Market Musings 3/3/2025
Quick thoughts on the markets and major portfolio news. Not on Ursa yet? Download Ursa from the App Store!
Markets end February right where it began in #Tariffs purgatory…
The S&P 500 ends down -1.4% in February as #Tariffs dominate headlines.
We ended January with the promise of the #Tariffs details coming soon. So what happened?
😬 February Tariffs
The White House announced 25% #Tariffs on Canada and Mexico and 10% on China. However, Mexico quickly moved to negotiate a deal to delay the #Tariffs until March while Canada followed suit with their own deal soon after. China, on the other hand, pursued their own retaliatory #Tariffs instead.
But it wasn’t over yet… The next week, 25% #Tariffs on steel and aluminum were announced as well as a promise for more reciprocal #Tariffs to be announced later.
Then the following week, more #Tariffs with 25% on cars, semiconductors and pharmaceuticals AND plans for 25% on the EU was in the works.
Finally, we wrapped up the month last week with the deadline up for Canada and Mexico’s #Tariffs and set to go into effect this week.
Meanwhile, the macro started to deteriorate as well.
We saw January’s #Inflation come in hotter than expected with concerns to rise further on the potential #Tariffs impact. Stubborn #Inflation continues to be an ongoing issue for the Fed and likely continues to push out further #RateCuts.
However, more concerning was #ConsumerConfidence tumbling. Consumer sentiment shocked markets with a -5% drop vs. January. In particular, inflation expectations sharply ticked up. Then, consumer confidence added fuel to the fire with an even larger drop the next week.
While markets have largely shrugged off the #Tariffs impact earlier in the month, consumer don’t seem to taking the same optimistic view.
😖 March Tariffs (again)
So, we’re back to where we started with a lot #Tariffs and trade war uncertainty. As of Monday, the day before the deadline, it doesn’t look like we’re getting another delay for Canada and Mexico. The White House reconfirmed #Tariffs are set to go tomorrow on Tuesday.
We expect March to be another month of #Tariffs drama as more tariffs are both announced and imposed and we might start to see retaliatory #Tariffs in return.
We’re keeping a close eye on the rising #Inflation, falling #ConsumerConfidence and potential impact to previously stabilizing #LaborMarkets.
Overall, our near-term sentiment is a little bearish at moment. If the macro volatility continues from February, we think the #Goldilocks economic soft landing will be in jeopardy. We’ll need to see the macro environment stabilize to get more positive.
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The statements, opinions and analyses presented here are provided as general information. This article is the opinion of the author. Anything within this article should NOT be considered an investment recommendation or advice. See Ursa’s full disclosures here.
Original Photo by fauxels.