3/3/25 - 3/7/25 Weekly Market Recap - Movers, Macro, Monetary, and Fiscal

Week 3/3-7/25

Weekly Market Summary by Aremorph


Summary - Movers, Macro, Monetary, and Fiscal


Global Weekly Movements

U.S. Equities

  • S&P 500 Index: 5,770.20 (-3.32%)

    • All sectors of the SPX are down this week except for XLV Healthcare. Financials saw the largest decrease at -5.58% with KKR dropping by 15% Discover Financial And Capital One dropping by 14%. With the labor market weakening many companies that rely heavily on credit services to retail consumers are expecting slower growth.

  •  Dow Jones Industrial Average: 42,801.72 (-2.50%)

  • Russell 3000 Index: 3,278.55 (0.52%)

  • NASDAQ Composite: 18,196.22 (-3.84%)

  • Big Movers of the Week 

    • FMC Corp (FMC): 41.29 (11.90%)

      • Despite President Trump's upcoming tariffs on agricultural products and retaliatory measures from China and Canada, CEO Pierre Brondeau purchased shares, signaling confidence in the company’s ability to navigate tariff risks.

    • Dollar General (DG): 81.84 (10.33%)

      • Dollar General's recent grand opening of a new distribution center in Arkansas and donations to local food banks coincided with a 10.33% rise.

    • Hewlett Packard (HPE): 15.81 (-20.19%)

      • Hewlett Packard Enterprise (HPE) saw a significant drop due to a mixed earnings report and a weaker-than-expected forecast for the upcoming year, which dampened investor sentiment.

    • KKR (KKR): 115.27 (-14.99%)

      • KKR & Co. Inc. is plunging in 2025 due to concerns about tariff impacts and a downturn in AI investments, which have affected many large-cap companies. Investor sentiment has soured on tech, leading to broader market declines, which have particularly impacted stocks like KKR.

Chinese Equities - Shanghai Composite (SHCOMP): 3,352.59 (1.58%)

Hong Kong Equities - Hang Seng Index (HSI): 23,720.26 (4.59%)

Japanese Equities- Nikkei 2225 (NI225): 37,076.71 (-1.21%)

European Equities 

  • UK Index (UKX): 8,679.88 (-1.47%)

  • German Index (DAX): 23,008.94 (1.44%)

Commodities

  • Gold Futures: 2,916.70 (.55%)

  • Crude Oil Futures: 66.62 (-2.20%)

U.S. Monetary & Fiscal Policy:

Tariffs!: President Trump imposed 25% tariffs on most imports from Canada and Mexico and raised China’s tariffs to 20%, affecting $1.5 trillion in trade. Canada and China retaliated, with Canada placing phased tariffs on $107 billion of U.S. goods and China imposing up to 15% levies on agricultural products. These tariffs increase costs for U.S. households, slow economic growth, and risk further global retaliation. Trump also plans additional tariffs in April, including sectoral levies on cars, semiconductors, and pharmaceuticals, escalating global trade tensions.

Weak Labor Data Supports Fed Cut at May 7th Meeting: Market expectations for a 25 basis point rate cut at the May 7th 2025 FMC meeting have risen by 10% points from 24.6% to 34.9% as bets on no change declined from 73.8% to 64.1%. This shift suggests that despite tariff driven inflationary pressures investors are focusing on recent weak labor data that are key drivers in the Fed's interest rates decisions. after all tariffs are expected to have lagging inflationary policies and with increased talk of potentia; stagflation the FED has more pressure on their decision regarding interest rates. 




Global Macroeconomic News:

ADP Employment: Private businesses in the U.S. added 77,000 workers in February 2025, marking the smallest gain in seven months and falling well below expectations of 140,000. Job growth was concentrated in construction and manufacturing, while sectors like trade, transportation, education, and information saw losses. Amid policy uncertainty and weaker consumer spending, employers appear to be exercising caution in hiring, with wage growth for job-changers slowing to 6.7% and remaining flat at 4.7% for job-stayers. This sharp decrease in ADP employment will pose as a key data point when the FOMC assesses the state of their dual mandate.


European Defense Spending: The European Union is proposing €150 billion in loans to enhance defense spending, addressing years of underinvestment amid growing security concerns. This initiative also includes activating a fiscal escape clause, allowing member states to allocate up to €650 billion for defense without triggering budgetary penalties. The combined funding could mobilize nearly €800 billion for defense purposes, aimed at bolstering support for Ukraine and responding to U.S. security policy shifts. EU leaders will discuss this proposal at an emergency meeting on March 7, with further concrete plans expected by March 21-22.


Global Investment Ventures by Microsoft: Microsoft is set to invest an additional 5.4 billion rand ($297 million) in South Africa by 2027, expanding its cloud and AI capabilities. This follows an initial investment of 20.4 billion rand, which includes data centers in Johannesburg and Cape Town, with plans for new facilities in Centurion. The new funds will also cover certification exams for 50,000 young people in digital skills over the next year, supporting economic growth and workforce development. The investment reflects Microsoft's belief in South Africa's potential and its stable investment environment, as the country seeks to accelerate growth.

Sources: Google Finance, Market Watch, CME Fedwatch, Yahoo Finance, Reuters, New York Times, Bloomberg, Wall St Journal, Washington Post, US Department of the Treasury

Have a great week investing!

Sincerely,
Aremorph

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