Weekly Market Pulse - Week ending February 28, 2025
Market developments
Equities: The Nasdaq Index had its worst week of 2025, dropping over 5% as growth concerns and high valuations led to the selling of the “Mag7”. While Nvidia reported a strong quarter this week, the earnings beat and guidance were not enough for investors, with the stock ending the week down more than 7%. Any recovery attempt on Friday was halted as tensions flared during a meeting between the U.S. and Ukraine.
Fixed Income: Treasury yields declined, and the US dollar strengthened. Market optimism over Federal Reserve rate cuts faded as uncertainty grew. Meanwhile, Canada’s bond market faces volatility due to potential tariffs set to begin on March 4, which could impact interest rate expectations and yield spreads.
Commodities: Gold had its worst week of the year amid concerns over President Trump’s tariff agenda. This correction in gold wasn’t unexpected as it was on an eight-week positive streak.
Performance (price return)
SECURITY |
PRICE |
WEEK |
1 MONTH |
3 MONTH |
YTD |
Equities ($Local) |
|
|
|
|
|
S&P/TSX Composite |
25,393.68 |
0.98% |
-0.10% |
-0.59% |
2.69% |
S&P 500 |
5,954.50 |
-0.98% |
-1.87% |
-0.74% |
1.24% |
NASDAQ |
18,847.28 |
-3.47% |
-4.49% |
-1.12% |
-2.40% |
DAX |
22,551.43 |
1.18% |
5.23% |
16.09% |
13.27% |
NIKKEI 225 |
37,155.50 |
-4.18% |
-4.77% |
-3.11% |
-6.87% |
Shanghai Composite |
3,320.90 |
-1.72% |
2.16% |
0.76% |
-0.92% |
Fixed Income (Performance in %) |
|
|
|
|
|
Canada Aggregate Bond |
239.46 |
0.88% |
1.53% |
2.22% |
1.74% |
US Aggregate Bond |
2240.16 |
0.85% |
1.71% |
1.02% |
2.34% |
Europe Aggregate Bond |
245.37 |
0.47% |
1.37% |
-0.10% |
0.66% |
US High Yield Bond |
27.37 |
0.37% |
0.74% |
1.75% |
2.02% |
Commodities ($USD) |
|
|
|
|
|
Oil |
70.04 |
-0.51% |
-5.06% |
1.92% |
-2.34% |
Gold |
2857.67 |
-2.67% |
3.41% |
8.33% |
8.88% |
Copper |
452.15 |
-0.84% |
6.48% |
11.18% |
12.29% |
Currencies ($USD) |
|
|
|
|
|
US Dollar Index |
107.60 |
0.93% |
-0.25% |
1.46% |
-0.82% |
Loonie |
1.4462 |
-1.65% |
-0.44% |
-3.10% |
-0.54% |
Euro |
0.9639 |
-0.80% |
-0.53% |
-1.68% |
0.21% |
Yen |
150.55 |
-0.85% |
3.31% |
0.66% |
4.42% |
Source: Bloomberg, as of February 28, 2025
Central Bank Interest Rates
CENTRAL BANK |
CURRENT RATE |
JUNE 2025 |
DECEMBER 2025 |
Bank of Canada |
3.00% |
2.61% |
2.36% |
U.S. Federal Reserve |
4.50% |
4.07% |
3.65% |
European Central Bank |
2.75% |
2.05% |
1.81% |
Bank of England |
4.50% |
4.16% |
3.86% |
Bank of Japan |
0.50% |
0.60% |
0.76% |
Source: Bloomberg, as of February 28, 2025
*Expected rates are based on bond futures pricing
Macro developments
Canada – Economy Sees Strong Q4 Growth
Canada’s GDP grew by 0.6% in Q4 2024, up from 0.3% in the previous quarter. Growth was fueled by a 1.4% rise in household spending, especially on vehicles and financial services. Business investment in non-residential structures increased by 0.7%, and exports surged by 1.8%, driven by metals, crude oil, and cars. Imports also rebounded by 1.3%.
U.S. – Core PCE Inflation Remains Above Fed Target
The U.S. core PCE price index rose by 0.3% in January 2025, slightly up from 0.2% in December. Annually, core inflation slowed to 2.6% but remained above the Federal Reserve’s 2% target.
International – Eurozone Inflation Hits Six-Month High, Japan’s Retail Sales Continue Upward Trend
Eurozone inflation was confirmed at 2.5% in January 2025, its highest since July 2024, mainly due to rising energy costs. While non-energy goods inflation held steady at 0.5%, price increases slowed for services and food. Core inflation remained at 2.7% for the fifth straight month. Consumer prices fell by 0.3% month-over-month.
Japanese retail sales grew 3.9% year-on-year in January 2025, marking 34 consecutive months of expansion. Growth was supported by rising wages and strong sales in fuel, non-store retail, automobiles, and cosmetics. Monthly sales rebounded by 0.5% after a decline in December.
Quick look ahead
DATE |
COUNTRY / REGION |
EVENT |
|
SURVEY |
PRIOR |
02-Mar-25 |
China |
Caixin China PMI Mfg |
Feb |
50.4 |
50.1 |
03-Mar-25 |
Eurozone Aggregate |
CPI Estimate YoY |
Feb P |
2.3 |
|
03-Mar-25 |
Eurozone Aggregate |
CPI Core YoY |
Feb P |
2.5 |
2.7 |
03-Mar-25 |
Canada |
S&P Canada Manufacturing PMI |
Feb |
|
51.6 |
03-Mar-25 |
United States |
ISM Manufacturing |
Feb |
50.5 |
50.9 |
03-Mar-25 |
Japan |
Jobless Rate |
Jan |
2.4 |
2.4 |
04-Mar-25 |
Eurozone Aggregate |
Unemployment Rate |
Jan |
6.3 |
6.3 |
04-Mar-25 |
China |
Caixin China PMI Services |
Feb |
50.8 |
51.0 |
05-Mar-25 |
Eurozone Aggregate |
PPI YoY |
Jan |
1.3 |
|
05-Mar-25 |
United States |
ISM Services Index |
Feb |
53.0 |
52.8 |
06-Mar-25 |
Eurozone Aggregate |
Retail Sales YoY |
Jan |
1.9 |
1.9 |
06-Mar-25 |
Eurozone Aggregate |
ECB Deposit Facility Rate |
|
2.50 |
2.75 |
07-Mar-25 |
United States |
Change in Nonfarm Payrolls |
Feb |
157.5 |
143.0 |
07-Mar-25 |
United States |
Unemployment Rate |
Feb |
4.0 |
4.0 |
07-Mar-25 |
Canada |
Net Change in Employment |
Feb |
|
76.0 |
07-Mar-25 |
Canada |
Unemployment Rate |
Feb |
|
6.6 |
08-Mar-25 |
China |
PPI YoY |
Feb |
|
(2.3) |
08-Mar-25 |
China |
CPI YoY |
Feb |
|
0.5 |
P = Preliminary
The Asset Allocation Team at NEI Investments
Judith Chan, CFA – Vice President, Head of Multi-Asset Portfolios
Mateo Marks, CFA – Senior Multi Asset Portfolio Analyst
Adam Ludwick, CFA – Senior Multi Asset Portfolio Analyst
Anthony Rago, B.A.Sc. – Senior Multi Asset Portfolio Analyst