Financial News

February Durable Goods Orders Fall More Than Expected Amid Aircraft Weakness

Demand for US durable goods decreased more than estimated in February amid weakness in the aircraft component, government data showed Tuesday.Orders for tangible items with an average life of at least three years fell 1.4% sequentially to $315.50 billion in February, following a 0.5% drop the month prior, the Census Bureau said. The consensus was for a 1.2% decline for February in a survey compiled by Bloomberg.Demand for transportation equipment fell 5.4% in February, following a 1.9% decrease in January. Civilian aircraft orders slumped roughly 29%, while the defense component logged a 3.8% drop. Motor vehicles and parts saw a 3.1% gain.Excluding transportation, durable goods orders rose 0.8% in February, higher than Wall Street's 0.5% growth view."February's decline in durable goods orders reflected aircraft-driven swings rather than overall weakness," BMO Capital Markets Senior Economist Priscilla Thiagamoorthy said in a note. "Stripping out transportation suggests business investment will continue to support overall economic growth early this year."Last month, planemaker Boeing (BA) reported that it received orders for 21 aircraft in February, up from 13 a year earlier, but down from 107 in January.Demand for primary metals, fabricated metal products, and machinery rose sequentially in February, while new orders for computers and electronic products were little changed, government data showed Tuesday.The ongoing US-Israel war with Iran, which started at the end of February, has curtailed shipments through the crucial Strait of Hormuz, sending energy prices soaring and stoking broad-based inflation concerns.Business equipment spending in the US was heading into the war with "plenty of momentum," Oxford Economics Lead Economist Bernard Yaros said in a remarks e-mailed toTuesday."The energy shock, along with the uncertainty created by the Iran war, is an emerging headwind," Yaros wrote. "However, the (artificial intelligence) buildout and the business tax cuts under the One Big Beautiful Bill Act will still allow equipment spending to grow this year, albeit a notch slower than earlier thought."Price: $208.86, Change: $-3.44, Percent Change: -1.62%

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US 3-Year Auction High Yield Rises From Previous Month, Demand Higher

The US Treasury's 3-year auction hit a high yield of 3.897% on Tuesday, up from the 3.579% high in the previous auction.The bid to cover ratio for the auction was 2.68, above the 2.55 ratio in the previous auction.Dealers represented 55.50% of the bids, with direct bidders at 8.41% and indirect bidders at 36.09%.For takedown, dealers took 13.28%, with direct bidders at 11.91% and indirect bidders at 74.81%.

US 3-Year High Yield 3.897% vs 3.579% Previous; Bid/Cover 2.68 vs 2.55 Previous

SocGen's EU Governments Weekly Bond Positioning Report

The weekly analysis of flows into eurozone government bonds shows that for the week ended last Friday, investors were net buyers of Germany's Bunds and France's OATs, and, net sellers of Italy's BTPs and Spain's SPGBs, said Societe Generale.-- Bunds saw net buying over the week, continuing the trend from the previous six weeks and driven by both domestic and non-domestic investors. Domestic investors were net buyers, extending the buying momentum from the prior 10 weeks, with activity concentrated in the 5-10y and 10-20y sectors, where asset managers and insurers were the most active participants. Non-domestic investors were also net buyers for the seventh consecutive week, primarily in the 5-10y sector, led by hedge funds and insurers.-- OATs experienced net buying, continuing the trend observed over the previous six weeks and driven by both domestic and non-domestic investors. Domestic investors were net buyers for the 11 consecutive week, with activity concentrated in the 20y+ and 10-20y segments, led primarily by asset managers and insurers. Meanwhile, non-domestic investors were also net buyers for the seventh consecutive week, driven by hedge funds, with demand focused mainly in the 5-10y and 10-20y maturities.-- BTPs saw net selling, reversing the buying trend from the previous six weeks and driven by non-domestic investors. Domestic investors were net buyers, extending the buying trend of the past four weeks, with activity concentrated mainly in the 5-10y and 2-5y segments, led by banks. Non-domestic investors were net sellers, reversing the buying trend of the past 11 weeks, driven primarily by asset managers and hedge funds in the 20y+ and 10-20y segments.-- SPGBs saw net selling, reversing the buying trend from the previous four weeks and driven by non-domestic investors. Domestic investors were net buyers, extending the buying trend seen over the last four weeks, with activity concentrated in the 10-20y sector and driven primarily by banks and insurers. Non-domestic investors turned net sellers for the week, with activity focused mainly in the 10-20y and 2-5y categories and driven largely by banks and hedge funds.

