3/9/25

Weekly Market Recap

The first week of March looked very similar to the last two weeks of February. U.S. stocks declined about 3.40% for the week, while international stocks gained a little more than 1%. Sentiment remained very negative, and volatility, as measured by the VIX, stayed fairly elevated. U.S. stocks did see a small recovery on Friday, ending the day up about 0.50%. This followed a speech by Federal Reserve Chair Jerome Powell at the University of Chicago. Powell noted that although uncertainty remains elevated, the economy is healthy, as evidenced by the strong labor market and inflation being close to the Fed’s 2% target. He also mentioned that sentiment readings have not been good predictors of consumption growth. In other words, people are expressing negative feelings about the economy but are not acting on them. Despite recent volatility, a moderately diversified global investor is likely seeing positive year-to-date returns. This is an important reminder of the value of diversification.

Chart of the Week

This week’s chart comes from Apollo Asset Management, showing the percentage of Americans planning to take a vacation in the next six months. Notice the sharp decline in the latest reading, which is another sentiment indicator. When people are nervous about the economy, they are less likely to spend, particularly on non-essentials such as vacations. However, before becoming too bearish, we should recall what Fed Chair Jerome Powell said on Friday: sentiment indicators often do a poor job of predicting actual behavior. If consumers follow through with their stated plans, we can expect to see economic activity slow this year. Combined with the impact of tariffs, this could lead to short-term economic pain.

Written by:

Ben Rones, CFA®

Senior Analyst at R&R Financial

The commentary in this newsletter is for informational purposes only and should not be taken as personalized investment advice

Chart of the week Source:

ConferenceBoard, Bloomberg, Apollo Chief Economist