Anna's Markets Recap

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Saturday, 5:34 AM

March 22, 2025

Good morning news friend! Here is a quick recap of what happened in the markets this week. 📰🌟

Economic & Market Overview

The Dow Jones Industrial Average led this week with a +1.2% weekly gain, while the S&P 500 rose +0.5% and the Nasdaq Composite added about +0.2%​.

GDP growth remains positive – the U.S. economy expanded at a 2.3% annual rate in Q4 2024​. Inflation has moderated to 2.8% year-over-year as of February​, down from January’s 3.0%, though still above the Fed’s 2% goal.

The Fed kept its policy rate unchanged around 4.5%, with officials signaling the possibility of two rate cuts later this year​. Gold prices dipped from about $3,050 to $3,030/oz over the week.

Sources: Reuters, TE, BLS.gov, Investopedia

Technology & Growth

Tesla surged +5.3% in one day after Elon Musk reportedly urged employees to “hang on to their stock” to bolster confidence during the recent selloff​.

Tesla shares remain about 30% lower than a month ago amid concerns about slowing sales in China and Europe.

Apple (AAPL) came under pressure mid-week after analysts cut iPhone sales forecasts, citing delays in rolling out advanced AI features like an upgraded Siri​.

Morgan Stanley trimmed its Apple price target, warning that a lack of compelling new AI capabilities could dampen iPhone upgrade demand​. Apple’s stock fell over 3% to around $210 on that news​, before rebounding later in the week.

Europe’s Digital Markets Act enforcement looms. Meta and Apple both are expected to comply with new platform rules with minimal financial impact.

Broadcom (AVGO) inched higher, supported by strong demand for its networking and custom AI chips and the successful integration of its VMware acquisition – investors see Broadcom as well-positioned in both cloud and semiconductor markets.

JPMorgan highlighted AI infrastructure as an ongoing driver, upgrading server-maker Super Micro on expectations it will benefit from Nvidia’s next-gen “Blackwell” chips​.

Sources: Investopedia, Investors, Reuters, FY, WallStreetJournal.

Financial Institutions

The Fed’s decision to hold rates steady removed immediate pressure on Bank stocks. Longer-term Treasury yields ticked down – the 10-year yield fell to about 4.25%, its 7th decline in eight weeks​.

This gentle steepening of the yield curve provided some relief for lenders’ net interest margins.

Credit and debit card spending has remained healthy, as evidenced by JPMorgan’s latest results showing robust payment volumes​.

Consumer credit quality is holding up with only a slight uptick in delinquencies forecast (around 3% in 2025 vs 2.75% last year)​, suggesting households are managing debt even with higher interest rates.

Visa (V) and Mastercard (MA) reported solid transaction volumes as consumers and businesses keep swiping, albeit with some normalization post-pandemic.

Visa and Mastercard are keeping a close eye on regulatory discussions around interchange fees – U.S. officials have floated proposals to cap credit card swipe fees​.

Falling yields have eased unrealized losses on banks’ bond portfolios, and the Fed’s pause gives banks time to adapt to higher long-term rate levels.

Sources: PYMNTS, ABA, Fortune.

Consumer Staples & Healthcare

This week a federal court backed the FDA’s move to halt compounded, copycat versions of Lilly’s (LLY) Mounjaro and Zepbound injections​.

That decision forces compounding pharmacies to cease producing tirzepatide (the active ingredient) by March 19, effectively safeguarding Lilly’s market for its popular GLP-1 therapies.

Lilly is also expanding its pipeline from obesity to Alzheimer’s drugs.

AbbVie (ABBV) launched new drugs and partnerships to spur growth beyond Humira, its flagship immunology drug facing declining sales.

In early March, AbbVie announced a deal to develop an obesity treatment (an amylin analog) with partner Gubra, marking its entry into the weight-loss drug arena​.

Additionally, AbbVie secured regulatory approvals for novel medicines, including Emblaveo, an antibiotic for intra-abdominal infections developed with Pfizer​.

Johnson & Johnson (JNJ) plans to boost U.S. investments by 25% (over $55 billion) in coming years to expand domestic manufacturing​.

J&J is building new production plants to reduce reliance on overseas supply, a strategic response to potential import tariffs on pharmaceuticals​.

After the pandemic lull, seniors have been catching up on elective surgeries and checkups, pushing Medicare Advantage costs higher​.

UnitedHealth (UNH) and peers have warned that medical cost ratios will be a bit above historical norms (UNH projects ~86% of premiums paid out in care for 2025)​.

The government’s proposed 2025 Medicare Advantage reimbursement rates include a 3.7% increase in payments to insurers​, which should help offset higher costs from greater utilization.

UnitedHealth also won a legal victory regarding overpayment allegations, reducing a potential $2 billion liability.

Procter & Gamble (PG) has successfully implemented price increases – mid-single-digit on average – with minimal pushback, helping maintain revenue growth even as unit volumes are roughly flat.

Costco (COST) reported quarterly numbers: net sales jumped 9.1% to $62.5 billion for the quarter ending mid-February​, and earnings per share rose to $4.02 (up from $3.92 a year ago)​.

The warehouse club saw robust 8.3% U.S. same-store sales growth, a 20% surge in e-commerce, and membership renewal rates around a record 93%​.

Costco’s EPS came in a bit below analysts’ expectations (Wall Street expected ~$4.10​). The company raised its quarterly dividend, signaling confidence in future cash flows.

Sources: Reuters, Reuters[2], Reuters[3], Reuters[4], AbbVie, CMS, Captide.

Energy & Industrial

U.S. crude oil (WTI) ended the week roughly flat at about $68.3 per barrel​.

Exxon Mobil’s (XOM) acquisition of Pioneer Natural Resources is expected to boost its Permian oil output over the coming years.

Energy demand domestically has held up, with gasoline and jet fuel consumption improving from winter lows.

Mortgage rates have come off their peaks, which is gradually improving homebuyer activity. New housing starts and permits have been tepid but not collapsing, and homebuilder sentiment has ticked up.

Home Depot (HD) noted that professional contractor demand remains solid (thanks to a backlog of remodeling projects), even as DIY customer transactions are softer.

The housing market overall is in a cooler phase compared to last year, yet household formation and pent-up renovation needs are providing a floor under the sector.

FedEx (FDX) cut its annual forecast and warned of “continued weakness and uncertainty in the U.S. industrial economy”​.

Boeing (BA) shares jumped 3% Friday after it won a major defense contract to build US fighter jets.

Sources: HomeDepot, Barrons, Reuters.

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Baked with love,

Anna Eisenberg ❤️