Indices
- Dow43,840, +412 or +0.95%.
- Nasdaq18,847, -677or -3.47%.
- S&P 5005,954, -59 or -0.98%.
- MSCI EAFE2,422.66, -20.64or -0.84%.
- USD10Y4.231%,-18.9bp or -4.28%.
- WTI Crude$69.95/bbl, -$0.33or -0.47%.
Tariffs, Job Cuts, and Political Instability Weighing on the Markets
There were quite a few negative data points last week;
- A majority of the eleven S&P 500 sectors traded down 4 of last week's 5 trading sessions. Technology and Communication Services were 2 of the three worst performers on 3 of those 4 days.
- February Consumer Confidence fell precipitously to 98.4 vs 102.3 expected and vs 105.8 last month (and the week prior Consumer Sentiment fell to a four-year low).
- Nvidia (NVDA) crushed their estimates, guided current year revenue estimates higher and yet traded down -8.66% for the week.
- Weekly jobless claims jumped to their highest levels since December 7th's report.
- The Atlanta Fed’s GDP Now tool has forecast an annualized contraction of -1.5% GDP for the first quarter. If this estimate holds it would be the first contraction of GDP since Q1 2022.
- The CBOE Volatility Index, known as the “fear gauge” spiked to 22 before closing at 19.63, its highest level of the year.
- Early in the week the administration voted with Russia, North Korea, and Belarus to oppose a United Nations resolution condemning Russia’s actions in Ukraine.
- The President also attempted to browbeat Ukrainian President Zelensky on live tv, accused Ukraine of starting the war, and backedRussian dictator Vladimir Putin.
- The administration also announced that 25% tariffs would go into effect against Mexico and Canada this Tuesday, March 4 and that another 10% would be added to China’s tariff bill. Further, 25% tariffs on steel and aluminum imports will go into effect on March 12.
All three indices closed lower for the month of February; Dow -1.6%, Nasdaq down nearly 4%, and the S&P dropped -1.4%. Next week’s non-farm payrolls will be another important data point to see how the labor market is responding to the administration’s wholesale destruction of various federal agencies. We are actively monitoring these trends and are currently discussing possible changes to our portfolios prior to our normal rebalancing scheduled for late April.
The Upcoming Week: Mar 3 – Mar 7
Earnings season continues to wane but there are still some interesting names reporting this week including chip giant Broadcom (BRCM) and consumer names Target (TGT) and Costco (COST). Economic reports include final February numbers in both the manufacturing and services sectors along with the February jobs report and its accompanying data on Friday.
Economic Calendar
- Monday – February Final S&P & ISM U.S. Manufacturing Surveys.Earnings: N/A.
- Tuesday – N/A. Earnings: Target (TGT), Nordstrom (JWN), Ross Stores (ROST).
- Wednesday – February ADP Private Payrolls, February Final S&P & ISM U.S. Services Surveys.Earnings: N/A.
- Thursday – Initial Jobless Claims. Earnings: Broadcom (AVGO), Costco (COST)
- Friday – February U.S. Non-Farm Payrolls, Unemployment Rate, and Average Hourly Earnings. Earnings: N/A.
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Disclaimer: This is not a recommendation to buy or sell any of the securities listed above. I personally, or a family member whose account I control, have positions in the following securities/assets...Bitcoin, Ethereum, Solana, ACHR, BITB, NVDA, and RIVN.