All three major stock index futures rise together, with January PCE data to be released tonight

1. On March 13th (Friday) before the US stock market opens, the three major US stock index futures all rose. As of press time, Dow futures are up 0.36%, S&P 500 futures are up 0.36%, and Nasdaq futures are up 0.36%.

2. As of press time, Germany’s DAX index is up 0.05%, the UK FTSE 100 is up 0.14%, France’s CAC 40 is up 0.02%, and Europe’s Stoxx 50 is up 0.13%.

3. As of press time, WTI crude oil is down 2.27%, at $93.56 per barrel. Brent crude oil is down 1.42%, at $99.03 per barrel.

Market News

Tonight’s PCE may show anomalies not seen in decades! Will the Federal Reserve’s rate cut path face new obstacles? At 8:30 PM Beijing time on Friday, the US will release the January PCE Price Index. Market expectations are for PCE to rise 2.9% year-over-year, unchanged from the previous value, and increase 0.3% month-over-month, slowing from last month’s 0.4%. On core measures, the market expects the core PCE price index to accelerate slightly to 3.1% YoY, the largest increase since April 2024, with a MoM increase remaining at 0.4%.

President Trump said he would escort ships through the Strait of Hormuz if necessary, increasing threats against Iran. US President Trump stated that if needed, the US will escort ships through the Strait of Hormuz, but he also expressed hope that US-led military actions will proceed smoothly, vowing to “launch very fierce strikes against Iran within the next week.”

The Fed’s rate cut expectations have been dashed: June becomes the new “dividing line,” and Wosh’s “easy money era” may not arrive as expected. Surveys show economists have delayed their expectations for the Fed’s next rate cut from March to June, but still expect two 25 basis point cuts by the end of the year. The 46 economists surveyed anticipate a faster rate cut pace than futures markets price in. Their median forecast suggests one more rate cut than the Fed officials’ December projection for 2026. Among the economists surveyed, nearly one-third express doubts about the core figure chosen by President Trump to succeed Powell—former Fed Governor Kevin Wosh. When asked whether they believe Wosh will commit to the Fed’s 2% inflation target, 13% are unsure, and 18% say “no.”

Rising oil prices are easing supply concerns! Under the blockade of Hormuz, Russian oil is stepping in. After the US granted a temporary exemption allowing other countries to purchase Russian energy cargoes already shipped at sea, around 30 Russian oil tankers in Asian waters now offer crude oil and broader fuels to interested international buyers. Analysts say that the recent Middle East geopolitical conflicts have significantly increased Russia’s marginal pricing power and fiscal revenue, with the Russian government potentially gaining billions of dollars this month. However, the current surge in international oil prices is not enough to push prices into a sustained downward trend due to the limited supply of exempted Russian oil.

The US, Japan, and the EU plan to advance a critical mineral trade agreement, possibly establishing a price floor mechanism. Sources say the US Trade Representative’s Office (USTR) has been leading negotiations with the EU and Japan on this framework and will continue to do so. The agreement aims to set price floors and tariffs for key materials to counteract market actions from China. A February report indicates the US has developed a critical mineral price floor mechanism and is promoting it among allies. Currently, the Trump administration and over 50 countries seek to reduce dependence on Asian resource supplies, deemed vital for national security.

Top-performing funds outperforming 97% of peers are bullish on Chinese tech stocks: increasing holdings in Alibaba and Tencent, betting on AI application dividends in China. A high-performing emerging market fund is increasing investments in large Chinese AI companies, believing they are more valuable than US tech giants investing heavily in expansion. Caroline Cai, CEO of Pzena Investment Management, said her $3.9 billion fund has been adding to Tencent (00700) and Alibaba (BABA.US). She believes these companies are undervalued and have greater upside potential given their potential to change daily life. In an interview in New York, Cai said, “You don’t have to pay high costs for the productivity boosts AI might bring.”

