Today's Update 03-17-2025

Key Points and Metrics

Key Points and Metrics:

1. United States Economic Data:

   • Retail Sales (February 2025):

     • Retail Sales MoM: Actual 0.2% (Forecast 0.6%, Previous -0.9%, Revised -1.2%)

     • Core Retail Sales MoM: Actual 0.3% (Forecast 0.3%, Previous -0.4%, Revised -0.6%)

     • Retail Sales YoY: Actual 3.11% (Previous 4.20%, Revised 3.91%)

   • NAHB Housing Market Index (March 2025):

     • Actual: 39 (Forecast 42, Previous 42)

   • Business Inventories (January 2025):

     • Business Inventories MoM: Actual 0.3% (Forecast 0.3%, Previous -0.2%)

   • NY Fed Manufacturing Index:

     • Actual: -20 (Forecast -1.9, Previous 5.70)

   • Effective Federal Funds Rate:

     • March 14: 4.33% (Unchanged from March 13)

2. Global Economic Forecasts by OECD:

   • World Growth:

     • 2025: 3.1%

     • 2026: 3.0%

   • United States Growth:

     • 2025: 2.2% (Down from previous forecast of 2.4%)

     • 2026: 1.6% (Down from 2.1%)

   • Eurozone Growth:

     • 2025: 1.0%

     • 2026: 1.2%

   • China Growth:

     • 2025: 4.8%

     • 2026: 4.4%

   • Canada Growth:

     • 2025 & 2026: 0.7% (Down from 2%)

3. Market Sentiment Indicators:

   • Fear and Greed Index: 21/100 (Extreme Fear)

   • Crypto Fear and Greed Index: 32/100 (Fear)

4. European Central Bank (ECB) Statements:

   • ECB's De Guindos:

     • Expects inflation to converge to the 2% target.

     • Notes a decrease in services inflation due to wage evolution.

     • Believes energy inflation is behaving relatively well.

     • Remarks that trade wars increase economic uncertainty and are detrimental to the global economy.

5. Trade and Tariff Developments:

   • European Union:

     • Plans to launch an investigation into possible safeguard measures to counter U.S. tariffs.

     • To probe aluminum imports redirected by U.S. tariffs on steel and aluminum.

   • OECD Simulation:

     • A broad-based trade war could reduce global growth by 0.3 percentage points and U.S. growth by 0.7 percentage points.

     • Potential cost to U.S. households estimated at $1,600, surpassing gains from increased tariff income.

6. Other Notable Headlines:

   • China:

     • PBOC officials indicate the use of policy tools such as reserve requirement ratios and relending facilities to support the economy.

     • Commerce Ministry aims to support export companies.

   • Market Movements:

     • U.S. stock futures declined following comments from Treasury Secretary Bessent downplaying market selloffs.

     • Gold is trading near record highs around $3,000 per ounce due to increased demand for safe-haven assets.

7. Canadian Economic Data:

   • Housing Starts (February 2025):

     • Actual: 229,030 units (Forecast 246,000 units, Previous 239,700 units)

   • Home Sales:

     • Fell by 9.8% in February from January levels.

8. Italian Inflation Data (February 2025):

   • Consumer Price Index (CPI):

     • CPI YoY Final: 1.6% (Previous 1.7%)

     • CPI MoM Final: 0.2%

   • Harmonized Index of Consumer Prices (HICP):

     • HICP YoY Final: 1.7% (Forecast and Previous 1.7%)

     • HICP MoM Final: 0.1%

9. Geopolitical Updates:

   • China-Taiwan Relations:

     • China's Commerce Ministry pledges support for export companies amid regional tensions.

     • Chinese military exercises near Taiwan described as a response to separatist activities.

   • Iran-U.S. Relations:

     • Iran's Foreign Ministry is considering a response to a letter from President Trump.

10. Corporate News:

    • Google:

      • Reportedly partnering with Taiwan's MediaTek to develop cheaper AI chips.

    • Intel:

      • CEO plans to restart AI efforts and aims to produce chips at an annual cadence.

FINAL THOUGHTS

Markets are showing resilience despite underwhelming retail sales data, as investors position ahead of Wednesday's critical Fed decision. The mixed economic signals - with retail sales missing expectations but core sales meeting them - reflect a consumer that's pulling back but not dramatically. Housing sentiment remains weak, adding to the complex picture facing policymakers.

Trade tensions are escalating with the EU's response to US aluminum tariffs, while extreme fear dominates market sentiment. The scheduled Putin-Trump call adds another layer of geopolitical uncertainty. With the OECD cutting growth forecasts and warning about trade war impacts, the Fed's communication about future rate cuts will be crucial for market direction in the coming weeks.

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Disclaimer: This article is for informational purposes only and does not constitute investment advice. Always do your own research and consider your financial situation before making investment decisions.

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Harry