Highlights
Tariff headlines and fears of a U.S. recession continued to weigh on stocks as the S&P 500, Nasdaq Composite and the Russell 2000 indices notched price declines a fourth consecutive week. Growth concerns and increasing recession fears—which were amplified by comments from President Donald Trump regarding a “period of transition” for the U.S. economy—also weighed on sentiment during the week. Markets now seek out some semblance of clarity in the upcoming Fed policy meeting on March 18-19 where policymakers are widely expected to hold interest rates steady. We anticipate the tariff and policy uncertainty to continue in the near term and remain well positioned to take advantage of opportunities arising from the increased market volatility. The pan-European Stoxx 600 had its second negative week in ten weeks amid worries about how U.S. trade tariffs would affect economic growth and uncertainty over monetary policy. Along with hopes for a Ukraine-Russia ceasefire, news that Germany’s incoming chancellor had secured parliamentary support for a large increase in state borrowing helped to curb losses. Positively, mainland Chinese stock markets rose on stimulus hopes after Beijing said it would hold a press conference on Monday with policymakers focusing on boosting consumption.
Data highlights:
The U.S. Consumer Price Index increased 2.8% over the past 12 months, coming in below the expected 2.9% and lower than the previous month’s strong 3% reading. The Bank of Canada reduced its overnight rate by 25 basis points, bringing it to 2.75%. The Producer Price Index (PPI), which measures the average change over time in selling prices received by domestic producers, remained unchanged in February compared to January. In Europe, U.K. Gross Domestic Product (GDP) contracted by 0.1% in January 2025, contrary to expectations of a 0.1% growth while in Asia, the Japanese GDP growth rate for Q4 2024 grew to 2.3% compared to 0.4% for the previous quarter.
Week ahead:
U.S Retail sales – Monday | Canada CPI – Tuesday | U.S. Fed Interest rate decision, Japan BoJ Interest rate decision, Eurozone CPI – Wednesday | U.K Unemployment rate & BoE Interest rate decision, Australia Unemployment rate – Thursday | Japan Inflation rate YoY, Canada retail sales – Friday