Morgan Stanley Set to Gain Market Share Amid Intergenerational Wealth Transfer, UBS Says

Morgan Stanley's (MS) shares likely have several tailwinds lined up, including its ability to benefit from a $20 trillion intergenerational wealth transfer, UBS Securities said in a Tuesday note.Morgan Stanley Head of Wealth Management Jed Finn said at a UBS conference earlier this year that some $20 trillion of wealth is bound to move from baby boomers to Gen X and, eventually, to millennials, according to a FactSet transcript."We view the upcoming intergenerational wealth transfer as a pivotal money motion event -- one in which (Morgan Stanley) is poised to capture share and outperform peers," UBS analyst Erika Najarian wrote in the note. "At the core of our upgrade thesis is the view that operating leverage will increasingly materialize as asset growth compounds and productivity per advisor improves, aided by the technology investments the company has made."Morgan Stanley currently manages roughly $7.4 trillion in wealth-related assets, making it the largest wealth management bank with about 10% of market share, according to Najarian."We believe this leaves a big runway as wealth transfer accelerates," the UBS analyst said. (Morgan Stanley) has catapulted from partnering with 2.5 (million) households in 2018 to (more than 20 million) today, showcasing a potent engine for future growth."UBS upgraded its rating on Morgan Stanley's shares to buy from neutral and raised its price target to $196 from $195.The financial services firm could outperform in the investment banking and markets franchises too, Najarian said."The firm's (investment banking) stands to benefit from a strategic M&A super cycle and a re-acceleration in IPO activity," Najarian said. "Despite concerns over (artificial intelligence-driven) volatility in software stocks, (Morgan Stanley's) exposure is single digits of the pipeline."Recent structural enhancements to its markets business could help drive durable returns for the division, according to the UBS report."We think the market isn't appreciating how active capital markets accelerates net new asset growth, as liquidity events naturally flow into the advisory funnel," Najarian said. "Because of this, we think the bias to margins is to the upside."Price: $167.22, Change: $+0.67, Percent Change: +0.40%

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Canada's Provincial Bonds Were Under Pressure in March, Says BMO

Canadian long provincial returns were under pressure over the past month alongside higher oil prices and a broad backup in bond yields, said Bank of Montreal (BMO).Spreads were relatively well behaved despite the risk-off sentiment stemming from the conflict in Iran, and provincials continue to outperform Government of Canada (GoC) bonds by a "solid" margin over the past six- and 12-month periods, the bank said in a Monday note.The geopolitical conflict and looming inflation impulse from higher oil prices has shifted market pricing on the Bank of Canada toward rate hikes later this year, although BMO still believes the bar for a hike is high given sluggish growth.Long spreads were mixed across the Canadian provinces over the past month, added the bank. Alberta outperformed on expectations that the recent budget, and its $9 billion deficit, will swing well into surplus in an environment of US$100/barrel oil prices.In the meantime, British Columbia continued to lag on deficit concerns and further credit rating downgrades, according to BMO. Most provinces have now tabled their FY26/27 budget.

Vancouver's Home Sales Stabilized at a Low Level in March, National Bank Says

Based on data from the Real Estate Board of Greater Vancouver (REBGV), National Bank of Canada's preliminary estimate is that seasonally adjusted home sales remained almost unchanged, or 0.1% lower, from February to March.This stabilization follows a slight rise of 3.2% in February after a drop of 10.7% in January.As a result, transactions continued to be very low on a historical basis and stood 30.2% below their historical average, noted the bank in a note last week.Resale market activity has not benefited so far from back-to-back rate cuts by the Bank of Canada in September and October, despite an improvement in the region's labor market, in contrast to a deterioration in the other two major Canadian cities since the beginning of the year, National Bank pointed out.It is likely that ongoing uncertainty surrounding trade relations with the United States, coupled with affordability challenges in the region, has continued to weigh on activity levels, added the bank.Should trade relations improve, the potential boost in consumer confidence could stimulate activity in the residential market, given the more favorable interest rate context, according to the bank.

