- Morning Download
- Posts
- 😞 Gains are gone
Good morning investors! Stocks sold off big time before recovering slightly to end the day.
Today we cover:
Business growth slows
Gains are gone
Target and more report earnings
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📊 Economy and News
US Business Growth Slows Sharply in February Amid Rising Costs
The latest flash Purchasing Managers' Index (PMI) surveys for February indicate a sharp slowdown in US business growth, with rising goods prices adding pressure to the economy. While the US led major developed economies in growth through late 2023 and into January, expansion nearly came to a halt in February.
Despite a two-year high in manufacturing selling prices, cooling inflation in the services sector helped moderate overall inflation for the month. However, input costs in the services economy remain elevated, continuing to rise at a pace well above pre-pandemic levels, with inflation even accelerating compared to January.
Global hits:
Australia reports fourth-quarter GDP growth of 1.3%, supported by exports.
Trump says the U.S. will take control of Greenland ‘one way or another’.
UK service firms cut staff at rapid pace ahead of tax, wage hikes.
India home prices to climb faster than inflation this year, rents even more.
Do you see Greenland joining the US in the future? |
Something about China: China targets ‘around 5%’ growth in 2025 and lays out stimulus measures as trade worries mount. It has raised budget deficit target to levels not seen since at least 2010 to shore up growth. The country will push defense spending by 7.2% in 2025 to ‘firmly safeguard’ national security. Lastly, it is also pushing 2025 budget for grain stockpiling, targets higher domestic output.
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📈 Stocks
S&P 500 5,778.15 (-1.22%)
DJIA 42,520.99 (-1.99%)
NASDAQ 18,285.16 (-0.35%)
BRENT CRUDE 70.22 (-1.15%)
* Prices as of Mar 3rd, 12:20 AM UTC
Everything went red
Stocks are experiencing a downturn, with small-cap stocks leading the decline yesterday as recession fears weigh heavily on the market’s most vulnerable companies.
Concerns were further heightened by remarks from Best Buy and Target, both of which signaled that price hikes would be inevitable under Trump’s tariffs. Their latest results also reflected signs of consumer weakness, adding to the uncertainty.
Amid these macroeconomic headwinds, volatility is expected to persist. Canada and China have responded with retaliatory measures against the tariffs, while Commerce Secretary Howard Lutnick hinted that a potential compromise could be in the works.
President Donald Trump conceded before a joint session of Congress that his steep new tariffs would cause “a little disturbance.”
Even U.S. airline stocks tumbled to their lowest levels since late 2024.
Target hits and misses: Target beat Wall Street’s fourth-quarter expectations on the top and bottom lines, but it’s planning for a rough first quarter, adding to concerns about consumer health. The company is set to expand online marketplace, boost product assortment as it aims for $15 billion in sales growth by 2030. The company also got some price target updates, with Telsey maintaining Target stock Outperform rating, $67 target. On the other hand, Citi has cut Target stock price target to $120 from $133.
Earnings:
Earnings results from yesterday presented a mixed picture. CrowdStrike reported fourth-quarter earnings and revenue that exceeded expectations. Like many in the tech sector, the company is emphasizing AI-driven growth opportunities. However, weak first-quarter guidance weighed on the stock, as management projected increased costs stemming from last summer’s nationwide outage. The company anticipates $73 million in outage-related costs this quarter, along with an additional $43 million allocated to customer retention efforts.
AeroVironment, the defense contractor, exceeded earnings expectations for its fiscal third quarter, but revenue fell significantly short. Manufacturing operations in California were disrupted by wildfires, while shifting U.S. support for Ukraine is impacting demand. The company, which derived 38% of its fiscal 2024 revenue from Ukraine, now faces headwinds as geopolitical uncertainties continue to evolve.
💵 Personal Finance
Benefits of investing in index funds
Index funds are a type of mutual fund or exchange-traded fund (ETF) that tracks a specific market index. This means that the fund's performance is designed to mirror the performance of the index it tracks.
Here are some of the benefits of investing in index funds:
Low fees. Index funds typically have very low fees, which means that more of your money goes towards investing and less goes towards paying fees.
Diversification. Index funds are diversified, which means that they hold a wide variety of assets. This helps to reduce your risk, as you are not putting all of your eggs in one basket.
Passive management. Index funds are passively managed, which means that they do not try to beat the market. This makes them a good choice for investors who do not want to spend a lot of time managing their investments.
Long-term performance. Index funds have historically outperformed actively managed funds over the long term. This is because index funds are designed to track the market, which has historically trended upwards.
Tax efficiency. Index funds tend to be more tax-efficient than actively managed funds. This is because they do not make as many trades, which can lead to capital gains distributions.
Ease of use. Index funds are easy to buy and sell, and they can be purchased through most brokerage firms.
Transparency. Index funds are transparent, which means that you can easily see what assets they hold and how they are performing.
Here’s more on index funds:
💰 Be a Better Investor
"In the short run, the market is a voting machine but in the long run, it is a weighing machine."
Resources:
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👩🏽⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.
Disclosures
Mode Mobile recently received their ticker reservation with Nasdaq ($MODE), indicating an intent to IPO in the next 24 months. An intent to IPO is no guarantee that an actual IPO will occur.
The Deloitte rankings are based on submitted applications and public company database research, with winners selected based on their fiscal-year revenue growth percentage over a three-year period.
A minimum investment of $1,950 is required to receive bonus shares. 100% bonus shares are offered on investments of $9,950+.
Please read the offering circular at invest.modemobile.com. This is a paid advertisement for Mode Mobile’s Regulation A Offering.