Linea Mercati Interview 3/13/25
March 14, 2025Linea Mercati Interview 3/17/25
March 18, 2025MARKET REVIEW
The New York Stock Exchange closed sharply higher on Friday, driven in particular by bargain buying after a week of sharp decline marked by twists and turns in US trade policy.
Canada’s main stock index rose 1.5% on Friday, following the trend of US markets, ending an otherwise gloomy week for stocks. The price of gold exceeded US$3,000 an ounce for the first time.
Context
“We had a bullish session” marked by “relief” among market participants, Peter Cardillo of Spartan Capital Securities commented to AFP.
Investors engaged in “bargain buying” after “the market declined sharply in a short period of time,” Patrick O’Hare of Briefing.com summarized in a note.
On Thursday, the S&P 500 fell 1.39% to 5,521.52 points and entered correction territory, meaning it has lost 10% since its year-to-date high reached on February 19. Its rebound on Friday allowed it to emerge from this phase.
The US market has been particularly shaken in recent days by the numerous twists and turns in the US-led trade war.
Donald Trump threatened France and the European Union (EU) on Thursday with 200% tariffs on their champagne, wine, and other spirits if the 50% tariffs announced by Brussels on American whiskey were not dropped.
Since returning to power in January, the US president has launched a series of trade offensives against both his allies and competitors, claiming that the United States is being unfairly treated in international trade.
The lack of news on Friday regarding the tariffs may have therefore relieved Wall Street, according to Peter Cardillo.
Stock markets are also discounting the risk of a US shutdown, which would paralyze the country’s spending, following the reversal of a senior Democratic Party official.
Chuck Schumer, who had stated on Wednesday that his party was united against the bill, finally announced on Thursday that he would personally vote for it due to his concern about the consequences of such a shutdown.
On the geopolitical side, “it seems there may be a chance to end the war (between Russia and Ukraine), according to Donald Trump,” the analyst suggested.
The US president called on Vladimir Putin on Friday to “spare the lives” of “thousands of Ukrainian soldiers” on the front lines, with the idea of a ceasefire being met with both reservations and cautious “optimism” from Moscow.
The G7, meeting in a climate of turmoil following Donald Trump’s return to the White House, affirmed its unity on Friday by threatening Russia with sanctions if it did not accept the ceasefire, which Ukraine had agreed to.
In terms of indicators, investors did not react strongly to the publication of the University of Michigan’s preliminary consumer confidence estimate.
According to this index, consumer confidence fell to 57.9 in March, from 64.7 a month earlier, a more pronounced decline than analysts had expected.
The indicator is weighed down by “uncertainty” surrounding the policies implemented by the new government and the anticipation of high inflation ahead.
“If consumer confidence continues to decline, it means investor confidence will decline,” noted Peter Cardillo, however.
On the bond market, the yield on 10-year US government bonds rose to 4.32%, compared to 4.27% the previous day at the close.
Elsewhere, the “mega-cap rebound” contributed to the market’s rise: Nvidia (NVDA, at US$121.67) jumped 5.27%, Apple (AAPL, at US$213.49) gained 1.82%, Amazon (AMZN, at US$197.95) rose 2.09%, and Microsoft (MSFT, at US$388.56) gained 2.58%.
The cosmetics retailer Ulta Beauty (ULTA, +13.68% at US$357.48) stood out, driven by quarterly results that exceeded analysts’ expectations. The chain was particularly boosted by strong sales during the holiday season.
DocuSign, a company specializing in electronic document signatures, soared (DOCU, +14.81% to US$85.76) after reporting better-than-expected fourth-quarter results, including net income of 86 cents per share.
