March 16, 2025
Volume 12, Issue 11
Weekly Recap
Despite a strong day on Friday, domestic stocks posted losses again last week, with the S&P 500, Nasdaq Composite, and Russell 2000 all notching a fourth consecutive week of negative returns. The S&P MidCap 400 fell for the seventh week in a row, while the Dow Jones Industrial Average slid 3.07 percent, putting all five indexes into negative territory for 2025. Ongoing uncertainty surrounding trade policy drove much of the negative sentiment as new tariff announcements from the Trump administration continued throughout the week. Growth concerns and increasing recession fears – which were amplified by comments from President Trump regarding a “period of transition” for the U.S. economy – also weighed on sentiment last week.
Last week’s relatively light economic calendar was highlighted by Wednesday’s release of the Labor Department’s consumer price index, which indicated that consumer prices rose 0.2 percent month-over-month in February, while core CPI (ex-food and energy) saw its lowest year-over-year increase since April 2021, rising 3.1 percent over the prior 12 months. February’s readings for both monthly and annual inflation slowed from January, and both were slightly below consensus expectations. The encouraging inflation print seemed to help alleviate some concerns about the U.S. economy entering a period of stagflation – an economic scenario in which growth is stagnant, inflation is high, and unemployment rises. However, data from the report predate a large portion of the Trump administration’s recent tariff actions, and investors were quick to return their focus to the uncertainty surrounding the impact that these actions will have on prices over the next several months.
Thursday’s producer price index data painted a similar picture for February, with headline prices unchanged from January and core prices declining for the first time since July compared with expectations for a 0.3 percent increase for both readings. While the overall results appeared promising, several components of the PPI that feed into the personal consumption expenditures index – the Fed’s preferred measure of inflation – remained elevated, which suggests that the PCE will likely remain well above the Fed’s 2 percent target when it is released at the end of the month. Fed policymakers are widely expected to hold interest rates steady following their upcoming meeting on March 18–19. Meanwhile, the University of Michigan reported its Index of Consumer Sentiment for March on Friday morning, which declined 11 percent month-over-month to 57.9. The index has now declined three months in a row and is down 22 percent from December 2024. According to the report, consumer expectations “deteriorated across multiple facets of the economy, including personal finances, labor markets, inflation, business conditions, and stock markets,” primarily due to “uncertainty around policy and other economic factors.” Notably, year-ahead inflation expectations increased to 4.9 percent from 4.3 percent in February, the highest since November 2022 and the third consecutive monthly increase of 0.5 percentage points or more. U.S. Treasury securities were in positive territory most of last week as yields decreased across most maturities in response to the week’s cooler-than-expected inflation data before sliding back Friday to being mostly unchanged.
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
U.S. consumer prices rose at the slowest pace in four months in February, welcome news for American households who remain apprehensive about the potential for tariffs to drive costs higher. The consumer price index increased 0.2 percent after a sharp 0.5 percent advance in January, according to Bureau of Labor Statistics data out Wednesday. Excluding often volatile food and energy categories, the so-called core measure rose 0.2 percent as well. The data will likely keep the Federal Reserve on track to resume cutting interest rates in June. But even as inflation shows signs of cooling, economists warned about looming price rises as (if) U.S. tariffs take effect.
Wholesale prices held steady in February, data that follows signs of modest cooling for consumer-price increases in a separate report issued a day earlier. But a data revision meant that prices charged by producers rose by more than initially estimated in January. The January increase was 0.6 percent, not the 0.4 percent previously estimated, the Labor Department announced Thursday. Overall, the producer-price index has climbed by 3.2 percent over the past 12 months, cooler than the revised 12-month figure from a month ago. In February, prices charged for eggs jumped by more than 53 percent, according to the PPI data. That fueled a 0.3 percent increase in prices charged for goods overall, balanced by a 0.2 percent decline in prices charged for services.
The United States economy is starting to show signs of strain as President Trump’s abrupt moves to shrink federal spending, lay off government workers and impose tariffs on America’s largest trading partners rattle businesses and reverberate across states and cities. Data Dump: CPI; PPI; Financial Accounts of the United States; Jobless Claims; Job Openings; Consumer Sentiment.
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.
The Meat Grinder (Josh Brown)
Estate Planning In The Digital Age (David Haughton)
Protect Your Parents from Scammers (Meg Bartelt)This is the best thing I’ve read recently. The sweetest. The most insightful. The best thread. When do television shows get good? 150 years of stock market crashes. How Covid changed us. The 100 best TV performances. Bureaucracy run wild. What Congress is really like. Fifteen big losers; Fifteen big winners. Fan fiction.
Americans spent $13.7 billion on sports wagering in 2024, +25 percent year-over-year, according to the American Gaming Association, even though it is still illegal in the three largest states. By way of comparison, they spent about $9 billion on going to the movies.
“Here’s the interesting thing about the stock market: it cannot be indicted, arrested or deported; it cannot be intimidated. threatened or bullied; it has no gender, ethnicity or religion; it cannot be fired, furloughed or defunded; it cannot be primaried before the next midterm elections; and it cannot be seized, nationalized or invaded. It’s the ultimate voting machine, reflecting prospects for earnings growth, stability, liquidity, inflation, taxation and predictable rule of law.” ~ Michael Cembalest, Chairman of Market & Investment Strategy, JPMorgan Asset Management
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
