U.S. Stock Market Outlook | Central Bank Super Week Approaches "Horrible Data" Revealed Tonight

Pre-Market Market Trends

1. As of March 17 (Monday), U.S. stock index futures are all down before the market opens. As of the time of writing, Dow futures are down 0.32%, S&P 500 futures are down 0.20%, and Nasdaq futures are down 0.09%.

1. As of the time of writing, the German DAX index is up 0.40%, the UK FTSE 100 index is up 0.13%, the French CAC 40 index is up 0.29%, and the Euro Stoxx 50 index is up 0.29%.

1. As of the time of writing, WTI crude oil is up 1.42%, priced at $67.86 per barrel. Brent crude oil is up 1.36%, priced at $71.54 per barrel.

Market News

Central Bank Super Week is Here! The U.S. and Japanese Central Banks Take Center Stage. This week, global central banks will welcome the highly anticipated "Super Week," with major central banks such as the U.S., Japan, and the UK holding monetary policy meetings in succession. Against the backdrop of escalating global trade friction risks and increasing uncertainty, the policy decisions of the two major central banks, the U.S. and Japan, will undoubtedly be the focus of attention. Meanwhile, several central banks, including those of the UK, Switzerland, and Sweden, will also announce interest rate decisions in quick succession. However, the market generally expects that under the shadow of "Trump's policies," "caution" and "wait-and-see" may become common policy "keywords" for various central banks. In light of the uncertainties brought about by Trump's policies, Morgan Stanley analysts expect the Federal Reserve to maintain the federal funds rate at 4.25%-4.5% during the March meeting; Fed Chairman Jerome Powell may continue the "patience" stance of "no need to rush into action" since the January meeting. Morgan Stanley also expects that at the press conference following the meeting, Powell will adopt a cautiously optimistic attitude towards economic growth and deflation but will emphasize that the Fed will remain patient and adhere to its "data-dependent" policy strategy, providing no clear guidance on future policy rate actions. Morgan Stanley believes that the future direction of monetary policy will depend on policy choices yet to be made and their cumulative effects, thus the Fed will not rush into action. Meanwhile, the market currently expects that the Bank of Japan will remain steady during this week's policy meeting. Faced with external risks brought about by Trump's policies, the Bank of Japan also needs to weigh the recently emerging signs of domestic economic recovery against the process of monetary policy normalization.

"Terrifying Data" Arrives Tonight! The U.S. retail sales data for February, known as "terrifying data," will be released at 20:30 Beijing time on Monday. Investors will assess whether the 0.9% decline in retail sales in January indicates the beginning of a slowdown in consumer spending Economists expect a rebound in February data, with retail sales projected to grow by 0.6%. Given the recent decline in the stock market due to concerns over economic growth, strategists point out that any signs of economic improvement could serve as a catalyst for the market. On the other hand, any further deterioration could put greater pressure on the stock market.

The Federal Reserve will perform a "policy balancing act": How will Powell soothe market jitters amid tariff smoke? Federal Reserve Chairman Jerome Powell faces a dual challenge this week: to convey confidence in the stability of the economic fundamentals to the market while hinting that policy tools are on standby to address potential risks. The backdrop of this high-difficulty balancing act is the escalating trade war under the Trump administration, which has significantly impacted market sentiment, leading to a sharp monthly decline in U.S. stocks, a steepening yield curve in the bond market, and a continuous drop in consumer confidence index. Although Powell has repeatedly emphasized that the U.S. economy is "on a solid footing," the White House's threats of tariffs against major trading partners continue to fester. Data shows that the S&P 500 index has retreated 10% from its peak, and the yield on the two-year U.S. Treasury bonds, which are most sensitive to Federal Reserve monetary policy, has plummeted 60 basis points to 3.83% since mid-January. The VIX, a measure of market volatility, even reached its highest level since August of last year last week. More troubling is that the Trump team's policy statements have exacerbated market confusion: the president describes the economy as being in a "transformational period," while Treasury Secretary Mnuchin uses "detox" to characterize the current adjustments, creating a stark contrast with the Federal Reserve's optimistic tone. In this regard, Dominic Konstam, head of macro strategy at Mizuho Securities, pointed out: "The Federal Reserve needs to clearly communicate its concern about asset price volatility; even if it does not directly intervene in the stock market, it cannot turn a blind eye to recent turmoil." This indicates that Powell's challenge lies in avoiding being interpreted as "bailing out the market," which would undermine the central bank's independence, while also leaving room for a possible policy shift.

