—— US Car Loan Delinquency Rate Hits Decade High; Nasdaq 100 Index Nears Technical Correction; JD.com Soars After Strong Earnings Beat; Walgreens Agrees to be Acquired for $10 Billion; Goldman Sachs to Cut 3% to 5% of Staff; China Exports Hit New Record Before Trade War
1. US Car Loan Delinquency Rate Hits Decade High
Financial markets are suggesting an increased likelihood of recession, fueled by tariff-related uncertainty and signals of economic fragility that are unsettling Wall Street.
According to a model from JPMorgan Chase & Co., the market-implied probability of an economic downturn rose to 31% on Tuesday, compared to 17% at the end of November. Indicators such as five-year Treasuries and base metals point to an even higher—essentially 50-50—chance of a contraction. While this scenario remains outside the central forecast, a similar gauge from Goldman Sachs Group Inc. shows recession odds rising to 23% from 14% in January.
“With softer economic activity data in the US and already weaker business and consumer confidence in recent weeks, the tariffs that came into effect on March 4th on Canada, Mexico and China are raising the risk of an even bigger hit to business and consumer confidence going forward,” noted JPMorgan strategist Nikolaos Panigirtzoglou. “In turn this raises the specter of a US recession and markets have naturally priced in higher probability.”
After a tumultuous session on Tuesday, sentiment has soured further as investors and business leaders grapple with the market volatility spurred by President Donald Trump’s threatened tariffs. In his address to Congress on Tuesday night, Trump defended his efforts to reshape global trade, acknowledging the potential for near-term pain.
Source: Bloomberg – Americans Fall Behind on Car Payments at Highest Rate in Decades
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2. Nasdaq 100 Index Nears Technical Correction
Car owners are falling behind on their monthly payments at the highest rate in more than three decades.
In January, 6.56% of subprime auto borrowers were at least 60 days overdue on their loans, the most recorded since Fitch Ratings began tracking the data in 1994.
An economic slowdown and persistent inflation have made it increasingly difficult for consumers to keep up with their bills. Auto loans have been especially burdensome, as rising car prices and higher borrowing costs contribute to a surge in repossessions.
The latest increase in subprime delinquencies comes at a pivotal moment for the US economy, with President Donald Trump’s trade policies unsettling stock markets and fueling concerns about sluggish growth.
The Federal Reserve Bank of New York recently reported that the share of all auto loans transitioning into serious delinquency—defined as at least 90 days late—rose to 3% in the fourth quarter, the highest level since 2010.
Source: Bloomberg – Wall Street Goes From Hope to Panic as Nasdaq 100 Nears a Correction
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3. JD.com Soars After Strong Earnings Beat
JD.com Inc. registered its strongest revenue growth in nearly three years, supported by Chinese government policies that stimulated consumer spending in the world’s second-largest economy.
The e-commerce giant reported a 13% increase in sales to 347 billion yuan (US$47.9 billion) for the December quarter—easily outpacing analysts’ estimates—while net income more than doubled to 9.9 billion yuan, according to a statement released Thursday. Following the announcement, JD’s American depositary receipts climbed as much as 6.1% in early New York trading.
Over the longer term, JD is poised to benefit from the government’s pivot to consumption-led economic growth—a key policy adjustment prompted partly by global macroeconomic uncertainties. In the latter half of 2024, Beijing introduced incentives for purchasing or upgrading home appliances and electronics, a move likely to have boosted JD’s sales. The company also gained from extending its Singles’ Day shopping event in November.
The robust results come on the heels of Alibaba’s better-than-expected performance last month, reflecting a more optimistic outlook for China’s tech sector, spurred by Beijing’s signals of renewed private-sector support.
Source: Bloomberg – JD.com Sales Rise Most in Years After China Consumers Awaken
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4. Walgreens Agrees to be Acquired for $10 Billion
Walgreens Boots Alliance Inc. has reached a deal to be acquired by Sycamore Partners for $10 billion, effectively taking the venerable US drugstore chain private.
