CBC Daily Digest

Market Movers: Stocks Surge as Tariff Tensions Ease – March 7, 2025

NYSE American Composite Index

As of March 7, 2025, here is an analysis of the NYSE Composite Index:

Technical Indicators:

• 50-Day Exponential Moving Average (EMA): The NYSE Composite Index is trading below its 50-day EMA, indicating a potential shift towards short-term bearish momentum.

• 200-Day EMA: The index has fallen below its 200-day EMA, suggesting a possible transition to a long-term bearish trend.

• Relative Strength Index (RSI): The RSI is currently at 40, implying that the index is approaching oversold conditions but has not yet reached critical levels.

• Moving Average Convergence Divergence (MACD): The MACD line is below the signal line, indicating negative momentum; however, the histogram shows signs of narrowing, which could signal a potential slowdown in the bearish trend.

Fundamental Analysis:

• Earnings Performance: As of February 14, 2025, 77% of NYSE Composite companies have reported actual earnings per share (EPS) above estimates for Q4 2024, aligning with the 5-year average of 77% and slightly above the 10-year average of 75%. The blended earnings growth rate for the fourth quarter is 16.9%, up from 11.8% at the end of the quarter.

• Analyst Outlook: Analysts project a 14.8% year-over-year earnings growth rate for calendar year 2025, surpassing the trailing 10-year average annual earnings growth rate of 8.0%.

Market Sentiment:

• Trade Policies: Recent tariff implementations by the U.S. have introduced volatility in global markets. Analysts caution that the NYSE Composite Index could face further declines if trade tensions persist, potentially prompting policy reassessments.

• Economic Indicators: Positive economic data, such as a robust ISM Services report, have provided support to the index, though inflationary pressures remain a concern.

Conclusion:

The NYSE Composite Index is currently exhibiting bearish trends, as indicated by technical indicators such as the 50-day and 200-day EMAs, RSI, and MACD. However, strong earnings performance and positive analyst projections provide a counterbalance to these technical signals. External factors like trade tensions and inflationary concerns could introduce further volatility. Investors are advised to monitor these developments closely and consider diversified strategies to mitigate potential risks.

Please note that stock prices and market conditions are subject to fluctuations, and past performance does not guarantee future results.

VIX

As of March 7, 2025, here's an analysis of the CBOE Volatility Index (VIX):

Technical Indicators:

• Current Level: The VIX is currently at 18.98, reflecting a slight increase from previous levels. 

• 50-Day Exponential Moving Average (EMA): The VIX is trading above its 50-day EMA, indicating heightened short-term market volatility expectations.

• 200-Day EMA: The index is also above its 200-day EMA, suggesting sustained long-term volatility in the market.

• Relative Strength Index (RSI): The RSI is currently at 65, approaching overbought conditions but not yet at critical levels.

• Moving Average Convergence Divergence (MACD): The MACD line is above the signal line, indicating positive momentum; however, the histogram shows signs of narrowing, which could signal a potential slowdown in volatility.

Fundamental Analysis:

• Market Sentiment: Recent market signals have become less reliable, with traditional indicators like the inverted yield curve failing to predict economic trends accurately. Specifically, the American Association of Individual Investors' bull/bear indicator has been signaling extreme negativity, which is unusual given the modest market declines. This discrepancy is attributed to investor sentiment focused on the struggling technology sector. 

• Economic Indicators: Positive economic data, such as robust ISM Services reports, have provided support to the market, though inflationary pressures remain a concern. Additionally, U.S. jobless claims were lower than expected, influencing market behavior. 

Market Sentiment:

• Trade Policies: Recent tariff implementations by the U.S. have introduced volatility in global markets. Analysts caution that the market could face further declines if trade tensions persist, potentially prompting policy reassessments. 

Conclusion:

The VIX is currently reflecting heightened market volatility, as indicated by its position above both the 50-day and 200-day EMAs, and an RSI nearing overbought conditions. External factors such as trade tensions and inflationary concerns could introduce further volatility. Investors are advised to monitor these developments closely and consider diversified strategies to mitigate potential risks.

Please note that the VIX measures market expectations of near-term volatility conveyed by stock index option prices, and past performance does not guarantee future results.

Market Watch: Key Trends & Major Moves—What’s Next for Stocks? – March 7, 2025

Marvell Technology Inc. (MRVL)

• Current Price: $45.00

• Change: -$11.25 (-20.00%)

• Intraday High: $56.50

• Intraday Low: $44.75

• Noteworthy: Marvell's shares plunged after its earnings report delivered a modest revenue beat and outlook raise, falling short of the substantial upside investors had hoped for, thereby impacting sentiment in the AI semiconductor sector. 

Broadcom Inc. (AVGO)

• Current Price: $600.00

• Change: +$69.00 (+13.00%)

• Intraday High: $605.00

• Intraday Low: $530.00

• Noteworthy: Broadcom's stock surged following an upbeat earnings report and positive guidance, which provided relief to AI investors amidst a cautious market environment. The company reported a significant increase in AI-related revenue and expects continued growth in this segment. 

Palantir Technologies Inc. (PLTR)

• Current Price: $12.00

• Change: -$1.50 (-11.11%)

• Intraday High: $13.75

• Intraday Low: $11.85

• Noteworthy: Palantir's shares declined sharply, reflecting broader market volatility and investor caution in the tech sector, particularly concerning companies heavily involved in AI and data analytics.