Daily US Equity Opening News - EU to fine META EUR 1bln, AAPL case closed; BABA Chair warns on AI data centres

TODAY'S AGENDA:

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  DAY AHEAD: The US Day sees the release of new home sales - expected to rise to 679k from 657k. The Conference Board's gauge of US consumer confidence is expected to fall to 94.0 from 98.3. Richmond Fed surveys will also be released today. Today's speakers' slate includes Fed's Kugler (voter), who will speak on the economic landscape, and Fed's Williams (voter), who will give opening remarks at NY Fed event; last week, Williams expressed support for a cautious approach to monetary policy amid economic uncertainty, and emphasised that the current "modestly restrictive" stance is suitable given the solid labour market and inflation concerns. In supply, the US will auction USD 69bln of 2yr notes.


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  BROKER MOVES: CRWD upgraded at BTIG, ALLY downgraded; CVNA upgraded at Morgan Stanley. For the full list, please click here.
  


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  MAJOR MORNING MOVES RECAP: US PRE-MARKET MOVERS: BABA, META, KBH, BA, CCI, TSLA, CRWD. To see the full list, please click here.
  

EQUITY NEWS:

MACRO

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  Tariffs - US President Trump is set to announce new tariffs on autos, lumber, and chips in the coming days, with potential tariff breaks for several countries. Additionally, he signed an order imposing sanctions on nations importing Venezuelan oil, indicating that tariffs on those doing business with Venezuela will be added to existing tariffs. As a result, China’s tariffs will increase to 45% on April 2nd. Elsewhere, President Trump’s economic adviser Stephen Miran downplayed concerns about short-term damage to the US economy from tariff hikes, stating that US consumers have flexible options to adapt to the new levies; he emphasised that tariffs are often misunderstood in terms of their impact.

TECH

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  Apple (AAPL) - EU antitrust regulators set to close the investigation into Apple's browser options on iPhones after Co. made changes to comply with landmark EU rules, according to Reuters citing sources. EU antitrust regulators set to announce decision early next week.


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  AI Data Centres, Alibaba (BABA) - Alibaba's Chairman Tsai cautioned about a potential bubble in data centre construction, suggesting that the rush to build facilities may exceed the demand for AI services, according to Bloomberg. He highlighted that many of these projects lack clear customers, as major tech firms and investment funds expand indiscriminately. He added, would recommence hiring, emboldened with more confidence following President Xi Jinping's February meeting with business entrepreneurs.


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  DeepSeek - China AI startup DeepSeek released an update to its V3 model, enhancing programming capabilities. The update aims to tackle real-world challenges while setting new benchmarks for accuracy and efficiency, highlighting DeepSeek's ambition to outpace competitors in the AI space.


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  Tech giants - India's Finance Minister said they will scrap a tax of 6% on digital advertisements online, easing costs for US tech giants such as Alphabet's Google (GOOG), Meta (META) and Amazon (AMZN) as a way of soothing US trade concerns. The decision on the levy takes effect from April 1st, a government source said earlier, thus just in time before Trump's threatened reciprocal tariffs on April 2nd.


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  Dropbox (DBX) - Faces pressure from activist investor Half Moon Capital to end its dual-class share structure, arguing it limits investor accountability, WSJ reports. The hedge fund also criticised Cos. slowing revenue growth and pricing strategy.


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  Samsung Electronics (SSNLF) - CEO Han Jong-Hee died at 63 from cardiac arrest. Samsung said Jun would be the sole CEO following Han Jong-Hee's death.


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  Autodesk (ADSK) - Director John Cahill purchased 2K shares for a total USD 534k.


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  Garmin (GRMN) - G3000 Prime selected for Pilatus PC-7 MKX for military training aircraft.


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  CrowdStrike (CRWD) - Upgraded at BTIG to 'Buy' from 'Neutral', now seeing potential for Cos. growth to reaccelerate in the H2 2026 with upside to Street forecasts in FY27. The firm believes Co. has demonstrated its dominance in the core endpoint security target market and a premium valuation is warranted for the shares.


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  ServiceNow (NOW) - Executive said they saved USD 350mln last year using AI agents; dismissed AI bubble talks.


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  Cerebras - IPO is has been delayed further as US national security review "drags on", according to Reuters sources.


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  Cognizant Technology (CTSH) - To discuss long-term growth strategy for next wave of AI-driven technology; board approved USD 2bln increase to buyback programme; USD 500mln shares to be repurchased in 2025.

