Will March bring relief after a rough February? 03/03/2025

 
HOT stories for today

US market wrap:
 

• After several weak sessions, U.S. stocks saw some buying interest, but sentiment remains bearish as investors worry about tariffs and potential weekend surprises. With key stocks under pressure and inflation showing signs of cooling, the market could be setting up for a rebound next week. January’s inflation rate slowed, Terawulf saw a recovery, and a specialty insurance stock surged. All 11 S&P 500 sectors closed green, led by financials (+2.05%), while real estate lagged (+0.70%). Treasury Secretary Scott Bessent said Mexico may match U.S. tariffs on China to avoid new duties set to take effect Tuesday.
• Warren Buffett warned that tariffs could drive inflation and burden consumers, calling them a form of taxation.Uncertainty around Trump’s trade policy has fueled market volatility, with all three major indexes ending February in the red. The S&P 500 fell 1.4%, the Dow lost 1.6%, and the Nasdaq Composite dropped 4%, its worst month since April 2024.

Will March bring relief after a rough February?
 

• U.S. stocks ended a volatile February under pressure from Trump’s tariff plans, economic slowdown fears, and geopolitical tensions. A late-month rally offered some relief, but uncertainty remains high as markets head into March. Concerns over slowing growth deepened after jobless claims hit an eight-month high, consumer confidence fell, and the Atlanta Fed revised its Q1 GDP forecast downward. Meanwhile, Trump reaffirmed plans to impose 25% tariffs on Canada and Mexico starting March 4 and raised tariffs on Chinese imports, fueling trade tensions.
• Despite the uncertainty, March has historically been a stronger month for stocks. However, analysts caution that inflation and tariff concerns may persist until late March, leaving investors focused on upcoming economic data for signs of stability.

 
Stocks on the move:       

• Nvidia (NVDA) — The chip giant climbed nearly 4% as late-session buying erased earlier losses triggered by geopolitical concerns following a tense exchange between President Donald Trump and Ukrainian President Volodymyr Zelenskyy.
• Dell Technologies (DELL) — The PC maker dropped 4.7% after missing fourth-quarter revenue estimates. Dell reported $23.93 billion in revenue, falling short of the $24.56 billion forecast by LSEG. However, adjusted earnings of $2.68 per share exceeded analyst expectations of $2.53 per share.
• Duolingo (DUOL) — Shares of the online language-learning platform tumbled nearly 17% after the company’s guidance for adjusted EBITDA in the current quarter came in below expectations. Despite the disappointing outlook, Duolingo’s fourth-quarter revenue and subscriber growth surpassed forecasts.
• SoundHound AI (SOUN) — The voice recognition company surged 17.5% after reporting fourth-quarter revenue of $34.5 million, beating FactSet’s estimate of $33.7 million. The company also raised its full-year revenue outlook.
• Walgreens (WBA) — The struggling drugstore chain slid 4.9% following a downgrade from Deutsche Bank to sell, citing significant uncertainty over Sycamore Partners’ proposed takeover. According to a Financial Times report, Sycamore plans to split Walgreens Boots Alliance into three separate entities.

Today’s action

• Asia-Pacific markets mostly gained on Monday as investors awaited more details on President Donald Trump’s tariff plans set to take effect this week. U.S. Commerce Secretary Howard Lutnick told Fox News on Sunday that the exact tariff on Mexico and Canada, scheduled for Tuesday, remains “fluid” and could be lower than the proposed 25%. However, he confirmed that the additional 10% duty on Chinese imports is finalized. Japan’s Nikkei 225 climbed 1.36%, while the Topix index advanced 1.27%. Hong Kong’s Hang Seng Index rose 1.33%, and China’s CSI 300 edged up 0.44%.
• U.S. stock futures also moved higher in early Monday trading as uncertainty over Trump’s tariff strategy continued. Dow Jones Industrial Average futures added 47 points, while S&P 500 and Nasdaq 100 futures ticked up 0.2% and 0.25%, respectively. Investors are also watching Friday’s key February jobs report, which is expected to show a slowdown in hiring.

Wahtclist: SMCI, NVDA, COIN, META, SOUN, DELL, MSFT

Bitcoin

• Cryptocurrency prices surged Sunday after President Donald Trump announced plans for a U.S. strategic crypto reserve, including XRP, Solana, and Cardano. In a Truth Social post, Trump pledged to make the U.S. the "Crypto Capital of the World" and later confirmed Bitcoin and Ethereum would be at the reserve’s core. Once skeptical of crypto, Trump has embraced the industry, promoting meme coins and NFTs. His administration is expected to be more crypto-friendly than Biden’s. He first introduced the national crypto reserve idea last summer and will host a crypto summit at the White House on Friday, joined by crypto czar David Sacks and key industry figures.
• Despite the announcement, Bitcoin recently recorded its worst monthly performance since February 2022, amid concerns over Trump’s trade policies. After peaking at $109,225 on inauguration day, it fell below $80,000 last week for the first time since early November.
  Watchlist: Bitcoin: 80 000-100 000, Ethereum:2000-2200, Solana: 120-176

Forex

• The Japanese yen found support after dipping to a one-week low against the US dollar, attracting buyers amid expectations of further rate hikes by the Bank of Japan. Rising Japanese government bond yields continue to boost the yen, while speculation of additional Federal Reserve policy easing weighs on the dollar. As a result, USD/JPY remains below the mid-150.00s during Monday’s Asian session.
• EUR/USD rebounded on Monday, snapping a three-day losing streak after briefly touching a two-week low near 1.0360 on Friday. The pair climbed past 1.0400 during Asian trading, driven by renewed dollar weakness. However, technical signals suggest caution, with a firm break below the 50% Fibonacci retracement level seen as a key trigger for bearish momentum.
  Watchlist: EUR/USD: 1.0200-1.0550, USD/JPY: 149-158.80

Basic Materials

• Gold prices edged higher on Monday as a weaker US dollar provided some support. Market expectations of two Federal Reserve rate cuts by year-end have weighed on the dollar, boosting demand for gold. Concerns over Trump's tariff plans and the potential for a global trade war also added to the metal’s appeal. However, gold struggled to extend its gains, holding above Friday’s three-week low.
• WTI crude oil rebounded, trading around $70.10 per barrel during Asian hours, as supply concerns resurfaced. Tensions between Trump and Ukrainian President Volodymyr Zelenskyy escalated during peace negotiations, raising fresh worries about the Russia-Ukraine conflict. Meanwhile, a planned US-Ukraine rare earth minerals deal collapsed after a heated exchange between the two leaders. Turkey also announced plans for the Iraq-Turkey oil pipeline to operate at full capacity once flows resume through Ceyhan, adding to market developments.
  Watchlist: GOLD 2600-2945, US Oil: 68.00-79.00

Key Economic Events Today:

EST time
09:45 am: USD Final Manufacturing PMI
10:00 am: USD ISM Manufacturing PMI
10:00 am: USD ISM Manugacturing Prices

Earnings

BMO (Before the US Market opens)
TGTX        TG Therapeutics
CRC          California Resources Corp.
BUR          Burford Capital

AMC (After the US Market closes): OKTA, GTLB

The TEFS Analyst team wishes you a successful day!