Weekly Recap: 2/24/25-2/28/25

Macro & Economic Developments

• Tariff Saga Continues:  Trump continued to threaten tariffs this week, first stating on Monday that the month-long delays on Mexico and Canada would be lifted and tariffs would go into effect in March. As a reminder, the executive order signed on Feb 1st planned to enact “25% tariffs on products from Mexico and Canada, as well as 10% duties on Canadian energy.” On Wednesday however, Trump “suggested that the tariffs on Mexican and Canadian imports would begin on April 2.” This was accompanied with a new threat on the EU, which the President said would see a levy of “25% generally speaking, and that'll be on cars and all of the things.” On Thursday, the President wrote on his social media that “the proposed TARIFFS scheduled to go into effect on MARCH FOURTH will, indeed, go into effect, as scheduled” in addition to pushing up tariffs on China to 20% from a previous 10%. On Friday, the Chinese Ministry of Commerce said that “China will take all necessary countermeasures to defend its legitimate rights and interests”, leaving room for a potential retaliation coupled with the already increased duties “on certain U.S. energy imports”.

• New Inflation Data: Economic data this week was mixed, with weekly jobless claims for the week ending Feb. 22nd coming in at a “a seasonally adjusted 242,000”. The DOW Jones estimate had been 225,000. In DC, which has seen large amounts of federal layoffs at the hands of the new administration, reported that “new claims totaled 2,047, an increase of 421, or 26%.” On Thursday, the US Labor Department reported that US GDP annualized grew +2.3% in Q4, lower than the +3.1% in Q3. This was supposedly caused by “increases in consumer spending and government spending that were partly offset by a decrease in investment.” On Friday, both January PCE and Core PCE were in-line with expectations, rising +0.3%. An increase in personal income cleared expectations however, rising +0.9% compared to the forecasted +0.4%. Spending fell -0.2% while the personal savings rate jumped +4.6%. Separate from data, Wednesday saw an inversion in the yield curve, with the yield for the 3-month note surpassing the 10-year yield. 

• Port Deal: On Tuesday, the International Longshoreman Association union and the US Maritime Alliance “approved a six-year contract” related to the “dockworkers on the U.S. East and Gulf coasts”. The agreement includes “a 62% pay hike over six years” and conditions related to the introduction of new technology at ports. In exchange for a more flexible use of automated technology, ports “have to hire new workers” and ensure that “full automation is off the table.” Last fall, the union conducted a strike, which, if continued, could’ve “crippled the economy.”

---

Earnings & Corporate Developments

• Tech Outlook Still Positive, Tariff Effects Anticipated: Despite fear from DeepSeek and US tariffs, companies in the space continue to deploy capital towards AI. Apple announced on Monday that it would be investing “more than $500 billion in the U.S. over the next four years” to build a new 250,000 sq. ft facility in Texas and conduct other initiatives. The company described the factory as playing a "key role" in its expansion into Apple Intelligence. NRG Energy, GE Vernova, and Kiewit also rolled out a plan to build “natural gas-fired power plants for tech companies” to support the increase in power demand, with NRG CEO Lawrence Coben stating that the trend in data centers has him “very confident that it's real and that it's happening.” The biggest news of the week, however, was NVIDIA’s earnings. Beating on both the bottom and top line, the company brought in an EPS of $0.89 and revenues of $39.3 billion for the quarter, citing that it had “successfully ramped up the massive-scale production of Blackwell AI supercomputers”. CEO Jensen Huang cited “agentic AI” and “physical AI” as ongoing developments in the space. NVIDIA’s guidance for Q1 also beat expectations with a sales forecast of “$43 billion plus or minus 2%”. In regards to DeepSeek, Huang stated that “increasing compute for training makes models smarter and increasing compute for long thinking makes the answer smarter”, seemingly shrugging off worries. On the other hand, the effects of tariffs could start to show in future reports, with HP stating that its lower-than-expected guidance “reflects its anticipation of higher costs tied to U.S. tariff increases on China.” NVIDIA, similarly, could see its margins shrink if Trump chooses to invoke “further export restrictions on Nvidia chips destined for China.”

