The recent downward revision of estimates for US economic output in the first quarter remains apparent, according to the updated median nowcast data collected by CapitalSpectator.com. The sluggish median prediction for the upcoming release of the official Q1 GDP report indicates that the economy is expected to continue its growth during the first three months of 2025. Nonetheless, the decline in estimates over the last few weeks underscores a heightened risk for Q2 and the following periods.
US retail sales showed a smaller rebound than anticipated in February. The 0.2% increase last month reflects a modest recovery from January’s significant drop. “It’s not an impressive report, but remaining in positive territory is a silver lining amidst consumer pessimism about the future,” stated Robert Frick, corporate economist at Navy Federal Credit Union. “The primary driver of consumer spending remains consumer income, which is experiencing healthy growth and saw a remarkable spike in January.”
The appetite for risk has declined in recent weeks, with the sharpest selling predominantly confined to US stocks in year-to-date comparisons. Conversely, other major markets across the globe continue recording gains in 2025, according to a selection of ETFs as of Friday’s closing (Mar. 14). The relative strength of international markets has preserved the resilience of global asset allocation strategies. However, rising concerns over a potential global trade war have dampened confidence about the near-term outlook.
US consumer sentiment has continued to decline in March, according to the University of Michigan’s survey. This month’s drop has been widespread, affecting various age groups, educational backgrounds, income levels, wealth statuses, geographical locations, and political affiliations. “Sentiment has diminished for three consecutive months and currently stands 22% lower than in December 2024,” noted the survey’s director. “While current economic conditions have remained stable, expectations regarding the future have worsened across several areas of the economy, including personal finances, employment markets, inflation rates, business conditions, and stock prices.”
● How Not To Invest: The Ideas, Numbers, and Behaviors that Destroy Wealth – and How to Avoid Them
Barry Ritholtz
Interview with author via Prof G podcast
Barry Ritholtz, the co-founder, chairman, and chief investment officer of Ritholtz Wealth Management, and host of the Masters in Business podcast, joins Scott to discuss his new book, How Not to Invest: The Ideas, Numbers, and Behaviors that Destroy Wealth and How to Avoid Them. They explore why diversification is seen as both mundane and appealing, the current valuations of the U.S. market, and whether the alternative investment industry is among the largest scams in economic history.
On Thursday, March 13, the US stock market dipped, ending the day 10.1% below its previous peak – a decline that many analysts classify as a “correction,” which typically ranges from 10% to 20%. A “bear market,” according to Wall Street terminology, is identified when the drop exceeds 20%. Although the term “bear market” is not currently applicable, stocks are undeniably on the defensive. However, certain sectors within global markets remain stable or are even rising. Here’s a brief overview highlighting a selection of recent winners based on a group of ETFs through yesterday’s close.
The US stock market has entered correction territory. The S&P 500 Index closed on March 13, posting a 10.1% drop from its previous record high. “The escalating tariff wars are becoming increasingly unpredictable and uncertain, which negatively impacts stocks,” remarked Jed Ellerbroek, portfolio manager at Argent Capital Management.
The premium for the US 10-year Treasury yield increased in February, reaching the highest spread since 2008. This estimation is derived from the average “fair value” calculations using three different models analyzed by CapitalSpectator.com.
US consumer inflation has decreased more than expected in February. The Consumer Price Index rose by 2.8% last month compared to the previous year. The core CPI, which excludes food and energy for a clearer trend analysis, dived to 3.1%. While this slower pace is a welcome change after months of persistent inflation, the February figures “do not account for future developments or previous tariff impacts,” warned Kevin Gordon, senior investment strategist at Charles Schwab. “The uncertainties tied to economic policies are currently more influential in the market than any single CPI reading.”
The Federal Reserve may exercise caution before implementing the next adjustment in monetary policy, but the Treasury market is already responsive, swiftly adapting to shifting economic expectations that reflect forecasts of weaker growth or potential downturns.
This article provides a snapshot of the current state of the US economy, highlighting recent trends in GDP forecasts, retail sales, consumer sentiment, and inflation. The evolving landscape calls for vigilance as shifting economic indicators could impact future financial strategies and investment decisions.
