Johnson & Johnson to Boost U.S. Investments by 25%, Plans Four New Manufacturing Facilities

Local Market Commentary

Local markets were closed on Friday for a public holiday. On the previous trading day, Thursday, 20 March, the JSE Top 40 fell 0.88% to close at 82,093.7 points, while the All Share Index dropped 0.70% to end at 89,518.8 points.

European Market Commentary

European shares declined on Friday, mirroring global market weakness amid trade tensions and geopolitical uncertainty, while travel and leisure stocks were impacted by the temporary closure of Heathrow Airport due to a fire. The STOXX 600 fell 0.6%, marking its third consecutive session of losses, though it ended the week 0.5% higher following German parliamentary approval of major borrowing reforms and a €500 billion stimulus package. Meanwhile, Russia's central bank maintained its key interest rate at 21%—its highest in over two decades—despite concerns from business leaders and President Vladimir Putin’s calls to avoid economic cooling, citing persistent inflationary pressures.

U.S. Market Commentary

The S&P 500 and Dow Jones managed slight gains on Friday, reversing earlier losses after U.S. President Donald Trump signalled potential flexibility on upcoming tariffs and announced plans for trade discussions with China. Despite this, market sentiment remained cautious, with several companies lowering forecasts ahead of the upcoming earnings season. FedEx shares dropped 6.45% following a downward revision of its full-year profit and revenue outlook, citing ongoing industrial sector weakness. The session also saw heightened volatility due to the simultaneous expiry of stock, index options, and futures contracts, known as "triple witching." Declining stocks outpaced advancers by a 1.93-to-1 margin on the NYSE and 1.42-to-1 on Nasdaq.

Asia Market Commentary

Asia-Pacific markets traded mostly higher this morning as investors monitored the approaching April 2 tariff deadline set by U.S. President Donald Trump. In South Korea, the Constitutional Court overturned Prime Minister Han Duck-soo’s impeachment, reinstating him as acting president and replacing Finance Minister Choi Sang-mok in the interim role. Meanwhile, Morgan Stanley raised its 2025 GDP forecast for China to 4.5%, citing stronger-than-expected economic activity in early 2024 and solid capital expenditure momentum, bringing its outlook in line with market consensus.

Currency Market Commentary

The British pound extended its decline against the dollar on Friday but remained on track for a weekly gain after the Bank of England held interest rates steady and highlighted rising global trade tensions. Meanwhile, the dollar hovered just below a three-week high as traders awaited clarity on U.S. President Donald Trump’s next round of tariffs, set to be announced on 2 April. The euro edged higher following three consecutive sessions of losses, while the yen weakened against the dollar amid rising U.S. Treasury yields. Market sentiment towards the dollar remains cautious, as initial optimism over Trump’s pro-growth policies has shifted to concerns that his aggressive trade stance could risk a recession.

Commodity Market Commentary

Gold edged lower on Monday as the dollar strengthened, with investors awaiting new catalysts following last week's rally, which saw bullion reach three consecutive record highs amid geopolitical tensions and expectations of U.S. interest rate cuts. Meanwhile, oil prices declined as markets evaluated the potential impact of ceasefire talks on Russian crude supply. A U.S. delegation is set to meet Russian officials on Monday to discuss a possible Black Sea ceasefire and broader efforts to end the Russia-Ukraine war, following prior discussions with Ukrainian diplomats.

Local markets were closed on Friday for a public holiday.

Johnson & Johnson (JNJ) +0.37%

Johnson & Johnson plans to increase its U.S. investments by 25% to over $55 billion over the next four years, driven in part by the potential impact of drug import duties proposed by the Trump administration. The company announced plans to build four new manufacturing facilities, including one in Wilson, North Carolina, where construction has already begun. While the locations of the other sites remain undisclosed, at least two investors indicated that much of this investment was already anticipated. The 25% increase is measured against the company’s spending over the previous four years.

FedEx Corporation (FDX) -6.45%

FedEx shares dropped 11% on Friday following a downward revision of its annual forecasts, raising concerns about the stability of U.S. manufacturing amid trade policy uncertainties. CEO Raj Subramaniam highlighted a challenging operating landscape, citing industrial sector weakness impacting higher-margin business-to-business shipments. The company has been implementing cost-cutting measures as demand shifts towards lower-margin e-commerce deliveries from firms like Temu and Shein. As a result, FedEx revised its fiscal 2025 adjusted earnings per share forecast to $18.00–$18.60, down from its previous estimate of $19.00–$20.00.

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