BofA estimates a third of last year’s equity wealth buildup could be gone. (0:15) PMI figures indicate GDP below 2% in Q1. (0:44) Boeing snags an upgrade. (2:57) Show NotesFord F-150 faces regulatory investigationEpisode transcripts: seekingalpha.com/wsb Sign up for our daily newsletter here and for full access to analyst ratings, stock quant scores, dividend grades, subscribe to Seeking Alpha Premium at seekingalpha.com/subscriptions.
Full Episode
Welcome to Seeking Alpha's Wall Street Lunch, our afternoon update on today's market action, news, and analysis. Good afternoon. Today is Monday, March 24th, and I'm your host, Kim Kahn. Our top story so far. We're mixing things up and starting with the Wall Street Research Corner today. U.S.
investors are set to see a decline in stock-based wealth of a whopping $3 trillion for Q1 2025, according to estimates from B of A using private client equity data. That's about a third of the $9 trillion that household equity wealth rose in 2024 when it climbed to about $56 trillion, strategist Michael Hartnett said. U.S.
fiscal, monetary, and trade policy are currently hawkish, while the yield curve is set to invert, Hartnett noted. Growth numbers will also likely come with some sticker shock, as the latest PMI figures showed that GDP will likely come in at an annual rate below 2% for Q1. At face value, the March S&P Global US Composite PMI topped estimates thanks to a rebound in services activity.
The Flash Composite rose to 53.5 from 51.6 in February. The services PMI came in at 54.3 versus 51.2 consensus and 51 in the previous month, but the manufacturing PMI clocked in at 49.8 versus 59.1 expected and 52.7 prior.
Chris Williamson, chief bureau economist at S&P Global Market Intelligence, said, "...a welcome upturn in service sector activity in March has helped propel stronger economic growth at the end of the first quarter."
However, the survey data are indicative of the economy growing at an annualized 1.9% rate in March and just 1.5% over the quarter as a whole, pointing to a slowing of GDP growth compared to the end of 2024. A key concern over tariffs is the impact on inflation, with the March survey indicating a further sharp rise in costs as suppliers pass tariff-related price hikes on to U.S.
companies, he added. Firms' costs are now rising at the steepest rate for nearly two years, with factories increasingly passing these higher costs on to customers. Thankfully, from the Federal Reserve's perspective, services inflation remains relatively subdued, but this reflects the need to keep prices low amid weak demand, which will harm profits.
Hopes that tariffs will be more targeted than scattergun have brought out stock buyers today. All the major averages are higher, and the S&P 500 had one of its best gap-up opens in years. Continuing the risk-on move, treasury prices are lower and yields are back up, with the 10-year back above 4.3%.
Seeking Alpha Analyst Market Gauge notes that the market has been dragged down by the magnificent 7, but the market in other areas is not as damaged. For example, the equal weight SPY, or SP, is essentially flat on the year, and the cyclical sectors are up 3%. Additionally, the risk-off sectors are up more than 4% on the year.
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