Cover:
-The number of seniors living alone is increasing, raising concerns about their nest eggs, Social Security, and Medicaid. The government safety net is in flux, and costs for health services and long-term care are increasing. Single retirees face challenges in managing household finances, dealing with health issues, and warding off loneliness, which is a risk factor for physical and mental health. In 2020, 11% of all U.S. households had people aged 65 and older living alone, up from 9% in 2010. The number may rise as more adults reach retirement without a partner or spouse. Experts argue that the US is ill-equipped to handle the growing population of seniors, and the singles among them, who may need more health services, long-term care, and financial resources. The country's safety nets, such as Social Security, Medicare, and Medicaid, may be facing cuts, making it more difficult for people to access their earned benefits.
Interview:
-No update
Tech Trader:
-Nvidia CEO Jensen Huang presented a compelling vision for the artificial-intelligence industry at the annual GTC developers conference in San Jose, California. Despite the excitement, Nvidia shares have been trading at just 26X forward price-to-earnings, an undemanding valuation for a company projected to boost revenue by 57% this year. The company's shares have been impacted by concerns about AI chip demand softening after the release of Chinese start-up DeepSeek's efficient models, rising chip competition from Broadcom AVGO, and uncertainty over President Donald Trump's threats to impose tariffs on chip imports. Huang defended Nvidia's bright prospects, stating that the reasoning capability in DeepSeek's AI model is driving a substantial increase in demand for resources. He emphasized that the amount of computation needed due to agentic AI is 100X higher than it was last year.
The Trader:
-Airlines stocks have experienced a long history of disappointing investors, with the S&P 500 Airlines Industry index returning 1.4% a year since 1990. However, this time, the stocks soared 95% from their August low to January high, with analysts predicting positive news for legacy carriers like Delta Air Lines, United Airlines Holdings, and American Airlines Group. The airlines index needed to gain just 25% to reach its all-time high. However, the stocks have tumbled due to uncertainty around tariffs and trade policy, which crush consumer and corporate confidence. United, Delta, American, and Southwest Airlines have provided warnings about the first quarter this month, and the sudden weakness in demand is coming from all quarters.
-The stock market struggled to make significant gains this week, but smaller, cheaper stocks helped neutralize losses in Big Tech. The S&P 500 index advanced 0.5%, while the Nasdaq Composite inched up 0.2%. The Dow Jones Industrial Average rose 1.2%. Tariffs remain the biggest concern as consumers, businesses, and investors remain uncertain about policy changes as President Donald Trump's April deadline approaches. The Federal Reserve emphasized uncertainty on Wednesday, with Chair Jerome Powell's remarks only to some extent soothing some nerves. The lack of clarity has continued to weigh on Google parent Alphabet, Amazon.com, Apple, Facebook parent Meta Platforms, Microsoft, Nvidia, and Tesla, the former stars of the rally. The weakness is starting to call into question the American exceptionalism trade, with Société Générale's head of global asset allocation questioning whether the long-awaited 'Great Rotation' out of US assets has begun.
Features:
-Nvidia has announced plans to build a quantum computing research center, NVAQC, to address some of the field's most challenging problems by integrating quantum hardware with supercomputers. The center aims to pave the way for accelerated quantum supercomputing. Researchers at the Jülich Supercomputing Centre in Germany are integrating an Advantage system from D-Wave Quantum with Europe's first exascale supercomputer. The integration enhances the efficiency of both types of systems, which build upon each other's strengths. The NVAQC will tackle some of quantum's most pressing issues, including qubit noise, which has hindered their commercial adoption. Partners on the project include Quantinuum, Quantum Machines, and QuEra Computing.
-A BlackRock infrastructure fund agreed to buy the Panama Canal ports, which had sparked President Donald Trump's ire for China's control of the waterway. The transaction, due to be completed in early April, would be a windfall for Hong Kong-based CK Hutchison Holdings, netting it over $19B in cash for the Panama Canal terminals and other ports around the world. The price is equal to about 85% of the company's market value for a business that generated less than 15% of its profits. However, the high-profile sale could be in jeopardy because Chinese leader Xi Jinping is displeased that CK Hutchison didn't consult him before negotiating the deal. CK Hutchison owns extensive international infrastructure assets, including electric power, natural gas, renewable energy, and water. It also controls a large group of retailers selling health and beauty-care products throughout Asia, including AS Watson. The company's founder, Li Ka-shing, draws comparisons to Warren Buffett. The Hong Kong-listed shares trade at about 45 Hong Kong dollars, while the US-listed shares fetch just seven times projected 2025 earnings, carry a roughly 5% dividend yield, and trade for about a third of the company's book value and estimated net asset value.
Europe:
-The European Union (EU) is deferring retaliatory tariffs against US products, covering €26B ($28.2B) of exports, until mid-April. The first phase of the levies is set to take effect on April 1, targeting items like lingerie and soy products. A second phase is scheduled for mid-April. Trump has threatened a 200% tariff on European wine, champagne, and other alcohol. In 2024, the US imported $6.8B worth of wine, with 80% coming from EU countries. Some wine-producing nations, such as Italy and France, have criticized the EU's response to the steel and aluminum tariffs, warning against intensifying the trade war. The EU is considering aligning the timing of the two sets of countermeasures to allow for simultaneous consultation with Member States on both lists.
Emerging Markets:
-No update
Commodities:
-Freeport-McMoRan stock has been upgraded to Buy by J.P. Morgan analysts, citing the risk of levies on copper as a potential winner from President Donald Trump's trade policies. The stock has a 30% upside, raising its price target to $52 from $48. Trump imposed 25% levies on steel and aluminum imports last month, and the market believes copper may be next. Since then, the gap between copper prices on the US COMEX exchange and the London Metal Exchange has widened, with prices in the US up over 25% this year and 13% on the London Metal Exchange. This premium means an additional boost for Freeport copper sold in the US. Despite the uncertainty, analysts believe Freeport stock can still outperform even if copper levies don't materialize.
Streetwise:
-The managed futures industry is seeking funds that can beat other assets during a crisis, but 60/40 investing is not suitable for this purpose. Instead, a go-anywhere, long/short, derivative trend-trading quantitative model is needed. Futures are contracts used to bet on the direction of stock indexes, government bonds, commodities, and currencies. Commodity trading advisors (CTAs) follow diversified futures strategies, including trend-following, which involves using software and charts to bet on rising and falling markets. Managed futures have been around for over 75 years, but the rise of exchange-traded funds and their promotion as tools for ordinary savers is new. BlackRock recently launched the iShares Managed Futures ETF, promising a unique source of return to diversify a portfolio. Managed futures have made money through various stock mishaps, such as the dot-com crash and the 2007-09 financial crisis.