20250304 Review: A close call

Yesterday's pre-market session seemed to continue the panic (concerns about Trump's State of the Union address?), but by the close, it was relatively unscathed. The recent market action has been quite chaotic, and the future remains uncertain. Here are the key messages to watch before the market opens:

1.President Trump delivers his first State of the Union address of his second term

In the State of the Union address, Trump announced the launch of a $5 million citizenship program for top global entrepreneurs, requiring them to pay U.S. taxes. He also celebrated the recent decline in interest rates and pledged to balance the federal budget, the first time since 2001. Additionally, he read a letter from Ukrainian President Zelensky, sent hours before the speech, expressing Ukraine's willingness to sign a mineral agreement and begin the process of ending the war. Trump praised Elon Musk and X during his speech, with Republican lawmakers cheering for Musk. However, Democratic Representative Al Green was ejected from the chamber by House Speaker Johnson for repeatedly interrupting the speech. Trump also proposed making U.S.-made car loan interest tax-deductible to boost the auto industry, which could impact investor sentiment in the tech and auto sectors.

2.Trade war escalates as U.S.-Canada-Mexico tariff battle erupts

The U.S. officially imposed a 25% tariff on Mexican goods and non-energy Canadian goods, a 20% tariff on Chinese goods, a 10% tariff on Canadian energy goods, and a 10%-15% tariff on U.S. goods exported to China. In retaliation, Canada announced a 25% tariff on $30 billion worth of U.S. goods and plans to impose an additional 25% tariff on $125 billion worth of goods within 21 days, along with a 25% export tax on Ontario electricity exported to the U.S.. Mexico plans to announce counter-tariffs against the U.S. this Sunday. Canadian Prime Minister Trudeau warned, "I won't sugarcoat it—this will be tough for Canadians." In the afternoon, U.S. Commerce Secretary Howard Lutnick hinted in a Fox Business interview that Trump might reach a compromise with Canada and Mexico, with possible adjustments to some tariffs announced tomorrow, provided immigration issues improve.

3.IRS plans layoffs

According to the Associated Press, the IRS is drafting plans to cut up to 50% of its 90,000 employees, a move that could impact tax enforcement and government revenue.

4.Tesla's sales surge in China while offering 0% APR loans in the U.S.

Tesla ($Tesla(TSLA.US)) registered 12,400 new vehicles in China last week, nearly doubling from the previous week, driven by the launch of the refreshed Model Y, which sold 6,600 units in its first week. However, according to the China Passenger Car Association (CPCA), Tesla sold 30,688 domestically produced EVs in China in February, down 49.2% YoY and 51.5% MoM, while BYD's sales reached 318,233 units, up 161.4% YoY. To stimulate demand, Tesla is offering 0% APR car loans in the U.S. for new Model 3 orders placed on or after March 3 (60-month term), with a 0.99% rate for 72-month loans.

5.CrowdStrike ($CrowdStrike(CRWD.US)) Q4 earnings beat expectations but guidance disappoints

CrowdStrike reported Q4 adjusted EPS of $1.03 (vs. $0.86 expected) and revenue of $1.06 billion, up 25% YoY, but its FY2026 guidance fell short: projected revenue of $4.74-$4.81 billion (below the expected $4.43 billion) and adjusted EPS of $3.33-$3.45. Nonetheless, the company highlighted 23% growth in annual recurring revenue (ARR) to $4.24 billion, a 97% customer retention rate, and continued progress in its AI-native cybersecurity platform.

6.Google ($Alphabet(GOOGL.US)) urges Trump administration to reconsider breakup plan

Google today called on the Trump administration's Justice Department to re-examine the antitrust lawsuit, fearing a breakup could weaken its search, advertising, and AI businesses and raise costs for consumers. Meanwhile, Google's self-driving subsidiary Waymo partnered with Uber ($Uber Tech(UBER.US)) to launch autonomous ride-hailing services in Austin, with Waymo's driverless cars offering UberX and Uber Comfort via the Uber platform.

7.Palantir ($Palantir Tech(PLTR.US)) collaborates with Société Générale to combat financial crime

Palantir announced the successful deployment of anti-financial crime technology at Société Générale, using AI and machine learning to detect money laundering and fraud. Palantir's France & EMEA managing director stated, "In the face of increasingly complex financial crimes, data analysis and integration are critical."

8.BlackRock CEO Larry Fink advises investors to buy the dip

The Fear and Greed Index fell to its lowest level since August 5 last year. Larry Fink said, "If the market takes a big hit, it's time to buy."

9.Robinhood ($Robinhood(HOOD.US)) CEO reveals key growth metrics

Robinhood CEO Vlad Tenev announced at the JMP conference:

• Futures trading is fully open, growing faster than index options and exceeding expectations

• Paid "Gold Members" have reached 3.1 million (up 500K from Q4)

• Net deposits in the first two months of Q1 hit $10 billion, up 42% YoY

10.Grab ($Grab(GRAB.US)) acquires Malaysia's Everrise supermarkets Grab announced the acquisition of 19 high-end Everrise supermarkets in Malaysia, planning to digitize operations and launch instant grocery delivery to strengthen its position in Southeast Asia. The company currently has $6 billion in cash reserves, accounting for 30% of its market cap.

11.China announces 2025 economic targets

• GDP growth target: ~5%

• CPI target: 2%

• Budget deficit ratio: 4% (5.66 trillion RMB)

• Ultra-long-term bonds increased to 1.3 trillion RMB (1 trillion in 2024)

• Local government special bond quota raised to 4.4 trillion RMB (3.9 trillion in 2024)

• Defense spending growth: 7.2%

12.EU launches €150 billion "Rebuild Europe" plan

• Provide €150 billion in loans to help member states enhance defense capabilities

• Total financing could reach €800 billion, primarily for air defense systems, drones, and other military equipment

• Beneficiary stocks: BAE Systems ($BAE Systems plc(BAESY.US)), Rheinmetall ($RHMG.DE), Leonardo ($LDO.MI)