A daily market update from Fundstrat — what you need to know ahead of opening bell.
“I know nothing with any certainty, but the sight of the stars makes me dream.” – Vincent Van Gogh
Chart of the Day
Good morning!
It’s been a jam-packed week for Elon Musk. It began with an X outage caused by what he described as a “massive” cyberattack, but then he got a new Tesla customer on Tuesday. It was also good news-bad news week for his Starlink business. First, the good news: Starlink signed a tentative deal to provide satellite-based broadband internet services to customers in India through Bharti Airtel, India’s second-largest telecom company. The company then signed a similar agreement with Bharti Airtel’s rival, Mukesh Ambani’s Jio Platforms. (Both deals are subject to approval from Indian regulators.)
The bad news is that Starlink is getting new global competition. If Starlink benefited from Musk’s meeting with Indian Prime Minister Narendra Modi at the White House on Feb. 13, other countries that perhaps view Musk and his friend President Donald Trump less favorably are increasingly seeking viable alternatives. And it looks like they might find them.
In Brazil, where Musk has tangled with the country’s Supreme Court, Brazilian state-owned group Telebrás in November signed a deal with China’s SpaceSail to provide satellite broadband services in direct competition with Starlink’s existing Brazilian (residential) offerings. SpaceSail, which is backed by the Shanghai municipal government, has announced an aggressive plan to deploy 648 low-earth-orbit (LEO) satellites this year, and a “mega-constellation” of as many as 15,000 satellites by 2030. (Starlink currently operates about 7,000 satellites, with reported plans for up to 42,000 by 2030)
European countries might have once looked to Starlink for satellite broadband instead of a Chinese state-owned provider, but Trump’s stance with regard to the Russia-Ukraine war has them motivated to become less dependent on the U.S. for any technology that could have military applications or implications. That’s led to bullish hopes for some homegrown rivals.
France’s Eutelsat, a major regional provider of enterprise-level satellite broadband, has seen its shares surge nearly 500% at times in highly volatile Paris trading since the beginning of the month, arguably due to a renewed interest in European technology independence. On the military side, Italian defense contractor Leonardo on Tuesday announced plans to “launch 18 military satellites and 20 civil multi-sensor satellites between 2027 and 2028,” as reported in the Wall Street Journal. There had been previous discussions between Musk and Italian Prime Minster Giorgia Meloni about a deal for Starlink services, but Europe’s recent push for greater military independence has boosted some analysts’ outlook for Leonardo.
Starlink has arguably enjoyed market dominance since 2019 or so. This has been key to driving the revenues required to sustain its launch-heavy business model: Starlink satellites are designed to fall out of the sky every five years and be replaced by a more advanced model, and the costs to continue this effort have grown alongside the company’s network.
Starlink’s dominance has also been a major reason for persistent calls (hopes) for an IPO. The prolific tech pundit (and New York City naysayer) James Altucher even went so far as to predict an IPO announcement for today. In less than 24 hours, we’ll know if that was just wishful thinking. Either way, it is clear that with increased competition threatening to erode Starlink’s revenues, the money raised through an IPO could come in handy in sustaining Starlink’s launch-heavy business model and ease the burden on its parent company, SpaceX.
Catch Up With Fundstrat
Feb Core CPI came in at +0.23% MoM, which is better than consensus of +0.29% MoM and the number is clean. That is, the downside read is due to a weakening of inflationary pressures. For the Fed, this is strengthening the case and overall picture that inflation is under control.
TECHNICAL
Markets are growing closer to tradable lows in this orderly and concentrated decline. At present, it will be helpful to watch for evidence of downtrend lines being broken, which might give some optimism from a structural perspective of a bottom that is currently lacking.
CRYPTO
We suspect MicroStrategy’s buying might have been a key catalyst behind yesterday rally, but speaking generally, we have concerns about the unsettling move in high-yield credit markets.
