The gains from Monday have been largely rolled back by declines the past two days. Through Thursday's closing bell, the Dow is ahead by 314 points on the week, NASDAQ is up 20, S&P 500 is up 25 points, and the NYSE Composite is down 51 points.
Not to be forgotten, the Dow Jones Transportation Average is up 275 points for the week, a gain of 1.88%. Some of the 20 component stocks of the $TRAN may be targets of bottom-fishers, as the index has had five consecutive weeks of losses, is trading well below its 200-day moving average and executed a "death cross" a little more than a week ago, with the 50-day dropping below the 200-day moving average. This week's gains might also be indicative of either a short squeeze or shorts closing out positions with profits. More than likely, it's a combination of the two, in addition to some bargain hunting.
Heading into the final session of the week, and second-last of the month and quarter, positioning may be a priority for funds, wishing to demonstrate proper allocations to their clientele. It would be reasonable to assume that the majority of long funds would show a preference for defensive positions in raw materials, consumer staples, utilities, and possibly health care while departing from information technology, financials, and consumer discretionary sectors.
Some of those trades may be set up for Monday, March 31, though it would seem obvious for fund managers to be scaling into positions in advance of the quarter-ending date and Trump's April 2nd tariffs, which the president has nicknamed "liberation day", in the belief that heavy tariffs will free American companies from tariffs and unfair trade policies effected by other nations.
How President Trump's tariff schemes play out is the main subject of debate within the investment community. With so many moving parts involved in global trade, even company managers with inside knowledge of their business structures and policies may not have a firm grip on what's about to unfold, creating an environment full of fear, uncertainty, and doubt (FUD) that is in no way beneficial to the smooth functioning of any business venture.
The major indices having moved only fractionally through Thursday sets up an intriguing dynamic to close out the week. Will traders see more volatility ahead or be able to conjure up some rationale to add to positions or stake out new opportunities? From a day-trading and algo-watching perspective, this is the essential question. Given prevailing choppiness in markets, it is difficult to discern any kind of consensus in either direction, though, admittedly, bears appear to be holding a strong hand.
Amid the confusion in equity markets, precious metals, the bastion of security, have advanced powerfully. As of Friday morning, gold has made new highs yet again, reaching $3,094.90 on the COMEX, while silver may finally be breaking out, marking a 13-year high at $35.49 early Friday morning.
Mass confusion over tariffs and other issues of governance, geo-politics, and valuations has served to enhance the prospects of gold and silver, both from a position of protection and one of anticipation for what may soon be a complete overhaul of global finance. The topic of gold-backed currency has been increasingly mentioned in economic circles for reasons that should be obvious. Central bank purchases of gold tonnage has been at or near record levels for three years running. If the supposedly wisest and largest currency managers on the planet are hoarding gold, they are not doing so devoid of some deeper, ulterior purpose.
With much of the world on a razor's edge, who can blame them?
Minutes ago, the Bureau of Economic Analysis (BEA) released February PCE data, showing the year-over-year PCE price index for February increased 2.5 percent. Excluding food and energy, the PCE price index increased 2.8 percent from one year ago.
From January, the PCE price index for February increased 0.3 percent. Excluding food and energy, the PCE price index increased 0.4 percent. The monthly headline numbers were generally in line with expectations, while the year-ago numbers were something of a head-scratcher with the full PCE below expectations and core, above.
The release didn't go over well in the futures market, with stock futures dropping near to morning lows. With less than half an hour until the opening bell, Dow futures are down 100 points, NASDAQ futures off 92, and S&P futures sliding about 20 points.
These numbers are going to be interpreted as somewhat inconclusive in terms of Fed interest rate policy, as the PCE is the most-favored inflation indicator.
Happy trading!
At the Close, Thursday, March 27, 2025:
Dow: 42,299.70, -155.09 (-0.37%)
NASDAQ: 17,804.03, -94.98 (-0.53%)
S&P 500: 5,693.31, -18.89 (-0.33%)
NYSE Composite: 19,534.72, -51.11 (-0.26%)
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