U.S. Stock Outlook | Tesla China’s wholesale sales in February fell by 50% month-on-month, Trump will deliver a congressional speech after hours

Pre-Market Market Trends

1. As of March 4 (Tuesday), U.S. stock index futures are mixed before the market opens. As of the time of writing, Dow futures are down 0.09%, S&P 500 futures are down 0.06%, and Nasdaq futures are up 0.07%.

1. As of the time of writing, the German DAX index is down 2.18%, the UK FTSE 100 index is down 0.41%, the French CAC 40 index is down 1.31%, and the Euro Stoxx 50 index is down 2.01%.

1. As of the time of writing, WTI crude oil is down 1.32%, priced at $67.47 per barrel. Brent crude oil is down 1.58%, priced at $70.49 per barrel.

Market News

Is the U.S. stock market correction not over yet? Bank of America’s contrarian indicator is nearing a “sell” signal. Amid the recent poor performance of U.S. stocks, a contrarian indicator from Bank of America is close to issuing a “sell” signal. Bank of America stated that its “Sell-Side Indicator (SSI)” fell to 56.7% in February, marking the first decline of this indicator since 2024. Although the indicator remains in the “neutral” range, it is comparatively closer to a “sell” signal. The SSI is a contrarian indicator that tracks Wall Street sell-side strategists' recommendations on the average allocation of stocks in balanced funds. When Wall Street is extremely bullish, it suggests a bearish outlook for the stock market; conversely, the opposite is true. Notably, the last time the SSI was this close to issuing a “sell” signal was in February 2021, after which U.S. stocks peaked 10 months later.

Trump's big day! Will his first congressional speech “shake up” the market? According to White House officials, Trump’s congressional speech will begin at 9 PM Eastern Time on Tuesday (10 AM Beijing Time on Wednesday), with the theme of “Reviving the American Dream.” It is expected that Trump’s speech will focus on his policy priorities, economic plans, and foreign affairs agenda. He may take this opportunity to promote the achievements of the federal government to date while also providing insight into his future work priorities. Trump hinted at the speech on social media on Monday, stating, “Big news tomorrow night, I will tell it like it is.” Industry insiders expect that key points to watch for in Trump’s congressional speech include: developments in the Russia-Ukraine situation; promoting Musk’s government streamlining plan; addressing high costs and tariffs; and more actions to deport immigrants Trump's tariff policy raises concerns, Goldman Sachs CEO reassures: The risk of a U.S. economic recession is extremely low. Trump stated on Monday that he would continue to impose new tariffs on Canada and Mexico. This has intensified volatility in the stock and bond markets, as investors weigh the prospects of a potential deterioration in global economic growth. However, Goldman Sachs CEO David Solomon stated that despite the uncertainties in global trade policy, the likelihood of the U.S. economy falling into recession is "very small."

Is Trump deliberately creating an economic recession to force the Federal Reserve to cut interest rates? Some analysts believe that the Trump administration may create a mild recession through aggressive cuts in fiscal spending and tariffs to pressure the Federal Reserve into lowering interest rates, thereby delaying debt pressures. Wall Street investor Larry McDonald stated that the U.S. debt issue is imminent, and if tariff policies and DOGE's drastic layoffs can lead to a short-term economic recession, it could create conditions for interest rate cuts, thus postponing a debt crisis. "If they can lower rates by 1%, they could save nearly $400 billion in interest next year." The CME Group's "FedWatch" tool indicates that the Federal Reserve is expected to implement three 25 basis point rate cuts before the end of this year.

Commodities welcome a new investment logic! "Commodity leader" Goldman Sachs strongly recommends gold, copper, and oil. Goldman Sachs, hailed as the "leader in commodities," stated that with the significant rise in tariff threats, inflation expectations, and inflation uncertainties, commodity investments are entering a new investment opportunity. Goldman emphasized that commodities are not only short-term trading tools but also an important component of long-term investment portfolios, especially in the current context of rising inflation expectations and reduced idle economic capacity, where their advantages in inflation hedging and diversified returns are becoming increasingly evident. Based on the fundamentals of commodities, Goldman particularly recommends going long on gold, copper, aluminum, and oil, believing these commodities have significant investment value in the current market environment. Goldman stated that gold, due to strong central bank demand, will become an effective tool for hedging against tariff and inflation risks. Copper and aluminum are attractive due to increased electrification demand. The oil market is favored due to OPEC's discipline and the attractiveness of term premiums. Additionally, the report predicts that European natural gas prices will significantly decline starting in 2027, especially in the event of a peace agreement between Russia and Ukraine.

