To The Moon

As we approach the last trading week of February 2025, I cannot help but wonder if US’s 3 major composite indexes will remain volatile, following the viral downwards spiral since Wed, 19 Feb 2025 ?

Below is my take. Share yours in the comments too, so that we can have a “complete” 360 view of the situation.

Market Sentiment

Last week, was a significant declines for all 3 composite indexes: (see above)

• DJIA : Fell -2.89% (1,292.97 to 43,428.02.).

• S&P 500: Fell -1.67% (-102.39 to 6,013.13).

• Nasdaq: Fell -2.20% (−438.36 to 19,524.01).

Below are activities for week beginning 24 Feb 2025.

Will they keep market nervous for a wee longer OR help to soothe market jitters ?

Key Economic Reports.

The more high-profile economic reports coming out this week includes:

• CB Consumer Confidence (Tue, 25 Feb 2025)

• US Gross Domestic Product (Thu, 27 Feb 2025)

• Personal Consumption Expenditures (PCE) report (Fri, 28 Feb 2025) - Fed’s preferred measure of inflation.

(1) US Consumer Confidence.

US consumer confidence experienced fluctuations throughout 2024 and into January 2025, influenced by various economic factors and policy decisions.

In December 2024, the Fed cut interest rate for the 3rd time, reducing it by -0.25% to 4.25% to 4.5%.

The series of interest cuts, that began with a substantial -0.5% from September 2024, intended to provide financial relief to inflation-weary borrowers.

Despite the cuts, consumer confidence continued to weaken towards end 2024 and into early 2025.

Consumer confidence index fell to 104.1 in January 2025, down from an upward revised 109.5 (December 2024), that was also lower than the previous month.

Mr Trump's election win in early November 2024 initially sparked a brief period of optimism among American consumers and businesses regarding US economy's prospects.

This optimism was short-lived.

According to Wall Street analysts, forecast for February 2025, Consumer confidence is expected to be lower at 103.3, down marginally from 104.1 (January 2025).

(2) US Gross Domestic Product (GDP).

So far, US GDP’s growth has been fluctuating between January 2024 and January 30, 2025:

• Q1 2024: Economy grew a modest 1.4%.

• Q2 2024: Economy grew by 3%, a 100% improvement from Q1 2024.

• Q3 2024: GDP growth accelerated to 3.1%, in a slowing pace growth.

• Q4 2024: The first preliminary reading released on 30 Jan 2025., was a further slowdown in annualized rate to 2.3%, below the expected 2.7%. It was also the slowest expansion in four quarters.

The 2nd preliminary readings will be crucial to restore some semblance of calm in the US market.

(3) Personal Consumption Expenditure.

US core PCE price index, showed a gradual decline from early to mid 2024, before simmering higher into early 2025.

Starting January 2024, the core PCE YoY was at 2.8%, and it steadily decreased over H1 2024.

By December 2024, the core PCE had risen back to 2.8%, marking no change or progress made.

Upcoming core PCE readings will be crucial barometer on whether inflation continues its downward trajectory or has become more resistant.

Goldman Sachs recently revised its forecast for January’s core PCE, projecting a 2.64% increase, up from its previous estimate.

This suggests that US inflationary pressures remains sticky.

Should January 2025 core PCE reading aligns with Goldman Sachs' revised forecast, it means US inflation is cooling down gradually.

Market traders, investors and policymakers will be closely watching this report release to (a) know US inflation trajectory and (b) its potential impact on US economic policy in the coming months.

Quarterly Earnings

With most of the mega cap companies already reported theirs and earnings season winding down, the possible stocks’ earnings that could still impact market sentiments includes:

• Li Auto(LI)$ - Mon, 24 Feb 2025 - tbc.

• $Home Depot(HD)$ - Tue, 25 Feb 2025. - morning

• $NVIDIA(NVDA)$ - Wed, 26 Feb 2025 - evening.

• Salesforce(CRM)$ - Wed, 26 Feb 2025 -evening.

• Dell(DELL)$ - Thu, 27 Feb 2025 - evening.

• $Berkshire Hathaway(BRK.B)$ - Fri, 28 Feb 2025 -tbc.

Buy Opportunities ?

Has tumbling US market presented “buying” opportunity for the Magnificent 7 stocks ? Let’s find out.

Magnificent 7 last week performances.

• $Apple(AAPL)$ - Gained +1.80% (+$4.33 to $245.55) - iPhone 16E unveil proved to be a positive catalyst, lifting it higher in a falling market.

• Amazon (AMZN) - Fell -5.51% (-$12.64 to $216.58).

• Alphabet (GOOG) - Fell -2.79% (-$5.22 to $181.51).

• Meta Platform (META) - Fell -5.94% (-$43.20 to $683.55)

• $Microsoft(MSFT)$ - Gained +0.14% (+$0.58 to $408.29). Fueled by announcement of its quantum chip “Majorana 1” and heralding its entry into the new and exciting - quantum computing realm.

• Nvidia (NVDA): Fell by -1.46%, (-$1.98 to $34.4). It needs (a) a stellar earnings report and (b) a glowing outlook & demand for its Blackwell chip to help it break through the $140 resistant level.

So many options, so little money to spread around. Alas !

Headwind or Catalyst ?

Below are “possible” market dampeners or catalysts for the week and maybe even into March 2025.

(1) Inflation concerns:

Inflation woes will continue to be a worry for the US market.

January 2025’s core Consumer Price Index (CPI) has reported a rise to 3.3% (annualized) from 3.2% (December 2024).

For January 2025’s core PCE, according to the Federal Reserve Bank of Cleveland's inflation Nowcasting, it is projected to be 2.66% YoY, a slight dip from 2.8% (December 2024). (see below)

Let’s hope that the forecast is accurate, and US market could close on a “high” on Fri, 28 Feb 2025.

(2) Tariff impacts:

The implementation of additional tariffs, especially the +10% tariff on imports from China, is affecting economic forecasts and business activity. (see below)

Companies are reporting higher input costs and selling prices in the manufacturing sector due to these tariffs.

(3) Economic slowdown:

Recent flash PMI data indicated a sharp slowing of US economic growth, with the US Composite Flash PMI Output Index falling to a 17-month low of 50.4 in February 2025. (see below)

This deceleration in business activity, coupled with weakening consumer sentiment, is creating uncertainty in the markets.

US market on the run up to PCE report release is usually jittery. Will it be the same this week, and in the process creates a “buy opportunity ?

Must Read: Click on below titles to access. Repost to share, Like as encouragement ok. Thanks.

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