While it remains to be seen, the White House appears likely to announce a narrower set of tariffs than previously expected on April 2. The new tariffs will apply only to countries that are buying oil and gas from Venezuela, and it would impose a punitive 25% duty on them. This announcement comes as oil prices started to trade higher again, impacting global markets. U.S. stocks exhibited surprising resilience turning in strong gains in early Monday trading. This occurs even against the backdrop of the S&P 500’s almost 5% correction in March.
In Europe, the Stoxx 600 recovered sharply last week. As a result, it rebounded against the U.S. S&P 500, closing 0.56% higher after suffering through two weeks of declines. Nonetheless, the Stoxx 600 is set for its first monthly loss this year. The jump sent Saab’s shares soaring to the top of the index after UBS raised its stock rating on neutral from buy. They further raised the target price from 250 Swedish krona to 525 Swedish krona.
"We believe Saab's product portfolio is well positioned for the defence spending upside," said UBS analysts.
The upgrade reflects Saab's strategic positioning in the defense market, particularly amid increased budget allocations and potential export opportunities to NATO members following Sweden's accession.
Bayer did not escape that legal storm unscathed. A U.S. court ruled the company should pay $2.1 billion in punitive damages tied to its Roundup weed killer, Bourgeois said, sending its stock tumbling to the basement of the Stoxx 600. The chemical has since been associated with serious health issues, including cancer, leading to more than 30,000 lawsuits filed against Bayer.
"We disagree with the jury's verdict, as it conflicts with the overwhelming weight of scientific evidence and the consensus of regulatory bodies and their scientific assessments worldwide," Bayer stated.
"We believe that we have strong arguments on appeal to get this verdict overturned and the excessive and unconstitutional damage awards eliminated or reduced," Bayer added.
In further shabby economic news, Germany’s PMI rose from 50.4 in February to 50.9 in March. This increase is a welcome sign that there are indications of stabilizing business activity.
"An upturn in business activity in March brings some good news for the government ahead of the Chancellor's Spring Statement, offering a respite from the recent flow of predominantly downbeat economic data. However… one good PMI doesn't signal a recovery," noted Chris Williamson, chief business economist at S&P Global Market Intelligence.
Employment and other economic growth indicators point to a very strong start for the first quarter, feeding a still-cautiously optimistic outlook.
"Economic growth in the first quarter looks promising, with the composite PMI staying above the expansionary threshold every month," commented Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.
Wall Street is still digesting all of this. All eyes are focused on the effects of U.S. tariffs and the continuing court fights that affect large companies.
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