Weekend Update, March 10th, 2025
Self-Inflicted Economic Wounds
Anti-Growth Policies are Weighing on Sentiment
Index, Sector & Asset Performance
The S&P 500 lost -3.1% last week and dropped into negative YTD territory for the first time this year. The NASDAQ fell -3.45% and fell into “correction” level, >-10% from its high. The S&P 500 ended last Friday almost -8% below its intraday peak on February 19th and first crossing of 6100 on December 6th, 2024. Last week marked the indexes worst week since last September. The selloff is being driven by Trump 2.0 policy focus on tariffs, immigration, and DOGE cutbacks which, in the short term, are all anti-growth and create uncertainty. The S&P 500 futures are down another -1.4% pre-market this morning on a Sunday interview with Fox news by the President. Interest rates continue to fall for the “wrong reasons”, concerns over economic weakness.
The index has experienced 6 straight days of moves greater than 1% for the first time since November 2020. Bank America’s Economic Policy Uncertainty index hit an all-time high.
Only the healthcare stocks rose last week with a small +.2% gain. Financial stocks led last week’s declines down -5.9% followed by consumer discretionary stocks at -5.4%, and energy -3.8%.
China stocks, 2025 year to date leaders, fell overnight as inflation readings there came in low.
Germany scrapped their “debt brake” to invest in defense, infrastructure and energy, sending their yields higher and the Euro soaring.
Economic Indicators and Earnings Commentary
February employment rose by 151k, which was slightly lower than estimates. Please recall that the OHFG investment team has written for 18+ months the overstating of the job market strength. ISM manufacturing fell to 50.3, while prices surged higher. Congress is working to avert a government shutdown with the GOP proposing a 6-month stopgap spending bill. The Chairman of the Fed spoke late on the week and indicated patience for cutting rates but there was room as the data looked to be slowing. CPI will be reported on Wednesday, along with PPI on Thursday and Consumer Sentiment on Friday. U.S. 4q24 earnings were not a problem with the S&P500 EPS rising +14% y/y versus 7% expectations. This is with the headwind of a stronger dollar in 2h24 and higher interest rates. Both influences are reversing and should help EPS in the 2h25.
Oracle and Adobe are among the latter cycle companies reporting earnings this week.
Global Market Trends/Commodities/Currencies
Oil prices are doing nothing fast and fell below $70bbl toward $67/bbl. Supply concerns and demand uncertainty resurfaced following President Trump’s tariff policies.
Gold prices are near $2900/oz. and rose 2.3% last week.
Bitcoin experienced a sharp decline, falling toward $85k on failing sentiment for a Trump led crypto reserve.
The U.S. dollar continues its decline toward 103.
Oak Harvest Weekly Stock Talk
2025 Stock MARKET-No One Said it Would Be Easy
The preceding discussion is for informational purposes only. Investing involves risk and no reference to any security listed above should be considered a buy or sell recommendation. Past performance is no guarantee of future results. Advisory services are provided through Oak Harvest Investment Services, LLC, a registered investment adviser.