Toronto's Housing Market Stabilizes in March After Seven Consecutive Declines, Says National Bank

According to the Toronto Regional Real Estate Board (TRREB) on Tuesday, seasonally adjusted home sales edged up 1.4% between February and March, the first increase in eight months, said National Bank of Canada.As a result, transaction levels in Toronto remain among the lowest since the COVID-19 pandemic and the 2008 financial crisis, noted the bank. In fact, sales were 40.8% below their historical average.The lack of momentum in the Toronto market is beginning to cause concern, especially since the Bank of Canada's interest rate cuts last fall failed to provide the spark the market had been hoping for to revive market activity, stated National Bank.There is no doubt that trade uncertainty with the United States continues to weigh heavily on Toronto's housing market, against a backdrop of ongoing affordability challenges, pointed out the bank.The slight increase in transactions in March is good news, but it is still too early to say for certain that this marks the beginning of a sustained upward trend, as tariff-related and now geopolitical uncertainty remains palpable, and the improvement in the labor market observed last fall in the region has partially reversed in recent months.On the supply side, new listings edged up 1.2% from February to March, following an 11.5% drop in February. Overall, National Bank estimates that active listings decreased by 3.5% during the month, marking the first decline in five months but remaining very high on a historical basis.Market conditions in Toronto, measured by the active listings-to-sales ratio, tightened in March for the first time in six months but continued to be among the loosest on record. Meanwhile, selling prices fell by 0.6% on a monthly basis, according to the MLS home price index.On a year-over-year basis, prices were down 7.2%.For Q1 2026, cumulative sales were down 7.2% compared with the same period in 2025, representing the slowest beginning of the year since 1995, added the bank.

Gilead Sciences to Acquire Cancer Treatment Developer Tubulis For Up To $5 Billion

Gilead Sciences (GILD) has agreed to acquire Germany-based Tubulis for up to $5 billion, aiming to expand its oncology pipeline.Gilead will pay $3.15 billion in upfront cash and up to $1.85 billion in milestone payments, the American biopharmaceutical firm said in a statement Tuesday.Tubulis' lead asset, TUB-040, is undergoing a trial for platinum-resistant ovarian cancer and non-small cell lung cancer, according to the statement. In October, Tubulis announced "positive" first-in-human data from TUB-040's trial.TUB-030, another anti-body drug conjugate, or ADC, being developed by Tubulis, has shown "promising" initial clinical data across various solid tumor types, Gilead said."The company brings a clinical-stage candidate that is a potential new treatment for ovarian cancer, as well as a next-generation ADC platform and a promising early pipeline," Gilead Chief Executive Daniel O'Day said. "Today's agreement follows a two-year collaboration with Tubulis, which has given us strong conviction in their programs and research capabilities."Earlier this year, Gilead agreed to buy cancer therapy partner Arcellx (ACLX) and privately held biotechnology company Ouro Medicines.The Tubulis deal, which is subject to "expiration or termination of certain regulatory filings," is anticipated to complete in the current quarter, according to the statement."Through our existing collaboration, Gilead has already seen the potential of our technologies and together, we are well positioned to accelerate the development of our ADC pipeline," Tubulis CEO Dominik Schumacher said.Following deal completion, Tubulis will operate as an ADC research unit within Gilead, according to the statement.Shares of Gilead were down 1.3% in Tuesday trade.Price: $138.99, Change: $-1.14, Percent Change: -0.81%

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Canada's March Ivey PMI Tumbles, Ivey Prices Index Surges

Canada's Ivey Purchasing Manager's Index (PMI), seasonally adjusted, for March slipped to 49.7 on Tuesday, indicating that purchases were less than the previous month.The Ivey PMI was 56.6 in February and 51.3 in March 2025. Tuesday's 59.7 was the lowest since November 2025.The Ivey Price Index jumped to 75.7 in March 2026 from 63.1 the prior month, while it was 75.6 in March 2025.Energy prices and other commodities have surged since the United States and Israel started attacking Iran on Feb. 28.

