Global Economic Daily - 2/28/2025
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Quote of the Day: Time passes irrevocably. – Virgil
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Equities: Stocks fell off hard on Thursday. The?S&P 500?fell during a volatile session, after President Donald Trump’s declaration that tariffs on Canada and Mexico would proceed as planned, as well as a negative reversal in bellwether stock Nvidia following earnings. The?S&P 500?closed down 94.49 points at 5,861.57. The broad market index remains in the red for the week and month. The?Nasdaq 100?pulled back 581.97 points to end the day at 20,550.95, with Nvidia’s 8.5% slide pulling the tech-heavy index lower. The?Dow Jones Industrial Average?lost 193.62 points to finish at 43,239.50. Both the broad market index and the tech-heavy Nasdaq are on pace for their worst week since September 2024. In a post on Truth Social, Trump announced the proposed tariffs of 25% on Mexico and Canada will take effect on March 4 after the one-month moratorium ends. Trump claimed that the two countries had yet to curb the flow of drugs over the border by enough. The president also stated that China, which already faces 10% tariffs from the U.S., would face an additional 10% levy. Shares of Nvidia fell even after?the chip giant exceeded fourth-quarter estimates?on the top and bottom lines. The AI play also issued strong guidance, reflecting continued demand driven by the artificial intelligence race. However, the company posted a decline in gross margins for the quarter and its smallest?revenue beat in two years, raising questions about whether the bull market leader could keep its momentum going. Besides Trump’s tariff declaration, a?jump in jobless claims?also subdued sentiment, adding to recent concerns of economic softening. Jobless claims for the week ended Feb. 22 came in at 242,000. This was up 22,000 from the previous week’s revised level and higher than the Dow Jones estimate for 225,000, according to a Labor Department report Thursday. This comes on the back of several other recent economic reports — including a softer-than-expected consumer confidence reading, disappointing retail sales numbers and a weak consumer sentiment reading — which have rattled stocks and raised worries about the health of the U.S. economy. Traders are now looking ahead to Friday’s personal consumption expenditures price index — the Federal Reserve’s preferred inflation gauge. With just two trading sessions left in February, all three major averages are on pace to finish lower. The broad market index has dropped almost 3%, while the Dow and the Nasdaq have are down 2.9% and 5.5%, respectively. TECHNICAL OUTLOOK – The Dow and S&P are now both way below the 14, 21 day moving average.
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Metals: Gold and silver prices are solidly lower and hit three-week lows in midday U.S. trading Thursday. Profit taking and weak long liquidation from the shorter-term futures traders are featured today. Veteran commodity market watchers remember the old trading adage: “A bull market needs to be fed fresh fundamental news often.” Such has not been the case for gold lately, even though there remain bullish elements that will likely keep a floor under gold prices. The key outside markets today see the U.S. dollar index solidly up, which is also a negative for the precious metals markets. Nymex crude oil futures prices are higher and trading around $70.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently around 4.3%. Bond yields have dipped lately. Friday comes the U.S. data point of the week, which is the January personal income and outlays report and its personal consumption expenditures (PCE) inflation indexes. The PCE price index is seen coming in at up 2.5%, year-on-year, compared to a rise of 2.6% in the December report. Technically, April gold futures bulls have the solid overall near-term technical advantage. However, a price uptrend on the daily bar chart has stalled out. Bulls’ next upside price objective is to produce a close above solid resistance at the contract high of $2,974.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,800.00. May silver futures bulls have slight the overall near-term technical advantage but a price uptrend on the daily bar chart has been negated. Silver bulls' next upside price objective is closing prices above solid technical resistance at $33.60. The next downside price objective for the bears is closing prices below solid support at $31.00. TECHNICAL OUTLOOK – Gold and silver are above the 14, 21 day moving average.
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DISCLAIMER: The Information and data contained herein was obtained from sources deemed reliable. The accuracy and completeness are not guaranteed
Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.