Highlights
Policy risks and growth concerns sent stock indexes lower for a second consecutive week, except the Dow Jones Industrial Average which managed to gain just about 1% for the week. Growth stocks led the decline and the Nasdaq Composite recorded its worst weekly drop since September. The story of Q4 earnings & 2025 guidance season has been that year-over-year EPS growth is starting to finally broaden out across the U.S. and the world, and this appears to be driving a broadening performance away from the Magnificent Seven and into the S&P 493 in recent weeks despite the soft patch of economic data and policy uncertainty. Tariff fears also continued to be a drag on equities as President Donald Trump reiterated plans to impose new levies on several trade partners by March 4.
Data Highlights:
In U.S, Initial claims for state unemployment benefits jumped 22k to a seasonally adjusted 242k for the week ended February 22. The increase was the biggest since last October. Analyst’s consensus was 221k. The GDP growth rate slowed down to 2.3% compared to 3.1% for the previous quarter. Canada’s GDP grew by 0.6% in the fourth quarter of 2024 compared to the previous quarter. This quarterly growth corresponds to an annualised rate of 2.6%, surpassing expectations of 1.8%. Over in Europe, The Eurozone’s annual inflation rate for January 2025 was reported at 2.5%, up from 2.4% in December 2024. Finally, the monthly CPI results from the Australian Bureau of Statistics showed that it has held steady at 2.5% slightly lower than analysts’ expectations of 2.6%.
Week Ahead:
Eurozone (Feb) CPI – Monday | Australia GDP Growth Rate – Wednesday | Eurozone Retail Sales & ECB Interest Rate Decision – Thursday | Eurozone GDP Growth Rate & Employment Change, U.S. Non-Farm Payrolls & Unemployment Rate – Friday.
