ETF Tracker StatSheet
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FED CHAIR POWELL’S COMMENTS SOOTHE MARKETS DESPITE ECONOMIC CONCERNS
- Moving the market
Yesterday’s market weakness continued this morning, with major indexes heading south despite a green opening.
The S&P 500 experienced its worst week since September. The roller-coaster ride persisted as Trump’s tariff policies created uncertainty around job growth and inflation. However, he later confirmed that goods from Canada and Mexico, covered by the USMCA, would be exempt from import duties.
The much-anticipated jobs report was weaker than expected, with 151,000 jobs created in February versus the expected 170,000.
Although the S&P 500 dropped below its 200-day moving average again, comments from Fed Chair Powell at a New York event were interpreted as soothing, despite offering no new information:
“Despite elevated levels of uncertainty, the US economy continues to be in a good place.”
“We do not need to be in a hurry and are well positioned to wait for greater clarity.”
“The costs of being cautious are very, very low.”
“The economy’s fine. It doesn’t need us to do anything, really, and so we can wait, and we should wait.”
Traders took these comments positively, and dip buyers emerged, pulling the major indexes out of the doldrums and into a green close.
Looking at the big picture, the markets have not been kind to big tech, with Apple being the only $3 trillion company left. Nvidia and Tesla have tumbled $1 trillion and $700 billion, respectively, in market cap this year.
Macro data reinforced the weakness in economic growth, while inflation remains ever-present, solidifying the stagflation scenario. Yet, rate-cut expectations remain high.
Bond yields were higher for the week, while the dollar was the worst-performing asset. Bitcoin eked out modest gains, but gold dominated, having been higher for 9 of the last 10 weeks, although it has been range-trading for the past 4 days.
Crude oil retreated for the 7th week in a row, breaking below the $70 level to reach its lowest price since May 2023.
Does this mean we should expect more relief in the form of tumbling gas prices?
2. Current “Buy” Cycles (effective 11/21/2023)
Our Trend Tracking Indexes (TTIs) have both crossed their trend lines with enough strength to trigger new “Buy” signals. That means, Tuesday, 11/21/2023, was the official date for these signals.
If you want to follow our strategy, you should first decide how much you want to invest based on your risk tolerance (percentage of allocation). Then, you should check my Thursday StatSheet and Saturday’s “ETFs on the Cutline” report for suitable ETFs to buy.
3. Trend Tracking Indexes (TTIs)
The markets experienced a sharp decline after a positive opening, with the S&P 500 and Nasdaq falling below their 200-day moving averages.
However, equities found support from Federal Reserve Chair Powell. Although he didn’t provide any new information, traders perceived his comments as reassuring.
This shift in sentiment halted the downturn, leading to a bullish mood that pushed the indexes to close in the green.
Our domestic TTI also recovered, while the international TTI saw a slight decline.
This is how we closed 03/07/2025:
Domestic TTI: +0.80% above its M/A (prior close +0.07%)—Buy signal effective 11/21/2023.
International TTI: +6.42% above its M/A (prior close +6.50%)—Buy signal effective 11/21/2023.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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