Hey Folks, the markets are showing wide swings every day but mostly ending up lower than the prior day’s range. Get my take on where we go to from here in this Weekly Round-up.
Market Sound Bites:
U.S. stock indexes declined during what ended as the worst week for some major indexes since early September. Ongoing uncertainty around trade policy remained a focal point throughout the week. The Trump administration announced a slew of exemptions and delays for the tariffs later in the week—including an announcement that goods covered by the U.S.-Mexico-Canada Agreement would be exempt for one month—however, the continued uncertainty and changing policies appeared to take a toll on investor sentiment during the week.
The week’s busy economic calendar kicked off on Monday with the Manufacturing PMI as it showed activity expanded in Feb with a reading of 50.3%, down 60 BPS from January. New Orders registered a sharp drop falling to 48.6% from 55.1%—and the prices component of the index surged to 62.4% from 54.9% in January. Meanwhile the Services PMI increased 70 BPS to 53.5%, the eighth consecutive month of expansion, and the services employment index increased 1.6 percentage points to 53.9%, the highest reading since December 2021. The Fed’s Beige Book rose slightly since mid-January,” but “consumer spending was lower while price sensitivity” rose, and “prices increased moderately in most districts.” And finally, the week’s economic calendar wrapped up on Friday with the nonfarm payroll showing the U.S. economy added 151,000 jobs in February, slightly below expectations but ahead of January’s reading of 125,000. The unemployment rate increased a tick to 4.1% from 4.0% in January.
In Europe, the ECB cut its key deposit rate by 25 BPS to 2.5%, as expected. ECB President Christine Lagarde said that rates were now “meaningfully less restrictive.” Meanwhile, the latest data indicated that annual inflation in the eurozone slowed to 2.4% in January from 2.5% in December. The core rate, which excludes volatile energy and non-alcoholic beverages prices, fell to 2.6% from 2.7%. European Union leaders said they backed plans to jointly borrow EUR 150 billion to spend on their militaries amid fears that Europe could no longer depend on U.S. military aid.
In Japan, the yield on the 10-year Japanese government bond rose to 1.53% from the previous week’s 1.37%, reaching its highest level since 2008 on expectations that the BoJ will continue raising interest rates this year.
And in China, they unveiled several key targets at the recent National People’s Congress (NPC) meeting, an annual event in which the central government announces its economic priorities for the coming year. For 2025, China set a growth target of 5% for the third straight year. Officials also set a fiscal deficit goal of about 4% of gross domestic product—the highest level since 1994, according to Bloomberg—and reduced its annual inflation target to about 2%, the lowest level since 2003, reflecting deflationary pressures in the economy. Many analysts think that China will have a harder time repeating its 5% growth pace this year given U.S. tariff uncertainty and a yearslong housing slump that has yet to hit bottom.
Enjoy this week’s Market Round-Up
Don’t Be A Rat Brain Trader – Be the Red Stripe Zebra !!
Trade Smart !
hpb
