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Big Bounce in Markets on Tamed-Down Tariff Proposals
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Monday, March 24, 2025
The market narrative for the first trading day of a new week was set very early on today: President Trump suggested his formerly draconian tariff policy on virtually all U.S. trading partners would not be as harsh on April 2nd as previously advertised. While in the abstract, a notion like this might signal wavering leadership, market indexes seized this as nothing but good news.
The Dow grew back +597 points, +1.42%, while the S&P 500 went up +100 points exactly, +1.76%. Meanwhile, the real winners today were the Nasdaq, +404 points, +2.27%, and the small-cap Russell 2000, +52 points, +2.57%. The deleveraging from Mag-7 tech growth U.S. AI plays looks to have played itself out, near-term — or at least unclenched its fist.
Bond yields have drifted upward on the news, as well — up roughly 4 basis points (bps) to +4.338% on the 10-year and +4.041% on the 2-year. This reaches the highest levels we’ve seen on the 10-year in four weeks, and the highest since exactly a week ago on the 2-year yield.
Flash PMI Results Mixed for March
After the market opened this morning, S&P flash U.S. Services and Manufacturing PMI results came out for March. They were notably better on the Services side: 54.3 amounts to a three-month high off February’s 15-month low 51.0. Importantly, these numbers are solidly above 50, which is the demarcation point between advancement and retraction.
Manufacturing, however, sank to 49.8 — its lowest level since December — following the previous month’s 52.7, which represented the biggest jump on this metric in almost three years. This disparity may suggest a pulling-forward of business ahead of tariffs being implemented, particularly on exports, which in March showed the slowest decline in nine months.
KB Home Misses Q1 Estimates
Mid-level homebuilder KB Home (KBH - Free Report) shares have sunk -9% following the release of its fiscal Q1 results after today’s closing bell. Earnings of $1.49 per share was off the Zacks consensus of $1.56, as well as the $1.76 per share delivered in the same quarter the prior year. Revenues came in at $1.39 billion, beneath the 1.50 billion analysts had been expecting.
Affordability concerns — not just with mortgage rates staying around 7%, but with the potential tariffs increasing costs of imports used to build new houses — were cited in the press release from the company. Guidance was also trimmed a bit on the revenue side, and this represents the first earnings mis in the past nine quarters.
Ahead of Tuesday’s open, Case-Shiller Home Prices will be out for January. Also, New Home Sales for February will be coming out shortly after regular trading begins. Both are expected to improve somewhat month over month. (Existing Home Prices will be out later in the week.)
Image: Bigstock
Big Bounce in Markets on Tamed-Down Tariff Proposals
Monday, March 24, 2025
The market narrative for the first trading day of a new week was set very early on today: President Trump suggested his formerly draconian tariff policy on virtually all U.S. trading partners would not be as harsh on April 2nd as previously advertised. While in the abstract, a notion like this might signal wavering leadership, market indexes seized this as nothing but good news.
The Dow grew back +597 points, +1.42%, while the S&P 500 went up +100 points exactly, +1.76%. Meanwhile, the real winners today were the Nasdaq, +404 points, +2.27%, and the small-cap Russell 2000, +52 points, +2.57%. The deleveraging from Mag-7 tech growth U.S. AI plays looks to have played itself out, near-term — or at least unclenched its fist.
Bond yields have drifted upward on the news, as well — up roughly 4 basis points (bps) to +4.338% on the 10-year and +4.041% on the 2-year. This reaches the highest levels we’ve seen on the 10-year in four weeks, and the highest since exactly a week ago on the 2-year yield.
Flash PMI Results Mixed for March
After the market opened this morning, S&P flash U.S. Services and Manufacturing PMI results came out for March. They were notably better on the Services side: 54.3 amounts to a three-month high off February’s 15-month low 51.0. Importantly, these numbers are solidly above 50, which is the demarcation point between advancement and retraction.
Manufacturing, however, sank to 49.8 — its lowest level since December — following the previous month’s 52.7, which represented the biggest jump on this metric in almost three years. This disparity may suggest a pulling-forward of business ahead of tariffs being implemented, particularly on exports, which in March showed the slowest decline in nine months.
KB Home Misses Q1 Estimates
Mid-level homebuilder KB Home (KBH - Free Report) shares have sunk -9% following the release of its fiscal Q1 results after today’s closing bell. Earnings of $1.49 per share was off the Zacks consensus of $1.56, as well as the $1.76 per share delivered in the same quarter the prior year. Revenues came in at $1.39 billion, beneath the 1.50 billion analysts had been expecting.
Affordability concerns — not just with mortgage rates staying around 7%, but with the potential tariffs increasing costs of imports used to build new houses — were cited in the press release from the company. Guidance was also trimmed a bit on the revenue side, and this represents the first earnings mis in the past nine quarters.
Check out the updated Zacks Earnings Calendar here.
What to Expect in the Stock Market Tuesday
Ahead of Tuesday’s open, Case-Shiller Home Prices will be out for January. Also, New Home Sales for February will be coming out shortly after regular trading begins. Both are expected to improve somewhat month over month. (Existing Home Prices will be out later in the week.)
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