A ‘Healthy’ market pullback— For now 17/03/2025

HOT stories for today

 

US market wrap:
 

• Stocks mounted a comeback Friday, recouping some of the week’s steep losses amid a pause in tariff headlines. The Dow Jones Industrial Average gained ground, while the S&P 500 rose 2.13% and the Nasdaq Composite climbed 2.61%, easing what had been one of 2023’s worst weeks so far. Much of Friday’s rally stemmed from the absence of fresh trade-war developments from the White House and news that Senate Minority Leader Chuck Schumer, D-N.Y., would not block a Republican government funding bill.
• Still, new data from the University of Michigan revealed eroding consumer confidence, weighed down by ongoing tariff uncertainty. Looking ahead, investors are focused on the Federal Reserve’s upcoming policy meeting. CME’s FedWatch tool shows a 97% probability of rates staying put, indicating little expectation for a surprise move by the Fed.

A ‘Healthy’ market pullback— For now
 

• Market sentiment remains tense after a bruising week for equities, but veteran investor Scott Bessent downplays alarm over recent declines. He views pullbacks as healthy resets, pointing out that the markets are in a “detox” period following years of heavy government spending, which may temporarily cool growth.
• While recession and policy uncertainties—especially around trade—have rattled traders, Bessent maintains that the underlying fundamentals will ultimately support a market rebound. Despite elevated volatility, he sees no cause for panic, noting that corrections can bolster longer-term stability and present fresh opportunities for disciplined investors. Ultimately, Bessent believes the markets will thrive again once confidence recovers, reflecting his optimistic outlook despite near-term headwinds.

 
Stocks on the move: 
      

• Ulta Beuty [ULTA] surged 12.3% after the beauty retailer beat fourth-quarter estimates, posting profits of $8.46 per share versus the $7.12 expected by LSEG.
• DocuSign [DOCU] soared 18% on stronger-than-anticipated results, partly driven by last year’s AI-enabled content rollout. CEO Allan Thygesen noted the e-signature company, collaborating with Microsoft and Google, has “started to turn the corner on the core business.”
•  Shares of Nvidia [NVDA], the popular megacap tech name, jumped 4% and are set to finish the week up over 6%, ending a three-week slump. Chipotle Mexican Grill [CMG] climbed 2.5% after Loop Capital upgraded the burrito chain to buy, citing its pullback as a compelling entry point. 
• Peloton [PTON] rallied 12% following an upgrade from Canaccord Genuity, which said the fitness firm has “regained its footing” and remains a “clear leader” in connected workouts.

Today’s action

• Asian markets kicked off the week on a positive note, fueled by China’s latest stimulus measures aimed at boosting consumer spending. Hong Kong’s Hang Seng Index rose 0.8%, while Japan’s Nikkei 225 gained 1.24%. Beijing unveiled new policies, including income support and credit easing, to stimulate demand. However, China’s blue-chip CSI 300 ended slightly lower as investors awaited further policy details.
• In contrast, Wall Street futures dipped amid growing concerns over economic headwinds. Dow futures fell 170 points (-0.41%), while S&P 500 and Nasdaq futures lost 0.52% and 0.62%, respectively. Investors are bracing for the Federal Reserve’s policy meeting this week, with markets expecting rates to remain unchanged. Retail sales data, set for release Monday, will offer further insight into U.S. consumer strength.

Watchlist: DOCU, CMG, PTON, NVDA, TSLA, COIN, AVGO, MU

Bitcoin

• The global cryptocurrency market fell 2.02% on Sunday, settling at $2.69 trillion as Bitcoin, Ethereum, and other major digital assets posted losses. Bitcoin dipped below $83,000, reaching an intraday low of $82,397, while Ethereum slid 2.45%. Cardano led declines among the top ten, dropping 4.7%, followed by XRP (-4.6%) and Dogecoin (-3.3%).
• Trading activity also slumped, with total crypto volume hitting $47.63 billion—a steep 34.65% drop from the previous day. The market remains under pressure, with investor sentiment turning cautious amid broader bearish trends. A continued correction in the Nasdaq could further weigh on Bitcoin and the crypto sector, adding to market volatility.
  Watchlist: Bitcoin: 78 000-100 000, Ethereum:1900-2600, Solana: 100-176

Forex

• The EUR/USD pair hovers around 1.0880 in Asian trading, supported by improving risk appetite amid reports of potential ceasefire talks between Trump and Putin. The Euro gained strength after Germany’s debt overhaul and increased state spending, while the US Dollar remains steady ahead of Monday’s Retail Sales data. However, the Greenback faced pressure after the University of Michigan's Consumer Sentiment Index fell to 57.9 in March, its lowest level since November 2022.
• Meanwhile, the Japanese Yen starts the week on a weaker note, as improved risk sentiment weighs on safe-haven demand. Fresh stimulus measures from China add to the risk-on mood, though expectations of further Bank of Japan (BoJ) rate hikes help limit JPY’s downside. Traders remain cautious ahead of key BoJ and Federal Reserve policy decisions later this week.
  Watchlist: EUR/USD: 1.0700-1.0900, USD/JPY: 148-160

Basic Materials

• Gold prices hover near all-time highs above $3,000, supported by escalating trade tensions and geopolitical risks. Investors continue to favor the safe-haven metal, with additional support coming from expectations of multiple Federal Reserve rate cuts in 2025. Meanwhile, the US Dollar remains near multi-month lows, further bolstering demand for gold.
• In the oil market, WTI crude extends its rally, trading around $67.40 per barrel. Prices climbed for the second straight session after China unveiled new stimulus measures to boost consumption, reinforcing optimism for stronger demand from the world's largest oil importer. However, rising geopolitical risks, including Houthi attacks on the USS Harry S. Truman and uncertainty surrounding the Ukraine war, add to the bullish momentum in energy markets.
  Watchlist: GOLD 2600-3000, US Oil: 65.00-79.00

Key Economic Events Today:

EST time
08:30 am: USD Core Retail Sales, Retail Sales
10:00 am: USD Business Inventories
10:00 am: NAHB Housing Market Index

Earnings

BMO (Before the US Market opens)
QFIN       Qifu Technology
SAIC       Science Application Inc
AMC (After the US Market closes): KODK, QD, FINV

The TEFS Analyst team wishes you a successful day!