• Consumer Worries: Multiple companies poised to benefit from a strong consumer reported earnings this week, indicating potential for both opportunity and weakness. Home Depot, which has struggled in recent years due to restrictive monetary policy, stated that “consumers will stop putting off projects as they gradually get used to higher interest rates.” Reporting a better-than expected revenue print of $39.70 billion and an increase of +0.8% in comparable sales, Home Depot “ended eight consecutive quarters” of declines in the latter. For FY25, the company is expecting revenue and comparable sales to grow by +2.8% and +1.0% respectively. EPS, however, is forecasted to fall -2.0%. Domino’s Pizza wasn’t as fortunate, reporting a +0.4% increase in same-store sales for the quarter against a +1.63% consensus, and stating that “the consumer environment for fast food would remain pressured in 2025.” TJS Cos., the company that owns TJ Maxx, Marshall’s, and HomeGoods, stands to benefit “ as price-conscious consumers hunt for deals”, and reported a strong Q4 with revenues of $16.35 billion above expectations and a $1.23 EPS. However, the company did guide below consensus for FY26, expecting “comparable sales to rise between 2% and 3%” and EPS to fall within $0.87-$0.89. This is primarily due to “a strong U.S. dollar and unfavorable exchange rates.” CEO Ernie Hermann didn’t seem bothered, stating that he is “excited about the sales and margin opportunity in this environment.”

---

Market Takeaways:

• US Equities:

• Both SPX and IXIC weakened while DJI rose, indicating a flight to more consumer defensive investments 

• Large-cap and Small-cap growth continued their downward trends since the start of the year, sentiment remains consistent to the downside

• In sector ETFs, XLI and XLRE were in favor this week potentially due to future on-shoring/infrastructure development and more activity in housing market; coupled with lower 10-year yields 

• US Macro/Fixed-Income:

• Curve not inverted, with the 2-year falling in anticipation of rate cuts in near-term  

• DXY sees strength amidst monthly and YTD downtrend; reaction to implementation and announcement of trade policy

• IG bonds continue to see strength, spread with HY appears to be widening; indicates defensive positioning in bond market

• Global Macro/Equities: 

• Canada 10-year yield falls substantially; anticipation of slowdown due to tariffs 

• EUR/USD falls and USD/CAD rises; indicating potential rate cuts for EUR and CAD due to slowdown from tariffs

• MCHI slows down from monthly and YTD strong performance; hype around AI coupled with tariffs from US are deflating sentiment

• Commodities:  

• Gold down, BTC up; both reversals of monthly and YTD trends, indicating reallocation amongst commodities in times of uncertainty and more favorable crypto environment

---

Portfolio Positioning & Tactical Insights

Current Portfolio Bias: Moderate Risk-on
Potential Tactical Adjustments: 

• Increase exposure to Real Estate due to falling 10-year yields and adjustment by consumers to high rates; use Home Depot guidance as support

• Increase IG fixed income allocation due to declining sentiment and economic uncertainty

• Monitor Growth stocks due to rescinding of previously announced tariff plans; administration likely to limit damage to largest players in the market and adjust trade policy accordingly

Risks to Monitor:

• Consistency in Tariff Policy → If Trump announces and implements tariffs without adjustments, reversing what he has been doing as of late, large-cap equities could come under more pressure

• Reciprocal Tariffs → If countries reciprocate tariff policy in response to the US, supply chains could be further disrupted

---

Index Performance

Factor Performance

Sector Performance

US Macro Performance

Corporate Bonds: 

Global Yields: 

Currency Pairs: 

Global Market Performance

Commodities

DISCLAIMER

The information provided in The Tulip Thesis is for general informational and educational purposes only and is not intended as financial, investment, or legal advice. The Tulip Thesis does not provide specific financial advice, investment advice, tax or legal advice. You should consult with a professional financial advisor, tax consultant, or attorney before making any investment or financial decisions.

The opinions expressed by contributors, authors, and editors are their own and do not necessarily reflect the views of The Tulip Thesis or its management. While we strive to provide accurate and up-to-date information, we make no representations or warranties, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained herein for any purpose.

Investing involves risk, including the potential loss of principal. Past performance is not indicative of future results. Readers are solely responsible for any actions they take based on the information in this publication. The Tulip Thesis shall not be liable for any loss or damage arising from the use of this information.

Disclosure: The Tulip Thesis, its owners, contributors, or affiliates may hold or trade securities mentioned in the blog.