Inflation Surprises to the Upside

The latest report on the core personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred inflation gauge, showed a higher-than-expected increase in February. The index rose by 0.4% for the month and pushed the annual inflation rate to 2.8%. Economists had anticipated slightly lower figures of 0.3% and 2.7%, respectively. Core inflation, which excludes volatile food and energy prices, remains a key indicator for policymakers assessing long-term inflation trends. Meanwhile, the broader PCE price index, which includes all items, aligned with forecasts, rising 0.3% monthly and 2.5% year-over-year.

Consumer spending increased 0.4% in February, slightly below the 0.5% forecast, while personal income surged 0.8%, doubling the expected 0.4% gain. Federal Reserve officials are expected to maintain their cautious stance on interest rate cuts, particularly with ongoing uncertainty surrounding tariffs. The rise in the personal saving rate to 4.6% suggests consumers are becoming more cautious with their spending, possibly in response to inflationary pressures. As discussions around tariffs continue, economists remain wary of their long-term impact on inflation, especially if a broader trade war escalates.

CoreWeave’s IPO Marks Largest Tech Offering Since 2021

CoreWeave priced its IPO at $40 per share, lower than its initial target range of $47 to $55, in the largest U.S. tech offering since 2021. The company reduced the offering from 49 million shares to 37.5 million, bringing its estimated valuation to around $19 billion. Nvidia, one of CoreWeave’s major shareholders, placed a $250 million order at the IPO price. Shares will begin trading on Nasdaq under the ticker symbol “CRWV.” This IPO is seen as a key test for tech startups and the venture capital market after a slowdown in public offerings since early 2022 due to inflation and interest rate concerns.

CoreWeave, which provides Nvidia GPU access for AI workloads, has seen rapid growth, with revenue surging over 700% to nearly $2 billion last year, though it reported a net loss of $863 million. The company has major clients like Microsoft, Meta, and IBM, and recently secured an $11.9 billion contract with OpenAI. However, it faces intense competition from cloud giants Amazon, Microsoft, and Google.

Gold Surges to Record Highs Amid Bullish Forecasts

Gold prices have soared past $3,050/toz, setting new records as Goldman Sachs ($3,300) and Bank of America ($3,500) raised their price targets. Analysts see medium-term risks skewed to the upside. If investment demand rises just 1%, gold could average $3,000/oz this year, while a 10% increase could push it to $3,500/oz. In an extreme scenario—where central bank demand accelerates and ETFs return to pandemic-era levels—gold could even surpass $4,500/oz within a year, though this remains a low-probability event. With these dynamics in play, the outlook for gold remains strong, making it an asset to watch in the months ahead.

Lululemon’s Cautious Outlook: Growth Slows Amid Economic Uncertainty

Lululemon Athletica released earnings yesterday after-the-bell and reported record annual revenue of $10.6 billion, a 10% increase from the previous year, with net income rising 17% to $1.8 billion. In Q4, earnings per share (EPS) reached $6.14, surpassing analyst expectations of $5.85. Despite strong financials, Lululemon issued a cautious outlook for fiscal 2025, projecting revenue between $11.15 billion and $11.30 billion—slightly below analysts’ estimate of $11.31 billion. The company also forecasted annual diluted EPS of $14.95 to $15.15, compared to expectations of $15.30. CEO Calvin McDonald cited economic uncertainty and U.S. tariffs on imports from China and Mexico as factors weighing on demand. Inflation concerns and a weaker consumer spending environment have led to slower U.S. traffic.

Rocket Lab Blasts Off: Stock Soars 9% After Winning $5.6B Space Force Contract

​Rocket Lab USA, Inc. (RKLB) has been selected by the U.S. Space Force to compete for missions under the National Security Space Launch (NSSL) Phase 3 Lane 1 program, a contract valued at up to $5.6 billion over five years. This selection positions Rocket Lab among five companies, including Blue Origin, SpaceX, United Launch Alliance (ULA), and Stoke Space, eligible to deliver national security payloads to designated orbits. Rocket Lab intends to utilize its Neutron rocket, a reusable medium-lift vehicle capable of carrying payloads up to 13,000 kilograms, for these critical missions. Following this announcement, Rocket Lab’s stock experienced a significant surge, reflecting investor optimism about the company’s expanding role in national security space operations.

What’s Coming Up at Tackle Trading?

The Tackle Trading Newsletter will be released later today with full analysis of all the week’s key events, earnings results, and of course an in-depth look at the technical landscape.

The Trading Justice Podcast will be released this weekend and Matt and Mark will discuss all the top stories in their colorful and insightful manner.

Have a fantastic weekend!

Gold Futures (/GC)

While there are many areas of the market that are struggling, gold is not one of them. One of the most consistent trends in recent years that you will ever see, gold is breaking to new all-time highs as we head into the weekend. We will write about gold in depth in the Tackle Trading Newsletter later today.