Highlights From Last Week
- S&P Case-Shiller home price index (20 cities)
- Consumer confidence
- PCE index
Most U.S. stock indexes declined for a second straight week, except for the Dow Jones Industrial Average, which rose 0.95%, extending its outperformance. Growth stocks, particularly tech stocks, struggled, with the Nasdaq Composite posting its worst weekly drop since early September. The “Magnificent Seven” stocks fell amid regulatory uncertainty and concerns over the sustainability of the AI-driven rally, with NVIDIA dropping 8.48% after its earnings report. Additionally, tariff fears weighed on equities as former President Trump reiterated plans for new trade levies by March 4.
Canadian stocks rebounded from earlier losses on Friday, closing the day in positive territory as uncertainty surrounding global events originating from Washington’s Oval Office eased. The TSX Composite Index climbed 265.26 points, or 1.1%, to finish the week and month at 25,393.45. Over the past five sessions, the index advanced 246 points, nearly a full percentage point. Despite a strong start to the year with a gain of over 3% in January, the index is on track for a decline of more than 1% in February. On the economic front, Statistics Canada reported that the country’s GDP grew by 0.6% in the fourth quarter, following a 0.5% increase in the previous quarter. The expansion was driven by higher household spending, increased exports, and rising business investment. Meanwhile, the Canadian dollar edged down 0.12 cents to 69.11 cents U.S.
The STOXX Europe 600 Index rose 0.60%, marking its longest weekly gain streak since August 2012, driven by strong corporate results and defense stocks despite U.S. trade policy concerns. Stock performance was mixed: Germany’s DAX gained 1.18%, Italy’s FTSE MIB rose 0.61%, France’s CAC 40 fell 0.53%, and the UK’s FTSE 100 climbed 1.74%.
Eurozone inflation showed mixed results in February. German inflation remained at 2.8% (above estimates), Italy’s stayed at 1.7% (below expectations), and France’s dropped to a four-year low of 0.9%. GDP data confirmed economic contraction in Germany (-0.2%) and France (-0.1%) in Q4 2023.
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, which tracks home prices across all nine U.S. census divisions, recorded a 3.9% annual increase in December, up from 3.7% in the previous month. The 10-City Composite saw a 5.1% year-over-year rise, slightly above the 5% increase in November. Meanwhile, the 20-City Composite posted a 4.5% annual gain, up from 4.3% the prior month. Among the 20 cities, New York led with the highest annual growth at 7.2%, followed by Chicago at 6.6% and Boston at 6.3%. Tampa recorded the weakest performance, with home prices declining by 1.1%.1
In February, consumer confidence saw its largest monthly decline since August 2021, marking the third consecutive drop. The index reached the lower end of its range since 2022, with pessimism growing about future business conditions, employment prospects, and income expectations. While views on present business conditions improved slightly, perceptions of the labor market weakened. The decline in confidence affected all age groups, especially those aged 35-55, and most income groups, except for households earning less than $15,000 or between $100,000–$125,000. Inflation expectations jumped from 5.2% to 6%, driven by persistent inflation, rising household staple prices, and tariff concerns. Mentions of trade, tariffs, and government policies in consumer responses surged. Consumers’ confidence in their financial situation declined from January’s highs, and recession fears hit a nine-month high. Optimism about the stock market weakened, with fewer consumers expecting price increases and more anticipating declines. Expectations for higher interest rates rose, while fewer consumers expected rates to drop. Purchasing plans for homes improved slightly due to lower mortgage rates, but demand for cars and big-ticket items, especially TVs and electronics, declined. Spending priorities shifted towards personal care, healthcare, and entertainment, while interest in streaming, travel, and vacations continued to decline. Consumers’ assessments of current business conditions improved slightly, but labor market confidence declined. Fewer consumers saw jobs as “plentiful,” and more considered them “hard to get.” Expectations for future business conditions, job availability, and income prospects all worsened.2