Under the terms announced Thursday, Sycamore will pay $11.45 per share in cash for Walgreens—a premium of roughly 8% over the retailer’s most recent closing price in New York. The stock climbed 5.7% in after-hours trading.
This valuation marks a sharp drop from Walgreens’ peak a decade ago, when it was valued at more than $90 billion. Competition from online sellers and big-box chains, along with tighter reimbursements from health insurers, have weighed heavily on the share price over the past 10 years. The stock has lost about half its value in the last 12 months alone.
The transaction, slated to close in the fourth quarter of 2025, includes a 35-day “go-shop” period during which Walgreens can seek and review alternative offers.
“It actually happened,” wrote Leerink Partners analyst Michael Cherny in a research note. “We don’t expect a competing bid to emerge given the size of the deal and its many moving parts.”
Source: Bloomberg – Walgreens Will Go Private in $10 Billion Deal With Sycamore
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5. Goldman Sachs to Cut 3% to 5% of Staff
Goldman Sachs Group Inc. is gearing up to launch its routine round of job cuts, shifting the timeline to earlier in the year compared to previous rounds that occurred later.
The New York-based bank plans to reduce its workforce by 3% to 5%, in line with past efforts, according to an anonymous source. The cuts will primarily target vice presidents—a group that had been over-hired relative to overall growth—as reported by The Wall Street Journal.
The efinancialcareers website first highlighted the scale and timing of these layoffs on Monday. A Goldman Sachs representative noted that the reductions are “part of our normal, annual talent management process” and declined to provide further details.
According to the bank’s latest annual filing, Goldman’s headcount stood at 46,500 at the end of 2024, up from 45,300 at the end of 2023, after having peaked at 48,500 the previous year.
The new round of cuts is set for the spring, following a previous series of layoffs in the latter half of the year.
Source: Bloomberg – Goldman Moves Up Annual Job Cuts, Targets 3% to 5% of Staff
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6. China Exports Hit New Record Before Trade War
China’s exports have reached a record high so far this year as the pressure of increased US tariffs—and the threat of more—prompted companies to frontload their shipments.
Exports grew by 2.3% in the first two months of the year, totaling $540 billion, according to a statement from the General Administration of Customs on Friday. Meanwhile, imports unexpectedly dropped by 8.4%, resulting in a record trade surplus of nearly $171 billion.
Economists surveyed by Bloomberg had anticipated a 5.9% increase in exports and a 1% rise in imports. These figures shed light on how the world’s largest trading nation has adjusted since Donald Trump began raising tariffs on Chinese goods.
The US imposed a 10% tariff on nearly all Chinese imports on February 4, and later increased that rate to 20% earlier this week.
Source: Bloomberg – China Had Record $540 Billion of Exports in Rush to Beat Tariffs
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7. Klarna Plans IPO as Early as April
Klarna Bank AB is aiming to secure at least $1 billion through a US initial public offering and may file publicly as early as next week, according to people with knowledge of the matter.
The Stockholm-based payments company intends to price the IPO in early April, said the people, who requested anonymity because the details aren’t yet public. Klarna is pursuing a valuation exceeding $15 billion for its listing on the New York Stock Exchange, they said.
Talks are still underway, and the specifics of the IPO—including its timing—could change, the people added. A Klarna representative declined to comment.
The firm confidentially registered for an IPO with the US Securities and Exchange Commission in November, according to a previous statement. Bloomberg News has reported that Klarna is working with a group of roughly 15 banks on the transaction, led by Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley.
Supported by Sequoia Capital, Klarna’s listing would provide a lift for technology IPOs, which have slowed after hitting record levels in 2021. Other fintech players such as Chime Financial Inc. and Zilch Technology Ltd. are also evaluating potential initial share offerings this year.
Source: Bloomberg – Klarna Set to File for $1 Billion-Plus IPO as Soon as Next Week
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