3/17/2025

Good Morning.

Gold reached $3,000 an ounce for the first time ever on March 14th. YTD gold has risen 12.3%. A central bank buying spree, fear of economic instability, and rapidly shifting rules of world trade have all contributed to this increase. 

(Gold Price YTD)

Lego had a record revenue of $10.3 in 2024. Its revenue grew 13% while other leading toymarkers revenue declined. This growth in sales has been global, not just in the U.S. market. Lego is continuing to heavily invest in digital products and notable brand partnerships.

Link to Lego Earnings report:https://www.lego.com/cdn/cs/aboutus/assets/blt1cdf90a38318ef56/the_LEGO_Group_Annual_Report_2024.pdf

Treasury Secretary Scott Bessent believes that the market is undergoing a correction and maintains a positive outlook on the U.S. economy. He stated “I‘m not worried about the markets. Over the long term, if we put good tax policy in place, deregulation and energy security, the markets will do great.” 

In today’s newsletter we will cover: 

• Markets

  • Market Turbulence

  • S&P 500 Correction

  • Sources of Volatility

  • U.S. Consumer 

  • Small-Cap Sell-Off Intensifies

  • The FED

• Deal of the week: Poppi $1.5 B acquisition 

• CPI Insight

• What to look out for this week!

Markets 

• Market Turbulence: The S&P 500 officially entered correction territory on Thursday, joining the NASDAQ after falling 10% from its record high set three weeks prior. Despite a strong rebound of 2.1% on Friday, the index still closed the week down approximately 2.2%, marking its fourth consecutive weekly decline.

• S&P 500 Correction: The S&P 500’s correction may have caught investors off guard, especially after an extended period of strong performance and a record high just three weeks prior. From 2023 through early 2024, the index surged a total of 53% without experiencing a similar pullback, making the recent decline a stark contrast to its previous momentum.

• Sources of Volatility: Beyond the usual economic reports and earnings updates, investors faced a flood of headlines. Market uncertainty was amplified by renewed tariff disputes and the looming threat of a partial U.S. government shutdown as lawmakers and the White House clashed over a funding bill.

• U.S. Consumer: U.S. consumer sentiment has fallen to its lowest level since November 2022, according to Friday’s preliminary University of Michigan survey. The index plunged from 64.7 in late February to 57.9, a far steeper drop than economists had anticipated. Additionally, an increasing number of survey respondents expressed concerns about rising inflation and unemployment.

• Small-Cap Sell-Off Intensifies: As the large-cap S&P 500 slipped into correction territory, small-cap stocks faced even steeper losses. The Russell 2000 Index, a key small-cap benchmark, neared bear market levels—defined as a 20% decline from a recent peak—after falling more than 16% from its November 2024 high. For the week, the index dropped about 1.4%, reflecting continued pressure on smaller companies.

• The FED: The U.S. Federal Reserve is expected to keep interest rates steady when it wraps up its two-day meeting on Wednesday. However, updated economic projections and remarks from Chair Jerome Powell could influence markets. Uncertainty surrounding the timing of future rate cuts remains due to mixed inflation data and concerns over tariffs.

  •  According to the CME FedWatch, futures that track the fed fund rate, investors price in a 99% probability of rates remaining between 4.25-4.5 for the March 19th meeting. 

Poppi $1.5 B acquisition 

• Poppi is a rapidly growing soda brand that markets itself as a healthy alternative to traditional sodas. In 2023 its revenue surpassed $100 M. The soda has low amounts of sugar, prebiotics and ingredients like apple cider vinegar. These healthy alternatives have been coined the name functional beverages. This market has experienced significant growth while larger brands like Coca-Cola and Pepsi have experienced minimal growth. Poppi is using increased consumer interest in healthy alternatives to rapidly grow its business and competitors have noticed. PepsiCo is in early talks to buy the beverage maker for $1.5 B. This acquisition comes after the end to an effort to launch its own functional beverage line. Poppi has made significant disruption in a market dominated by large brand names utilizing influencer marketing and a shift in consumer demand.

CPI Insight

• The latest Consumer Price Index (CPI) report shows inflation moderating more than expected. The CPI rose 2.8 percent year-over-year, slightly below the 2.9 percent forecast and down from 3.0 percent in January. The core CPI, which excludes food and energy, increased 3.1 percent annually, also below the 3.2 percent forecast and down from 3.3 percent previously.

• In February, the Consumer Price Index (CPI) rose 0.2%, down from 0.5% in January, with shelter costs increasing 0.3% month-over-month and 4.2% year-over-year—the slowest annual rise since December 2021. Since housing accounts for about one-third of the CPI basket, changes in shelter costs significantly impact overall inflation. Moreover, housing CPI typically lags private market rent measures by about a year, as it reflects both new and existing leases, making this increase less concerning. 

• Energy prices showed mixed trends, with gasoline falling 1.0 percent, while electricity and natural gas increased 1.0 percent and 2.5 percent, respectively. The overall energy index rose 0.2 percent for the month.

• The food index increased by 0.2%, following a 0.4% rise in January. Notably, egg prices surged by 10.4%, driving a 1.6% increase in the meats, poultry, fish, and eggs category. Over the past 12 months, egg prices skyrocketed by 58.8%, significantly contributing to the 7.7% year-over-year rise in the broader category. This increase is due to the ongoing bird flu outbreak that has led to the culling of millions of egg-laying hens, significantly reducing egg supplies and driving prices to record highs. A dozen Grade A eggs averaged $5.90 in February, up 10.4% from the previous year. ​ 

• Core CPI rose 0.2 percent month-over-month, cooling from 0.4 percent in January. While medical care, used cars, and household furnishings saw price increases, airline fares dropped sharply by 4.0 percent.

What To Look Out For This Week!

Monday: U.S. Retail Sales

Tuesday: Federal Open Market Committee (FOMC) meeting begins, Nvidia GTC conference keynote featuring CEO Jensen Huang

Wednesday: FOMC interest-rate decision, Fed Chair Jerome Powell's press conference

Friday: Carnival (CCL) earnings 

We are two college students on a mission to immerse ourselves in the financial industry. We are eager to learn more and make new connections. Our goal is to share exciting and informative content that provides a broad picture of current events and offers valuable insights.

Founders: Ben Banchik, Zachary Singer

Additional Contributors: Willam Le

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