Bank of America. The firm has a buy rating on the stock and a $200 target price, implying a nearly 76% upside from Wednesday’s close.

While it is “super fun seeing people love images” in ChatGPT, “our GPUs are melting,” Altman posted on social media site X on Thursday, adding that the company will temporarily limit the feature’s usage as it works to make it more efficient.

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