TABLE OF CONTENTS

1. Market Recap

2. EQUITIES: Gareth Soloway on a coming significant market breakdown

3. EQUITIES: Markets are at an “inflection point,” says Peter Boockvar

4. ECONOMY: Eric Basmajian on the economy’s “warning signs”

5. ECONOMY: Bob Elliott on why the economy could slow down

6. TECH: John Belton on whether the Nasdaq has hit a top

7. What to Watch

MARKET RECAP

Relations between the U.S. and Ukraine broke down on Friday, February 28th, following a tense Oval Office meeting between American President Donald Trump and Ukraine’s President Volodomyr Zelenskyy.

The discussion between the leaders led to an argument, with Trump accusing Zelenskyy of “gambling with World War III.” The leaders did not sign a proposed minerals deal, as had been planned, and a joint press conference was cancelled.

The Trump-Zelenskyy meeting comes amidst rising strains on Washington-Kiev relations, with Trump calling Zelenskyy a “dictator” on February 19th, and Zelenskyy accusing Trump of falling victim to Moscow’s “disinformation.”

Following the latest meeting, Trump issued a statement, saying that “[Zelenskyy] disrespected the United States of America in its cherished Oval Office. He can come back when he is ready for Peace.”

The S&P 500 dipped briefly following the exchange before paring losses. The Euro fell 0.27 percent against the U.S. dollar. The VIX spiked to 22.3, up 6 percent from the start of the trading session.

Market Movements

From February 21st to February 28th, the following assets experienced dramatic swings in price. Data are up-to-date as of February 28th at 5pm ET (approximate).

1. iRobot Corp. — down 16.9 percent.

2. Peloton — down 12 percent.

3. Nvidia — down 7.2 percent.

4. Anheuser-Busch InBev — up 11.7 percent.

5. American International Group — up 8.2 percent.

The following major assets experienced the following price movements during the same time interval.

DXY — up 0.9 percent.

Bitcoin — down 14.3 percent.

Gold — down 2.7 percent.

10-year Treasury yield — down 5 percent.

S&P 500 — down 1 percent.

Russell 2000 — down 1.5 percent.

USD/yuan — up 0.4 percent.

EQUITIES:
SIGNIFICANT MARKET BREAKDOWN
Gareth Soloway, February 26, 2025

Gareth Soloway, Chief Market Strategist and President of Verified Investing, said that he expected “significant downside” in markets.

“You have to be more bearish now,” he said. “The trend has broken… and I think it’s important to note that we have some very big negatives that are concerning investors.”

Pointing to inflation, a slowing economy, and tariffs as examples of “negatives,” Soloway said that recent consumer data also point to headwinds for the markets.

“We’ve seen recently the Michigan [consumer] sentiment numbers coming in much weaker than expected,” he explained. “The consumer is the backbone of the U.S. economy, and if that players is slowing — and even the mid-tier to upper-tier [like Walmart] is slowing — this economy is in some trouble.”

When it comes to Bitcoin, Soloway said that it is likely to head lower, based on his technical analysis.

“You’re going to likely head back [down] to this $73-$74,000 level, which again would be major technical support,” he said. “The stock market [has] been tanking [in] the last couple [of] days, Bitcoin’s tanking the last couple [of] days.”

However, Soloway said that in the long-term, he is bullish on Bitcoin.

“I think there’s a viability towards having an alternative to the U.S. dollar or fiat currencies,” he said. “That’s where Bitcoin comes in.”

Gold’s recent rally, which saw the precious metal up 8.6 percent since the start of the year, is over for now according to Soloway.

“In the short-term, we know that gold sells off when there’s panic in the markets,” he said. “We’re starting to see a little bit of that.”

EQUITIES:
MARKET ‘INFLECTION POINT’
Peter Boockvar, February 24, 2025

Peter Boockvar, CIO of Bleakley Financial Group, said that the tech trade is “over.”

“I think that there is some reality check to [Magnificent 7 stocks’] fundamentals, and potentially their growth rates,” he explained. “Whether it’s the DeepSeek news… [or] AI’s influence on Google’s search business, for example… [Mag7] stock market dominance, I think, is coming to an end.”

He added that U.S. markets are at an “inflection point,” and that a rotation out of U.S. major indices and into small-caps, mid-caps, or emerging markets is possible.

“I think that U.S. tech stocks, the Mag7, have become a reserve holding of many foreigners, and some foreign central banks,” he explained. “If this trade is sort of tiring out [then] what happens if foreigners start to reallocate some of this capital into other things, maybe outside the U.S.? Does that have implications for the U.S. dollar?”

