(Justin Vaughn, Editor, Options Trading Report)
Consumers Sentiment Sinks… The University of Michigan Consumer Sentiment Survey, conducted by Janet Hsu, revealed many concerns. Government job eliminations, lingering wars, and immigration back-lashes, and ..tariffs have saddled the U.S. Consumer. The latest University of Michigan survey released mid-March was drastically lower, dropping 11% to 57.9% [last month was 64.7%] falling steadily since President Trump was elected. Recession concerns are on the rise as “soft-landing talk” has pretty much disappeared since the start of the year according to Alpha Sense. Chief Executive Magazine’s recent poll of 220 CEOs taken March 4, 2025, revealed that the “outlook for business conditions in 12 months fell to the lowest level since November 2012.” The National Federation of Independent Businesses said, “that small business optimism index fell in February.” Technology, chips and artificial intelligence stocks staved off a disastrous week, rallying the Nasdaq Composite Index 2.6%, still down 2.4%, halving the week’s loss on Friday. The S&P 500 turned positive after a week-long decline, while the blue-chip Dow Jones Industrial Average added 675 points, the only exchange to have avoided correctional territory. “Stocks got oversold,” said Doug Peta, chief U.S.Investment Strategist at BCA Research. “It’s a simple reflex move. We really can’t read much into it until we see what happens Monday and Tuesday.”
The market calmed Monday, with the indexes creeping higher, extending Friday’s rally. A positive Retail Sales Report helped to settle market tariff fears, giving investors and traders a break. All three indexes were positive, with the Dow Jones up 0.9%, followed by the S&P 500 and Nasdaq adding 0.9% and 0.3% respectively. Jay Woods, chief global strategist at Freedom Capital Markets, “attributed some of the relief to a lack of urgent trade policy news. It’s been quiet on the tariff front, and quiet out of Washington. It’s been nice to get back to a slow boring day.” Gold continued strong, edging up and over $3.000.00 a troy ounce on Tuesday. Bitcoin struggled, staying near even in the $84,000 range unable to stoke a rally. U.S. Treasury yields were weaker with the 10-year rate finishing Monday at 4.304%, off slightly from Friday.
The Fed kept the breaks on the rates Wednesday, and Mr. Powell stated “We think it’s a good time for us to await for further clarity.” Economists, strategists and the general market seemed to agree that Mr. Powell acted appropriately in dealing with a topsy-turvey economy, influenced by many governmental decisions. The Dow Jones Industrial Average opened higher Wednesday bouncing up nearly 400 points with the S&P and Nasdaq up buoyed by Mr. Powell’s remarks and light optimism amid the tariff turmoil. Stocks continued positive Thursday reacting to the Fed’s decision not to adjust interest rates. All exchanges were conservatively higher.
The Shinny metal is blazing hot….gaining over 42% the past 6 months outfueling the S&P 500’s 19% gain. Currently gold is trading at $3.046.50 a troy ounce rising steadily as consistently strong buying by central banks and consumers continues. In 2024 Central Banks accumulated 1,045 tons of gold, with 2025 looking to be another record purchase year. Central Banks in China, Uzbekistan and Kazakhstan are heavy buyers this year according to the World Gold Council. A “store of value,” with a limited supply, gold inventory increases only 1% to 2% per year with demand influencing price. In a 10-year span a $10,000 investment in gold has grown to $26,119 according to investment platform AJ Bell. The U.S. is home to the largest storehouse of gold in the world, with Bank of England number two. Andrew Dickey, director of U.S. Mint’s precious metals said, “said at a time when financial markets are more unpredictable, investors are taking active steps to protect their portfolios.” Both Goldman-Sachs and Bank of America economists and analysts have positive forecasts for gold growth in 2025, predicting upsides to $3,100 and $3,200 a troy ounce respectively. Steady-eddy gold could surprise even the banks… beating all predictions.
RUMBLINGS ON THE STREET
Seema Shah, Chief Global Strategist at Principal Asset Management, WSJ – “The U.S. economy faces headwinds from erratic tariff policies, weaker growth forecasts, and stretched market valuations,” she said.
Stephen Brown, Economist at Capital Economics, WSJ – “Consumer spending is on track to slow sharply this quarter, but not by as much as we previously feared.”
Krishna Gopaul, an analyst at the World Gold Council, Barron’s – “Gold plays well when there are tensions in the world.”
Alex Chartres of Ruffer, a British Fund WSJ – “In a hyperfinancial economy like America’s, asset prices can lead the economy, not just the other way around. Decline in asset markets creates the risk of weakening conditions in the real economy.”
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