February 24, 2025

 

(NVIDIA IS THE HEADLINE ACT THIS WEEK)

 

February 24, 2025

 

Hello everyone

 

WEEK AHEAD CALENDAR

MONDAY FEB. 24

5:00 a.m. Euro Area Inflation Rate

Previous: 2.4%

Forecast: 2.5%

8:30 a.m. Chicago Fed National Activity Index (January)

10:30 a.m. Dallas Fed Index (February)

Earnings:  Public Storage, Diamondback Energy, Domino’s Pizza

 

TUESDAY FEB. 25

9:00 a.m. FHFA Home Price Index (December)

9:00 a.m. S&P/Case Shiller comp. 20 HPI M/M December

10:00 a.m. Consumer Confidence (February)

10:00 a.m. Richmond Fed Index (February)

7:30 p.m. Australia CPI Indicator

Previous: 2.5%

Forecast: 2.5%

Earnings:  Extra Space Storage, Workday, Axon Enterprise, First Solar, Caesars Entertainment, Public Service Enterprise Group, Keurig Dr Pepper, Home Depot

 

WEDNESDAY FEB. 26

8:00 a.m. Building Permits final (January)

10:00 a.m. New Home Sales (January)

Previous: 3.6%

Forecast: -2.6%

Earnings: Nvidia, eBay, Salesforce, Universal Health Services, Paramount Global, Invitation Homes, TJX Companies, Lowe’s Companies

 

THURSDAY FEB. 27

8:30 a.m. Continuing Jobless Claims (02/15)

8:30 a.m. Durable Orders preliminary (January)

8:30 a.m. GDP second preliminary (Q4)

Previous: 3.1%

Forecast: 2.3%

8:30 a.m. Initial Claims (02/22)

10:00 a.m. Pending Home Sales Index (January)

10:00 a.m. Pending Home Sales (January)

11:00 a.m. Kansas City Fed Manufacturing Index (February)

Earnings:  HP, Dell Technologies, NetApp, Autodesk, Warner Bros. Discovery, J.M. Smucker Co., Norwegian Cruise Line Holdings, Hormel Foods

 

FRIDAY FEB. 28

8:30 a.m. Core PCE Deflator (January)

8:30 a.m. Personal Consumption Expenditure (January)

8:30 a.m. Personal Income (January)

8:30 a.m. Wholesale Inventories preliminary (January)

9:45 a.m. Chicago PMI (February)

 

A weak response to Chinese warships off our coastline

I considered our Prime Minister’s, Anthony Albanese, response to the Chinese warships performing live-firing drills in the Tasman Sea to be weak, and less than robust. Most alarming is the fact that Beijing did not formally warn the Australian Defence Force (ADF) about its warships’ live fire testing. Authorities were only aware on Friday, just before the drill took place.  Can you imagine if our Australian warships did the same to China and sat off their coastline and informed China – or did not inform them - that they were just performing live-firing drills, what the response would be?? I very much doubt the response would have been weak.

Earlier in February, a Chinese fighter jet released flares in front of an Australian military aircraft, which was condemned as “unsafe and unprofessional.”

China is flexing their muscle and showing their might, whilst trade relations between Australia and China rest on shaky ground.

 

This week Nvidia earnings and PCE could embolden the market - or not

On Wednesday, Nvidia reports earnings, and this event could be potentially market-moving.  It’s the first earnings report since Deep Seek disturbed the outlook for artificial intelligence companies.  Nvidia shares are up 4% so far this year after rallying some 170% in 2024 and 200% in 2023.  And these moves accounted for much of the S&P500’s bull run for those two years. Wealth is concentrated in a basket of stocks, and the story does not usually end well when you see that inequitable distribution.   Some analysts are advising to buy Nvidia ahead of earnings, however, I would prefer to stand aside.  Even if the chipmaker beats expectations for the quarter, investors are going to need a lot of reassurance that the chipmaker can deal with the concerns raised by Deep Seek earlier this year, as well as any tariff uncertainty.  Great earnings results are all very well, but if investors are not confident that Nvidia can navigate the many challenges dotting the economic landscape, then sentiment could turn against it. 

Another possible market-moving event this week is the personal consumption expenditure price data.  This is the Fed’s preferred measure of inflation, and this data could decide the short-term path of monetary policy.

If the data comes in line the markets could run higher, however, if we get a hotter data print, markets could sell off, especially with the rising concerns over the potential inflationary impact of higher tariffs.

 

MARKET UPDATE

S&P500

Even though the S&P did turn lower on Friday, it is possible that we see more wide-ranging movement as part of the topping process.  A decisive break of $5773 should indicate the bears have taken over control of the market.

Resistance:  ~$6065

Support: ~$5995/$5930

GOLD

This market has been surging since December, but it looks like momentum might be slowing and a recent peak may have been formed (for a month or so).  This is yet to be confirmed, but a failure to build on recent gains would give weight to this observation.

Resistance: ~$2955/60

Support:  ~$2800

BITCOIN

Wide-ranging behaviour to continue as there are no firm signs that the crypto will break out in the near term. 

Resistance: $109.5/$110.5k area

Support: $91/$92k)

 

 

QI CORNER

 

 

 

 

WORD OF THE WEEK

Hygge

Noun: Danish [hou-geh]

Cozy blankets, warming candles, relaxing with friends.  All your worries melting away.  These are all considered ‘hygge’.

‘Hygge’ is when you take pleasure from and can appreciate gentle and soothing things.  It’s being surrounded by things that make you feel cozy and comfortable, which then engender feelings of contentment.

Something that we all need in these tumultuous times.

 

 

WHAT IS…?

Cockroach Theory

You are aware of the notion – for every cockroach you see, there’s 100 more you don’t.  Cockroach theory applies that thinking to the world of investing – when a piece of bad news relating to the markets is released to the public, there’s likely more lurking in the wings.

 

 

HISTORY CORNER

On February 24

SOMETHING TO THINK ABOUT

 

Cheers

Jacquie