COMMUNICATIONS

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  Meta Platforms (META) - The EU plans to fine Meta up to USD 1bln for alleged Digital Markets Act violations, with an announcement expected this week, NY Post reports. Trump has criticised EU fines on US firms, vowing retaliatory tariffs. Apple (AAPL) may also face penalties soon, NY Post said. Separately, WSJ reports that Meta is proposing monthly subscription fees for European users of Instagram and Facebook if they opt out of personalised ads; users could pay EUR 14.00/month for an ad-free Instagram on mobile, or EUR 17.00/month for both platforms on the desktop, as part of a proposal Meta has presented to regulators in recent weeks.


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  Alphabet (GOOG) - Google is revamping its search engine by integrating AI-driven chat features, BBG reports. In 2021, the web search team proposed replacing traditional links with a chatbot that directly answers queries. It aligns with CEO Sundar Pichai's long-term vision to integrate AI into Alphabet's core, leveraging its DeepMind and Google Brain labs.


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  ByteDance - Blake Chandlee, TikTok's executive responsible for global advertising sales and marketing, is stepping down as part of a reorganisation, Bloomberg reports. He will transition to an advisory role. Chandlee, who joined TikTok in 2019 from Facebook (META), faces the change amid a deadline for a potential US sale by April 5th.


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  Trump Media & Technology (DJT) - Trump Media signed a non-binding agreement with Crypto.com to launch exchange-traded funds and products focusing on digital assets and securities with a "Made in America" theme, WSJ reports. The ETFs will be available through Crypto.com’s broker-dealer Foris Capital.

FINANCIALS

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  Blackstone (BX) - China's Vice Premier He Lifeng met Blackstone Chairman Stephen Schwarzman in Beijing, expressing China's openness to more US investments. The meeting signals Beijing's efforts to attract foreign capital amid economic challenges. Blackstone President Gray told investors to avoid hasty decisions regarding President Trump's tariff actions, urging patience; he recommended waiting to see how tariff negotiations unfold, warning that short-term moves could result in missed long-term opportunities.


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  BlackRock (BLK) - Launched its first bitcoin ETP in Europe in a bid to tap growing demand for cryptocurrency exposure in new markets after attracting more than USD 50bln into similar products in the US.


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  KKR & Co. (KKR) - KKR's Asset Management segment has earned over USD 475mln in total realised performance and investment income as of March 24th, marking a 15% increase vs Q1 2024. The quarter's monetisation activity comprises of 60% realised performance income, and 40% realised investment income.


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  HSBC Holdings (HSBC) - CEO said the bank intends to double down in Asia and the Middle East following its exit from business areas in Europe and the US.


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  eToro Group - Filed for an IPO, revealing a significant revenue increase; in 2024, the trading platform reported USD 12.6bln in revenue and net income of USD 192mln, up from USD 3.89bln in revenue and USD 15.3mln net income Y/Y.


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  Ally Financial (ALLY) - Downgraded to 'Sell' from 'Neutral' at BTIG; noted several negative macro trends and industry commentary have made it more cautious on the auto lending industry and particularly prime auto lending.


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  Citigroup (C) - Appointed Akira Hoshino as the head of markets for Japan, effective immediately. Hoshino, who previously led the FX and rates sales divisions, will drive business growth and lead the markets franchise in Japan.

CONSUMER DISCRETIONARY

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  KB Home (KBH) - Shares slump in premarket after missing earnings and revenue estimates, citing weaker homebuyer demand, and it lowered its 2025 outlook, but noted that recent sales trends have improved. Q1 2025 (USD): EPS 1.49 (exp. 1.58), Revenue 1.39bln (exp. 1.50bln); Deliveries 2,770 (exp. 2,996), net orders 2,772 (exp. 3,266). Guidance: FY housing revenue 6.60-7.00bln (prev. 7.00-7.50bln, exp. 7.07bln), Housing gross margin 19.2-20% (prev. 20-21%), Average selling price 480-500k (prev. 490-500k). Also announced it has appointed Robert R. Dillard as Executive VP and CFO, effective March 31st; Dillard previously served as CFO at Sonoco Products (SON).


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  European Auto Sales - European car sales dropped 3.1% in February, marking the steepest decline in five months, as economic uncertainty led to reduced consumer spending on major purchases. The European Automobile Manufacturers' Association reported new car registrations fell to 963,540 units, with Spain being the only major market showing growth.


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  Tesla (TSLA), BYD (BYDDY) - Tesla's sales in Europe plummeted by 40% in February, marking a continued decline over 10 of the past 12 months. Co. registered only 16,888 new cars, contrasting with the 31% increase in industry-wide EV registrations during the same period. Separately, ARK Invest’s Cathy Wood said Tesla remains highly competitive against BYD and predicts that robotaxis will represent 90% of Tesla’s value within five years.