Responding to Microsoft CEO Satya Nadella’s February 19th announcement that Microsoft had made a quantum computing breakthrough, Boockvar said that it had the potential to be “disruptive” to the tech sector.

“Think about all the data centers that are being built,” he said. “If you can sort of shrink the size of the capability of the data centre, there’s going to be a lot of wasted real estate out there. There’s going to be a lot of technological obsolescence on all the data centers that are being built right now.”

When it comes to the performance of Walmart, whose stock fell 6 percent after the company issued disappoint guidance, Boockvar said that it was trading at “crazy multiples,” like other big retailers.

“We’ve seen that [happen] in a variety of other stocks,” he said. “It was a momentum trade that took them to tremendously elevated levels, and I think the Walmart news, I guess, maybe, is just a wakeup call… All these momentum stocks, all these comfort stocks, including the Mag7, really sucked a lot of the stock market energy away from everything else and into these names.”

ECONOMY:
ECONOMIC WARNING SIGNS
Eric Basmajian, February 26, 2025

Eric Basmajian, Founder of EPB Research, said that the concern that tariffs will cause inflation is “overstated.”

“If you increase tariffs on, let’s say, motor vehicles, that will increase the price of [motor vehicles],” he explained, “but unless there’s a broad-based increase in money supply, that increase in the price of motor vehicles will be offset by a decrease in price in another good that’s not being consumed, or it will reduce the amount of vehicles being consumed — so growth would go down, in that sense… nominal economic growth is not changed by tariff policy.”

Basmajian said that, based on leading indicators such as manufacturing and construction sector job losses, the overall labor market is not at significant risk of major weakness at present, though he sees “early warning signs.”

“Usually you need to see job losses in those two sectors [manufacturing and construction] combined increase to 100,000-200,000… before it starts to spill over into broader coincident economic weakness,” he said. “Those two sectors combined are only about 10,000-20,000 jobs lost so far. So we’re still pretty early in the labor market deterioration situation, in my view.”

The Federal Reserve is currently engaged in “tight” monetary policy, according to Basmajian, which could lead to an economic slowdown.

“If the Fed holds policy in this range, and money supply growth in real terms continues at about that 1 percent pace, they will continue to engineer a slowdown in the cyclical sectors, and then it will spread forward,” he said. “Should the Fed keep policy here, mortgage rates will stay elevated and the economy will continue to slow, with these long lag times notwithstanding.”

ECONOMY:
WHY MARKETS ARE FLATLINING
Bob Elliott, February 21, 2025

Bob Elliott, CEO of Unlimited, said that fiscal policy would be the big driver of economic trends in 2025.

“Look at the series of policies that have come in so far,” he explained. “Pretty much all of them are growth negative in the course of the next six to twelve months.”

Elliott pointed to immigration, trade, tax, and spending policies as potential contributors to an economic slowdown.

“The clampdown on immigration is reducing the potential growth rate of the U.S. economy,” he said. “If you look at tariff implementation, which is in the short term effectively a tax on consumption, that certainly is starting to add up to be a meaningful drag on the economy. And then there’s some ambiguity about what DOGE [The Department of Government Efficiency] and other tax and fiscal policies are going to be ahead.”

He added that inflation was likely to slow in 2025, based on the latest data releases, including the Producer Price Index.

“Inflation is not going to be interesting in 2025,” said Elliott. “It’s gradually cooling. All the data is aligned with that.”

Elliott said that the “real uncertainty” is whether real GDP growth would remain at 3 percent, and whether company earnings growth would remain strong.

When it comes to gold, Elliott said that foreign investors had been driving strong retail demand, and that gold is a “geopolitical hedge” and an “uncertainty hedge.”

“You look at the current circumstances, both of those things [geopolitical and policy uncertainty] are elevated, and so it makes sense that [gold] is getting a bid,” he said.

TECH:
HAS NASDAQ TOPPED?
John Belton, February 23, 2025

Despite DeepSeek’s and Alibaba’s recent advances in AI technology, John Belton, Portfolio Manager at Gabelli Funds, said that the U.S. continues to lead in artificial intelligence.

“The U.S. is still at the leading edge when it comes to generative AI technologies,” he said. “The U.S. is still far ahead of China when it comes to companies in the real economy having adopted and having started to build out useful AI applications.”

Belton added that Nvidia, the chip manufacturer, has “no real competition.”

“There is no alternative to Nvidia,” he said. “I don’t see that changing anytime soon… I think the valuation on Nvidia is still reasonable… I don’t think we’re anywhere near the peak in terms of earnings yet, so I’m still comfortable holding Nvidia over the medium to long term.”

