To The Moon

The last week of February 2025 brought increased volatility with growth stocks taking significant hits, particularly in AI and tech names.

All indexes fell across the board ending the week on a low note. (see below)

US Composite Indexes - Past Week performance

• DJIA: +0.8% (+347.79 to 43,840.91).

• S&P 500: .-1.20% (-72.19 to 5,954.50).

• Nasdaq: -3.8% (-743.57 to 18,847.28).

The S&P 500 index pulled back from recent all-time highs (ATHs) as traders re-assessed valuations in high-growth sectors, with market attention focused on (a) Nvidia’s earnings and (b) inflation data.

For week beginning 03 Mar 2025, below are the 5 factors to watch in the market.

(1) Jobs Report & Fed Signals.

Friday's US Nonfarm Payrolls (NFP) report at 8:30 am will be this week's most significant market event.

Following recent mixed signals about labour market strength, the NFP takes on additional importance.

Traders will focus not only on the headline jobs number and unemployment rate, but particularly on Average Hourly Earnings as a gauge of wage inflation.

The NFP report will coincide with (i) Fed Chair Powell's testimony and (ii) the Fed Monetary Policy Report.

This “lethal” combination could significantly impact rate cut expectations.

Any signs of cooling in the labour market might revive hopes for earlier Fed easing, while continued strength could further delay rate cut timelines.

The Nonfarm Payrolls and Unemployment reports are two of the most important economic indicators, as the shift in the number of positions since it is strongly associated with the overall health of the US economy.

One of the Fed’s mandates is “full” employment, and it considers labour market changes when determining its policy decisions.

(2) Manufacturing and Services Data.

Manufacturing data.

The week kicks off Mon, 03 Mar 2025 with key manufacturing indicators at US time 10 am. Reports include :

• Manufacturing Purchasing Manager Index (PMI).

• ISM Manufacturing PMI .

Manufacturing has shown signs of contraction in recent months.

Latest reports will provide fresh insights into whether the sector is stabilizing or deteriorating further.

Manufacturing PMI shows business conditions in the US manufacturing sector and serves as a significant indicator of overall economic conditions.

PMIs are considered one of the most reliable leading indicators for assessing the state of US economy, helping analysts and economists anticipate changing economic trends.

Services data.

Wed, 05 Mar 2025 brings the (a) Services PMI and (b) ISM Non-Manufacturing PMI, offering a more comprehensive view of economic activity.

Given that services drive the majority of economic growth, any significant deviation from expectations could impact broader market sentiment about economic health.

More specifically, the ISM Services PMI, shows business conditions in the US services sector, that accounts for over 70% of the US GDP.

PMI indices are leading economic indicators used by economists and analysts to gain timely insights into changing economic conditions, as the direction and rate of change in the PMIs usually precede changes in overall US economy.

(3) Tech Sector.

Following recent volatility in technology stocks (see above), this week’s three (important) tech earnings reports that could influence market sentiment.

Reporting IT companies are:

• Tue, 04 Mar 2025 - $CrowdStrike Holdings, Inc.(CRWD)$.

• Wed, 05 Mar 2025 - $Marvell Technology(MRVL)$.

• Thu, 06 Mar 2025 - $Broadcom(AVGO)$. Key AI infra player, highly anticipated by Wall Street.

After NVIDIA's recent report moved markets, these earnings could either (1) amplify concerns about high-growth stock valuations or (2) help stabilize the tech sector if results & guidance exceed expectations.

(4) Fed Beige Book & Powell's Testimony.

On Wednesday's Fed Beige Book release will provide qualitative insights into economic conditions across different regions.

The Beige Book often offers nuanced perspectives on (a) inflation pressures, (b) hiring trends, and (c) business sentiment that go beyond quantitative data.

Combined with Fed Chair Powell's testimony on Friday, these events will give traders valuable context for assessing the Fed's likely policy path.

Mr Powell's comments will be particularly scrutinized for any shifts in tone regarding (1) inflation concerns or (2) timing of potential rate cuts.

(5) Retail Sector’s Health.

US retail giants will be reporting their earnings this week as well:

• Tue, 04 Mar 2025 - $Target(TGT)$.

• Wed, 05 Mar 2025 - $Costco(COST)$.

These reports come at a critical time for gauging (i) consumer spending trends and (ii) retail sector health.

With recent mixed signals from retailers about consumer behavior, the two earnings reports will provide fresh and in-depth insights into spending patterns across different consumer segments.

Target's commentary on discretionary spending will be particularly watched, while Costco's membership trends could offer perspectives on consumer sentiment in the current economic environment.

My viewpoints: (mine only)

I think there is an additional factor that is likely to trigger US market’s reaction this week. (see below)

On Tue, 04 Mar 2025 when the tariffs are enacted and when both Mexico & Canada announced their retaliations, US market will be shaken and stirred.

The extent of the rattle will depend on the other 2 countries counter tariffs’ details.

US market will suffer the initial blow. US economy will eventually bear the brunt of the repercussions.

Industries heavily reliant on North American supply chains, eg. the automotive sector, are likely to be hit hard.

The tariffs will significantly increase costs for companies that rely on cross-border component manufacturing Watch out GM, Ford & Stellantis ?

Maybe even the aerospace player like Boeing Co(BA)$ ?

On a Sun, 02 Mar 2025 CNBC post, US Treasury Secretary Scott Bessent has assured US that the tariffs would not lead to inflation returning. Is this even possible ?

Delving into his past, Bessent had a distinguished career in global finance spanning four decades, with expertise in macroeconomics, currency, and fixed income markets.

Here’s hoping that he has some tricks up his sleeves to ensure the majority Wall Street “consensus” are wrong.

For now, it’s still a 50-50.

Will another bold or reckless pushed for the Make America Great Again initiative tip the (a) US economy, (b) US stock market and (c) US international standing over the cliff come Wed, 05 Mar 2025 when Mr Trump vows to present to Congress a “radical” plan to turn America around ? (see below)

Will it still be a 50-50, thereafter ? More importantly, will US market crater after plan is unveiled ?

Whatever the outcome maybe, have you planned the different action strategies to adopt, based on how the 6 factors will play out ? I do. Individual investors like us cannot be over-prepared, right !

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

• CRWD strikes again, post PCE cooling data ?

• Magnificent 7 : Bear Market Proof ?

• NVDA saved by PCE Inflation Report ?

• Do you think the 3 Tech stocks will be heroes-stocks of the week ?

• Do you think US market will survive the week, with US levy 25% tariffs on Mexico and Canada on Tue, 04 Mar 2025 and slap a further +10% tariffs on China, on top of existing 10% ?

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