Weekly Market Insight

It is with great pride and joy that the team at Poljak Group Wealth Management celebrates a special milestone for my brother and business partner, Denis, who has recently been promoted to Executive Managing Director at Steward Partners. We’re deeply gratified to be affiliated with Steward Partners; as one of the fastest growing independent wealth management firms in the nation, this acknowledgement of his hard work, steadfast dedication to our clients, and achievement in our industry marks a “first” in naming an Executive Managing Director for our region. We’re excited about our affiliation with Steward Partners, Raymond James, and our full network of support— and our work together in future as we continually strive to achieve the best possible results for our clients.

Congratulations, Denis, and thank you for your extraordinary performance and ongoing commitment to helping ensure success for our clients and community!

Today's Market Recap

Dow +0.50%, S&P 500 +0.83%, Nasdaq +1.38%, Russell 2000 +1.12%

US equities were higher in Monday trading as stocks reversed earlier declines on latest dovish Iran developments and ended near best levels. Big tech all higher, while retail-investor favorites, most shorted, high-beta stocks, growth, momentum all rallied as well. Other outperformers included memory, industrial metals, E&Cs, travel and leisure, transports, Laggards included energy, A&D, media, telecom, MCOs, multiline insurance, payments, protein. Treasuries firmer with curve flattening; yields down 4-5 bp at long end. Dollar index down 0.2%, weaker on the major crosses. Gold finished down 1.1%, though cut into decline after settlement. Silver was up 0.2%, though up over 2.5% after close. Bitcoin futures up 1.1%. WTI crude settled up 4.3% in very volatile trading, though now down over 5% (and Brent down over 9%); earlier crossed $100/barrel for the first time since July 2022. (FactSet)
Stocks reversed earlier declines after Trump told CBS News war with Iran could be over soon. Trump said he believes war is very complete, added the US is very far ahead of its initial 4-5 week timeframe for the conflict. Trump also said he is thinking of taking over the Strait of Hormuz, warning Iran it would be the end of their country if they tried to continue attacks in Strait. Trump also scheduled to hold a news conference tonight at 4:30PM CT. Stocks rallied and oil plunged following the late session update, reversed earlier risk-off move tabbed to unsettled geopolitical backdrop and WTI spike above $100/bbl (though stocks had pared losses and oil had pared gains through the session on buy-the-dip momentum, expectation for G7 and/or Trump to announce measures to ease oil price pressure). Early reads called latest comments Trump's attempt at an off-ramp after recent media reports focused on lack of near-term resolution to conflict. Also comes after focus on affordability concerns (notably energy costs), market pricing more hawkish Fed rate cut path, and unpopularity of US engagement with Iran, particularly with midterm elections looming. Resilience narrative still getting a hearing amid a solid economic backdrop and continued expectations for double-digit Q1 earnings growth; analysts also note US has been a relative outperformer. (FactSet)

Last Week's Market Recap (Monday, March 2nd - Friday, March 6th)

Dow (3.01%), S&P 500 (2.02%), Nasdaq (1.24%), Russell 2000 (4.07%)

US equities were lower last week, with the S&P 500 down for a second-straight week, posting its worst performance since October. The Nasdaq Composite was off for a second-straight week, though was a relative outperformer. The small-cap Russell 2000 was down for a second-straight week and posted its worst weekly performance since Apr-25. (FactSet)
The Mag 7 was mixed. Semis and other AI-linked groups were also weaker, but software extended its recent rebound. Other underperformers included precious metals miners, industrial metals, transports, machinery, travel and leisure, homebuilders, building materials, funds/PE, IBs, and banks. Outperformers included energy, commodity chemicals, financial data, software, discounters, telecom, and grocers. (FactSet)
Treasuries sold off sharply, with the 2Y yield up 17 bp to 3.56% and the 10Y up 18 bp to 4.14%. The dollar index was up 1.4%, its best week since Aug-25. Gold was down 1.7%. Silver was down 2.6%, its first loss in four weeks. WTI crude was up 35.6%, its biggest weekly jump on record (back to 1983). (FactSet)

S&P 500 Sector Performance (Source: FactSet)

Outperformers: Energy +0.97%, Tech (0.36%), Consumer Disc. (1.44%), Financials (1.76%)
Underperformers: Materials (7.15%), Consumer Staples (4.91%), Healthcare (4.64%), Industrials (4.09%), Real Estate (2.30%), Utilities (2.14%), Communication Services (2.07%)

What happened last week?

