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1. Jerome Powell said the Fed was waiting to see what will happen next.

The market fell for the second day, waking up negative after overnight posts from Nvidia and AMD that they would face high costs trying to export their lower-end chips to China.

The market then doubled its fall after Jerome Powell’s remarks, which made no indication that the FOMC would adjust rates soon. Instead, Powell said their technique over the past year has been to slow things down and wait a while.

Powell said the U.S. slowed down in the past quarter, after a solid comeback last year, and large tariffs will likely bring inflation back and slow things down more.

Not exactly what the market wanted to hear.

2. Travel stocks have been under pressure.

Travel stocks slumped after President Trump’s tariffs fueled concerns about less spending by Americans and reduced international travel.

“What you’re seeing in the travel stock movement is uncertainty,” Oppenheimer analyst Jed Kelly said. “It’s more of a sentiment-related issue, and when sentiment’s not as good, people don’t travel as much.”

With their fixed costs, airline stocks are especially sensitive to sudden drops in demand. Lower oil prices help, but their shares have been hardest-hit, falling nearly 40% on average since Inauguration Day.

Source:WSJ

3. Some of the world's biggest pension funds have halted their investments in the U.S. until the country stabilizes, according to the FT.

Some of the world’s biggest pension funds are halting or reassessing their investments into the US, saying they will not resume until the country stabilises after Donald Trump’s erratic policy blitz.

The moves underscore how big institutional investors are rethinking their exposure to the world’s largest economy as the US president’s trade policy upends markets.

4. Tariff pain for luxury shares.

The shares of LVMH have plummeted 35% from this year’s peak and are near the lowest forward-earnings multiple since the Covid era. Overall, the sector has lost 25% of its value in the past two months. And with the US and China digging in for a protracted trade war as the reporting season rolls on, the risk is that analysts will slash estimates even further, pressuring stocks.

“We haven’t yet seen the impact of recent events upon the business,” says Natasha De La Grense, executive director at Goldman Sachs International. The miss at LVMH’s key fashion and leather division was below “even the most bearish numbers,” she says. The readout from the LVMH results is clear: high-end consumers in China and the US are spending less on luxury as President Donald Trump hoists tariffs. With global economic growth sputtering and the chances of a recession rising in the US, the weaker dollar could also end up hitting profitability.

BofA analysts have lowered estimates several times in the past few weeks and see the first quarter earnings season as a catalyst for consensus downgrades. Operating margins are hovering at the lowest levels in years, but may not account for US tariffs yet, let alone a recession scenario.

“The luxury backdrop remains challenging, even for high-quality companies, usually set to navigate periods of volatility with a stronger shield,” say JPMorgan analysts led by Chiara Battistini. “We continue to believe that specific brand momentum and category exposure — notably for Richemont, Prada and Hermes — should still provide self help to better navigate these volatile times.” Still, consensus estimates probably need to be lowered. Analysts still expect 30% upside to price targets on average for the sector.

“2025 could likely be another difficult year for luxury,” says Morningstar senior equity analyst Jelena Sokolova. “Nonetheless, over the past 30 years, luxury downturns have been short-lived — one to two years — and the sector has delivered solid, above-GDP growth.”

5. Apple is now at the mercy of Trump.

Even after a market bounceback following Trump’s clawback of some tariffs, Apple’s stock ended last week down nearly 12% from where it was before the initial tariff announcement.

Apple will remain under pressure to diversify its manufacturing base. And that will be an expensive shift.

“The reality is that major U.S. technology companies remain heavily dependent on China’s highly efficient and deeply integrated manufacturing ecosystem,” IDC hardware analyst Francisco Jeronimo said in a report over the weekend. “For high-volume products like smartphones, tablets or PCs, any attempt at rapid diversification would be both costly and logistically unfeasible.”

The continued uncertainty will hang over Apple’s stock, raising the question of whether it can—or even should—reclaim its previous, rich valuation. Going forward, Apple’s multiple will need to reflect a Trump discount. This will have to take into account the incredible leverage the administration now has over the company and chief Tim Cook.

This new, less predictable reality needs to be reflected in Apple’s valuation. The stock was trading around 29 times projected earnings for this year ahead of Trump’s tariff announcement. That multiple was ahead of most other megacap tech stocks and more than twice the multiple commanded by hardware makers such as Samsung, Dell and HP.

Source:WSJ

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