The latest Market Talks covering Technology, Media and Telecom. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.
0720 GMT - Increased tariffs are a hindrance to global trade and therefore a headwind overall to demand fundamentals for the freight sector, JPMorgan analysts write. The bank thinks the container shipping lines are most exposed. They have an asset-intensive business model and high operating leverage to freight rates, which are influenced by the demand-supply balance. European listed transport companies are 15%-20% exposed to U.S. trades, except for ZIM, which is most exposed with over 50% of its capacity on North America-linked trade lanes. Maersk and Hapag-Lloyd have 20% exposure. Freight forwarders are also exposed, but more on an asset light basis with around 20% exposure, the bank says. DSV has 17% exposure, Kuehne+Nagel 20%, and DHL Group 10%-15%. (dominic.chopping@wsj.com)
0328 GMT - Negative spillover to Singapore from U.S. tariffs looks likely, CGS International analysts say in a research report. Although Singapore incurs "only" the base tariff rate of 10% on its exports to the U.S., other key Singapore exports to the U.S. will be affected, the analysts say. These include "machinery," such as medical apparatus & precision engineering equipment as well as "ships, boats & other floating structures," the analysts note. Singapore's GDP growth outlook for 2025 could come in at the lower end of the current official forecast range of between 1.0% and 3.0%, the analysts add. CGS International recommends large-cap defensive names--Singtel, CapitaLand Ascendas REIT, Keppel DC REIT and Singapore Technologies Engineering. (ronnie.harui@wsj.com)
0313 GMT - In Taiwan's equity market, Citi prefers non-AI names with decent dividend yields and solid earnings growth outlooks, given macro uncertainties and concerns about the sustainability of AI investment. Most AI supply chain share prices have corrected more than 15% so far this year, Citi analysts say in a research note. "While we believe the long-term structural growth trend on AI remains intact, we see near-term share prices might be volatile," they say. The analysts note a reset in expectations for AI downstream names due to slower shipments of Nvidia's GB200 and potential U.S. AI technology export controls. Citi prefers United Microelectronics Corp., Novatek, and MediaTek. (sherry.qin@wsj.com)
0213 GMT - Inari Amertron's earnings outlook could face rising trade-war risks disrupting supply chains and dampening demand, say Maybank IB analysts Anand Pathmakanthan and Arvind Jayaratnam in a note. While spared from direct U.S. tariffs, Inari's heavy reliance on Apple exposes it to softer iPhone demand in China and potential margin pressure, they reckon. Inari handles over 70% of radio-frequency chip testing for Apple's main U.S. RF supplier, with the segment contributing to 66% of revenue in 1H FY 2025, they note. Near-term revenue should stay stable, backed by solid RF demand, but Maybank flags weaker volume in 1H FY 2026 and possible pricing pressure from Apple as medium-term risks. Maybank cuts Inari's target price to MYR2.00 from MYR2.70, while maintaining a hold rating. Shares are 2.0% lower at MYR1.96.(yingxian.wong@wsj.com)
0208 GMT - The impact of so-called reciprocal tariffs by the U.S. may not be entirely negative for Malaysia's tech sector as semiconductors are exempt from the 24% tariff, Citi analyst Steven Chan says in a note. He thinks the exemptions should encompass most of Malaysia's tech value chain although risks of future additional tariffs remain. A lower tariff on Malaysia compared with Vietnam, Taiwan and China is likely to strengthen its position as businesses diversify their supply chains, he says. However, companies with exposure to certain end markets, such as autos, may face near-term risks, he adds. Citi maintains a neutral rating on Malaysia's tech sector, naming Frontken as its top pick. Frontken provides surface-treatment and mechanical-engineering services for the chip and other industries. (yingxian.wong@wsj.com)
0119 GMT - Malaysia's equity market may stay range-bound as investors digest the higher-than-expected 24% U.S. tariff, CIMB Securities analysts Ivy Ng Lee Fang and Lim Yue Jia say in a note. Export-driven sectors could come under pressure, though Malaysian glove makers may gain market share from Chinese competitors facing steeper tariffs. The impact on export-driven earnings could become more pronounced in coming months, due to higher tariffs and absence of festive demand, they add. In near term, they expect domestic-oriented companies with stable dividend yields, such as banks, telecom, utilities to provide shelter from tariff-related headwinds. Despite uncertainties, CIMB maintains its end-2025 KLCI target at 1657, with Public Bank, CelcomDigi, Tenaga Nasional, and IHH Healthcare among its top picks. The KLCI at 1511.07. (yingxian.wong@wsj.com)
