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February 28, 2025
Dow: 43,374
S&P: 5874
Nasdaq: 18,520
10-YR T-Note: 4.24%
Bitcoin: 80,580
Vix: 20.75
Gold: 2.858
Crude Oil: 69.41
Don Selkin, the creator and innovator of the "Fair Value" numbers, as its Chief Market Strategist on the Newbridge platform has given CNBC and its Predecessor, these numbers every day for the over 40 years - never missing a single day, as well as given the fair value for the Nasdaq 100 futures since their introduction in 1996 and the Dow Jones stock index futures since 1997. Mr. Selkin has also been quoted in several publications including but not limited to Bloomberg News, New York Post, Reuters, and The New York Times. Mr. Selkin's Fair Value numbers are included in the U.S.
Futures Report broadcast on CNBC every day before the market
opens attributing "Newbridge Securities" as the source. In addition, NSC provides to its professionals, their clients and the public access to Don Selkin's more in depth financial market views.
In what had to be one of the worst market collapses in the recent horrible series lately, the indices turned very nice opening trading into a downside disaster like we rarely see. And as a result, the market has now seen its worst week since September and is now lower for the month of February with today the last trading day of this month.
The Dow began with a nice 450 point gain at the opening and then began to collapse as the President issued more restrictive tariff polices which undermined the advance very rapidly and then things tailgated to the downside in one of those horrible late slide to finish right at the lows with a closing decline of 193 to 43,239 with only a handful of old-time stocks doing a little better, as MCD, 3M and UNH eking out small gains.
The S&P followed the same awful pattern with a strong 37 point advance also collapsing for the same reason and it ended lower by a hard to believe 94 to 5861 with the large technology stocks, led by a miserable showing from the former mighty NVDA leading the way lower after its earnings report last night.
The Nasdaq joined in the downside misery with a 167 point early advance turning into a closing 530 point decline to 18,540 led by NVDA as mentioned above and also by the pathetic trading in TSLA, which has now plummeted by 37% after its leader has become the leader of government policies toward reducing the size of the government workforce.
The Russell 2000 Index of small stocks followed the others to the downside with a 34 point collapse to 2139 and the VIX put in a late rise to 21.63 on the collapse of equities.
Investor frenzy around AI technology faltered some more, as the S&P after its all-time high last week, put in its fifth drop in six days as concerns about the U.S. economy’s future have been behind much of the drop, including worries about how further tariffs pushed by the President could worsen inflation as the S&P has lost all but 1.4% of its rally since Election Day.
Weighing most heavily on the market was former superstar stock NVDA, one of the most influential companies that has been leading the market for years. After initially rising at the open of trading following a better than expected profit report, it quickly slid to a loss of 8.5%.
Better-than-expected earnings reports have become routine for it, whose chips are powering the surge into AI technology, but this was the company’s first since Deep seek shook this industry.
After the Chinese upstart said it developed a large language model that can compete with the world’s best without using the most expensive chips, investors had to question all the spending it assumed would go into NVDA’s chips and the ecosystem that is built around the AI boom, such as electricity to power large data centers.
Its performance for the latest quarter, along with its forecasts for upcoming results, were “good enough to keep the debate moving in a positive direction,” according to one analyst, but it apparently wasn’t enough to send the stock higher, particularly given criticism that its price had already leaped too high, too quickly. After more than tripling two years ago, the stock more than doubled last year as its sales exploded. Its gross margins had the smallest revenue beat in two years, which did not help either. It had accounted by itself for 22% of the S&P’s gain last year.
The market also soured on Dow component CRM, which fell 4% despite topping analysts’ profit expectations for the latest quarter. Several analysts called the performance solid, and the company continued to tout its AI offerings, but it gave a forecast for upcoming revenue that fell short of expectations.
One AI-related company bucking the trend was SNOW as the AI data cloud company rose 4.5% after delivering stronger profit and revenue for the latest quarter than analysts expected.
A 1.7% rise for BRK, the company run by famed investor Warren Buffett, did well also as the owner of Geico, BNSF railroad and other businesses has built a hoard of unused cash recently. That could indicate Buffett, who’s famous for buying stocks when prices are low, may not see much worth purchasing in a market that critics say looks too expensive.
In the bond market, Treasury yields swung following Trump’s latest announcement on tariffs, as he said “the proposed TARIFFS scheduled to go into effect on MARCH FOURTH will, indeed, go into effect, as scheduled” for imports from Canada and Mexico. He also said he would add an additional 10% tariff on Chinese products on that date.
Such moves could push up prices for U.S. households when inflation has already proven to be stubborn. Investors had been hoping the threats are merely leverage that Trump will use to negotiate with other countries before ultimately inflicting less pain on the economy than feared.
But even if that proves to be the case, all the talk on tariffs has already gotten households to feel more nervous about the economy. That is dangerous because their strong spending has been a main reason the U.S. economy has avoided a recession.
Such uncertainty also pressures the Federal Reserve, which has few if any tools to help an economy where growth is slowing and inflation is rising at the same time.
Jeff Schmid, president of the Federal Reserve Bank of Kansas City, said in a speech Thursday that he has “become more cautious” in his hopes that inflation will continue to ease. He also said that discussions with people in his district suggest “elevated uncertainty might weigh on growth” for the economy.
For now, at least, the U.S. economy appears to be in solid shape. The government left alone its estimate for the economy’s performance during the last quarter of 2024, though it raised its estimate for a measure of inflation during the quarter.
The weekly jobless claims rose to 242K, which is a three-month high, but nowhere close to where it’s been in past recessions.
In the bond market, the yield on the 10-year Treasury edged up to 4.27% from 4.26% late Wednesday.
The fourth-quarter earnings season finally comes to an end with the following – yesterday – SNOW, SNPS, AI, NTNX, SJM,WB, PM higher, WB and NVDA, EBAY, PARA, SG and Dow component CRM lower in addition to BBWI, NCLH; today - ADSK, ESTC higher and DUOL, HPQ, RKLB, DELL lower.
Economic reports will see: yesterday – today - January durable goods orders up 3.9%, weekly jobless claims rose to 242K, 4Q G.D.P second reading stayed the same at 2.3% and January new home sales fell to the lowest ever; Friday – January Personal Income report (P.C.E.), which is always important to the Fed came in at a gain of 0.3% and year over year it was ahead by 2.5%, January trade deficit hit a record high of $153 billion, January personal income gained 0.9% while personal spending declined by 0.2% (weather induced perhaps).