Stock News

Q1 earnings beat expectations but can’t hide AI anxiety: Adobe (ADBE.US) CEO resigns after 18 years. Facing market doubts about its ability to stay ahead in AI, Adobe CEO Shantanu Narayen will step down. On the same day, the company released its Q1 report, exceeding market expectations in revenue and earnings. Adobe expects revenue for the quarter ending in May to be between $6.43 billion and $6.48 billion, with analysts averaging $6.43 billion; adjusted EPS is forecasted at $5.80–$5.85, versus an average estimate of $5.70. For the quarter ending February 27, revenue grew 12% to $6.4 billion, above the $6.28 billion forecast. Adjusted EPS was $6.06, versus an expected $5.88.

Middle East conflict spreads to beauty retail: inflation may squeeze consumer budgets, Ulta Beauty (ULTA.US) issues lower-than-expected guidance. In Q4, driven by the success of its Beauty Unleashed strategy, same-store sales growth, and acquisition of Space NK, revenue continued strong, with net sales up 11.8% to $3.9 billion, beating expectations, and same-store sales up 5.8%, higher than the 1.5% growth in Q4 2024 and above the 4.25% forecast. However, EPS was $8.01, down from $8.46 last year, missing Wall Street estimates by 2 cents. The company’s full-year guidance is below expectations, with same-store sales projected to grow 2.5–3.5%, with a median below the 3.5% analyst consensus.

Apple (AAPL.US) announces a reduction in App Store commissions in China. Following discussions with Chinese regulators, Apple will lower commission rates for apps on its Chinese App Store. The standard commission for in-app purchases and paid apps will decrease from 30% to 25%. Eligible apps under the Small Developer Program and Mini Program Partner Program will see their commission rates drop from 15% to 12% after the first year. The change takes effect from March 15, 2026, without requiring developers to re-agree to terms. Apple states it remains committed to fairness and transparency, offering competitive rates not exceeding those in other markets.

Starbucks (SBUX.US) labor disputes and governance red flags may threaten shareholder value. Two influential shareholder advisory firms warn that Starbucks may overlook financial and reputational risks from labor disputes, potentially impacting long-term shareholder value. The warning comes as negotiations between Starbucks and its US union—formed by baristas—have been broken for over a year. ISS analysts noted ongoing disputes and questioned whether the board has adequately overseen management’s handling of labor relations, just ahead of the March 25 annual shareholder meeting.

Microsoft (MSFT.US) expands AI healthcare efforts: launches Copilot Health targeting “superintelligent healthcare.” Microsoft is broadening its AI-driven consumer health products with Copilot Health, which aggregates data from wearables, health records, and lab results to provide “medical intelligence.” The goal is to pave the way toward “superintelligent healthcare,” defined as health AI combining general practitioners’ broad knowledge with specialists’ deep expertise. The service will be phased in, initially available in the US for users aged 18 and above, in English. It can collect data from over 50 wearables including Fitbit, Oura, and Apple Health.

To counter competition and cost pressures, STMicroelectronics (STM.US) plans to introduce humanoid robots to advance factory automation. The European chip giant announced a transformation plan involving retraining staff and deploying robots in aging fabs to avoid closures. At the SEMI semiconductor conference in Sopot, Poland, CTO Thomas Morganstern showed a video of a robot transporting silicon wafer carriers into equipment. “This is our first operational robot,” Morganstern said. “In the coming years, we will deploy over 100 humanoid robots inside factories to handle various tasks.”

Important Economic Data and Event Schedule

Beijing Time 20:30: US January Personal Spending MoM, US January PCE Price Index YoY, US Q4 Real GDP Annualized QoQ Revision, US January Durable Goods Orders Initial.

Beijing Time 22:00: US March University of Michigan Consumer Sentiment Index Initial, US January JOLTs Job Openings.

Next day Beijing Time 01:00: US Weekly Rig Count as of March 13.

Next day Beijing Time 03:30: CFTC Weekly Commitments of Traders Report.