Your Weekly Update for Monday, March 24, 2025.
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Mike Elerath
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Mike.Elerath@beaconrwa.com
Bill Roller
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CERTIFIED FINANCIAL PLANNERTM
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bill.roller@beaconrwa.com
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Click on the image below to go to https://youtu.be/BkXuWX1N9V8 to see the video from March 21 in which Mike Elerath, Bill Roller, and Keller Williams Realtor Michael Harding discuss the financial markets and Clark County real estate.
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Summary
Markets were UP SLIGHTLY last week. The Dow Jones Industrial Average was UP 1.20% to 41,985.35 while the S&P500 ended UP 0.50% to 5,667.56. The Nasdaq Composite ROSE 0.17% to 17,784.05. The annual yield on the 30-year Treasury Fell 1.9 basis point(s) to 4.596%.
Economic data included the Federal Reserve keeping rates unchanged, with a balanced commentary about current conditions but noting uncertainty about the economic path ahead. Positive data came in from retail sales and industrial production, in addition to existing home sales and housing starts. However, several regional manufacturing indexes fell back.
Equities rebounded for the first time in a month in the U.S., while international stocks ended flattish. Bonds gained along with falling yields. Commodity prices generally rose, along with stronger energy.
Economic Notes
(0) The March FOMC meeting resulted in no interest rate action, but the formal statement language change toward “uncertainty” having risen was meaningful, and a not-so-subtle reference to potential risks of the administration’s trade policies (and/or communication about such policies). The evolution in the FOMC’s views were clarified by the released dot plot estimates (where the range of member views on possible outcomes widened). In the usual post-meeting press conference, Chair Powell’s comments were a bit more dovish than some expected, which financial markets liked. When asked about the lack of change in the median dot plot estimates, it was noted that the upward revision to inflation and downward shift to growth roughly offset each other—again, keeping things in balance.
How about the change in the pace of quantitative tightening? That does provide some subtle easing effect, as selling fewer bonds to the market reduces supply, which can reduce the risk of long-term yields moving higher as quickly. Powell noted as much, in describing the change as a technical change to guard against removing too much bond market liquidity. This was also likely done to avoid disrupting liquidity conditions during the U.S. debt ceiling debate. Treasury Secretary Bessent and the administration would likely approve, with their stated hopes of moving the 10-Year Treasury yield lower, to ease burdens on business lending and U.S. interest payments.
The theme of balance but uncertainty was echoed by Powell during press conference. On the positive side, Powell noted that the “economy is strong overall,” that labor market conditions “remain solid,” and again referenced their “significant progress” toward their policy goals over the last two years. He continued to highlight the theme that the economy was in a good place, but also the humble reality that he didn’t know what was going to happen with U.S. policies in the four areas of trade, immigration, fiscal policy, and regulation (how could he?), but the net effect of these policies will matter looking forward (so it’s too early to make changes in an anticipatory way). He also downplayed the extreme pessimism of current sentiment surveys, which show spiking inflation in years ahead, as an “outlier” driven by tariff fears.
(0) Retail sales rose by 0.2% in February, well below the median forecast calling for 0.6%, led by a -1% drop in gasoline station sales (due to lower prices) and a half-percent drop in autos/parts. Removing volatile autos from the equation raised sales a tenth to 0.3%, while core/control sales gained a stronger 1.0%, above the 0.4% expected, reversing the -1% decline of the prior month after revisions. Within the core segment, gains were strongest in non-store/internet and health/personal care (each up around 2% rounded), while clothing and sporting goods each fell by about a half-percent each. It’s possible that some of the non-gasoline sales were tied to consumers attempting to front-run the expected imposition of at least some tariffs. Compared to a year ago, overall sales were up 3%, which is about right in line with inflation, implying minimal real growth.
(+) Industrial production rose 0.7% in February, exceeding the median forecast of 0.2%, although that was coupled with a revision downward for the prior month. Manufacturing production rose by 0.9%, with a 12% gain in motor vehicle assemblies, as well as a 2% rise in capex equipment. On the other hand, utilities production fell by over -2%, as winter temperatures moderated in a variety of areas, while mining activity rose 3%. Capacity utilization rose by 0.5% to 78.2%, well above expectations for little change. Over the past year, the most positive contribution continued to be high-tech equipment (up 13%), while auto production remained down (-5%), as did other non-auto production slightly.