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  Hyundai Motor (HYMTF) - Will invest USD 21bln in the US from 2025-2028, expanding production, EV components, and steel manufacturing. Plans include USD 9bln to boost vehicle production, USD 6bln for localising auto parts, and a Louisiana steel mill producing 2.7mln tons of low-carbon steel annually. Additionally, the Chairman said they will purchase USD 3bln of US LNG.


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  O-I Glass (OI), Linde (LIN) - O-I Glass and Linde are set to install Linde's Optimelt Thermochemical Regenerator technology at O-I's glass plant in Holzminden, Germany. The collaboration aims to reduce fuel consumption and Scope 1 CO2 emissions, enhancing energy efficiency in O-I's glass-melting operations.


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  Carvana (CVNA) - Upgraded to 'Overweight' from 'Equal Weight' at Morgan Stanley with a PT of USD 280 (prev. 260). The bank said while Carvana remains more exposed to a lower strata of auto credit relative to the rest of the analysts' auto coverage, Carvana has demonstrated execution with profitable growth and addressed leverage concerns. MS noted the sharp pullback in the share price presents a "unique opportunity for investors to gain exposure to a leader in auto retail and fleet fulfillment".


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  International Paper (IP) - Provided long-term targets; FY27 revenue seen at USD 26-28bln, EBITDA USD 5.5-6.0bln; sees double-digit TSR through the cycle.


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  Volkswagen (VWAGY) - Said it would collaborate with Valeo (VLEEY) and Mobileye (MBLY) as it deepens its network of suppliers to develop assisted and autonomous driving. It will draw on the suppliers' capabilities for enhanced partially automated driving, known as Level 2+ systems, for security and driver comfort in new high-volume models over the next few years.

INDUSTRIALS

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  Boeing (BA) - Seeking to withdraw its guilty plea agreement in a criminal case related to deceiving regulators before two 737 MAX crashes, WSJ reports. Co. wants more lenient treatment from the DoJ after a federal judge rejected the original deal, delaying resolution beyond the Biden administration. Meanwhile, China's Commerce Minister met with President of Boeing Global. Hopes Boeing will play active role, contribute to the development of China-US economic, trade relations.


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  Airbus (EADSY), Boeing (BA) - Airbus CEO warned that potential tariffs between the US and Europe could hurt Boeing more than Airbus, as US President Trump prepares to announce significant levies across various industries next month. Additionally, he stated that the jury is still out on the type of engines for Airbus's next aircraft programme, with Spirit Aero (SPR) remaining a bottleneck. Airbus is also in talks regarding a possible satellite JV.


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  UniFirst (UNF), Cintas Corporation (CTAS) - Cintas has ended acquisition talks with UniFirst regarding its USD 275/shr cash offer, a 46% premium over UniFirst’s 90-day average price as of January 6th. CEO cited a lack of substantive engagement from UniFirst on key transaction terms.


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  Lockheed Martin (LMT) - Secured a USD 238mln US Navy contract modification for the F-35 Lot 20 production, covering long lead materials and parts for non-US Department of Defence partners and Foreign Military Sales customers.


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  Honeywell (HON) - Appointed David Sewell to lead advanced materials unit ahead of spin-off; spin-off set to become an independently listed Co. by late this year or early 2026.


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  Defence names - The US Navy is expected to announce this week who will build its next-generation carrier-based stealth fighter - a program worth hundreds of billions over its lifetime and a key part of plans to confront China, according to Reuters citing sources. The new jet is expected to feature advanced stealth capabilities, improved range and endurance, and the ability to integrate with both uncrewed combat aircraft and the Navy's carrier-based air defense systems. The competition has been intense, with Boeing (BA), Lockheed Martin (LMT), and Northrop Grumman (NOC) submitting detailed proposals and prototypes for evaluation.

ENERGY

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  China Refiners - China’s private refiners face a setback as the Trump administration imposes a 25% tariff on Venezuelan oil and gas buyers, Bloomberg reports. China has long been a major buyer of Venezuela’s crude, accounting for over 40% of its oil exports, complicating Beijing’s commercial ties with the country.


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  Gunvor - Stephane Degenne, Gunvor Group's head of trading, is leaving the company as part of a broader leadership transition, Bloomberg reports. Degenne, who advanced from an oil market dealmaker to a senior role under CEO Torbjorn Tornqvist, departs amid a generational shift at the energy trader.


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  Chevron (CVX) - The Trump administration extended Chevron's deadline to cease its operations in Venezuela, granting the company until May 27th to complete its exit from partnerships with state-owned Petroleos de Venezuela. This extension follows lobbying efforts by the Texas-based oil giant. Chevron produces about one-fifth of Venezuela's crude output.


