March 23, 2025
Volume 12, Issue 12
Weekly Recap
Domestic stocks moved mostly higher last week, with many indexes snapping multi-week declines. The Dow Jones Industrial Average performed best, advancing 1.2 percent, while the S&P MidCap 400 posted its first weekly gain since January. Large-cap tech stocks generally underperformed, weighing on the technology-heavy Nasdaq Composite, which was the worst-performing. As measured by Russell 1000 indexes, value outperformed growth for the fifth consecutive week, bringing its total year-to-date outperformance to 897 basis points (8.97 percentage points).
Trading volumes were relatively light, including the lightest daily volumes of 2025 on Thursday, as traders continued to digest changes related to new policies, economic growth forecasts, and geopolitical risks. The highlight of last week’s economic calendar came on Wednesday as the Federal Reserve concluded its March monetary policy meeting. As was widely expected, the central bank held its policy rate steady at 4.25–4.5 percent. Fed officials also indicated that they expect 50 basis points (0.5 percentage points) of rate cuts this year, unchanged from a previous projection in December. Notably, however, policymakers increased their expectations for inflation in 2025 while lowering their expectations GDP growth. The Fed’s post-meeting statement also noted that “uncertainty around the economic outlook has increased.”
Nevertheless, takeaways from the meeting seemed to be largely positive, with Fed Chair Jerome Powell stating that the Fed’s “base case” is that the impact of tariffs will be transitory and that “most measures of longer-term expectations remain consistent with” the central bank’s 2 percent inflation target. Traders appeared to welcome the generally dovish tone following the meeting, with most stock indexes posting solid gains for the day.
Other economic data releases during the week seemed to provide a somewhat mixed outlook. On Monday, the Census Bureau reported that retail sales in February rose 0.2 percent, well below consensus estimates for a 0.7 percent increase. January’s reading was also revised down to -1.2 percent, marking the steepest decline since July 2021. On the other hand, control group sales – which feed directly into the GDP calculation and exclude several volatile categories, including automobiles and restaurants – rose 1 percent during the month, exceeding estimates for a 0.4 percent gain.
Monday also brought data from the Empire State Manufacturing Survey, a survey of manufacturers in New York that measures general business conditions, which indicated that “business activity dropped significantly” in March, while “optimism about the outlook waned considerably for a second consecutive month.”
Elsewhere, several housing market-related data releases provided a more optimistic outlook, highlighted by a better-than-expected 4.2 percent increase in existing home sales in February, driven by an increase in supply. February housing starts also surprised to the upside with an adjusted annual rate of 1.5 million starts during the month, up 11.2 percent from January, although the reading represented a 2.9 percent decline year-over-year. U.S. Treasuries generated positive returns last week as yields across most maturities declined following the Fed’s policy meeting. The belly of the yield curve performed best.
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
The Federal Reserve held interest rates steady on Wednesday, though indicated it would probably reduce rates later this year. Officials also projected that the U.S. economy would grow 1.7 percent this year, down from its 2.1 percent projection in December. “Uncertainty around the economic outlook has increased,” the Federal Open Market Committee noted in its policy statement. Stocks rallied after the decision. Federal Reserve Chairman Jerome Powell told reporters Wednesday that Fed officials “really can’t know” if inflation caused by tariffs will be transitory or longer lasting.
Investors have slashed holdings of U.S. equities by the most on record, underscoring the massive rotation that’s underway in global markets.
Americans are vulnerable to market turmoil. Meanwhile, the Trump administration has been extraordinarily blasé about falling stocks. Even the Trumpiest stocks are suffering.
The market for credit cards has become a reverse Robin Hood, as poor Americans with bad credit subsidize bonuses for wealthier cardholders. “High costs are weighing down working-class families, while driving big rewards to rich ones. Over the past few decades, the credit-card market has quietly transformed into two credit-card markets: one offering generous benefits to wealthy Americans, the other offering expensive debt to the poor, with the latter subsidizing the former.” Data Dump: Mortgage Delinquencies; Existing Home Sales; Unemployment Claims; FOMC Statement;Mortgage Applications; Housing Starts; Industrial Production and Capacity Utilization; Retail Sales.
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.
Are Stocks a Sure Thing Over the Long Term? Not Necessarily (Meir Statman)
How Not to Invest (Nick Maggiulli)
Beautiful vs. Practical Advice (Morgan Housel) This is the best thing I’ve read recently. The saddest. The most disconcerting. The most interesting. Jaguars.Airport Theory. 100. Slugging. RIP, John Feinstein. RIP, George Foreman.
Warren Buffett has long imparted a probability lesson in the form of a wager, offering $1 million via the Berkshire Hathaway NCAA tournament bracket challenge if any employee got every March Madness pick right. This year, he’s tweaking the odds to make it easier. The prize will be awarded if an entrant picks the winners to at least 30 of the 32 first-round games. The odds remain long, but not nearly so long as they were. Buffett also offers what he calls the “lollapalooza” prize: $1 million a year for life if a single entrant correctly predicts the winners of each of the first 48 games ahead of the tournament’s Sweet 16. Depending upon how likely one estimates the likelihood of upsets, the chances of picking a perfect bracket are about 1 in 128 billion. Nobody ever has.
“The most powerful productivity tool ever invented is simply the word ‘no.’”
~ Shane Parrish
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