1749 GMT - While Apple has diversified its supply chain to Vietnam, India and the U.S., Wedbush says the vast majority of iPhones are produced in China, with over 50% of Mac products and 75% to 80% of iPads made there. "The reality is it would take [Apple] three years and $30 billion dollars in our estimation to move even 10% of its supply chain from Asia to the U.S. with major disruption in the process," the analysts say in a research report. This would lead to dramatic increases in price points, they add. "It's hard to comprehend and the near-term margin impact on Apple's gross margins during this tariff war could be significant with the Street already factoring in lower numbers ahead." Apple slides 8.7%. (sabela.ojea@wsj.com; @sabelaojeaguix)
1702 GMT - This week's mortgage rate readout will serve as an important benchmark for the rest of the year, says Realtor.com senior economist Joel Berner. Freddie Mac's rate for a 30-year fixed rate fell 1 basis point to 6.64%. The yield on the 10-year Treasury had been sliding, giving mortgage rates a bit of room to ease. President Trump announced a range of tariffs Wednesday that have sent the markets recoiling, Berner says, and the impact will be seen in mortgage rates reported in the coming weeks. The 10-year Treasury has fallen even further Thursday, with investors exiting the stock market, so it's likely mortgage rates will continue to come down in the coming months as a result. This shock to the system will be felt in the housing market for the rest of the year. (chris.wack@wsj.com)
1508 GMT - Big technology companies aren't immune to U.S. tariffs, Quilter Cheviot analyst Ben Barringer writes in a note. Apple makes 90% of its products in China, with 10% in other Asian countries such as Vietnam and India. "These countries are facing the harshest tariffs, so we can expect iPhones and Apple Watches to go up in price, while hitting the profits of the company significantly," Barringer says. The tariffs are also likely to lead to cutbacks on software and cloud spending. "Alphabet will see a double whammy with digital advertising also cut back on in a tougher economic environment--with Meta also being hit in this regard," he adds. Apple, Meta Platforms and Alphabet shares are down 8.6%, 8% and 3.9% respectively. (najat.kantouar@wsj.com)
1451 GMT - ASML Holding's first-quarter results will likely reflect an uncertain outlook, UBS analysts write in a note. The Dutch supplier of semiconductor-making equipment should see weaker orders for the period compared with the fourth quarter of last year, the bank says. UBS anticipates order bookings in the range of around 4 billion-5 billion euros against consensus of 5 billion euros and 7.1 billion euros in the fourth quarter. The company's 2026 outlook has deteriorated somewhat versus three months ago, mainly due to increasing uncertainty around AI end demand, the analysts say. ASML shares are down 5.3% at 583.40 euros.(najat.kantouar@wsj.com)
1401 GMT - U.S. President Trump's 20% tariff on EU imports will hurt tech companies either side of the Atlantic, lobby group Digital Europe says. "The EU and the U.S. are interconnected economies, tariffs will result in painful repercussions on the digital and digitalizing industries on both sides of the Atlantic," it says. "This is an extra tax on products that are essential for the running of the digital economy like advanced machinery, grid technologies and telecoms equipment. It's bad for both the U.S. and Europe," it adds.(edith.hancock@wsj.com)
1320 GMT - Investors stuck with Tesla and its CEO Elon Musk because disruption and growth went hand-in-hand, "but Musk and Tesla are facing a clear moment of truth ahead and this is a fork in the road decision... stay leading DOGE and risk the future of Tesla," Wedbush's Dan Ives and Sam Brandeis say in a research note. As Musk has committed all his time to the Department of Government Efficiency, Tesla's stock has suffered in part due to public backlash to cuts made by DOGE. Citing media reports that say Trump has told his cabinet that Musk will be leaving in coming months, the analysts say the situation is not sustainable and the longer he stays at DOGE, the more risk to Tesla. Tesla is off 6% premarket. (denny.jacob@wsj.com; @pennedbyden)
(END) Dow Jones Newswires
April 04, 2025 04:20 ET (08:20 GMT)
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