News We’re Following
Breaking News
- Wholesale price measure was flat in February, compared with expected increase CNBC
- Russian negotiator rejects temporary cease-fire plan in Ukraine war WSJ
- Trump vows 200% tariff on EU wine, escalating trade tensions BBG
Markets and economy
- U.S. budget deficit surged in February, passing $1 trillion for year-to-date record CNBC
- Canada retaliates against Trump with new tariffs on American-made goods QZ
- Wind and solar overtake coal power for first time in U.S. WSJ
Business
- Intel names Lip-Bu Tan as chief executive officer WSJ
- Saudi Investment Fund pays $3.5Bn to capture Pokémon Go BBC
- Walmart gets an earful from China over response to Trump tariffs WSJ
Politics
- Democrats will block GOP plan to avert government shutdown: Schumer BBG
- New Hampshire Sen. Jeanne Shaheen to retire AX
- Arrested Columbia student to remain in Louisiana, judge orders WSJ
- EPA rolls back dozens of environmental regulations SEM
Overseas
- Naples residents camp outdoors after overnight quake BBC
Of Interest
- Saturn gains 128 new moons, bringing its total to 274 NYT
Bonsai thefts sweep Japan as miniature trees grow more popular BBG
| Overnight |
| S&P Futures -9
point(s) (-0.2%
) Overnight range: -46 to +18 point(s) |
| APAC |
| Nikkei -0.08%
Topix +0.13% China SHCOMP -0.39% Hang Seng -0.58% Korea -0.05% Singapore +0.12% Australia -0.48% India -0.35% Taiwan -1.42% |
| Europe |
| Stoxx 50 +0.05%
Stoxx 600 +0.28% FTSE 100 +0.37% DAX -0.2% CAC 40 +0.04% Italy -0.26% IBEX +0.42% |
| FX |
| Dollar Index (DXY) +0.04%
to 103.66 EUR/USD -0.16% to 1.0871 GBP/USD -0.12% to 1.2947 USD/JPY -0.06% to 148.16 USD/CNY +0.08% to 7.2436 USD/CNH +0.05% to 7.2453 USD/CHF +0.1% to 0.8828 USD/CAD +0.06% to 1.4378 AUD/USD -0.55% to 0.6286 |
| Crypto |
| BTC +0.4%
to 83442.85 ETH +0.0% to 1891.49 XRP +2.48% to 2.285 Cardano -0.04% to 0.7291 Solana +1.53% to 127.06 Avalanche +1.71% to 19.24 Dogecoin +1.12% to 0.172 Chainlink +0.09% to 13.38 |
| Commodities and Others |
| VIX +1.36%
to 24.56 WTI Crude -0.53% to 67.32 Brent Crude -0.39% to 70.67 Nat Gas -0.44% to 4.07 RBOB Gas -0.17% to 2.147 Heating Oil -0.45% to 2.196 Gold +0.45% to 2948.1 Silver -0.42% to 33.11 Copper -0.94% to 4.776 |
| US Treasuries |
| 1M -1.3bps
to 4.2631% 3M -1.1bps to 4.288% 6M -0.6bps to 4.2259% 12M -1.4bps to 4.0382% 2Y +0.2bps to 3.9884% 5Y +0.9bps to 4.0787% 7Y +1.1bps to 4.2031% 10Y +1.0bps to 4.3219% 20Y +1.6bps to 4.6781% 30Y +1.8bps to 4.6491% |
| UST Term Structure |
| 2Y-3
M Spread narrowed 0.5bps to -32.3
bps 10Y-2 Y Spread widened 1.2bps to 33.1 bps 30Y-10 Y Spread widened 0.7bps to 32.3 bps |
| Yesterday's Recap |
| SPX +0.49%
SPX Eq Wt -0.47% NASDAQ 100 +1.13% NASDAQ Comp +1.22% Russell Midcap -0.04% R2k +0.14% R1k Value -0.39% R1k Growth +1.32% R2k Value +0.04% R2k Growth +0.24% FANG+ +2.49% Semis +2.94% Software +2.0% Biotech +1.14% Regional Banks +1.16% SPX GICS1 Sorted: Tech +1.56% Comm Srvcs +1.43% Cons Disc +1.02% SPX +0.49% Energy +0.44% Fin +0.2% Indu +0.0% Utes -0.37% REITs -0.38% Materials -0.45% Healthcare -1.02% Cons Staples -2.02% |
| USD HY OaS |
| All Sectors -3.7bp
to 354bp All Sectors ex-Energy -3.5bp to 321bp Cons Disc -2.4bp to 336bp Indu -3.6bp to 267bp Tech -6.1bp to 359bp Comm Srvcs -5.8bp to 542bp Materials -4.4bp to 316bp Energy -3.9bp to 358bp Fin Snr -1.5bp to 304bp Fin Sub +1.1bp to 227bp Cons Staples -3.2bp to 234bp Healthcare -5.3bp to 375bp Utes -3.6bp to 249bp * |
| Date | Time | Description | Estimate | Last |
|---|---|---|---|---|
| 3/13 | 8:30AM | Feb PPI m/m | 0.3 | 0.4 |
| 3/13 | 8:30AM | Feb Core PPI m/m | 0.3 | 0.3 |
| 3/14 | 10AM | Mar P UMich 1yr Inf Exp | 4.2 | 4.3 |
| 3/14 | 10AM | Mar P UMich Sentiment | 63.0 | 64.7 |
| 3/17 | 8:30AM | Feb Retail Sales m/m | 0.7 | -0.9 |
| 3/17 | 10AM | Mar Homebuilder Sentiment | 42.0 | 42.0 |
| 3/18 | 8:30AM | Feb Import Price m/m | -0.1 | 0.3 |
| 3/19 | 2PM | Mar 19 FOMC Decision | 4.5 | 4.5 |
| 3/19 | 4PM | Jan Net TIC Flows | n/a | 87.144 |