In January, new orders for manufactured durable goods increased by 3.1% ($8.7 billion) to $286.0 billion, following two consecutive monthly declines. Excluding transportation, new orders remained unchanged, while excluding defense, they rose 3.5%. The increase was primarily driven by transportation equipment, which rose 9.8% ($8.6 billion) to $96.5 billion. Shipments of durable goods increased for the second consecutive month, rising 0.4% ($1.3 billion) to $288.2 billion, following a 0.8% increase in December. Again, transportation equipment led the rise, increasing 1.3% ($1.2 billion) to $94.5 billion.3
For the week ending February 22, the seasonally adjusted initial claims for unemployment benefits rose to 242,000, marking an increase of 22,000 from the previous week’s revised figure. The prior week’s level was adjusted upward by 1,000, from 219,000 to 220,000. The four-week moving average climbed to 224,000, reflecting an increase of 8,500 from the previous week’s revised average, which was adjusted upward by 250, from 215,250 to 215,500. Meanwhile, the total number of continued weeks claimed across all programs for the week ending February 8 reached 2,223,716, an increase of 4,696 from the previous week. In comparison, during the same week in 2024, there were 2,122,829 claims filed across all programs.4
The Federal Reserve’s preferred inflation gauge, the personal consumption expenditures (PCE) price index, rose 0.3% in January, bringing the annual rate to 2.5%. The core PCE, which excludes food and energy, also increased 0.3% for the month and reached 2.6% annually, down from 2.9% in December. Personal income rose sharply by 0.9%, exceeding expectations of 0.4%, but consumer spending declined by 0.2% instead of the forecasted 0.1% increase. The personal savings rate jumped to 4.6%. Goods prices climbed 0.5%, driven by higher vehicle and gasoline costs, while services rose modestly by 0.2%. The data aligns with expectations and suggests the Federal Reserve may hold interest rates steady as officials seek further confirmation of inflation trending toward the 2% target before considering rate cuts. Market expectations for a June rate cut increased slightly, with futures traders now placing the odds above 70%.5
Next week brings key economic data, including US nonfarm payrolls, global PMI surveys, and the ECB’s interest rate decision following updated inflation figures. The US jobs report on Friday will be closely watched, especially after January’s below expected 143k payroll increase and prior months’ revisions. With unemployment dropping to 4.0% and wage growth rising, the data supports the Fed’s cautious approach to rate cuts. However, weaker PMI and consumer confidence data in February suggest economic uncertainty, particularly in the service sector, which has seen slowing growth and employment declines. US businesses cite concerns over government changes, trade policies, and budget cuts, potentially leading to further layoffs.
The global economic outlook will also be assessed through manufacturing and services PMIs, with attention to inflation trends that could impact central bank policies. The ECB, facing persistent service sector inflation, is expected to cut interest rates on Thursday, though upcoming CPI data may influence its decision.
| WK | Year to Date | |
| Dow | 0.95% | 3.05% |
| S&P500 | -0.98% | 1.24% |
| Nasdaq | -3.47% | -2.40% |
| S&P400 Mid-cap | -0.22% | -0.83% |
| Russell | -1.47% | -3.01% |
| TSX | 1.00% | 2.70% |
- https://www.spglobal.com/spdji/en/index-family/indicators/sp-corelogic-case-shiller/sp-corelogic-case-shiller-composite/#overview
- https://www.conference-board.org/topics/consumer-confidence/press/CCI-Feb-2025
- http://www.census.gov/manufacturing/m3/adv/pdf/durgd.pdf
- https://www.dol.gov/ui/data.pdf
- https://www.bea.gov/news/2025/personal-income-and-outlays-january-2025
Important Information:
Warren Gerow is an independent investment wealth consultant to Sightline Wealth Management.
Sightline Wealth Management LP (“Sightline”) is an investment dealer and is a member of the Canadian Industry Regulation Organization (CIRO) and the Canadian Investor Protection Fund (CIPF).
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