Daily Newsletter 3/10/25
What we watch before markets open
Good morning.
Investors are particularly focused on the ongoing impact of President Trump's trade policies, including tariffs affecting Mexico, Canada, and China, as well as concerns about government spending and job cuts. These factors have contributed to recent market volatility and are likely to continue influencing economic sentiment throughout the week.
US$
103.716. The US dollar experienced significant weakness last week, falling over 3% against major currencies to reach a four-month low. The dollar index (USDX), which measures the US currency against six others, dropped to 103.45, its lowest level since November 2024.
Gold
Last wee’s rise was driven by safe-haven demand amid weaker-than-expected U.S. jobs data and a declining U.S. dollar index, which hit a four-month low.
Gold futures 2.911.80. The market is showing resilience, supported by a weaker dollar and safe-haven demand amid global trade tensions.
Recession Fear
Concerns about a potential U.S. recession in 2025 have been rising, driven by several economic and policy factors.Here's a summary of the current situation:
Key Drivers of Recession Fears
Policy Uncertainty:
President Donald Trump's sweeping tariffs, federal workforce layoffs, and other economic policies have created uncertainty, impacting consumer confidence and business investments.
The Federal Reserve faces a dilemma: whether to raise interest rates to curb inflation or lower them to prevent a recession.
Market Volatility:
Investors are seeking crash protection, with increased demand for options that profit from market downturns.
Consumer Confidence Decline:
This decline is linked to inflation expectations and apprehension about job security.
Economic Indicators:
The Atlanta Federal Reserve model suggests negative growth for Q1 2025, while consumer spending has slowed significantly.
Yield curve inversions and unemployment concerns signal potential economic weakness.
Differing Perspectives
Recession Risks:
Some experts argue that the risk of a downturn is significant due to declining consumer sentiment and policy-driven uncertainty.
Stagflation—low growth combined with high inflation—is also being discussed as a possible scenario.
Optimistic Views:
Others believe fears are overblown, citing that the Federal Reserve could still act to avert a recession by cutting interest rates.
While consumer spending has slowed, some indicators suggest resilience in certain sectors of the economy.
FNV
Franco-Nevada Corporation (FNV) is expected to report its next earnings on Monday, March 10, 2025, before the market opens This date is consistent across multiple sources, although it's important to note that it has not been officially confirmed by the company. The earnings report will cover the quarter ending December 31, 2024.