Welcome to the weekly Velaris Trading Newsletter.
Brief Overview
What’s Coming in Week 13?
The market enters Week 13 with the economy still center stage. Friday's PCE report will be the highlight, supported by GDP data on Thursday and PMI and confidence readings earlier in the week. With fear of a recession, investors remain cautious ahead of crucial macro data.
Weekly Market Wrap:
Week 12 saw markets range-bound despite a brief rally post-FOMC. The Fed kept rates at 4.5% and slightly eased QT. Powell's cautious optimism clashed with lingering structural risks. The S&P 500 stayed below 5700, while Trump's tariffs and a slowing economy heightened fragility.
Earnings Highlights:
GameStop Corp. (GME), Cintas Corp. (CTAS), Paychex Inc. (PAYX), Dollar Tree Inc. (DLTR), Chewy Inc. (CHWY) und Lululemon Athletica Inc. (LULU).
What does week 13 bring?
Monday, March 24:
S&P Global US Manufacturing & Services PMIs: Expected at 51.9 and 51.2 respectively. A drop could indicate early economic softening.
Earnings: KB Homes (KBH)
Tuesday, March 25:
New Home Sales: Expected at 0.68M, flat vs. prior month, showing stagnation in housing momentum.
Consumer Confidence: Forecast at 94, down from 98.3, indicating declining optimism.
Earnings: McCormick (MKC), GameStop (GME)
Wednesday, March 26:
Durable Goods Orders: A -0.7% drop expected, indicating weaker business investment.
MBA Mortgage Applications Index: Will reflect demand for housing and refinance activity.
Earnings: Cintas (CTAS), Paychex (PAYX), Dollar Tree (DLTR), Chewy (CHWY)
Thursday, March 27:
Initial Jobless Claims: Forecasted at 225K, still healthy but edging up.
Q4 GDP (Final): Expected to decline from 3.1% to 2.3%, reinforcing the slowdown narrative.
Wholesale Inventories: Expected at 0.4%, giving insight into supply chain health.
Earnings: Lululemon (LULU)
Friday, March 28:
PCE Price Index (Feb): Core inflation expected at 0.3% MoM. This is the Fed’s preferred inflation gauge and the week’s most critical release.
Personal Income & Spending: Expected at 0.4% and 0.6%, respectively. High spending despite slowing income growth would raise inflation concerns.
Earnings: None
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.
Weekly Market Wrap
Markets in Week 12 responded to a highly anticipated FOMC meeting and a mix of economic signals. The Fed held rates at 4.5% and slightly slowed the pace of QT, signaling a mild shift but stopping short of pivoting. Powell’s speech struck a cautious tone: no immediate recession, but no urgency for rate cuts either. The market initially pumped on this news but failed to hold gains, signaling a lack of conviction.
Political risks resurfaced as Trump confirmed tariffs set to begin in April. Despite the Fed’s neutral stance, geopolitical and trade tensions threaten to weigh on global sentiment. The SPX remained stuck in a range below 5700, with downside risks toward 5430 or 5250 if macro headwinds strengthen.
Meanwhile, crypto sentiment remained weak. While structurally pro-crypto developments are emerging in U.S. politics, traders remain cautious amid low volume and fragile momentum.
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Crypto & Market Outlook
This week will once again center on inflation data, particularly Friday’s PCE. If the Fed’s preferred inflation gauge shows signs of easing, rate cut hopes for summer could come true. Conversely, sticky inflation would affirm the "higher for longer" narrative.
The GDP print on Thursday is another critical check on U.S. economic momentum. A sharp slowdown from Q4 could reignite recession fears, especially as consumer confidence trends lower and labor market cracks emerge.
Markets will also respond to PMI data early in the week, which could provide leading insight into the health of the services and manufacturing sectors.
Key Catalysts to Watch:
PCE Price Index: Most important inflation print of the week. A hot number = risk-off.
GDP Final Read: A steeper slowdown = economic weakness and Fed pressure.
Consumer Confidence: Will reflect how households are reacting to inflation and recession fears + policy.
PMI Readings: Leading indicators of growth. Weak data could confirm slowdown.
Crypto Sentiment: Still weak; any bounce will need macro confirmation.
Conclusion
Week 13 could become a turning point. Inflation data and GDP numbers will likely dictate short-term direction, and a miss could renew fears. Equities remain fragile, tech is overextended, and macro pressure is mounting. Crypto needs a risk on environment to regain momentum.
Key Takeaways:
PCE on Friday will likely drive market sentiment.
A falling GDP print signals clear economic softening.
Consumer confidence is deteriorating, matching weak labor trends.
Crypto remains sentiment-driven and vulnerable.
Tariff risks and Fed ambiguity keep markets in a tight range.
Stay focused. Watch data. Preserve capital. Patience wins.
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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