US stock outlook | Futures on the three major stock indexes are rising. Will tonight's CPI support “US stagflation”?

1. On March 12 (Wednesday), the futures of the three major US stock indexes rose sharply before the US stock market. As of press release, Dow futures were up 0.58%, S&P 500 futures were up 0.78%, and NASDAQ futures were up 0.92%.

2. As of press release, the German DAX index is up 1.84%, the UK FTSE 100 is up 0.55%, France's CAC40 is up 1.36%, and the European Stoxx 50 is up 1.46%.

3. As of press release, WTI crude oil rose 1.01% to $66.92 per barrel. Brent crude rose 0.66% to $70.22 per barrel.

Market news

Tonight, will CPI confirm “US stagflation”? The US Bureau of Labor Statistics will release the February CPI report on Wednesday. Economists predict that after a sharp rise in January, US inflation in February may still be high, further proving that progress in containing prices has stalled. After rising 0.5% at the beginning of the year, CPI is expected to rise 0.3% month-on-month in February. According to the survey, core CPI, which excludes the volatile food and energy categories, is also expected to increase 0.3% month-on-month. On an annual basis, the CPI growth rate is expected to be 2.9%, and the core CPI is expected to grow at a year-on-year rate of 3.2%, both 0.1% lower than in January.

Goldman Sachs joined the ranks of undermining US stocks and lowered the target level of the S&P 500 index at the end of the year. Goldman Sachs strategists lowered the year-end target for the S&P 500 index from 6,500 points to 6,200 points, citing increased policy uncertainty, particularly tariffs, and concerns about economic growth prospects. Goldman Sachs lowered its target for the US stock index further shows that people are increasingly skeptical about the prospects of the world's largest economy. This forecast reduction also takes into account the decline in the shares of the Big Seven tech companies. They said that the sharp decline in the index was largely driven by the so-called Big Seven's sharp drop of 14%, and the price-earnings ratio of these stocks fell from 30 times to 26 times. As geopolitical uncertainty intensifies, more and more Wall Street banks are concerned about economic growth, and Goldman Sachs is joining in. Citibank and HSBC analysts also lowered their views on the US stock market this week, citing economic concerns.

Ignore the fall in US stocks! Trump denies recession and downplays market turmoil. US President Trump downplayed sharp market sell-offs caused by fears that his tariff agenda would drag the economy into recession, and said he did not expect the US to fall into recession. When Trump made these remarks, the market experienced three weeks of fluctuation. Trump had planned to raise tariffs on Canadian steel and aluminum products to 50% on Wednesday, but that decision was dramatically reversed in less than six hours. White House chief trade adviser Navarro said in an interview with the media on Tuesday afternoon that Trump no longer plans to implement this tariff adjustment. Ahead of the sharp decline in recent weeks, the US president and government officials warned that the US economy could be in trouble as they use tariffs to rebalance trade flows and drastically cut federal government spending and labor. Trump declined to rule out the possibility of a recession in an interview on Sunday.

Trump's heavy taxes on steel and aluminum are now being imposed, and the “counterattack” of US and European tariffs has been upgraded: the EU fights back with 26 billion euros. On March 12, local time, the European Commission announced that it will take countermeasures against the US steel and aluminum tariff policy and plans to impose tariffs on US goods worth 26 billion euros (about 28.3 billion US dollars). According to information, US President Trump's promised policy of imposing 25% tariffs on all steel and aluminum imported from the US will take effect as planned on March 12, and this move marks another major escalation in the trade war between the two long-term allies. The European Commission said in a statement that it would take “quick and appropriate” measures. EU Trade Commissioner Maros Sevkovic traveled to Washington last month to try to find an amicable solution with senior members of the Trump team, including US Secretary of Commerce Howard Lutnick.

Individual stock news

Water Drop (WDH.US) achieved revenue of 2,772 billion yuan for the full year of 2024, achieving profits for 12 consecutive quarters. Shuidi's net revenue was 687 million yuan, Q4 operating expenses accounted for 45.1% of revenue, and net profit to mother was 99.62 million yuan, achieving 12 consecutive quarters of profit. Looking at the full year of 2024, net operating income was 2,772 million yuan, and net profit to mother was 368 million yuan, an increase of 119.8% over the previous year. Since the launch of the share repurchase program was announced in September 2021, as of the end of February 2025, Shuidi has spent a total of about US$100 million to repurchase approximately 52.1 million ADS (American Depositary Shares) from the open market. With the approval of the company's board of directors, Shuidi also announced that it will begin a new round of cash dividend payments to share the company's value creation with shareholders.

