February 23, 2025
Volume 12, Issue 08
Weekly Recap
The Dow Jones Industrial Average and the S&P 500 each notched their worst days of the year on Friday after soft economic data dragged on the major indexes. The Dow and the S&P 500 slipped 1.7 percent each. The tech-heavy Nasdaq Composite fell 2.2 percent. Large caps and value stocks were hurt least.
The S&P pulled back from Wednesday’s record close. Walmart’s disappointing outlook on Thursday sparked selling that picked back up in Friday morning trading following some disappointing surveys from S&P Global on activity in the manufacturing and services sectors.
Economic growth has been supporting stocks through the volatility of higher than expected inflation numbers. The University of Michigan’s Consumer Sentiment Index also dropped more than expected.
Bonds rallied across the yield curve with the belly of the curve outperforming. The yield on the 2-year U.S. Treasury note fell to 4.19 percent. The benchmark 10-year U.S. Treasury note yield traded down to 4.42 percent.
Traders are now pricing in a 64 percent chance that the Federal Reserve cuts interest rates at least once in the first half of the year, according to the CME FedWatch Tool. That’s up from 52.8 percent on Thursday. Wall Street will get a wave of key earnings reports headlined by Nvidia next week. On the inflation front, the personal consumption expenditures price index – the Fed’s favored inflation gauge – will likely be a highlight for markets.
Market Monitor
A full listing of market performance data is available here.
DQYDJ.com (“Don’t Quit Your Day Job”) offers helpful investment calculators here, including one that shows total returns for individual stocks. Koyfin.com provides reams of data on individual stocks, including the ability to track total return — and just about anything else — over time.
In the News
Why is Warren Buffett hoarding so much cash? His annual letter was released yesterday. Read it here. Despite Berkshire Hathaway’s huge cash position, Buffett emphasized his commitment to owning stocks.
“Over time, we think it highly likely that gains will prevail – why else would we buy these securities? – though the year-by-year numbers will swing wildly and unpredictably. Our horizon for such commitments is almost always far longer than a single year. In many, our thinking involves decades. These long-termers are the purchases that sometimes make the cash register ring like church bells.”
I encourage you to read it all.
The S&P 500 continues to do well, but, so far in 2025, global markets are doing better.
Vanguard’s S&P 500 ETF ($VOO) is now the biggest on the planet, usurping $SPY. The big reason? It’s 70 percent cheaper.
DOGE is homing in on Medicare.
Different generations have different ideas about money.
The “5 Types of Wealth” – Why you’re wealthier than you think.
Between Monday’s high and Thursday’s close, UnitedHealth Group’s stock ($UNH) fell about 9 percent on minimal news. On Friday, the Department of Justice announced a civil fraud probe into the company’s Medicare billing, putting the stock down -20 percent since Monday. Who knew something?
In a stunning portrait of human progress, Charles C. Mann has compared the lives of average middle-class Americans today to those of 18th-century elites. Take Thomas Jefferson, for example: “Jefferson lived in a world of horse-drawn carriages, blazing fireplaces, and yellow fever. But what most separates our day from his is not our automobiles, airplanes, and high-rise apartments – it is that today vast systems provide abundant food, water, energy, and health to most people. … In Jefferson’s time, not even the president of the United States had what we have.” Data Dump: Existing Home Sales; Mortgage Delinquencies; Active Home Inventories; Jobless Claims; FOMC Minutes; Housing Starts; Mortgage Applications.
Charts of the Week
I found the following articles to be of note. Some may be of interest only to advisors while others are aimed more broadly. You may hit paywalls below; many can be overcome here.
- Should You Pay Off Your Mortgage Before Retirement? (Ben Carlson)
- What It Looks Like to Run Out of Money (Dr. Jim Dahle)
- 3 Levels of Retirement Readiness: Where Do You Stand? (Fritz Gilbert)
- Fix, Fine, Flourish: A Framework To Take Clients From (Just) “Fine” Stagnancy To Being Engaged Again(Meghaan Lurtz)
This is the best thing I’ve read recently. The most powerful. The most absurd. The worst use of statistics. Freddie deBoar and I don’t agree on much, but we agree on this. Election analysis. Fast food science. Best fans. Rhiannon. Blood on the Tracks at 50. Impromptu.
Panini holds the exclusive trading card licenses for both the NBA and the WNBA. Its flagship 2024 Prizm set for the WNBA has been released. Hobby boxes (12 packs with 12 cards in each pack and a guarantee of two autographed cards per box) are selling for an average of around $1,200 each across retailers. Panini’s 2024-25 NBA Prizm set was released last week, and the average price of an NBA hobby box is around $700. The reason for the price difference: Caitlin Clark.
At a party given by a billionaire on Shelter Island, the late Kurt Vonnegut informed his friend, Joseph Heller, that their host, a hedge fund manager, had made more money in a single day than Heller had earned from his wildly popular novel, Catch-22, over its entire history. Heller responded, “Yes, but I have something he will never have. Enough.”
Securities and advisory services are offered through Madison Avenue Securities, LLC, a member of FINRA and SIPC, a registered investment advisor. This report provides general information only and is based upon current public information we consider reliable. Neither the information nor any opinion expressed constitutes an offer or an invitation to make an offer, to buy or sell any securities or other investment or any options, futures, or derivatives related to such securities or investments. It is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation, and the particular needs of any specific person who may receive this report. Investors should seek financial advice regarding the appropriateness of investing in any securities, other investment, or investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. Investors should note that income from such securities or other investments, if any, may fluctuate and that price or value of such securities and investments may rise or fall. Accordingly, investors may receive back less than originally invested. Past performance is not necessarily a guide to future performance. Diversification does not guaranty against loss in declining markets. Madison Avenue Securities, LLC | 13500 Evening Creek Drive N, Suite 555 | San Diego, CA 92128 US