When it comes to the tech-heavy Nasdaq, Belton said that in the long-term, he is optimistic.

“The economy is very resilient,” he said. “[There are] a lot of reasons to believe in and be excited about AI. There’s a lot of new things the new [Trump] administration is doing [that] should be more business-friendly. So, I think if you have a long-term perspective… stocks are still a good place.”

The Trump White House has brokered a $500 billion investment into large-scale data centres to benefit AI. This ‘Stargate Project’ could benefit companies like Oracle, which have invested in the project, but there is a lot of uncertainty surrounding the investment, said Belton.

“I think it’s hard to have real conviction on how this is going to unfold,” he said. “Beyond [the first $100 billion], I think it’s going to depend on a lot of factors that are still kind of unfolding.”

TABLE OF CONTENTS

1. Market Recap: Matt Gertken on why the Ukraine War could end in 2025

2. ECONOMY: Judy Shelton on whether The Fed should end

3. ECONOMY: Danielle DiMartino Booth on tariffs and inflation

4. ECONOMY: BNY’s Vincent Reinhart on who wins trade wars

5. MARKETS: Chance Finucane on risks the market isn’t pricing in

6. MARKETS: A ‘major reprice’ of assets is coming, says Clem Chambers

7. CRYPTO: Bitcoin to $180k in 2025, according to Van Eck’s Matt Sigel

8. What to Watch

MARKET RECAP

Latest News. On Tuesday, February 18th, U.S. State Department officials met with their Russian counterparts for the first time since the Ukraine war began in 2022.

The two teams, led by U.S. Secretary of State Marco Rubio and Russia’s Foreign Minister Sergey Lavrov, agreed to look into ending the Ukraine war.

Ukraine was excluded from the talks.

The Kremlin announced that a presidential summit between Donald Trump and Vladimir Putin is expected this year.

The White House signalled that it expects European countries to shoulder more of the burden of peacekeeping in Ukraine. The news sent European defense stocks soaring higher.

German arms manufacturer Rheinmetall was up 9.4 percent and Sweden’s Saab AB was up 21.3 percent over the week, from February 14th to February 21st. Britain’s BAE Systems was up 2.7 percent over the same period.

Matt Gertken, Chief Geopolitical Strategist at BCA Research, said that he expects the Ukraine War to end this year.

“Certainly the window of opportunity for Russia is very clear while President Trump is in power,” he said. “I think it probably will be this year [that the war ends].”

On February 12th, U.S. Secretary of Defence Pete Hegseth said that it is unrealistic to expect Ukraine to become a NATO member state, or to return to its pre-2014 borders.

Commenting on this, Gertken said, “having the Americans, as a formal matter of policy, admit that Ukraine won’t join NATO is a major concession to Russia, and should help to culminate in a ceasefire agreement.”

However, he added that such a ceasefire may be fragile if it includes European peacekeeping troops in Ukrainian territory.

“The U.S. has not wanted to have a trip wire that would cause conflict with NATO,” Gertken explained. “Minsk 3 is what [Pete Hegseth] said they don’t want, and that may very well be what they end up getting.”

The Minsk agreements were two ceasefire deals between Russia and Ukraine, brokered by European nations in 2014 and 2015.

Gertken also discussed the possibility that aid to Ukraine will dry up under the Trump administration.

“The writing is on the wall, that Ukraine is effectively being abandoned,” he said. “That’s what makes it very likely that we will get a ceasefire… There may be a small swap of territory for the piece that Ukraine invaded, in Russia around Kursk, but that’s not very large compared to the huge amount that Russia has taken.”

Market Movements

From February 14th to February 21st, the following assets experienced dramatic swings in price. Data are up-to-date as of February 21st at 5pm ET (approximate).

1. Celsius Holdings — up 46 percent.

2. Saab AB — up 21.3 percent.

3. Alibaba Group — up 11.6 percent.

4. Coinbase Global — down 14.2 percent.

5. Walmart — down 8.9 percent.

The following major assets experienced the following price movements during the same time interval.

DXY — No significant change.

Bitcoin — down 1 percent.

Gold — up 1.9 percent.

10-year Treasury yield — down 1 percent.

S&P 500 — down 1.7 percent.

Russell 2000 — down 3.7 percent.

USD/yuan — No significant change.

ECONOMY:
WILL TRUMP ABOLISH THE FED?
Judy Shelton, February 20, 2025

Judy Shelton, Senior Fellow at The Independent Institute and former Economic Advisor to President Trump, said that the Federal Reserve’s inflation target should be zero.

“I think zero inflation is the appropriate target,” she said. “I would love the day that there’s no difference between the real rate of interest and the nominal rate of interest, because the real rate of interest reflects real supply and demand for capital.”