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  Shell (SHEL) - Accelerated its strategy to enhance value while reducing emissions. It plans to lower its annual spend to USD 20-22bln for 2025-2028, and increase shareholder distributions to 40-50% (prev. guided 30-40%) of cash flow from operations. Said it will prioritise buybacks, and explore strategic and partnerships in the US chemical sector. Additionally, it raised its structural cost reduction target to USD 5-7bln by 2028 (prev. USD 2-3bln by 2025).


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  Colonial Pipeline - Defended its proposal for operational changes to its fuel network, countering objections from Exxon Mobil (XOM), Chevron (CVX), and Trafigura. Co. argued that the changes would enhance pipeline integrity, reliability, and increase capacity for shippers, according to a filing.


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  TechnipFMC (FTI), Equinor (EQNR) - TechnipFMC was awarded a large integrated Engineering, Procurement, Construction, and Installation contract by Equinor for the Johan Sverdrup Phase 3 development in the Norwegian North Sea. The contract, valued between USD 0.50-1.0bln, will be included in TechnipFMC's Q1 numbers.

MATERIALS

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  China Steel - Some Chinese steel mills, including four in Xinjiang, have reduced production by 10% due to a supply glut and low profitability, Bloomberg reports. Despite the cuts, the overall market impact is limited, as the region represented only 1.3% of China’s steel output last year, according to Mysteel and the NBS.


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  Aluminium - Energy traders Vitol and Gunvor have recently made significant moves in the global metals market by taking large long positions in the LME aluminium contracts, BBG reports. The positions were at times bigger than the available stock in the exchange’s warehousing network. It has raised questions from the LME, with both companies reportedly making moves in February and March.


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  Glencore (GLNCY), Nanshan Aluminium - Shares of Glencore-backed Nanshan Aluminum International fell 1% in its Hong Kong debut, impacted by weak metal prices. The alumina producer's shares had initially risen by 1.1% before dipping to HKD 26.35.

HEALTHCARE

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  AstraZeneca (AZN) - Pushing forward with its USD 2.5bln research hub in Beijing, aiming to bolster ties with the Chinese government amidst an investigation into alleged illegal activities, Bloomberg reports. CEO Soriot's efforts to maintain strong relations are seen as key to navigating challenges in Cos. second-largest market.


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  GSK (GSK) - Conducting a study in the UK to assess whether its Shingrix shingles vaccine reduces the risk of dementia in elderly adults. The study will track 1.4mln people aged 65-66 over four years, potentially leading to an expanded use of the vaccine.


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  Omnicell (OMCL) - Appointed Perry A. Genova as Senior VP and Chief Technology Officer, effective March 31st. He will lead Cos. technology strategy, focusing on advancing medication and supply management to support the industry's Autonomous Pharmacy vision.


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  Merck (MRK) - Entered exclusive license agreement for HRS-5346, an investigational oral lipoprotein inhibitor, for cardiovascular disease from Jiangsu Hengrui Pharmaceuticals. Hengrui Pharma to receive USD 200mln upfront payment from Merck, and eligible for up to USD 1.77bln in milestone payments.


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  Illumina (ILMN) - Activist Investor Keith Meister will join the board of directors of Illumina; current board member Scott Gottlieb will become Chairman, WSJ reports.

CONSUMER STAPLES

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  McCormick & Company (MKC) Q1 2025 (USD): Q1 Adj. EPS 0.60 (exp. 0.64), Revenue 1.61bln (exp. 1.61bln). Reaffirmed FY25 outlook, namely, adj. EPS seen at 3.03-3.08 (exp. 3.07), and revenue flat to up 2% Commentary: FY25 outlook reflects plans to offset costs related to US import tariffs on China. Executive said for the year to go, expect prices in global consumer segment to be flat.


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  Bunge Global (BG) - Announced an agreement to sell its European margarines and spreads business to Vandemoortele. The completion of the sale is subject to customary closing conditions, including regulatory approval.

UTILITIES

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  American Electric Power (AEP) - Priced its USD 2bln stock offering at USD 102.00/shr.


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  Oklo (OKLO) - Reported a steeper annual loss compared to FY23, noting they “We are an early‑stage company with a history of financial losses, and we expect to incur significant expenses and continuing financial losses".

REAL ESTATE

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  Crown Castle (CCI) - Appointed Dan Schlanger as interim CEO after terminating Steven Moskowitz. Schlanger will continue as CFO until April 1st, when Sunit Patel will take over. Schlanger will later oversee the sale of small cells and fibre businesses, expected to close in H1 2026. CCI reiterated its FY25 AFFO/shr outlook between 4.06-4.17 (exp. 4.69).

25 Mar 2025 - 12:49- Fixed IncomeExclusive- Source: Newsquawk