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Thursday, March 20

Noteworthy macro moves today: US Dollar Index +0.5%. Ethereum -3.1%. US 10Y Treasury Bond +0.3%.

The Bank of England (BoE) has decided to maintain its benchmark interest rate at 4.5%, with an 8-1 vote reflecting a cautious approach amid ongoing global trade uncertainties and signs of economic slowdown in the UK. The BoE noted progress on disinflation but acknowledged that inflation pressures could rise again, necessitating careful monitoring as it navigates monetary policy adjustments.

In the United States, initial jobless claims rose slightly less than expected to 223,000 for the week ending March 15th, indicating continued stability in the labor market despite concerns over potential economic slowdowns due to tariffs imposed by President Trump. Additionally, the Philadelphia Fed Manufacturing Index showed unexpected resilience with a reading above forecasts at 12.5 for March.

Market sentiment is currently mixed following these developments; European equity indices are down significantly while U.S. stock futures indicate lower openings after strong gains earlier this week driven by dovish signals from Federal Reserve Chair Jerome Powell regarding future rate cuts amidst persistent inflationary challenges linked to tariff impacts on growth expectations.

iShares China Large-Cap ETF (FXI) [-2.6%]
The iShares China Large-Cap ETF (FXI) has seen a notable decline of approximately 2.7% in pre-market trading, coinciding with the Federal Reserve's decision to maintain interest rates and signal potential cuts later this year, which has introduced economic uncertainty. The People's Bank of China reported that both the Loan Prime Rate and the 5-Year Loan Prime Rate remain unchanged, a decision that has been maintained for five consecutive months. Recent reports indicate a significant drop in various Chinese stocks, including FXI, which fell alongside declines in other major holdings such as JD and Pinduoduo. Additionally, the movement in USD/CNH has negatively impacted FXI's performance. The AUD/USD currency pair's decline may reflect broader market sentiment affecting FXI as well.

Invesco DB US Dollar Index Bullish Fund (UUP) [+0.5%]
The Invesco DB US Dollar Index Bullish Fund (UUP) experienced a 0.5% increase in pre-market trading, coinciding with a 0.40% rise in the U.S. Dollar Index to 103.88. This uptick follows the Federal Reserve's decision to maintain interest rates within the 4.25%-4.50% range, alongside indications of potential rate cuts later this year due to economic uncertainties. The dollar's strength has been further supported by mixed global market performance, with declines in Asian markets and lower trading in European indices. Additionally, the Swiss National Bank's recent policy rate cut has influenced demand for the dollar, while ongoing geopolitical tensions have bolstered safe-haven assets like gold, contributing to the dollar's performance against other currencies. The USD/CNH has also seen upward movement, reflecting broader market sentiment towards the dollar.

JBL | +7.1% | +1.3B
Jabil Inc | Electronic Manufacturing Services
Jabil Inc. reported robust Q2 financial results, achieving revenue of 6.73 billion, which surpassed the consensus estimate of 6.41 billion. The adjusted earnings per share (EPS) stood at 1.94, exceeding expectations of 1.83 and reflecting a notable increase from 1.68 in the same quarter last year. The company raised its fiscal year 2025 core EPS outlook to 8.95, above the previous guidance of 8.75 and the consensus of 8.74. Additionally, Jabil increased its revenue forecast for FY25 to 27.9 billion from 27.3 billion, also exceeding prior estimates. For Q3 FY2025, Jabil anticipates core EPS in the range of 2.08 to 2.48, with revenue projected between 6.7 billion and 7.3 billion, compared to an estimate of 6.74 billion. Following the earnings announcement, Jabil's stock price rose significantly in pre-market trading.

VEON | +4.3% | +3.8B
VEON Ltd | Wireless Telecommunication Services
VEON Ltd reported a profit from continuing operations of 487 million for fiscal year 2024, an increase from 380 million the previous year. The company achieved quarterly sales of 998 million, slightly above the consensus estimate of 997 million, reflecting a year-over-year increase. For fiscal year 2025, VEON anticipates underlying local currency revenue growth of 12% to 14% and EBITDA growth of 13% to 15%. The group expects capital expenditure intensity to range between 17% and 19%. Additionally, VEON announced the start of the second phase of its share buyback program, which will involve up to 35 million in repurchases of American Depositary Shares. Revenue guidance for fiscal year 2025 has been set at 4.5 billion to 4.6 billion.

BABA | -4.2% | -112.6B
Alibaba Group Holding Ltd | Broadline Retail
Alibaba Group Holding Ltd has experienced a notable decline of 4.1% since Wednesday. Recent reports indicate that Alibaba and Baidu are open sourcing AI models to navigate U.S. restrictions, aiming to decentralize development and attract global talent. In social media discussions, approximately $180 million flowed back into Alibaba's shares via Stock Connect on October 30, with a net inflow of HKD3.9 billion in Southbound Trading. Additionally, Pinduoduo's recent earnings report, which missed revenue expectations but surpassed earnings forecasts, has shifted focus towards the earnings outlooks for other Chinese platform operators, including Alibaba. Earlier sentiment on social media highlighted that Alibaba was one of the few stocks showing an increase for the month.

PDD | -4.5% | -30.2B
PDD Holdings Inc | Broadline Retail
PDD Holdings Inc reported its fourth-quarter results, revealing revenue of 110.61 billion yuan, which fell short of the analyst consensus estimate of 115.38 billion yuan, despite a year-on-year increase of 24%. Net income rose to 27.45 billion yuan from 23.28 billion yuan. Adjusted earnings per American depositary share came in at 20.15 yuan, exceeding expectations of 19.68 yuan. Nevertheless, the revenue miss overshadowed these results, leading to a decline in PDD's stock price, which was down approximately 6.5% in pre-market trading. Concurrently, PDD's performance is aligned with the broader market trend, which is also moving lower amid global economic uncertainty and concerns regarding consumer spending in China, despite recent stimulus measures.

BIDU | -3.7% | -9.7B
Baidu Inc | Interactive Media & Services
Baidu Inc (BIDU) has seen its stock price drop significantly, down 3.5% in pre-market trading, following a broader decline in major Chinese stocks. This decline coincides with Baidu's recent denial of allegations regarding an internal data breach linked to the daughter of a vice president, who leaked personal information online during an online dispute. The company clarified that the leaked data originated from external "doxing databases," asserting that its policies prevent employee access to user data. Additionally, social media discussions highlight that Baidu was down over 5% at market close yesterday, alongside other major players like Meituan and Kuaishou. The Hong Kong Hang Seng Index also experienced a notable drop, reflecting a general downturn in the market. Meanwhile, the AUD/USD currency pair has declined, which may correlate with Baidu's recent price movement.

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