The net revenue of MOMO.US (MOMO.US) in Q4 fell 12.2% year over year, and the number of Momo paid subscribers fell to 5.7 million. Zhiwen Group's Q4 net revenue was 2,6365 million yuan (RMB, same below), down 12.2% year on year. Net profit attributable to the company was 187.2 million yuan, compared to 452.5 million yuan for the same period last year. After dilution, revenue per ADS was 1.05 yuan, compared to 2.32 yuan for the same period last year. Non-GAAP net profit attributable to the company was 230.5 million yuan; diluted revenue per ADS was 1.30 yuan. In December 2024, the Exploration App had 10.8 million monthly active users, 13.7 million in the same period last year, 900,000 paid users in the fourth quarter, and 1.2 million in the same period last year. In the fourth quarter, the total number of paid users of the Momo app was 5.7 million, compared to 7.4 million in the same period last year. Looking ahead, the company expects total net revenue for the first quarter of 2025 to be between 2.4 billion yuan and 2.5 billion yuan, a year-on-year decrease of 6.3% to 2.4%.

The total annual revenue of EH.US (EH.US) has reached record highs, and the total revenue for the 2025 fiscal year is expected to be around 900 million yuan. In fiscal year 2024, the number of Ehang Smart EH216 series unmanned aerial vehicles sold and delivered was 216, up 315.4% from 52 in 2023; total revenue was 456.2 million yuan, a record high, up 288.5% from 2023; adjusted net profit under non-US GAAP was 43.1 million yuan. For the first time, the company achieved adjusted profit under non-US GAAP. According to reports, the company expects total revenue for the 2025 fiscal year to be about 900 million yuan, an increase of about 97% over the previous year.

Century Internet (VNET.US) released its 2024 Q4 and full-year financial report: annual net revenue of 8.26 billion yuan, an increase of 11.4% over the previous year. Century Link maintained strong growth in financial and operating data last year. Net revenue for the fourth quarter of 2024 reached RMB 2.25 billion, up 18.3% year on year; adjusted EBITDA (non-GAAP) was RMB 721.3 million (US$98.82 million), up 63.8% year over year, including one-time disposal proceeds of some E-JS02 data center assets, which was approximately RMB 87.7 million (USD 12 million). Net profit was RMB 3.45 million, and loss was RMB 2.42 billion for the same period in 2023. Net revenue for the year was RMB 8.26 billion, up 11.4% year over year. Net profit increased by 2.85 billion yuan year-on-year to 248.4 million yuan (US$34.3 million), with a net loss of 2.6 billion yuan for the same period in 2023.

Is the US chip industry about to change? It is reported that TSM.US and the Big Three will take over the Intel (INTC.US) foundry. According to people familiar with the matter, TSMC has proposed to Nvidia (NVDA.US), AMD (AMD.US), and Broadcom (AVGO.US) to invest in a joint venture. The joint venture will operate Intel's fab, and TSMC's shareholding ratio in the joint venture will not exceed 50%. According to the proposal, TSMC will be responsible for the operation of Intel's foundry division, which specializes in producing chips tailored to customer needs, but TSMC's shareholding ratio will not exceed 50%. Sources also revealed that TSMC has also made similar investment proposals to Qualcomm. In response to the above report, TSMC replied that the company did not comment on the rumor.

Musk and Trump support each other! Tesla (TSLA.US) plans to double US production capacity to push “manufacturing back to the US.” Elon Musk, the world's richest man, xAI founder and Tesla CEO, made a big announcement that Tesla plans to fully double the production capacity of electric vehicles in the US within the next two years. Musk's move not only shows his confidence in the future development of the US electric vehicle industry, but also expresses strong support for US President Donald Trump's “return of manufacturing to the US” policy of returning to the White House. It is also a “mutual support” for Trump to firmly agree with DOGE (US Department of Government Efficiency)'s recent budget cuts and to publicly endorse the purchase of Tesla to support Musk.

Key economic data and event forecasts

20:30 Beijing time: The annual US CPI rate for February was not adjusted seasonally (%).

22:30 Beijing time: Changes in US EIA crude oil inventories for the week ending March 7 (10,000 barrels).

23:00 Beijing time: US IPSOS main consumer sentiment index PCSI for February.

The next day at 04:30 a.m. Beijing time: US API crude oil inventory changes for the week ending March 7 (10,000 barrels).

The next day at 00:00 a.m. Beijing time: The EIA releases the monthly short-term energy outlook report.

Performance Forecast

Thursday morning: Adobe (ADBE.US)

Thursday pre-market: Futu (FUTU.US), Weibo (WB.US), Youke United (UCL.US)