Unhedged Vibrational movements in the market
30 snips
Feb 25, 2025 The discussion kicks off with the striking rise in semiconductor demand driven by AI, attracting investment like a modern gold rush. Market sentiment reveals a chilling downturn in housing and negativity towards the economy, contrasting past growth predictions. There's an examination of stagflation concerns alongside the Fed's challenges with rising unemployment. Geopolitical shifts stir changes in U.S. defense stocks, particularly impacting major players like Lockheed Martin, while investor bullishness shows slight declines amidst economic uncertainty.
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Market Vibe Shift
- The market experienced a "vibe shift" due to a buildup of negative economic data and changing expectations around the Trump administration's policies.
- Small-cap stocks, initially favored under Trump, have declined while the broader market remains flat.
Economic Slowdown Indicators
- Economic indicators suggest a potential slowdown, with falling consumer sentiment, a contracting service sector, and concerns about tariff impacts.
- Walmart, a key retailer, issued soft guidance for 2025, signaling decreased consumer spending.
Market Reactions and Surprises
- The market anticipates further Fed rate cuts due to slower growth, with the 10-year treasury yield declining.
- Contrary to expectations, the dollar is softening, and US risk assets haven't reacted strongly to the growth slowdown.