Weekly Market Pulse: A Discounting Mechanism

2025-03-17 13:25:00 ET

Summary

• Job openings rose, there was no rise in jobless claims even after the large layoffs in the government sector, and the inflation reports were better than expected.
• The bad news for stock investors is that corporate profit margins are probably going to come down. The good news is that margins are near all-time highs so the damage might not be too severe.
• Value stocks outperformed again last week as they have since the correction started. Small cap stocks continue to underperform but also continue to offer the best values in the market.

There wasn’t a lot of economic news last week, but it was largely as expected and seemed pretty good. Job openings rose, there was no rise in jobless claims even after the large layoffs in the government sector, and the inflation reports were better than expected. What’s not to like? We didn’t get any big moves in bonds or currencies in response, so market expectations regarding growth and inflation were essentially unchanged. So why did stocks sell off another 2.3%?...

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