Gary Smith’s Market Take for March 9, 2025

Major Asian indices rose around +1.25% overnight, despite more disappointing data out of China, led by a +2.1% gain in Indian shares. I still don’t believe that the imminent aggressive easing by China that many have been expecting for months will come to fruition in the near-term.

Major European indices are mixed as a +.89% gain in Germany offsets a -.89% loss in Italian shares. The Bloomberg European Financial Services/Bank Index is down -.45%. While the current European “can-kicking” may satisfy politicians’ needs for short-term stability, I continue to believe their recent actions will eventually result in an even more intense debt crisis over the intermediate-term.

Oil continues to trade well, rising +1.0%, despite the big euro currency decline and growing emerging market demand worries. Lumber is falling another -1.2% today and is down -4.2% since Dec. 29th despite the growing optimism for the homebuilding sector. The 10Y Yield is rising just +3 bps today to 2.04%. I would expect to see a much bigger move higher in yield when investors truly believe the US economy is gaining significant upside traction. As well, the Philly Fed/ADS Real-Time Business Conditions Index is down -17.1% over the last 5 days and continues to trend lower from its mid-December peak.

Stocks continue to trade very well. Small-caps are meaningfully outperforming today. I have a small long position in shares of (TFM), which is hitting a new high today. The stock is slightly extended short-term, but is breaking out of its post-IPO range and should outperform over the intermediate-term. I covered all of my index trading hedges this morning, but plan to put them back into place this afternoon. I am positioned 100% net long.