Morgan Stanley: U.S. stocks may see a short-term rebound, but long-term recovery faces numerous obstacles. The Morgan Stanley strategy team noted last Sunday that after a significant decline since February, U.S. stocks are showing signs of a short-term rebound. Their analysis indicates that current market sentiment and positioning indicators are in an oversold state not seen since 2022, combined with expectations of seasonal trading recovery in late March and the potential boost to first-quarter corporate earnings from a weaker dollar, the market is expected to undergo a technical correction. However, despite the short-term rebound momentum, there are still technical concerns. The S&P 500 index, Nasdaq 100 index, and Russell 1000 growth/value index have all fallen below their 200-day moving averages, which have shifted from support levels to resistance levels. Although a short-term rebound window may have opened, Morgan Stanley remains cautious about long-term recovery. Downgrades in economic growth expectations are putting pressure on stock valuations; while quarterly earnings may see seasonal rebounds, sustained improvement will require time to validate. From a policy perspective, the likelihood of stimulus measures such as tax cuts and deregulation being implemented in the short term is low. The Federal Reserve would need to see significant deterioration in the labor market or credit market to restart easing, and both scenarios are not favorable signals for the stock market Hedge Fund Favorite! UBS Raises Gold Price Target to $3,200 Amid Escalating Global Trade War Risks. UBS Group has become the latest bank to raise its gold price expectations due to the increasing likelihood of a prolonged global trade war. UBS analysts expect this situation to continue driving investors to buy more gold, the ultimate safe-haven asset. UBS has raised its gold price forecast for the next four quarters to $3,200 per ounce, up from its previous long-term forecast of $3,000. UBS stated that U.S. President Donald Trump's plan to impose widespread reciprocal tariffs and additional tariffs on specific industries on April 2 is an imminent risk event that could stimulate sustained safe-haven demand across the market. Last Friday, gold prices broke the key psychological barrier of $3,000 per ounce for the first time in history. Gold prices will also benefit from a deteriorating U.S. economic outlook, as traders currently expect the Federal Reserve to further cut interest rates amid growing recession concerns. UBS analysts said, "In other words, we see a shift from 'Trump put options' to 'Fed put options.' We still believe that from a long-term diversification perspective, allocating about 5% of a portfolio to gold to balance the dollar is the best choice."

Individual Stock News

Intel (INTC.US) New CEO Plans Comprehensive Reform of Chip Design and Manufacturing Business, Restart AI Initiatives. Sources reveal that incoming Intel CEO Pat Gelsinger is considering significant adjustments to the company's chip manufacturing methods and AI strategy to turn around the company's fortunes. Gelsinger plans to reshape Intel's positioning in the AI field and address the "slow and bloated" middle management issue through layoffs. Improving the manufacturing business is also one of his core tasks. Sources indicate that Gelsinger's goal is to establish a stable annual update rhythm for Intel's AI chips within the next few years, but competitive products may not be launched until at least 2027.

AstraZeneca (AZN.US) to Acquire Belgian EsoBiotec for Up to $1 Billion, Strengthening Cancer Business. British pharmaceutical company AstraZeneca has agreed to acquire Belgian biotechnology company EsoBiotec for up to $1 billion to further enhance its capabilities in cancer treatment. The two companies announced on Monday that AstraZeneca will pay $425 million upfront and up to $575 million upon achieving research and regulatory milestones. According to AstraZeneca, EsoBiotec's platform has the potential to enhance the immune system's ability to attack cancer, thereby transforming cell therapy. It utilizes targeted viruses to directly modify immune cells in the human body, aiming to reduce treatment time from the current weeks to just minutes. EsoBiotec will become a subsidiary of AstraZeneca and continue operations in Belgium. The transaction is expected to be completed in the second quarter.

Niu Technologies (NIU.US) Q4 Revenue Increased 71.1% Year-on-Year, Electric Scooter Sales Up 64.9%. The financial report shows that Niu Technologies' Q4 revenue was 819.2 million yuan (RMB, the same below), a year-on-year increase of 71.1%; the gross margin was 12.4%, compared to a gross margin of 19.0% in the same period last year The net loss was 72.5 million yuan, compared to a net loss of 130.2 million yuan in the same period last year; the adjusted net loss was 66.7 million yuan, compared to an adjusted net loss of 122.4 million yuan in the same period last year. Q4 electric scooter sales were 226,634 units, a year-on-year increase of 64.9%. Among them, electric scooter sales in the Chinese market were 182,333 units, a year-on-year increase of 65.1%; electric scooter sales in overseas markets were 44,301 units, a year-on-year increase of 63.9%. Looking ahead, Niu Technologies expects Q1 2025 revenue to be between 631 million and 707 million yuan, representing a year-on-year growth of 25% to 40%. The company also expects full-year electric scooter sales in 2025 to be between 1.3 million and 1.6 million units, representing a year-on-year growth of 40% to 70%. As of the time of publication, Niu Technologies' stock rose over 9% in pre-market trading on Monday.

Important Economic Data and Event Forecast

Beijing time 20:30 U.S. March New York Fed Manufacturing Index

Beijing time 20:30 U.S. February Retail Sales Month-on-Month

Earnings Forecast

Tuesday morning: Xinye Technology (FINV.US)

Tuesday pre-market: Beike (BEKE.US), XPeng (XPEV.US), Tencent Music (TME.US), Tiger Brokers (TIGR.US), Huya (HUYA.US)