(-) The Empire manufacturing index fell by another dramatic -25.7 points in March to a contractionary level of -20.0, well below the -1.9 expected. Within the report, new orders and shipments fell back sharply, as did employment to a lesser degree. Prices paid rose by nearly five points to a strong 45 level. Expectations for business conditions six months out fell by -10 points to a still-expansionary 13. The volatility month-to-month for this regional index continues, which takes away some usefulness, relative to the standard ISM and similar national indexes.
(-) By contrast, the Philadelphia Fed manufacturing index fell by -5.6 points to a still-positive 12.5 level in March, above the 9.0 level expected. The underlying results were mixed, with new orders down -13 points, and shipments down -24 points, but both remained positive. On the other hand, employment rose 14 points further into expansion. Prices paid also rose 8 points further into expansion at 48. Business conditions six-months ahead fell by a sharp -22 points to a still-positive level of 6.
(+) Existing home sales for February rose by 4.2% to a seasonally-adjusted annualized rate of 4.26 mil., reversing the drop the prior month and surpassing the -3.2% decline expected. Single-family gains of 6% offset a drop in condos/co-ops of -10%. Regionally, the West and South were positive, while the Northeast fell slightly. Year-over-year, sales activity remained down -1%. The median existing home sales price was up 4% over the past year to $398,400, representing over a year and a half of consecutive trailing year increases. Unsold home inventory rose 5% on the month to the equivalent of 3.5 months’ supply, which remains tight. Ever optimistic, the NAR noted that, despite little change in mortgage rates, “home buyers are slowly entering the market,” being driven by “more inventory and choices” helping to alleviate pent-up housing demand. Higher prices are certainly a headwind, as are high financing costs, and the lock-in effect of existing homeowners being reluctant to move and take on more expensive financing, as has been widely discussed. This has also been seen by the rising percentage of transactions being first-time buyers.
(+) Housing starts rose by 11.2% in February to a seasonally-adjusted 1.501 mil. units on a seasonally-adjusted annualized basis, well above the 1.4% rise expected, and reversing a similar-magnitude decline of the prior month. Single-family and multi-family starts rose at similar rates, with gains in the Northeast (47%) and South (18%) contributing sharply, while starts in the Midwest fell by -25%. Building permits fell by -1.2% in the month to a rate of 1.456 mil. adjusted units. Much of this was likely weather-related. Starts remained down -3% from a year ago, so the industry remains in catch-up mode relative to national housing needs; multi-family permits are down -13%, in reaction to overbuilding in some parts of the country, such as the Sun Belt.
(-) The NAHB Housing Index for March fell another -3 points to 39, moving even more contractionary, and the lowest level in seven months. Within the report, current sales fell by -3 to 43, sales expectations were steady at a level of 47, while prospective buyer traffic fell by -5 points to 24. It was also noted that a larger number of builders cut home prices. This homebuilder sentiment survey remains depressed due to the high interest rate environment, which weighs on affordability, seen by the home price cuts (albeit likely also with smaller homes being built).
(-) Initial jobless claims for the Mar. 15 ending week rose by 2k to 223k, just below the 224k median forecast. Continuing claims for the Mar. 8 week rose by 33k to 1.892 mil., reversing the decline the prior week, and above the 1.887 mil. expected. Claims were largest in the largest states, which one would expect, with those from Federal employees remaining minimal.
(-) The Conference Board’s Index of Leading Economic Indicators declined -0.3% in February, a bit more than the -0.2% expected, which would have matched the January decline after revisions. For the month, the index was helped by average weekly manufacturing hours, which was more than offset by negative consumer sentiment, ISM manufacturing new orders, and jobless claims. Over the past six months, the LEI fell by -1.0%, which was a stronger pace than the -2.1% drop for the prior six-month period of Feb.-Aug. 2024. The most pronounced semi-annual drivers were slower ISM new orders, consumer sentiment, and an inverted yield curve (10-year minus Fed funds rate) for that time. The Conference Board’s narrative continued to point out headwinds ahead, mentioning the sentiment-based pessimism. However, on the positive side, the indicator’s 6-mo. and 12-mo. growth rates “while still negative, have remained on an upward trend since the end of 2023, suggesting that headwinds in the economy as of February may have moderated compared to last year.” Though, substantial policy uncertainty was highlighted, with the “notable pullback in consumer sentiment and spending since the beginning of the year,” they perhaps surprisingly forecast growth of around 2.0% in 2025. This is roughly around trend.
