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March 5, 2025
Dow: 42,550
S&P: 5781
Nasdaq: 18,302
10-YR T-Note: 4.20%
Bitcoin: 89,463
VIX: 23.79
Gold: 2,907
Crude Oil: $66.70
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 one of the more bizarre sessions in what has been a series of them, the market got socked badly on the downside with another historic last hour collapse after some of the indices had the nerve to actually go positive.
The Dow got as low as an 844 point collapse before finally ending down by 670 to 42,520 which means that it has dropped by 1,300 points in the last two days. It was led on the downside by financials such as AXP, GS and JPM, in addition to BA, CAT, CRM, HD, JPM, 3M, PG and V.
The S&P had a really bizarre day with a downside disaster of 117 points, but then made a strange rally to gain 15 points at 3:25pm, from which is then further collapsed to finally end with a closing loss of 71 to 5778. This late collapse was led by technology stocks and financials as the trade war between the U.S. and its key trading partners escalated, wiping out all the gains since Election Day for the S&P.
The Nasdaq had the really strangest day of all, as it got as low as 394 points down, from which is got some short-covering and had the nerve to get as high as a gain of 239 at 3:25pm as there was some interest in beaten-down NVDA, plus GOOG, ADBE and even MSTR. But this could not hold either, and from there it retreated down to a moderate closing decline of “only” 65 points, which seems to be a “victory” in the current negative environment.
The Russell 2000 Index of small stocks had nothing going for it once again as it fell deeper into correction with a 22 point loss to 2078. Meanwhile the VIX loved the negativity in the market as it rose to 23.51.
The administration imposed tariffs on imports from Canada and Mexico starting yesterday and doubled tariffs against imports from China. All three countries announced retaliatory actions, sparking worries about a slowdown in the global economy.
The market could soon face more twists in the tariff drama. After the closing bell, Commerce Secretary Howard Lutnick told Fox Business News that the U.S. would likely meet Canada and Mexico “in the middle” on tariffs, with an announcement coming as soon as today and this was probably a result of trying to halt the recent stock market disaster.
The recent decline in stocks has wiped out all of the markets’ gains since the election in November. That rally had been built largely on hopes for policies that would strengthen the U.S. economy and businesses. Worries about tariffs raising consumer prices and reigniting inflation have been weighing on both the economy and the market.
The tariffs are prompting warnings from retailers, after reports from BBY and TGT after they gave their latest financial results. The latter fell despite beating earnings forecasts, saying there will be “meaningful pressure” on its profits to start the year because of tariffs and other costs.
BBY plunged by 13% for the biggest drop among S&P stocks after giving investors a weaker-than-expected earnings forecast and warning about tariff impacts. “International trade is critically important to our business and industry,” said its C.E.O.
He said that China and Mexico are the top two sources for products that BBY sells, and it also expects vendors to pass along tariff costs, which would make price increases for American consumers likely.
Imports from Canada and Mexico are now to be taxed at 25%, with Canadian energy products subject to 10% import duties. The 10% tariff that Trump placed on Chinese imports in February was doubled to 20%.
China responded to new U.S. tariffs by announcing it will impose additional tariffs of up to 15% on imports of key U.S. farm products, including chicken, pork, soy and beef, and expanded controls on doing business with key U.S. companies. Canada plans on slapping tariffs on more than $100 billion of American goods over the course of 21 days. Mexico also plans tariffs on goods imported from the U.S.
Companies in the S&P are wrapping up the latest round of quarterly financial reports. They have posted broad earnings growth of 18% for the fourth quarter. But investors have already trimmed expectations for the current quarter to about 7% growth from just over forecasts of 11% at the beginning of the year.
Concerns about profits follow a series of economic reports with worrisome signals that include U.S. households becoming more pessimistic about inflation and pulling back on spending. Consumer spending has essentially driven U.S. economic growth in the face of high interest rates.
Investors have been hoping that the Federal Reserve would continue lowering interest rates in 2025. The central bank has signaled more caution, though, partly because of uncertainty surrounding the economic impact of tariffs. The Fed is expected to hold rates steady at its upcoming meeting later in March.
In the bond market, Treasury yields were mixed. The yield on the 10-year Treasury rose to 4.20% from 4.16% late Monday. It is still down sharply from last month, when it was approaching 4.80%, as worries have grown about the strength of the U.S. economy.
The yield on the 2-year Treasury held steady at 3.94%.
Earnings this week will see: today – OKTA higher and BBY, TGT lower; today – CPB, ROST, BOX, CRWD lower and FLH higher; tonight – JWN, Victoria’s Secret, ZSK; Thursday – BURL, COST, GPS, M.
Economic reports are: today – ISM Non-Manufacturing Survey rose to 53.5, January factory orders rose 1.7%; Thursday – January trade balance, weekly jobless claims; Friday – February jobs report for which the estimate is 160,000 and the unemployment rate remains at 4%.
