What happened last week…
The S&P 500 landed in negative territory for the fifth time over the past six weeks. After a down day to close the week, weekly performances for the three major indices were as follows: DJIA (-0.96%), S&P 500 (-1.53%), NASDAQ (-2.59%).
In tariff news, President Donald Trump said there will be a 25% tariff on imports of automobiles and automobile parts, which is expected to generate $100 billion in annual revenue. The tariff could impact U.S. automakers that manufacture various components outside of the U.S. Trump said the April 2 deadline for other tariffs could be “more lenient than reciprocal.” He also said last week that a 25% tariff would be imposed on any country that purchases oil and gas from Venezuela. Trump also threatened larger tariffs on the European Union and Canada if they were to work together to do “economic harm to the USA.”
The GDP growth rate (final estimate) for Q4 2024 landed higher than expectations (2.3%) as it rose to 2.4% compared to the second estimate of 2.3%. However, the reading was a decrease from the Q3 2024 rate of 3.1%. The Q2 2024 rate was 3.0% and the Q1 2024 rate was 1.6%, which was the lowest growth since the Covid pandemic.
New home sales for February missed expectations (680,000) but increased to 676,000 from the upwardly revised 664,000 (from 657,000).
According to FactSet, as of March 28, for Q1 2025, the estimated year-over-year earnings growth rate for the S&P 500 is forecasted to be 7.3%, which would be the seventh-straight quarter of growth for the index. The estimated year-over-year revenue growth of the S&P 500 is projected to be 4.2%, which would be the 18th consecutive quarter of growth for the index. For CY 2025, earnings growth is projected to be 11.5% with revenue growth projected to be 5.4%.
Happening this week…
On Tuesday, the manufacturing PMI for March is expected to remain at 50.3, which marked back-to-back expansionary readings after 26 consecutive months in contraction (below 50). On Thursday, the non-manufacturing PMI for March is expected to decrease to 53.0 from 53.5, which marked eight straight months of expansion. The figure has expanded in 54 of the previous 57 months.
On Wednesday, the ADP employment change may increase to 120,000 from 77,000. On Friday, the unemployment rate is expected to increase to 4.2% from 4.1%, nonfarm payrolls are forecasted to decrease to 128,000 from 151,000, and average hourly earnings month-over-month are expected to remain at 0.3%.
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- The Rockline Team
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