Warning Signs from Main Street 26/03/2025

HOT stories for today

US market wrap:
 

• The S&P 500 notched a modest advance, edging up 0.16%. The Dow Jones Industrial Average inched higher by 4.18 points, or 0.01%, while the Nasdaq Composite climbed 0.46%. This marked the third consecutive day of gains for all three major indices. Markets ended slightly in the green even after Tuesday’s consumer confidence report showed Americans’ short-term expectations for income, business conditions, and employment fell to their lowest level in 12 years. Still, equity bulls are working to sustain recent upward momentum as tariff concerns ease and mega-cap tech stocks rebound.
• Looking at the S&P 500 heatmap, 6 of 11 sectors closed in positive territory, led by communication services (+1.27%), while utilities lagged behind (-1.60%). GameStop (GME), a favorite among retail traders, surged 6% Tuesday afternoon after its board unanimously approved a move to allocate company funds into bitcoin.

Warning signs from Main Street
 

• Concerns over a U.S. recession are mounting as consumer confidence weakens and more homeowners fall behind on mortgage payments—particularly those with FHA-backed loans. The Conference Board’s confidence index dropped for a fourth straight month, with future expectations hitting their lowest level in over a decade, reinforcing fears of a slowing economy. Moody’s economist Mark Zandi highlighted a spike in missed payments among first-time, lower-income buyers as a sign of rising financial stress.
• While these delinquencies alone may not spark a recession, Zandi warned they often signal trouble before it spreads more broadly. Foreclosure activity is also climbing, with early signs pointing to FHA and VA loans as potential stress points in the housing market, raising concern among analysts heading into 2025.

 
Stocks on the move: 
      

• Mobileye (MBLY) — Shares of the autonomous driving technology company rallied about 8.7% after Volkswagen revealed a partnership aimed at advancing its assisted and self-driving capabilities
• CrowdStrike Holdings (CRWD) — The cybersecurity firm gained more than 3% after BTIG upgraded the stock from neutral to buy
• Oklo (OKLO) — The nuclear tech company declined 6.4% following a wider full-year loss compared to the previous year, and warned of substantial ongoing expenses and continued financial losses
• Cloudflare (NET) — The network security provider rose over 2% after Bank of America raised its rating two notches, from underperform to buy
• Crown Castle (CCI) — The telecom infrastructure stock fell 3.7% after the company’s board abruptly removed CEO Steven Moskowitz, appointing CFO Dan Schlanger as interim chief executive

Today’s action

• Asia-Pacific markets moved mostly higher on Wednesday, mirroring Wall Street’s strength amid hopes that U.S. President Donald Trump’s tariffs may be less aggressive than previously feared. Hong Kong’s Hang Seng Index edged up 0.16%, while the CSI 300 in mainland China slipped 0.25%. Japan’s Nikkei 225 advanced 1.03%, and Australia’s S&P/ASX 200 added 0.71%.
• U.S. stock futures showed little movement in early Wednesday trading after the S&P 500 posted a slight gain, marking its third consecutive day in the green. Futures linked to the Dow Jones Industrial Average were flat, with S&P 500 and Nasdaq 100 futures also largely unchanged. On the earnings front, Chewy (CHWY), Dollar Tree (DLTR), Cintas (CTAS), and Paychex (PAYX) are set to release quarterly results. Investors are also awaiting February’s preliminary data on durable goods orders. On the economic calendar, a key consumer confidence report is due Tuesday, followed by initial jobless claims data on Thursday—both seen as potential market movers.

                                             Watchlist: TSLA, DLTR, GME, CHWY, CTAS, PAYX, META, BA


Bitcoin

• Bitcoin hovered near the $88,000 mark Tuesday, showing resilience even as approximately $1 billion worth of BTC was quietly transferred from wallets linked to the collapsed Mt. Gox exchange. Roughly 11,500 bitcoins were moved, but the market reaction was minimal.
• Meanwhile, World Liberty Financial (WLFI), a crypto initiative backed by U.S. President Donald Trump, unveiled plans to launch a USD-pegged stablecoin called “USD1.” The DeFi-focused platform recently raised $550 million across two token sales. Despite both developments, bitcoin’s price remained largely unaffected, underscoring strong market confidence. The near-term outlook stays cautiously optimistic as traders absorb the news without panic selling.
  Watchlist: Bitcoin: 78 000-100 000, Ethereum:1900-2600, Solana: 100-176

Forex

• The Japanese Yen (JPY) edged lower in Wednesday’s Asian session, pressured by upbeat equity markets and mild U.S. dollar buying, pushing USD/JPY past the mid-150.00s. Japan’s Services Producer Price Index (PPI) eased to a 3.0% YoY rate in February, reinforcing the Bank of Japan’s cautious stance. Still, the yen’s downside appears limited due to the divergence between the BoJ and Federal Reserve’s policy outlooks. Traders may stay on the sidelines ahead of key inflation data from both Tokyo and the U.S., including Friday’s PCE Price Index.
• Meanwhile, EUR/USD hovered near 1.0780, up 0.13% on the day, as the dollar softened following weaker-than-expected U.S. consumer confidence data, which dropped to a four-year low. Euro gains were also supported by dovish comments from ECB’s Villeroy, who said there is still room for further rate cuts. Attention now turns to U.S. durable goods data due later Wednesday.
  Watchlist: EUR/USD: 1.0700-1.0950, USD/JPY: 148-150
   

Basic Materials

• Gold (XAU/USD) edged lower during Wednesday’s Asian session, pressured by renewed U.S. dollar strength and a broadly positive tone in global equity markets. The precious metal struggled to build on Tuesday’s gains as the dollar rebounded toward a three-week high. While trade uncertainty, recession worries, and Fed rate cut expectations offered some support, they weren’t enough to offset risk-on sentiment.
• Meanwhile, West Texas Intermediate (WTI) crude rose to around $69.15, supported by a larger-than-expected draw in U.S. inventories and renewed supply concerns. The American Petroleum Institute (API) reported a 4.6 million-barrel drop in crude stockpiles last week, sharply contrasting with the prior week’s build and beating expectations for a 2.5 million-barrel decline. Adding to upward pressure, President Trump reiterated plans to impose tariffs on countries purchasing oil and gas from Venezuela, fueling fears of tighter global supply.
  Watchlist: GOLD 2600-3050, US Oil: 65.00-79.00

Key Economic Events Today:

EST time

08:30 am: USD Core Durable Goods Orders
10:00 am: USD FOMC Member Kashkari Speaks
10:30 am: USD Crude Oil Inventories
01:10 pm: USD FOMC Member Musalem Speaks

Earnings

BMO (Before the US Market opens)
CTAS         Cintas Corp.
PAYX         Paychex Inc.
DLTR         Dollar Tree
CHWY       Chewy Inc.

AMC (After the US Market closes): JEF, ALVO, FUL

The TEFS Analyst team wishes you a successful day!