A look at the day ahead in U.S. and global markets from Mike

Dolan

It's Friday, so today I'll provide a quick overview of what's

happening in global markets and then offer you some weekend

reading suggestions away from the headlines.

Today's Market Minute

* Britain's Heathrow Airport was shut on Friday after a huge

fire at a nearby electrical substation knocked out its power,

disrupting flight schedules around the world.

* President Donald Trump said on Thursday the United States will

sign a minerals and natural resources deal with Ukraine shortly

and that his efforts to achieve a peace deal for the country

were going "pretty well" after his talks this week with the

Russian and Ukrainian leaders.

* Motorists have traded in a record number of Tesla electric

vehicles this month, Edmunds data showed, amid a wave of

protests against CEO Elon Musk's work as an adviser to U.S.

President Donald Trump.

* Japan's core inflation hit 3.0% in February and an index

stripping away the effect of fuel rose at the fastest pace in

nearly a year, a sign of broadening price pressure that

reinforces market expectations of further interest rate hikes.

* Germany's Bundesrat upper house of parliament is set to vote

on Friday on a spending splurge aiming to revive growth in

Europe's largest economy and scale up the military for a new era

of European collective defence.

Markets end week on glum note as tariffs loom

World markets turned gloomy again on Friday, now that the

week's big central bank meetings have passed and April's planned

U.S. tariffs have moved front and center.

The week's main economic data releases were fairly benign,

with existing home sales for February and weekly jobless claims

showing no major disruptions.

The Philadelphia Federal Reserve's March business survey

showed sentiment ebbing, though by less than forecast. New

orders readings fell sharply, however, and prices paid jumped.

But with much uncertainty about what lies ahead, the

investment mood remains downbeat and upcoming first quarter

corporate earnings and guidance may be a nervy affair.

FedEx ( FDX ) dropped 5% overnight after it cut its

full-year profit and revenue forecasts, with the parcel delivery

giant fretting about tariff-related impacts and "continued

weakness and uncertainty in the U.S. industrial economy".

Micron Technology's ( MU ) revenue beat on strong demand for

AI-related chips struck a more positive note, bumping its shares

up 2% in after-hours trading.

But S&P 500 futures were in the red overall first

thing on Friday after clocking another down day yesterday.

Treasury yields were slightly lower, and the dollar

was broadly firmer.

Overseas markets were in the red too, with Europe

impacted by a disruption to travel stocks after a fire near

London's Heathrow airport shut down traffic for all of Friday.

Germany's upper house of parliament is set to vote on Friday

on a spending boost aimed at reviving growth in Europe's largest

economy and scaling up the military for a new era of European

collective defence.

Chinese stocks lost more than 1%, but

Japan's Topix index ended the day at an eight-month high

as banks gained on the country's above-forecast inflation data.

Meanwhile, Turkey's markets remained under pressure. Trading

on the Istanbul bourse was halted for a second time on

Friday as a market-wide circuit breaker kicked in after heavy

declines of up to 7%.

Turkey's lira, stocks and bonds have weakened sharply

since Wednesday when authorities detained Istanbul Mayor Ekrem

Imamoglu, who is widely considered the main political rival of

President Tayyip Erdogan. Protests erupted and thousands marched

nationwide.

Turkey's central bank sold $10 billion in foreign currency,

according to economists' calculations, following the lira

decline.

Weekend reading suggestions

Here are some articles away from the day-to-day headlines that

you may find interesting.

* Shot by both sides? With fresh murmurs about a challenge to

Federal Reserve independence, economists Pei Kuang, Michael

Weber and Shihan Xie examine how political polarisation affects

public attitudes toward the Fed and inflation expectations.

* Beneath the gloomy seas off southern England, 400 million

mussels encrust ropes hanging from buoys dotted over an area the

size of the country's biggest airport. But, as Reuters Kate

Holton reports, they're not immune from Britain's alarming

sewage overspill and are just one example of a problem that's

now difficult to control.

* Seismic geopolitical shifts are challenging many standing

economic assumptions - nowhere more than in the energy world.

Carlyle strategists Jeff Currie and James Gutman write about

"The New Joule Order". Driven by the quest for security, nations

are creating a diversified energy mix of joules across multiple

sources from renewables to nuclear and carbon.

* 18th century blues. U.S. President Donald Trump invoked the

Alien Enemies Act of 1798 in a proclamation made public last

Saturday as part of his pledge to deport millions of people who

are in the country illegally. Reuters' Tom Hals explains what

the act is and how it has been used in the past.

* How should we read the dollar's retreat and understand a

potential 'Mar-a-Lago Accord'? Two articles on Project Syndicate

this week tackle these subjects head on. Former chairman of

Goldman Sachs Asset Management Jim O'Neill wonders if this

year's dollar slide will prove to be more than a cyclical recoil

and Harvard Professor Jeffrey Frankel tries to make sense of

'Plaza II' speculation.

* Big Tech faces Big Power. Reuters Tim McLaughlin examines the

growing demands on the U.S. grid from the datacenter boom. Data

Center Alley, a 30-square-mile stretch outside Washington D.C.,

is home to more than 200 data centers and consumes roughly the

same electricity as Boston. So power company officials were

alarmed when a big chunk of those centers suddenly dropped off

the grid one day last summer and switched to on-site generators.

* The Organisation for Economic Cooperation and Development's

latest forecasts show how Trump's tariff hikes could slow growth

in Canada, Mexico and the United States while driving up

inflation. The Paris-based OECD also pointed out this week that

outstanding government and corporate bonds globally exceeded

$100 trillion last year, adding that funding the net-zero

emissions transition would be an "immense challenge". If new

investment needed for the transition is financed publicly, that

could send debt-to-GDP ratios 25 percentage points higher in

advanced economies by 2050 and 41 points higher in China, the

OECD said.

Chart of the day:

The U.S. current account deficit narrowed slightly in the fourth

quarter of 2024, according to data out on Thursday. But this may

be a temporary blip as trade numbers for January have already

shown the goods deficit exploded to record levels early this

year. Trade numbers have become a bit challenging to interpret,

however, with imports likely jumping to frontrun tariff

increases, while huge imports of gold bars are also believed to

have pushed up the number.

This matters because these distortions will affect Q1 GDP

calculations. Some GDP models are signalling a sharp contraction

for the current quarter as a result of the widening net trade

gap. However, many economists assume the gold factor is fleeting

and will be removed from official data.

Today's events to watch:

* Canada February house prices, January retail sales

* New York Federal Reserve President John Williams speaks;

European Central Bank policymaker Jose Luis Escriva speaks

* US corporate earnings: Carnival

(By Mike Dolan, editing by Anna Szymanski

[email protected])