Welcome to the weekly Velaris Trading Newsletter.
Brief Overview
What’s Coming in Week 11?
Inflation remains the central theme: The CPI report on Wednesday and the PPI report on Thursday will be crucial in determining whether inflation continues to decline or proves to be more persistent than expected. Additionally, labor market data and consumer confidence will be key areas of focus.
Weekly Market Wrap:
Markets experienced a volatile week marked by political developments and mixed economic data. Expectations for rate cuts were slightly dampened, but labor market weakness could still push the Federal Reserve toward an earlier policy easing.
Earnings Highlights:
Key earnings this week include reports from Oracle, Adobe, UiPath, and DocuSign. Tech stocks remain in the spotlight, as they have been a major support for the market thus far.
What does week 11 bring?
Monday, March 10:
No major economic reports
Earnings Reports
Oracle Corp. (ORCL), Asana Inc. (ASAN)
Tuesday, March 11:
JOLTs Job Openings (JAN)
Provides insights into the U.S. labor market and labor demand.Earnings Reports
Ferguson Enterprises Inc. (FERG), Ciena Corp. (CIEN)
Wednesday, March 12:
Consumer Price Index (CPI)
Expected at 2.9%, slightly lower than last month’s 3.0%. The most important inflation indicator of the week.Core CPI
Expected at 3.2%, also showing a slight decline compared to the previous month.Earnings Reports
Adobe Inc. (ADBE), UiPath Inc. (PATH), SentinelOne Inc. (S)
Thursday, March 13:
Producer Price Index (PPI) MoM
Expected at 0.3%, indicating the trend in producer prices. A decline would be a positive sign for inflation control.Initial Jobless Claims
Expected at 225K, reflecting the state of the labor market.Earnings Reports
DocuSign Inc. (DOCU), Rubrik Inc. (RBRK)
Friday, March 14:
University of Michigan Consumer Sentiment - Preliminary
Expected at 64, an indicator of consumer confidence.Earnings Reports
Li Auto Inc. (LI), Gogo Inc. (GOGO)
IMPORTANT: The expectations of the respective economic data may change in the course of the week. They will be updated in the Discord and will be discussed in more detail.
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Weekly Market Wrap
This week was marked by high volatility and political developments. The dominant topic was Trump’s first "Crypto Summit" at the White House. Expectations for a Bitcoin-friendly policy were high, but the announcement of a strategic Bitcoin reserve of 200,000 BTC turned into a classic "sell the news" event. Many took advantage of the price surge to take profits, putting pressure on the market.
On the macroeconomic side, mixed signals emerged: The U.S. labor market remained weaker than expected. Only 151,000 new jobs were created in February (compared to the expected 170,000). The unemployment rate rose from 4.0% to 4.1%. This slowdown could prompt the Fed to consider rate cuts sooner, though Fed Chair Powell remains cautious.
The U.S. dollar’s weakness and ongoing trade tensions with China continue to create uncertainty. A potential trade war could lead to a larger market correction.
Crypto & Market Outlook for Week 11
Next week will be all about inflation data. The CPI report on Wednesday will be the key event: If inflation declines more than expected, it could stabilize markets and reinforce expectations for an earlier rate cut. However, if inflation remains stubborn, renewed selling pressure may emerge.
Factors that could move the market this week:
CPI & PPI Reports: If inflation data comes in above expectations, it could reinforce the "higher for longer" Fed policy and dampen rate cut hopes.
Labor Market Data: Continued labor market weakness could accelerate rate cuts.
Trade Policy: Further escalations in U.S. trade disputes could heighten volatility.
Crypto: Markets remain dependent on regulatory developments and macroeconomic factors.
Conclusion
The upcoming inflation data will determine whether the Fed maintains its "higher for longer" policy or moves toward an earlier rate cut. If CPI and PPI figures come in lower than expected, it would be bullish for risk assets. Otherwise, further selling pressure may follow.
Key Takeaways:
CPI & PPI in Focus: These reports will dictate market sentiment.
Labor Market Under Watch: A weaker labor market could reinforce rate cut expectations.
Trump & Trade Policy: New tariffs or sanctions could add uncertainty.
Crypto Remains Volatile: Regulatory clarity remains a key factor.
Markets are heading into a crucial week, stay alert!
Here's to a successful week, and stay tuned for more weekly outlooks on the crypto and financial markets.
Best regards,
your Velaris Trading Team!
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