When it comes to whether a central bank is even needed in the United States, Shelton said that “ that is the question of the moment, and I think we’re fast approaching some kind resolution.”

“There… is a mood now to question the Fed,” she explained. “You have people like Senator Mike Lee saying that the Fed has gone beyond its constitutionally intended powers. Basically, Congress farmed out its own responsibility… to regulate money to [The Fed], whose record on delivering stable money has not been very impressive.”

To help the U.S. economy achieve stable prices and low inflation, Shelton put forward the idea of gold-backed treasury bonds, with a 50 year maturity, which she called “treasury trust bonds.”

“A holder of a treasury trust bond would be able to be reimbursed for loss of purchasing power in terms of gold, which would be a surrogate for the real economy, and for commodities,” she explained. “And so, you now put the burden on the U.S. government, on both monetary and fiscal policy, to do better than market expectations with regard to preserving the purchasing power of the dollar, and I think truly aiming for stable prices as a mandate of the Fed, and in conjunction with a balanced budget.”

ECONOMY:
FED’S RESPONSE TO TARIFFS
Danielle DiMartino Booth, February 19, 2025

Whether tariffs affect inflation depends on how they’re implemented, as well as their magnitude, according to Danielle DiMartino Booth, CEO of QI Research.

“If it’s a one-time shock to the system, then it will filter in and out of the data within a very short period of time,” she explained. “If it was to be death by a thousand cuts, and for there to be… a constant trickling in of ever-increasing tariffs, then that would certainly build into an inflationary impulse on its own.”

However, DiMartino Booth said that the ongoing Department of Government Efficiency (DOGE) job cuts would be “disinflationary” and could slow economic growth.

“Every single job in America generates income,” she said. “To the extent that that job no longer exists, that income is no longer being generated, and the Fed must attend not just to its inflation mandate, but also to its employment mandate.”

DiMartino Booth was also skeptical that the private sector would be able to absorb public sector layoffs.

“The private sector layoff tally right now is about 100,000,” she explained. “If anything, these [laid off] public sector employees are going to be presenting a form of competition to others in the private sector who continue to look for jobs.”

She added that uncertainty about fiscal policy and geopolitics is not properly priced into markets.

“[The 10-year bond yield] looks like a deer in the headlights,” she said. “It looks like it is completely frozen at 4.5 percent, not knowing which direction Fed policy is going to take next, not knowing whether or not the policies that are coming out of the new administration are going to be inflationary, whether they’re going to be deflationary, whether the jobs cuts are going to be offset potentially by a one-time check sent out by the Department of Government Efficiency.”

ECONOMY:
WHO WINS IN TRADE WAR?
Vincent Reinhart, February 17, 2025

Vincent Reinhart, Chief Economist at BNY Investments, said that although Trump’s 25 percent steel and aluminum tariffs would raise prices, they were unlikely to make a significant impact on the CPI.

“[With tariffs,] you raise prices,” he said. “It’s a little more complicated for what this does to steel prices, because an exchange rate gets in between… That’s why we didn’t see all that much pass-through in 2017 [during Trump’s first-term tariffs]… It is a small cost to an important input in production. You’re not going to see it on the CPI in three months.”

Although he said that the “case for free trade is pretty overwhelming,” Reinhart added that he understood why Trump may have advocated for tariffs.

“Our exports are a lot smaller than our imports,” he explained. “When we put on a tariff, it’s on our imports. When we get retaliation, it’s on our exports, i.e. the retaliator hits us less than we hit them in terms of quantity.”

Reinhart also said that many imported goods have high margins, which companies could afford to adjust in response to tariffs.

“I think that the White House believes they’ve got leverage because they’ve got a tool that hurts other economies more than [the U.S.],” he said.

If tariffs are used “transactionally,” as a threat against other countries to get specific policy outcomes, then Reinhart said that the outcomes themselves may even be good.

“If a tariff is used transactionally… then it’s hard to get too excited about the incidence of it because it’s going to go away,” he said. “And it’s possible that you’ll get other better policy outcomes as a consequence.”

MARKETS:
BOND MARKET WARNING
Chance Finucane, February 18, 2025

Chance Finucane, CIO of Oxbow Advisors, observed that 10-year yields have been rising over the past few months, signalling both higher inflation and economic growth.

“If it has gone up, say, by 100 basic points, maybe half of that is from the inflation rate rising, and the other half is from a little bit better economic growth,” he explained.

He added that uncertainty over Trump’s economic policies are not being properly priced into markets.

