Positive Geneva talks; oil fluctuates; Nvidia drops over 5%, Dell and Netflix rise.

Geneva Talks Conclude with Positive Progress; Trump Administration Plans to Retain Tariff Revenue

U.S. Strategy on Tariffs

On February 27, Politico reported that officials from multiple departments within the Trump administration are accelerating the development of legal strategies to retain billions in tariff revenue, even if the Supreme Court rules these tariffs as "illegally imposed." Initial ideas include discouraging companies from applying for refunds, preventing the government from actually paying refunds, or retaining at least part of the tariff revenue through various means. One proposal suggests that tariffs collected over the past year could be classified as legitimate income under a new tariff framework being prepared by the government.

Federal Reserve Insights

Federal Reserve Governor Milan reiterated the need for a 100 basis point rate cut by 2026, despite improvements in the labor market. He warned that excessive regulation is inflating bank credit costs, leading to a surge in private credit, although it does not currently pose systemic risks.

Fed Governor Goolsbee stated that while rates could be lowered, he prefers not to make significant cuts before inflation eases.

Mortgage Rates and Housing Market

The average rate for a 30-year fixed mortgage in the U.S. has dropped to 5.98%, marking the first time it has fallen below 6% since September 2022. Analysts suggest that this gradual improvement in affordability could lead to a strong spring selling season in the housing market.

Semiconductor Market Trends

The South Korean stock market has surged nearly 50% this year, driven by AI and corporate governance reforms, now ranking as the ninth largest globally. Goldman Sachs believes the rally is not yet over, citing severe shortages in memory chips due to tech giants' capital expenditure expansions.

Nvidia's Earnings Impact

Following Nvidia's earnings report, the stock experienced a habitual drop, dragging down the Nasdaq by over 1%. Nvidia fell more than 5%, marking its third consecutive decline after reporting better-than-expected earnings. Analysts noted that while Nvidia rarely misses earnings targets, the current market environment requires clearer strategic responses to investor concerns about its competitive edge.

Other Notable Stock Movements

• Meta Platforms (META): Reported challenges in developing advanced AI chips, leading to a shift in focus to simpler designs.
• Dell Technologies (DELL): Forecasts AI server revenue of approximately $50 billion for the current fiscal year, leading to a post-earnings surge of over 10%.
• Netflix (NFLX): Exited the Warner Bros acquisition bid, resulting in a post-market increase of over 9%.

Regulatory Developments

New regulations on food safety for online food delivery services will take effect on June 1, requiring platforms to ensure compliance with merchant qualifications and conduct regular verifications.

Market Outlook

Schroders expressed a positive outlook for mainland China and Hong Kong stock markets, particularly favoring healthcare and precious metals sectors due to favorable liquidity and government support for innovative drugs.

Earnings Forecasts

BeiGene expects revenue between RMB 43.6 billion and 45 billion for 2026, while NIO's subsidiary GeniTech has secured cash investments totaling RMB 2.257 billion for new share issuance.

Conclusion

The financial landscape is witnessing significant shifts influenced by regulatory changes, market dynamics, and corporate strategies, with a focus on AI and technology sectors driving growth and investment opportunities.