Market Notes
| Period ending 3/21/2025 | 1 Week % | YTD % |
| DJIA | 1.21 | -0.91 |
| S&P 500 | 0.53 | -3.34 |
| NASDAQ | 0.18 | -7.76 |
| Russell 2000 | 0.65 | -7.51 |
| MSCI-EAFE | 0.78 | 10.26 |
| MSCI-EM | 1.15 | 5.65 |
| Bloomberg U.S. Aggregate | 0.49 | 2.59 |
| U.S. Treasury Yields | 3 Mo. | 2 Yr. | 5 Yr. | 10 Yr. | 30 Yr. |
| 12/31/2024 | 4.37 | 4.25 | 4.38 | 4.58 | 4.78 |
| 3/14/2025 | 4.33 | 4.02 | 4.09 | 4.31 | 4.62 |
| 3/21/2025 | 4.33 | 3.94 | 4.00 | 4.25 | 4.59 |
U.S. stocks snapped a month-long losing streak, with gains in both large and small cap stocks, and value continuing its streak of outperforming growth. By sector, energy, financials, and health care led with gains of one to several percent; materials, consumer staples, and utilities suffered minimal declines of a fraction of a percent. Real estate also declined slightly. Markets turned around from the prior week, bouncing off of -10% correction territory for the time being, helped in mid-week by a more dovish tone about the economy struck by Fed Chair Powell. This was in contrast to some signs of pessimism elsewhere, such as consumer sentiment around the unclear upcoming tariff response. (Although by this morning, some of the administration’s rhetoric about the April 2 trade ‘Liberation Day’ has been toned down a bit.)
Foreign stocks also saw minor gains, with strength in Japan offsetting flattish results in Europe. Uncertainty about trade continues to hover over Europe and Japan both, although the German spending response had been taken positively. The Bank of England, Bank of Japan, and Swedish Riksbank each kept policy interest rates on hold for now, as they absorb changing global growth dynamics. The Swiss National Bank, though, cut by a quarter-percent with low inflationary pressure and higher downside risk. In emerging markets, gains in India, South Korea, and Brazil (despite a percent hike in rates but markets were glad it wasn’t more dramatic) offset declines in China and Turkey (the latter of which fell -20% as the mayor of Istanbul, and opponent of President Erdoğan, was detained on corruption and terrorism charges). Some Chinese industrial and retail sales data came out better than expected, which may have influenced perceptions about the possible robustness of forthcoming government policy stimulus (their announced ‘Special Action Plan’). That plan is intended to boost personal consumption above all else, but details on implementation have been sparce.
Bonds saw positive results across the board last week, as long-term yields declined, with continued investor concerns around the economy. Investment-grade corporates outperformed U.S. Treasuries a bit, as credit spreads came in slightly. With a stronger U.S. dollar, foreign developed market and emerging market bonds were mixed.
Commodities were higher overall for the week, with gains in energy, agriculture, and precious metals, which offset declines in industrial metals. Crude oil prices rose 2% last week to $68/barrel. The oil environment reflected a variety of factors including new sanctions on Iran and OPEC+ production cuts, along with the prior weekend’s U.S. military strikes against Houthi positions, following the resumption of their targeting of ships in the Red Sea. The risk, of course, is that a major transport route for a good proportion of the world’s oil is cut off for some period of time. However, fears of a slowing global economy and impact on demand offset these supply factors somewhat.
Mortgage Rates
“The 30-year fixed-rate mortgage has stayed under 7% for nine consecutive weeks, which is helpful for potential buyers and sellers alike,” said Sam Khater, Freddie Mac’s Chief Economist.
The 30-year FRM averaged 6.67% as of March 20, 2025, up slightly from last week when it averaged 6.65%. A year ago at this time, the 30-year FRM averaged 6.87%.