“The level of uncertainty about where markets and the global economy goes has heightened, and yet we’re not seeing that priced into financial markets yet,” he said. “[This] leads us to really want to focus more on the risk side of the equation, and the potential downside with any new investments that we make.”

Finucane said that the S&P 500 had become too concentrated, and that investors should seek to diversify, in order to “outperform” markets over the next two years.

“The top 10 stocks in the S&P 500 are now 38 percent of the weight of that index, because they’ve risen so high,” he explained. “Over the next two years, you’re better-off having a more diversified portfolio across an array of stocks, rather than being so concentrated like the S&P 500 is.”

When it comes to undervalued assets, Finucane said that consumer staples and healthcare are examples of industries that have potential upside.

“You’ve got consumer staples and healthcare that have really sold off sharply,” he said. “[With] consumer staples, it’s concern about weight-loss drugs ruining demand for some of their products [and] it’s people not wanting to own defensive businesses. [With] healthcare, it’s the risk [of] disruptions to healthcare policy in the United States… but we now think it’s so priced in, that there’s opportunity there that wasn’t there six months ago.”

MARKETS:
’MAJOR REPRICE’ OF ALL ASSETS
Clem Chambers, February 16, 2025

Clem Chambers, Founder of ANewFn, said that the recent rise in the gold price points to increasing “volatility,” as well as uncertainty about U.S. government policy.

“How are you going to put some money aside…. if it turns out to be catastrophic?,” he said. “Well, there’s really only one place to go, and that’s gold.”

He added that gold will “go to $5,000” within a couple of years.

When it comes to the risk posed to American artificial intelligence firms from Chinese competitors like DeepSeek and Alibaba, Chambers said that “it doesn’t matter” for chip demand.

“[DeepSeek] doesn’t lower the demand for the training hardware that Nvidia makes,” he explained. “It doesn’t lower the demand for cooling for all those machines… There is no limit to how much [artificial] intelligence you want.”

Chambers said that there would be a “major reprice” of major indices.

“[There] is a fairly large amount of uncertainty at the end of that [Nasdaq] chart,” he said. “[It’s] not surprising, seeing that there’s a new administration… there’s good reason for there to be uncertainty.”

Chambers said that his top asset for 2025 is British equities.

“[The UK] has been such a terrible market for so long, and the local chancellor has declared open season for taking over FTSE 100 companies and carrying them off,” he explained. “For the sort of stuff that I hold, which are… large companies with huge profits and great value, great international businesses, they’re all getting strip-mined… It’s cheap, it’s going up, it’s going to go up for two or three years.”

CRYPTO:
$180k BITCOIN IN 2025
Matthew Sigel, February 18, 2025

Matthew Sigel, VanEck’s Head of Digital Assets Research, said that Bitcoin could reach $180,000 per coin in 2025.

“The most explosive part of the Bitcoin cycle tends to happen in the one year after the halving,” he said. “We had that last halving in April of last year… The previous smallest ever cycle was 2,000 percent from the trough to the peak, so if we assume a 1,000 percent price return, that would be roughly $180k for this cycle… [It is] likely to peak out in Q4 of this year.”

In the medium-term, Sigel said that he predicts Bitcoin will reach $450k.

“Over the medium-term, we benchmark this asset to gold, and specifically the 50 percent of the gold market that is used for speculative purposes, rather than jewelry and industrial purposes,” he explained. “If you assume that Bitcoin can surpass that 50 percent of gold market cap, that would be a $450,000 Bitcoin price target.”

Sigel said that The Department of Government Efficiency’s budget cuts may have a negative impact on the Bitcoin price.

“A lot of people buy Bitcoin when they’re frustrated with how government is functioning,” he said. “To the extent we get major sustainable cuts in the U.S. budget deficit, I think that’d probably be a negative for Bitcoin, all things equal.”

Responding to Elon Musk’s suggestion that federal government payments be put on a blockchain, Sigel said that the benefit of this would depend on what kind of blockchain is used.

“There’s a number of blockchains that function similar to permissioned databases,” he said. “But if this were to go on something truly permissionless and open-source like Ethereum, where the blockchain explorers are very well-developed, then I think that would be tremendous for U.S. citizens to see how payments are being made, and where funds are coming from, and where they’re going.”

WHAT TO WATCH

Tuesday, February 25, 2025

• S&P/Case-Shiller Home Price Index. This tracks monthly U.S. home prices across major U.S. metropolitan areas.

Thursday, February 27, 2025

• Pending Home Sales. This shows monthly pending home sales; i.e., residential real estate transactions which have not yet closed.

Friday, February 28, 2025

• Personal Consumption Expenditures. This is a monthly measure of spending on consumer goods and services in the United States.