Asset Management Weekly Market Commentary

Market updates for the week ending February 21, 2025

Key observations

• U.S. stocks gave ground last week as strength out of value-oriented sectors such as financial services and energy weren’t enough to offset declines in MAG7 communication services and discretionary names, while some high-profile consumer staples names struggled as well.
• Chinese markets kicked off the week focused on a rare meeting between President Xi and the country’s tech leaders in a very visible vote of confidence for the country’s ‘national champions,’ which along with positive earnings and trade remarks, boosted investor sentiment and sent the MSCI China Index higher by over 4% on the week.
• Interest rates in the U.S. remained rangebound, ebbing and flowing with the introduction of reciprocal tariffs which pushed yields higher, while softer jobless claims data and a surprisingly weak Services PMI from February in the back-half of the week forced Treasury yields modestly lower for the sixth consecutive week, buoying interest rate sensitive segments.

What we're watching

• The Conference Board releases its Consumer Confidence Survey for February on Tuesday which is expected to weaken modestly to 103.2 from 104.1 in January.
• Personal Consumption Expenditure, the FOMC’s preferred inflation gauge, for January is released Friday. Headline PCE is expected to rise 0.3% month over month and 2.5% year over year versus 0.3% and 2.6% readings from December. Core PCE, which tends to be more closely watched, is expected to rise 0.3% month over month and 2.6% year over year versus 0.2% and 2.8% readings in the prior month.
• Semiconductor behemoth and artificial intelligence darling Nvidia is set to post quarterly results on Wednesday and could dictate the near-term direction for U.S. stocks. More upbeat guidance/commentary could boost any/all AI-related plays after a rocky start to the year for many stocks tied to this theme.