Individual Stock News

Tesla (TSLA.US) sees over a 50% month-on-month decline in wholesale sales in China in February. According to data from the Passenger Car Association, Tesla's wholesale sales in China in February were 30,688 vehicles, a decrease of 51.5% compared to January's wholesale sales of approximately 63,238 vehicles, and a decline of 49.2% year-on-year. Tesla's performance in the Chinese market lags behind its competitors. BYD reported a 161.4% increase in passenger car sales last month, reaching 318,233 vehicles. As of the time of writing, Tesla's stock fell nearly 2% in pre-market trading on Tuesday.

TSMC (TSM.US) to invest an additional $100 billion in U.S. factories. Chip manufacturing giant TSMC announced plans to invest an additional $100 billion in its U.S. factories to increase chip production domestically and support President Trump's goal of boosting domestic manufacturing. TSMC CEO C.C. Wei stated that TSMC had previously planned a $65 billion investment in the U.S., and this $100 billion is an addition to that He emphasized that these measures will create thousands of new job opportunities.

Target (TGT.US) Q4 performance exceeded expectations, but warned of significant profit pressure in the coming months. The financial report showed that Target's Q4 revenue was $30.91 billion, a 3% year-on-year decline, but better than the analysts' average expectation of $30.84 billion; earnings per share were $2.41, better than the analysts' average expectation of $2.26. Q4 same-store sales grew by 1.5%, higher than the analysts' average expectation of 1.3%. The company expects same-store sales to remain relatively unchanged in fiscal year 2025, which is below analysts' expectations; it anticipates net sales growth of about 1% in fiscal year 2025. The company also warned that profits will face "significant" pressure in the coming months due to factors such as weak sales in February and uncertainties surrounding consumer confidence and tariffs. As of the time of writing, Target's stock rose over 4% in pre-market trading on Tuesday.

Sycamore reportedly to acquire Walgreens Boots Alliance (WBA.US) for billions, could the century-old pharmacy giant split and go private? According to insiders, private equity firm Sycamore Partners is set to acquire Walgreens Boots Alliance, a deal that may end the tumultuous history of the retail pharmacy giant as a publicly traded company, which has lasted over 120 years. Both parties are finalizing preparations for the deal, which could be announced as early as this week. According to previous reports, Sycamore is nearing a deal to acquire Walgreens Boots Alliance for $11.30 to $11.40 per share in cash, with a total deal size of about $10 billion. As of the time of writing, Walgreens Boots Alliance's stock rose over 6% in pre-market trading on Tuesday.

After a single-day plunge of 64%, Sunnova (NOVA.US) continues to decline in pre-market trading. Following a drop of over 64% on Monday, Sunnova's stock fell nearly 4% in pre-market trading on Tuesday as of the time of writing. In terms of news, Sunnova warned that there is significant uncertainty regarding its ability to continue operations. Sunnova stated that its cash inflows are insufficient to meet obligations and has suspended its performance guidance. The company indicated that management has developed plans to address risks, including debt refinancing, obtaining additional debt financing, cutting expenses, and modifying dealer payment terms. The company also mentioned that it has hired financial advisors to help "manage certain aspects of debt management and refinancing," but did not disclose specific names.

Most popular Chinese concept stocks rose in pre-market trading. As of the time of writing on Tuesday, in pre-market trading, Atour (ATAT.US) rose nearly 4%, NetEase (NTES.US), Bilibili (BILI.US), and ZaiDing Pharmaceuticals (ZLAB.US) rose over 3%, while Baidu (BIDU.US), GDS Holdings (GDS.US), and JD.com (JD.US) rose nearly 3%, and Li Auto (LI.US) and Nio (NIO.US) both rose over 1%.

Important Economic Data and Event Forecast

At 03:20 Beijing time the next day, FOMC permanent voting member and New York Fed President Williams will deliver a speech.

Earnings Forecast

Wednesday morning: CrowdStrike (CRWD.US), Ross Stores (ROST.US), Nordstrom (JWN.US)