Friday, March 21, 2025
Many times, when we get toward the end of a trading week, we have been exposed to enough new market data to set a somewhat new outlook on the trajectory of the economy and how to invest in it. Other times — like this week — we get all the data we could want, but are still in the dark as much as when we started the week.
Obviously, the tariff-setting date of April 2nd will be impactful, and in ways not even Fed Chair Jerome Powell could be reasonably certain of during his press conference mid-week. We knew the Fed was not budging from its 4.25-4.50% interest rate range at this meeting (the Fed does not meet again until May 6th and 7th), as much because everyone heading the Federal Reserve is waiting to see what happens April 2nd, too.
We now know Retail Sales a month ago were still growing, albeit at a notably slower pace. The Housing market made some progress, as we saw in Starts and Permits, but the Homebuilder Outlook has clearly dimmed. And our most finely-parsed employment data, Weekly Jobless Claims, remains in a range consistent with an historically robust labor market.
But what’s ahead? Markets are still trying to price this in. Should the “tariff war” escalate to a level that causes pain worldwide… well, let’s just say it doesn’t take a Fed Chair Powell to see what that might lead to. The question is, would the U.S. allow that level of pain to be endured by American enterprise? And if so, for how long?
Pre-market futures have been tanking. Literally four paragraphs ago, we saw the Dow -185 points, the S&P 500 -26 and the Nasdaq -112 points. Currently, we’re -335 points on the Dow, -45 on the S&P 500 and -196 points on the Nasdaq. Bond yields have been slipping, as well: down more than -50 basis points (bps) from near-term highs in early January.
We’re pointing toward a lower trading week, in fact, even with the nice rally we saw Wednesday. Currently, we’re still off the recent market lows one week ago (last Friday was a nice up-trading day), but while it was starting to look like we were trending back toward late-February levels, this morning that appears once again in doubt.
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Pre-Markets Sinking on Dimming Outlook
Friday, March 21, 2025
Many times, when we get toward the end of a trading week, we have been exposed to enough new market data to set a somewhat new outlook on the trajectory of the economy and how to invest in it. Other times — like this week — we get all the data we could want, but are still in the dark as much as when we started the week.
Obviously, the tariff-setting date of April 2nd will be impactful, and in ways not even Fed Chair Jerome Powell could be reasonably certain of during his press conference mid-week. We knew the Fed was not budging from its 4.25-4.50% interest rate range at this meeting (the Fed does not meet again until May 6th and 7th), as much because everyone heading the Federal Reserve is waiting to see what happens April 2nd, too.
We now know Retail Sales a month ago were still growing, albeit at a notably slower pace. The Housing market made some progress, as we saw in Starts and Permits, but the Homebuilder Outlook has clearly dimmed. And our most finely-parsed employment data, Weekly Jobless Claims, remains in a range consistent with an historically robust labor market.
But what’s ahead? Markets are still trying to price this in. Should the “tariff war” escalate to a level that causes pain worldwide… well, let’s just say it doesn’t take a Fed Chair Powell to see what that might lead to. The question is, would the U.S. allow that level of pain to be endured by American enterprise? And if so, for how long?
Pre-market futures have been tanking. Literally four paragraphs ago, we saw the Dow -185 points, the S&P 500 -26 and the Nasdaq -112 points. Currently, we’re -335 points on the Dow, -45 on the S&P 500 and -196 points on the Nasdaq. Bond yields have been slipping, as well: down more than -50 basis points (bps) from near-term highs in early January.
We’re pointing toward a lower trading week, in fact, even with the nice rally we saw Wednesday. Currently, we’re still off the recent market lows one week ago (last Friday was a nice up-trading day), but while it was starting to look like we were trending back toward late-February levels, this morning that appears once again in doubt.
Questions or comments about this article and/or author? Click here>>