The Iran conflict was the big story of the week. The US and Israel attacked Iran over the weekend, killing Iran's Supreme Leader. Iran struck multiple US bases and embassies in the region, as well as regional oil infrastructure. The Strait of Hormuz was also effectively closed, which has led to growing fears around production shut-ins. Qatar's energy minister warned Friday that war in the Middle East could lead all Gulf energy exporters to shut production within days and drive oil to $150 a barrel (FT). Media reports said Kuwait has curtailed production at certain fields as storage has filled (link).
Markets initially shook off the attack, though slipped throughout the week. Energy fared best as oil jumped above $90 a barrel for the first time since Oct-23 (the dollar was also a beneficiary of oil spike). Treasuries sold off sharply, with the 2Y yield up 17 bp and 10Y yield up nearly 20 bp for the week.
The market also priced in a flatter Fed rate cut path as the week's events unfolded, with pricing now suggesting ~39 bp of cuts through year-end, down from 55 bp a week ago. FOMC voters Kashkari and Williams were among those that suggested the Fed could pause as it gains clarity on energy prices following the attack (Bloomberg). However, Governor Waller played down the inflation impact from the war, and the Fed shouldn't sit on its hands if the numbers aren't good (Bloomberg). There was also a press focus on how geopolitics and an increasingly hawkish FOMC composition has added challenges to Warsh's path to rate cuts this year (Bloomberg). (FactSet)
The Trump administration attempted to calm concerns around oil, proposing several measures to help lower prices, including shipping insurance and easing measures restricting flows (the US last week issued a temporary waiver for Indian refineries to buy Russian oil to ease supply pressures). However, the White House rejected intervening in oil futures (Bloomberg), while tapping the SPR is unlikely an option (FT). (FactSet)
The market was also looking for off-ramp opportunities for the Trump administration, though that was somewhat dashed last Friday after Trump ruled out negotiations and demanded Tehran's "unconditional surrender." US Central Command also estimated operations to last at least 100 days, possibly through September (Politico). Fears that the conflict turns into a wider regional war remained a key overhang as well (Axios). (FactSet)
Street strategists continued to point out that geopolitical shocks have historically been a good dip buying opportunity. Morgan Stanley analysts noted that at a 1m/6m/12m time horizon post-geopolitical events in the Middle East, the S&P 500 has been up 2%/6%/8%, on average. Wells Fargo also noted the S&P 500 rallied 16% during the first Gulf War and 14% in the first three months following the second Gulf War. (FactSet)
The macro resilience theme was upended by Friday's February payrolls report, which showed a -92K decline, missing consensus for a +55K gain, and a -69K downward revision for the prior two months. January retail sales were mixed, declining on a headline basis, but the control group was in line. Economic data earlier in the week were stronger, including February ISM manufacturing expanded for a second-straight month, while ISM services jumped to the highest level since Aug-22. (FactSet)

This week

This week's macro calendar includes Tuesday's February NFIB Small Business index and February existing home sales; Wednesday's February CPI; Thursday's initial claims and January housing starts; and Friday's January durable goods, second reading of Q4 GDP, January core PCE, and March preliminary Michigan consumer sentiment and January JOLTS job openings. (FactSet)
Treasury auctions this week include Tuesday's $77B sale of 2Y notes, Wednesday's $78B sale of notes, and Thursday's $49B auction of 7Y notes. (FactSet)

Key Dates/Data Releases for this week (Source: Market Week)

3/10: Existing home sales
3/11: Consumer Price Index, Treasury statement
3/12: Housing starts, international trade in goods and services, Producer Price Index
3/13: Gross domestic product, Personal Income and Outlays

It is our pleasure to serve you! We created Market Insight to keep you informed and up to date on our current industry focus, as well as areas of concern and interest to our firm and clients. Our team will continue to closely monitor market and economic news and trends; we are actively tracking ongoing developments in the Middle East and other parts of the world and will share with you significant economic and market impacts.

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