AlexandrKudin
THE U.S.MARKET 🇺🇸 Yesterday, the main indices continued to decline: the S&P 500 fell 0.76%, the Dow Jones lost 1.14%, and the Nasdaq dropped 0.18%. Investors were assessing new developments regarding tariff increases, along with macroeconomic data. - President Trump threatened to raise tariffs on Canadian steel and aluminum to 50% but later reverted to the previously announced rate of 25% after Ontario abandoned plans to impose a surcharge on U.S. electricity exports. Trump downplayed concerns about a recession due to tariffs, stating: “I don't see that at all. I think this country will prosper.” However, he warned company executives that tariffs could increase further. In response, stocks recovered part of yesterday's losses, and the rebound continues today. - Meanwhile, the EU announced plans to retaliate against the new U.S. tariffs. The countermeasures will target steel and aluminum products, textiles, agricultural goods, and household appliances—impacting goods previously affected by the trade dispute with Trump, totaling $26 billion. 🤔 What Trump is doing isn’t supporting the growth of U.S. stock markets. At this point, I don’t see signs of a recession, and historically, recessions have not been driven solely by policy uncertainty. However, it remains uncertain how markets will respond if his current escalation eventually leads to de-escalation. - The number of job openings in January increased by 232,000 month-over-month to 7.74 million, surpassing economists' expectations of 7.65 million. December’s data was revised downward by 92,000. These figures indicate the labor market remains healthy, as also reflected in the latest NFP employment report. - At the same time, the small business sentiment index, like other sentiment indicators, fell by 2.1 points in February to 100.7, slightly below forecasts of 100.9. Respondents' uncertainty levels reached the second-highest on record amid tariff volatility. - All sectors of the S&P 500 closed in the red yesterday. The industrial sector led the decline, particularly in transportation, after Delta Air Lines lowered its forecast ( DAL). Defense stocks also saw significant losses, while the communication sector weakened due to a correction in telecom stocks, following Verizon’s reduced outlook ( VZ). - Almost all defensive and cyclical sectors underperformed the market due to a shift toward the largest technology companies. The Magnificent Seven gained 0.39% on the day, while the broader equal-weighted index declined 1.33%. 🤔 The market has been overdue for a correction of this scale. Typically, a 10% decline doesn’t turn into a 20% bear market unless it is driven by an economic recession, a drop in corporate profits, or a cycle of Fed rate hikes. I don’t see any of these factors at play right now. However, even if the worst of the decline is behind us, volatility may persist, and there’s a high likelihood that the market will trade sideways for some time. 📈 Today, investors are focusing on February’s inflation data, which will influence the Fed’s outlook on interest rates. 🤔 The Fed views tariffs as temporary price disruptions rather than long-term inflationary pressures. If this stance remains unchanged, the central bank may disregard short-term tariff-driven price increases and remain open to cutting rates later this year. 📈 KEY ECONOMIC DATA RELEASES TODAY : 🛢 OPEC monthly oil market report 🇺🇸 U.S. Core Consumer Price Index (CPI) (m/m) (Feb) 🇺🇸 U.S. Consumer Price Index (CPI) (y/y) (Feb) (m/m) 🇺🇸 U.S. Crude oil inventories 🇨🇦 Canada interest rate decision 🇺🇸 U.S. Oil - EIA inventory report HAVE A SUCCESSFUL DAY $SPX500 $NSDQ100 $DJ30 $UK100 $GER40
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