Brief: Canada's Ivey Prices Index Surges to 75.7 in March Vs. 63.4 in February

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Samsung Issues Upbeat Q1 Guidance on Chip Demand

South Korean tech conglomerate Samsung Electronics released on Tuesday strong first quarter 2026 earnings guidance, forecasting a record 57.2 trillion won in operating profit and 133 trillion won in consolidated sales.Sales in the first quarter are expected to rise 68% on year, and while profits should gain by 755%, according to Samsung.Samsung's positive Q1 outlook was undergirded by high AI chip demand, but tempered modestly by expectations on other Galaxy products, such as mobile phones and home entertainment goods.The Samsung guidance release somewhat answered market concerns that Middle East turmoil could hamper the tech giant's revenue and profits, although a sustained conflict could again challenge outlooks in future quarters.Samsung's Q1 revenues are expected to rise about 41% from the fourth quarter of 2025, while profits should jump by about 171% in the same period, according to the forecast.Samsung's Q1 outlook "far outpaced brokerages' earnings consensus of 38.1 trillion won in operating profit and 117 trillion won in sales, prompting analysts to describe the guidance as a 'super surprise,'" reported The Korea Times.With this upbeat outlook, Samsung is poised to become the globe's fourth-most profitable enterprise, trailing only Apple (AAPL), Saudi Aramco and Microsoft (MSFT), said The Korea Times.Samsung shares traded up 1.8% at the close of Tuesday's trade.

Broadcom Announces Long-Term Deal to Develop Custom AI Chips for Google

Broadcom (AVGO) shares rose early Tuesday as the chipmaker agreed to produce artificial intelligence chips for Alphabet's (GOOG, GOOGL) Google and expanded its collaboration with Amazon-backed (AMZN) AI startup Anthropic.Broadcom entered into a long-term deal with Google to develop and supply custom tensor processing units for its future generation of TPUs, the company said in a late Monday regulatory filing. TPUs are Google's application-specific chips used to accelerate machine learning workloads.The deal also includes a supply assurance agreement for Broadcom to provide networking and other components for Google's next-generation AI racks through up to 2031, according to the filing.Broadcom's stock increased 3% in the most recent premarket activity.Last month, Broadcom reported fiscal first-quarter results above Wall Street's estimates, as the chipmaker's artificial intelligence revenue more than doubled year over year.Separately, Anthropic, Google and Broadcom expanded their partnership under which the AI startup would gain access to roughly 3.5 gigawatts worth of TPU-based AI computing capacity, beginning in 2027."This groundbreaking partnership with Google and Broadcom is a continuation of our disciplined approach to scaling infrastructure," Anthropic Chief Financial Officer Krishna Rao said in a Monday blog post. "We are making our most significant compute commitment to date to keep pace with our unprecedented growth."Anthropic said the expansion of its compute infrastructure will power its Claude AI assistant models and meet rising global demand. The vast majority of the new compute will be sited in the US.In November, Anthropic disclosed a $50 billion investment in computing infrastructure in the US, with plans to build data centers in Texas and New York. In October, the startup said it will expand its use of Google Cloud technologies, including up to 1 million TPUs, to boost its compute resources for AI research and product development.

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Australia's Service Activity Shrinks to 26-Month Low in March

Australia's service sector in March slumped into contraction for the first time after 26 months as the oil price shock continued to weigh heavily on the domestic and international economy.The seasonally adjusted S&P Global Australia Services PMI Business Activity Index dipped to 46.3 from 52.8 in February, according to the think tank's Tuesday news release.The decline was attributed to the ongoing Iran war, which weakened new orders and new business, as well as business sentiment, which fell to its lowest in 28 months."The S&P Global Australia Services PMI data for March paint a picture of how the war in the Middle East has impacted companies, and the results are concerning," S&P Global Market Intelligence economics director Andrew Harker said. "Business activity was down solidly amid a renewed fall in new orders, with the rate of decline in output more pronounced than the earlier flash reading, suggesting that downwards momentum gathered pace over the course of the month."Among sectors, the finance and insurance sector recorded the sharpest reduction.In a March note, Fitch said that the ratings of Australia's big four --- Westpac (ASX:WBC, NZE:WBC), ANZ Group (ASX:ANZ, NZE:ANZ), Commonwealth Bank of Australia (ASX:CBA) and National Australia Bank (ASX:NAB) --- are well positioned to withstand macroeconomic headwinds for the next two years. However, the Middle East conflict may weaken their financial metrics if it is prolonged.Barrenjoey analyst Jon Mott warned investors to stay away from bank stocks as there is the possibility of the war in Tehran not being resolved in the near term. Moreover, analysts from Morgan Stanley and Macquarie lowered their outlook on the banking industry, according to a March 25 report in the Financial Review.Only the consumer services sector saw an increase in activity, S&P Global said.Despite the slowdown in demand and orders, service providers added more manpower, with employment rising for the fifteenth straight month. Data indicated that employers are working on expanding their work capacity on future projects.Meanwhile, the S&P Global Australia Composite Output Index declined to 46.6 in March from 52.4 in the prior month, showing that the private sector business activity contracted for the first time in a year and a half.

