A.M. Edition for Mar. 11. Tesla stock fell 15% on Monday in its worst trading day since 2020, as Elon Musk concedes his work in Washington is making it hard to focus on his business empire. Plus, global markets try to shake off yesterday’s down day on Wall Street as fears about the U.S. economy mount. And WSJ national security correspondent Michael Gordon joins us from Saudi Arabia, where the U.S. and Ukraine are trying to mend ties and pave the way for peace talks with Russia, Luke Vargas hosts. Check out our special series on how China’s trillion-dollar infrastructure plan is challenging the West. Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: What are today's global market concerns?
Global markets try to shake off yesterday's down day on Wall Street as fears about the U.S. economy mount. Plus, as Tesla's stock skids, Elon Musk admits his work in Washington is making it hard to focus on his businesses. And we'll get the latest as the U.S. and Ukraine try to mend ties and pave the way for peace talks with Russia.
The purpose of the meeting is to sort of right the ship after that very fraught meeting between President Trump, Vice President J.D. Vance, and Zelensky. The vibes are good. The proof will be in the pudding.
It's Tuesday, March 11th. I'm Luke Vargas for The Wall Street Journal, and here is the AM edition of What's News, the top headlines and business stories moving your world today. Markets across Asia and Europe are attempting to find their footing today after yesterday's big slides on Wall Street, as concerns grow about the U.S. economy tipping into a recession.
Chapter 2: How is the U.S. economy influencing global markets?
Economists are increasingly gloomy, with JPMorgan Chase bumping up the possibility of a recession this year to 40 percent from 30 percent at the start of the year. while a team at Goldman Sachs put those odds at 20 percent on Friday, but noted that number could go up if the Trump administration sticks to its policies, even as data worsens.
Journal finance editor for Europe Alex Frangos joins me now. And Alex, we are seeing the administration doing just that.
Yeah, and I think that's what has people concerned. The market was believing, you know, over the last month that a lot of the tariff talk was bluff, that it was a negotiating tactic, that there would be a quick deal with the different countries involved and we could go on our merry way, hopefully towards tax cuts, which investors love.
Chapter 3: What is the impact of Trump's trade policies on the economy?
and have a kind of redux of the Trump 1.0, where you got tax cuts and the tariff stuff didn't turn out to be all that bad. But what they're coming to realize is that Trump is much more serious this time. His advisors around him are much more serious and perhaps a little bit more united in the idea that tariffs are a more permanent possibility.
And they're worried that the disruptions to trade could really ding the economy. And in a way, not to be apocalyptic, but we saw after the financial crisis in 2008, 2009, was that trade stopped because finance stopped and people freaked out and that made the economy plunge. And so there's a little bit of that fear going through markets.
Our next test of Trump's commitment to his trade policy will come tomorrow. Our colleague Gavin Bade in Washington reporting that the administration so far is signaling there'll be no reprieve from steel and aluminum tariffs, 25% for each, that are set to go into effect on Wednesday.
Though I guess, Alex, the real test will be whether that commitment holds up should we see markets react again like they did yesterday. What's the sense here a little bit before the open?
Chapter 4: How are investors reacting to recent market changes?
Yeah, I mean, so far, early in the morning, markets have stabilized a bit, and stock futures are pointing up a little bit. But it's certainly not a rebound, and it'll take time for markets to digest and absorb this change in sentiment. You have to remember that you had this huge run-up. going into the election, after the election, and now it's all erased.
And we didn't have a lot of conversations when the stock market was going up a lot every day. You just sort of go with it, go with the flow. Oh, that looks good. But when it starts dropping 4%, as the NASDAQ did yesterday, people start to get really agitated and we're in that mode. But what's changed from November to now, economically, things look a little bit more dour. It's more uncertain.
And so investors are trying to price in that change.
Chapter 5: What economic indicators should we watch this week?
In terms of helping to price in that change, we'll get a few data points this week that could make that a bit easier.