The 15-year FRM averaged 5.83%, up slightly from last week when it averaged 5.80%. A year ago at this time, the 15-year FRM averaged 6.21%.
Freddie Mac’s Primary Mortgage Market Survey® is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20% down and have excellent credit. Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Borrowers may still pay closing costs which are not included in the survey.
Through our relationship with Mortgage Window, Inc. (NMLS#2485156) in Vancouver, Washington we originate residential and reverse mortgages.
Selected Cryptocurrencies
| Symbol | Name | Price | 24h % | 7d % | Market Cap | Volume(24h) |
| BTC | Bitcoin | $87,414.56 | 3.14% | 4.61% | $1,734,421,914,861 | $22,427,045,150 |
| ETH | Ethereum | $2,084.67 | 3.70% | 8.64% | $251,493,219,516 | $11,809,876,133 |
| XRP | XRP | $2.45 | 2.23% | 4.28% | $142,735,301,432 | $2,877,407,936 |
| BNB | BNB | $628.21 | 1.01% | -0.66% | $89,504,045,101 | $1,378,831,831 |
| SOL | Solana | $142.68 | 7.08% | 10.59% | $72,961,131,692 | $3,314,457,442 |
| DOGE | Dogecoin | $0.18 | 3.20% | 1.91% | $26,216,141,880 | $782,069,371 |
| ADA | Cardano | $0.73 | 2.71% | 0.69% | $25,723,248,831 | $765,972,382 |
| TRX | TRON | $0.23 | -2.48% | 6.00% | $21,688,956,319 | $637,267,740 |
| LINK | Chainlink | $15.16 | 5.64% | 9.60% | $9,967,741,977 | $344,153,443 |
| TON | Toncoin | $3.68 | 0.34% | 7.40% | $9,140,919,562 | $120,354,704 |
| LEO | UNUS SED LEO | $9.77 | -0.07% | -0.44% | $9,030,143,998 | $1,880,784 |
| AVAX | Avalanche | $21.62 | 10.00% | 16.08% | $8,997,072,505 | $433,169,486 |
| XLM | Stellar | $0.29 | 3.47% | 5.77% | $8,901,873,737 | $178,310,415 |
| HBAR | Hedera | $0.19 | 4.49% | 0.21% | $8,112,202,311 | $200,498,495 |
| SHIB | Shiba Inu | $0.00 | 2.15% | 1.82% | $7,801,957,311 | $145,382,530 |
| SUI | Sui | $2.39 | 5.50% | 4.88% | $7,590,246,325 | $637,269,984 |
| DOT | Polkadot | $4.68 | 4.84% | 6.97% | $7,315,828,769 | $183,675,520 |
| LTC | Litecoin | $93.46 | 1.27% | 0.13% | $7,061,944,597 | $463,544,015 |
Information current as of 5:40 AM PDT, Monday, March 24, 2025. Source: https://coinmarketcap.com
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Sources: Ryan Long, CFA, FocusPoint Solutions, American Association for Individual Investors (AAII), Associated Press, Barclays Capital, Bloomberg, Citigroup, Deutsche Bank, FactSet, Financial Times, Goldman Sachs, JPMorgan Asset Management,
MarketfieldAsset Management, Morgan Stanley, MSCI, Morningstar, Northern Trust, Oppenheimer Funds, PIMCO, Standard & Poor’s, StockCharts.com, The Conference Board, Thomson Reuters, T. Rowe Price, U.S. Bureau of Economic Analysis, U.S. Federal Reserve, Wall Street Journal, The Washington Post. Index performance is shown as total return, which includes dividends, with the exception of MSCI-EM, which is quoted as price return/excluding dividends. Performance for the MSCI-EAFE and MSCI-EM indexes is quoted in U.S. Dollar investor terms.
The information above has been obtained from sources considered reliable, but no representation is made as to its completeness, accuracy or timeliness. All information and opinions expressed are subject to change without notice. Information provided in this report is not intended to be, and should not be construed as, investment, legal or tax advice; and does not constitute an offer, or a solicitation of any offer, to buy or sell any security, investment or other product. FocusPoint Solutions, Inc. is a registered investment advisor.
Notes key: (+) positive/encouraging development, (0) neutral/inconclusive/no net effect, (-) negative/discouraging development.