Japan Household Spending Lags in February

Spending by Japan's households declined in February from a year earlier, perhaps raising a challenge to the Bank of Japan's plans to tighten monetary policy.Expenditures for two-or-more-person households in Japan in February reached an average of 289,391 yen, down 1.8% in real terms from the same month in 2025, reported the Statistics Bureau.February marked the third month in succession that household outlays have declined in Japan, on year.The declining outlays came despite a recently improving picture for family income.The average monthly income per household with a worker logged at 589,038 yen in February, up 1.6% in real terms from the previous year, added officials.Japan average household outlays on food, which absorb about 30% of family budgets, declined 0.5% on year in February, dragged down by sluggish seafood and seasoning-products purchases.Spending on transportation and communication fell 5.9% on year, due in part to soft auto sales, reported the Statistics Bureau.In contrast, family outlays on housing rose 12.1% on year in February, while spending on culture and recreation gained 10.8%, according to official figures.For the Bank of Japan, the nation's soft household spending is a concern.The central bank has reiterated it wants the demand for labor to be strong enough that real wages rise, thus allowing consumers to spend more and boost the overall economy.However, the recent monthly spending surveys show households sitting on their wallets, conserving financial resources.The next Bank of Japan policy session falls on April 27-28. The central bank has held its key rate unchanged since December.According to Polymarket odds, there is a 62% chance the Bank of Japan will raise rates by 0.25% to 1%, at the pending meeting.

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Equity Futures Fall as Trump's Latest Iran Deadline Looms

The benchmark US stock measures were trending lower before the opening bell Tuesday ahead of President Donald Trump's deadline for Iran to reopen the key Strait of Hormuz.The S&P 500 was down 0.4% and the Nasdaq lost 0.6% in premarket activity, while the Dow Jones Industrial Average lost 0.3%. The indexes finished the previous trading session higher, with the Nasdaq and the S&P 500 posting a fourth straight increase.Trump's latest deadline for Iran to reopen the Strait of Hormuz or face destructive attacks is set to expire at 8 pm ET, with no immediate signs of a diplomatic breakthrough to end the war."We're giving them till tomorrow, 8 o'clock Eastern time, and after that, they're going to have no bridges," Trump told reporters at the White House Monday, according to NBC News. "They're going to have no power plants."Iran has rejected a proposal conveyed by intermediaries for a temporary ceasefire, Reuters reported Tuesday, citing a senior Iranian source.On Monday, JPMorgan (JPM) Chief Executive Jamie Dimon said that supply disruptions caused by the Iran war could keep inflation and interest rates higher than expected.Separately, International Monetary Fund Managing Director Kristalina Georgieva reportedly said that "all roads now lead to higher prices and slower growth" as a consequence of the war.West Texas Intermediate crude oil was up 1.8% at $114.52 per barrel before the open Tuesday, while Brent rose 0.6% to $110.40.UnitedHealth Group (UNH) and CVS Health (CVS) rose more than 6.5% each before the open, while Humana (HUM) surged 11%, as the Centers for Medicare and Medicaid Services finalized a proposal to raise payments to Medicare insurers by 2.48% on average next year. Broadcom (AVGO) gained 3.6% after the company announced a long-term agreement to develop chips for Alphabet's (GOOG, GOOGL) Google.Tuesday's thin economic calendar has the durable goods orders report for February at 8:30 am. Chicago Fed President Austan Goolsbee is set to speak at 12:35 pm, while remarks from Fed Vice Chair Philip Jefferson are due at 5:50 pm.Levi Strauss (LEVI) is scheduled to release its latest financial results after the markets close.Gold slipped 0.6% to $4,657 per troy ounce, while bitcoin fell 1.9% to $68,296.