Well, it could be. We'll get inflation numbers and some indicators of the job market and consumer sentiment. Consumer sentiment is really important. But what we've seen lately is that it's the sentiment numbers that look bad, but the real economy data in terms of jobs... been holding up pretty well.
And so I think what people are looking for is the first sign that the job market is cracking or that real activity is turning down. And then we'll have a better sense whether this is a growth scare or an actual heading towards a recession.
Alex Frankos, Journal Finance Editor for Europe. Thanks so much for dropping by. Thanks, Luke. In other market news today, Japan's economy grew at a slower pace than initially estimated in the fourth quarter of last year, amid concerns that President Trump's economic policies could further dent the country's recovery. Japan's Trade Minister Yoji Muto traveled to D.C.
Chapter 6: Why did Tesla stock experience a significant drop?
this week, but failed to win an immediate exemption from Trump's tariff campaign. Tesla shares continued their slide in off-hours trading after notching their worst day since 2020.
Disappointing sales data and investor apprehension over Elon Musk's role in the Trump administration have erased Tesla's post-election gains, with shares down more than 45 percent this year and more than 36 percent over the past month.
In an interview on Fox Business Network's Kudlow, host Larry Kudlow asked Musk about the pressure of running the Department of Government Efficiency alongside his other work. I mean, how are you running your other businesses? With great difficulty.
On Monday, UBS lowered its first quarter delivery forecast for the electric vehicle maker amid a drop in European deliveries, with environmentally minded buyers increasingly shying away from the brand. And shares in Delta Airlines have slid in off-hours trading after the airline lowered its outlook, citing reduced consumer and corporate confidence, particularly in domestic travel.
Chapter 7: How is Elon Musk managing his business responsibilities?
Airline shares have tumbled in recent weeks, as industry analysts said the uncertain economic outlook would likely have a chilling effect on consumers' willingness to make vacation plans. Several other airlines will provide updates later today. Coming up, we'll head to Saudi Arabia, where high level talks between U.S.
and Ukrainian officials are taking place, with both sides hoping for a reset in relations. That story and more after the break. Top American and Ukrainian officials are meeting as we speak in Saudi Arabia for talks about a potential peace process to end the Russia-Ukraine war. The Journal's Michael Gordon is attending those talks in Jeddah. Michael, the last time the U.S.
and Ukraine met face-to-face, it didn't end well. This is that combative encounter in the Oval Office between Trump and Zelensky late last month. What is the atmosphere like there today?
The vibes are good. The proof will be in the pudding. What the Ukrainians have suggested in recent days is they're preparing to offer some sort of ceasefire that would apply to airstrikes involving Ukraine and Russia and perhaps attacks at sea. And indeed, they seem to have underscored that. the importance of that with a fairly sizable drone attack on Moscow overnight.
And Secretary Rubio on the plane over here to Jeddah, he spoke to us just as we were landing. And he said he was hopeful there could be progress in this meeting today and that the hold on arms and intelligence to Ukraine would It was a pause that might soon be lifted.
In terms of Ukraine's negotiating position here, that White House meeting we've been talking about ended with Trump really berating Zelensky for not being committed to a peace to end the war with Russia. And yet Ukraine coming to the table today, possibly offering a ceasefire. That sounds like a key distinction.
A ceasefire would be an initial step to lay the groundwork for prospective peace talks. It really couldn't be an end in itself, not as far as the U.S. is concerned, and not for the Ukrainians either. I mean, one reason those talks in the White House were so difficult is the Ukrainians want some sort of security guarantees. They note that
The Russians seized Crimea in 2014 and then came back eight years later and launched a full-scale invasion of their country. So Zelensky's argument is Putin can't be trusted. And therefore, if there is to be a peace settlement, there has to be some sort of security guarantee or arrangement where the U.S. backstops British and French troops in Ukraine or something to make sure that agreement holds.
The Americans today have been reluctant to provide it. So there are not only things that have to be done on the Ukrainian and Russian side to cement a peace, but there are things that have to be done on the West side as well.
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