Cover:
-Stephen Schwarzman and Larry Fink are increasingly involved in each other's business, as seen in BlackRock's recent Panama Canal deal. Blackstone, founded in 1985 as a mergers-and-acquisitions advisory shop, has grown into the world's largest private-asset firm, while BlackRock, launched inside Blackstone three years later as a bond manager, now runs $11.6T in assets. Both companies have varying business models, but they share a common denominator: their stocks have soared, with Blackstone's stock value being more so than BlackRock's recently. Blackstone and BlackRock, are merging due to inevitability. Blackstone is offering alternative-asset securities, backed by investments in real estate, private credit, and buyouts, to retail investors, while BlackRock is moving beyond selling public-market securities, such as those in its $4.2 trillion iShares exchange-traded-fund business. The converging companies face the challenge of diversifying beyond their origins and navigating the mature core markets of their core markets.
Interview:
-No update
Tech Trader:
-The Magnificent Seven stocks have lost their magnificence, with Tesla's stock falling 45% from its 52-week closing high of about $480, while Apple, Amazon.com, Alphabet, Meta Platforms, Microsoft, and Nvidia are off an average of 16% from their own peaks. Fears include a slowing economy due to uncertain U.S. trade policies, Chinese artificial-intelligence competition, and the impact of CEO Elon Musk's political activity on auto sales. Technical analysis reveals that there is always a bottom, and it's just a question of how far a stock has to fall to reach it. Technicians use price charts to determine where investors may decide to buy or sell stocks, looking for support and resistance. The 50-day and 200-day moving averages are considered particularly important, as they indicate the average of where the stock has traded over a period.
The Trader:
-The residential solar industry has been struggling, with high interest rates making panel installation expensive and some states changing rules to make it less financially rewarding. SunPower, a leading rooftop solar developer, filed for bankruptcy in August, and Sunnova Energy International issued a "going concern" warning due to the deterioration in its cash position. This is not the moment to buy the dip, as pressure on these companies will likely grow in the months ahead. However, large-scale solar installations are still good economic bets, as the US enters a period of higher electricity demand for the first time in over a decade, thanks to new data centers and factories. Solar was the largest source of new utility-scale electricity generation last year and is expected to account for 52% of electricity additions in 2025. Investing in companies deploying all that solar power can be difficult, as many are privately held or small parts of larger energy and investment firms like Shell or KKR. However, there are a few options, such as Clearway Energy, a Princeton, N.J.-based company that owns nine gigawatts of solar, wind, and battery installations around the country and more than two gigawatts worth of natural-gas plants.
-President Donald Trump's trade war has caused a sharp drop in the stock market, with investments like consumer staples stocks, gold, and bonds holding up well this year. However, some sectors of the stock market have fared well amid tariff worries, such as Staples stocks, which finished down 1.7% on Tuesday, and noncyclical sectors like healthcare and utilities, which have also fared well. Jefferies analyst Randal Konik suggests playing defense in a volatile market, focusing on names with secular tailwinds, little fundamental downside, generating lots of cash, and with catalysts ahead. Even some growth stocks can be defensive, with Trivariate Research publishing a basket of "low beta growth stocks" that have posted solid returns in 2025. These stocks have solid prospects for earnings growth and comparatively low volatility. ETFs like the iShares MSCI USA Minimum Volatility Factor can be a broader approach, as they can dramatically outperform during periods of uncertainty.
Features:
-Ford Motor and General Motors have received new Wall Street ratings and price targets, with GM stock adding 0.8% on Friday and closing at $47.44. Analyst Itay Michaeli, who moved from Citi to TD Cowen, remains bullish on GM despite the threat of tariffs and high interest rates making cars less affordable. He believes that the sector has a long history of groupthink and over-extrapolations leading to opportunities, such as GM shares. Michaeli's top pick for GM is based on stock buybacks, strong earnings from the truck franchise, and growing electric-vehicle sales. Ford stock had a better day, with shares gaining 3% and closing at $9.90. However, Ford stock was down 20% over the past 12 months, while GM shares were up 21%. About 63% of analysts covering GM stock have Buy ratings, with an average price target of about $62. About 29% of analysts covering Ford stock have Buy ratings, with an average price target of about $10 a share. The average Buy-rating ratio for stocks in the S&P 500 is about 55%.
-Tesla stock experienced a volatile trading session on Friday, ending in the red despite an unusual upgrade and a call from a long-time bullish analyst. Tesla shares have been in a slump after an incredible run, with shares trading higher shortly after the open but falling as low as $250.73. At the end of Friday trading, Tesla stock was $262.67, down 0.3%. TD Cowen analyst Itay Michaeli upgraded shares to Buy from Hold, with a price target jumped to $388 a share from $180. Michaeli's target price jumped to $208, indicating that the list of potential game-changing level catalysts across EV, autonomous vehicles, and robotics is robust enough to tilt risk/reward favorably.
Europe:
-The European Central Bank (ECB) has reduced its benchmark lending rate by a quarter-point, marking the sixth reduction since lowering borrowing costs in June. This brings the deposit rate down to 2.5% from 4% when the cuts began. The ECB started cutting earlier than the US Federal Reserve (Fed) due to weak economic conditions and weakening inflation. The ECB's decision comes amid global financial turmoil as President Trump imposed tariffs on the biggest US trading partners, China, Canada, and Mexico. Investors now expect the Fed to cut three or four times this year due to concerns about the growth outlook. Germany has also announced plans to lift government spending on defense and infrastructure, which is expected to boost Europe's largest economy. ECB President Christine Lagarde said it is too soon for the central bank to change its outlook due to the recent market shift.
Emerging Markets:
-No update
Commodities:
-Wheat prices are expected to rise due to unfavorable weather conditions and dwindling Russian wheat inventories. The Russian-Ukraine war has already raised wheat prices by 55% over the past 2½ years. Russia, the world's largest wheat exporter, is expected to export 46M tonnes when the next harvest occurs, down from 55.5M tonnes last year. The US and Ukraine, leading wheat exporters, are expected to export 23M and 16M tons respectively. Canada's retaliatory tariffs on US wheat imports will likely lift wheat prices, as will higher Canadian fertilizer costs due to US tariffs. Russia's inventory levels at the beginning of the season have dropped 19% versus last year's stockpile, while Ukraine has been hit with a 76% drop in its stockpile. These falling grain inventories make the financial markets more sensitive to weather-led crop damage. The US weather system started gently for the wheat crop, with snow and cold temperature keeping it dormant and not vulnerable.
Streetwise:
-The S&P 500 index has seen a slight decline year to date but has more than tripled investor money over the past decade. However, there are concerns about the S&P 500 Equal Weight index doing better than the regular index, which is dominated by tech companies. Defensive sectors are rallying, with healthcare being the best performer this year. Value stocks outperformed growth by 3.9 percentage points in February, making it one of the top 5% of months for relative value returns since 1979. Europe and China are outperforming the US. This leaves indexers torn over whether to adjust their fund mixes. Three UK professors have released a report that offers clues on how investors should think about long-term returns. The report, Triumph of the Optimists: 101 Years of Global Investment Returns, presents evidence on the exploits of stocks, bonds, bills, currencies, and consumer prices across countries and time periods.