Weekly Market Update for March 14, 2025
by Jared Plotz, Director of Research
Equity markets bounced higher on Friday, concluding another volatile week that saw the S&P 500 end Thursday in correction territory (i.e. down >10% from its recent peak, in February). We anticipate the first half of 2025 to exhibit greater volatility than seen the last couple years and we continue to make portfolio changes that we think will be beneficial in a choppier environment. We have highlighted to clients during portfolio reviews that a 10% intra-year correction is not uncommon, and is in fact normal. The S&P 500 declined -2.3% this week, while the Nasdaq slid -2.4%. Year to date, the S&P 500 is down a little over 4%.
The 10-Year Treasury yield, an interest rate indicator, closed at 4.32%, rising +1 bp from last week. The 6-Month US Treasury, a favorite of our US Treasury strategy, ended unchanged at 4.24%. As some concerns have surfaced regarding GDP growth and consumer spending amidst economic unknowns, fixed income markets have begun assuming additional Fed rate cuts down the line. Such cuts to short-term rates typically benefit fixed income securities.
US economic data was soft this week. Small business optimism fell in February, though it remains above average. Consumer (CPI) and producer (PPI) inflation rates for February both slowed slightly versus January. And consumer sentiment (as measured by the University of Michigan) fell to 57.9 from 64.0 the prior month, with “uncertainty” noted as on the rise.
Uncertainty seems to be the key word of this past month. This earnings season, over half of the S&P 500 companies mentioned tariffs on their conference calls. The war in Ukraine continues, with hopes for a ceasefire seesawing this week. And the US Senate negotiated into the final possible day on a continuing resolution for federal spending that would avoid a government shutdown – a deal that is expected to be reached by midnight.
Looking ahead to Monday next week, retail sales for February will be reported by the Census Bureau. These figures could provide a glimpse of any early impacts from the drop in consumer confidence in recent weeks. On Wednesday, the Federal Reserve will host a press conference following the conclusion of their two-day policy meeting. No change to benchmark rates is expected, but investors will listen for changes to the medium-term outlook. We will also get a slew of housing data points for February next week, including the NAHB Housing Market Index, building permits, housing starts, and existing home sales. Coincidentally, earnings metrics and commentary from home builders Lennar and D.R. Horton are on the docket. In light of the pending tariff hikes on Canadian lumber, executives may share cautious outlooks.
The information contained in this commentary is not investment advice for any person. It is presented only for informational purposes. Included information has been obtained from sources considered reliable, but we do not guarantee that the foregoing materials are accurate or complete. Investors should contact Ulland Investment Advisors for individualized information prior to deciding to participate in any portfolio or making any investment decision. Ulland Investment Advisors does not provide tax advice. All investors are strongly urged to consult with their tax advisors regarding any potential investment.Performance quoted is past performance. Past performance is not indicative of future performance. There is always a possibility of loss.
Current performance may be lower or higher than performance shown. Differences in performance versus the indices/funds may be attributable, in part, to differences in the asset make-up of the strategy vs. the indices/funds. Performance calculations are based on the reinvestment of dividends and gains unless these amounts were paid out to the client. Performance is subject to revision. See www.ullandinvestment.com for important strategy disclosures.
This does not constitute a recommendation of any investment strategy or product for a particular investor. Investing involves risk; principal loss is possible. Investors should consider the investment objectives, risk, charges, and expenses of the strategy carefully before investing. This and other important information can be obtained by contacting Ulland Investment Advisors at www.ullandinvestment.com or 612.312.1400.
