U.S. Indices closed notably in the red Monday and sold off through the duration of the US afternoon, on the broader risk-off theme amid poor US data and President Trump noting tariffs will go ahead. On the former, and potentially heightening US growth concerns, Feb ISM Manufacturing disappointed with the headline underwhelming, driven by employment and new orders plunging below 50, but prices paid soared. In the accompanying comments, many mentioned the uncertainties the looming tariffs are causing. In wake of the data, the latest Atlanta Fed GDPnow forecast sees Q1 at -2.8% from -1.5%, continuing to exasperate the growth fears. Later in the day, US President Trump said reciprocal tariffs start April 2nd and tariffs on Canada and Mexico to start Tuesday, as expected, which saw the Dollar pare off lows while both the Canadian Dollar and Mexican Peso saw notable weakness. Moreover, Trump announced China tariffs are to double 20% on Tuesday. In addition, US indices also sold off, with Treasuries rising to session highs while the Japanese Yen gained. Overall, the Dollar was still notably softer to start the week with all G10 FX peers (ex-CAD) firming against the Buck. As mentioned, Treasuries firmed amid the risk-off tariff trade, albeit already were gaining on poor US data, while the crude complex sold off after Bloomberg reported that OPEC+ will go ahead with the April oil output increase. Note, this was later confirmed by OPEC+. US/Ukraine relations continue to boil with seemingly no imminent improvement of relations, as Trump posted an AP article on Truth titled “Ukraine’s Zelensky says end of war with Russia is ‘very, very far away’”, adding “this is the worst statement that could have been made by Zelensky, and America will not put up with it for much longer”; Zelensky replied on X noting “it is very important that we try to make our diplomacy really substantive to end this war the soonest possible.” Elsewhere, sectors were largely in the red with Tech and Energy the two laggards and the former hit by Nvidia (-8.7%) which even breached its DeepSeek low. For the record, Fed’s Musalem (2025 voter) said his outlook is for continued solid economic growth, but recent consumer and housing data pose some downside risk, and also that is hard to separate weather and confidence from January spending. Ahead, all attention is on if tariffs go into effect on Mexico/Canada at midnight (US time). ISM Manufacturing PMI for February fell to 50.3 from 50.9, and shy of the expected 50.8. Within the breakdown, employment and new orders fell to 47.6 (prev. 50.3) and 48.6 (prev. 55.1), respectively, while prices paid surged to 62.4 (exp. 55.8, prev. 54.9) and outside the top end of the forecast range (54.9). Imports showed modest growth to 52.6 from 51.1, but given the looming tariffs, some expected a much greater rise amid potential front-loading. Production dipped, albeit remaining above 50, while inventories and backlog of orders rose, but still stayed below 50. New export orders grew, but at a slower rate M/M, while supplier deliveries printed 54.5 from 50.9. Within the report, it notes that demand eased, production stabilised, and de-staffing continued as panellists’ companies experienced the first operational shock of the new administration’s tariff policy. Prices growth accelerated due to tariffs, causing new order placement backlogs, supplier delivery stoppages and manufacturing inventory impacts. The report adds, “Although tariffs do not go into force until mid-March, spot commodity prices have already risen about 20%.” In the 10 respondents’ comments, 8 of them mentioned tariffs and the uncertainty they are creating, which gives us an insight into how Cos. are currently thinking given the looming tariffs. Overall, Pantheon Macroeconomics see the manufacturing sector continuing broadly to stagnate over the next few quarters. Meanwhile, Fed Member Musalem said his outlook is for continued solid economic growth, but recent consumer and housing data pose some downside risk. However, the St Louis Fed President said it is hard to separate weather and confidence from January spending. Elsewhere, added restrictive monetary policy is still needed to ensure inflation returns to the 2% target and a patient approach to policy will help achieve the Fed’s goals and sustain economic expansion. He added he would look closely at the behavior of inflation expectations if the Fed’s inflation and jobs goals come into conflict. Expects economy to continue to grow but says he would be concerned about signs of further weaking of consumption or dampening of business confidence. Elsewhere, Oil closed lower by 2.21%, while Gold reversed all of Friday’s move lower with a rise of 2.1%.
To mark my 3150th issue of TraderNoble Daily Commentary I am offering a special 2-Year Rate of Euro 2750 for my Platinum Service which includes 1 to 4 updated emails throughout the trading day to demonstrate this value, a monthly subscription over the same period would cost 4440 euro in total This offer represents a 38% discount and is open to both new and existing members. If anyone is interested in this offer can you please email me on bryan@tradernoble.com for details
For anyone following my Platinum Service it made 52 points on the first trading session for March after closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a record 9619 points in October 2022. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1900 points. I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
Recent Comments