U.S. Yields Drop, China’s Surge, and the Fed Stalls on Rate Cuts

Money Masters' Market Kickoff Week 11

March 10, 2025

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Dear Money Master,

China’s economy is facing deflation, while the Fed remains cautious on rate cuts, and U.S. job growth slowed in February. Meanwhile, CoreWeave is prepping a massive IPO, and Novo Nordisk shares fell after disappointing weight-loss drug results. In earnings, Abercrombie & Fitch and MongoDB struggled, while Adidas and Costco posted solid sales but warned of challenges ahead.🌍💼

In today’s Deep Dive, we break down how bond yields work and why they’re moving in opposite directions in the U.S. and China. Let’s get into it! 🚀 

📰 Your Daily Financial Digest - March 10th, 2025

🌍 Economics & Finance:

  1. China’s Consumer Prices Fall, Signaling Weak Demand 📉
    China’s CPI fell 0.7% in February, slipping into deflation as food, tobacco, and alcohol prices declined. Economists worry Beijing’s 5% growth target may be tough to achieve. Read More

  2. Fed Stays Cautious Amid Economic Uncertainty 🏦
    Chair Jerome Powell reaffirmed a ‘wait-and-see’ stance on rate cuts, citing policy uncertainty from President Trump’s tariffs and spending plans. Markets now expect fewer cuts in 2025. Read More

  3. U.S. Job Market Slows in February, Unemployment Rises 💼
    The economy added 151,000 jobs, missing forecasts of 170,000. The unemployment rate edged up to 4.1% as tariff threats and federal job cuts weighed on hiring. Read More

💻 Technology:

  1. CoreWeave Prepares for Massive $4B IPO 🚀
    Nvidia-backed CoreWeave, a cloud computing firm, is eyeing a $4 billion IPO, valuing the company at $35 billion. Microsoft, its largest client, accounts for 62% of its revenue. Read More

  2. Novo Nordisk Shares Drop as Weight-Loss Drug Falls Short 📉
    CagriSema helped diabetic patients lose 15.7% of their weight, below the expected 25%. Investors reacted negatively, sending Novo Nordisk shares down 6.3%. Read More

💹Earnings:

  1. Abercrombie & Fitch’s Growth Slows, Shares Plunge 📉
    Despite beating Q4 estimates, the retailer issued weak 2025 guidance, citing slowing Abercrombie brand sales. Hollister outperformed, but concerns over profitability pressured the stock. Read More

  2. MongoDB’s Weak Outlook Sparks Selloff 💾
    MongoDB posted strong Q4 results but warned of slowing cloud database adoption. Revenue growth is expected to decelerate to its lowest rate since going public in 2017. Read More

  3. Adidas Beats Expectations but Warns of Slower Growth 👟
    Q4 sales jumped 19%, helped by the final Yeezy sell-off. However, Adidas warned of slowing demand in 2025 as key sneaker trends fade and competition from On and New Balance heats up. Read More

  4. Costco Misses on Earnings Despite Strong Sales 🛒
    Revenue climbed 9% to $63.72 billion, beating estimates, but rising merchandise costs hurt margins. Membership fees grew 7%, but investors worry about profitability in the coming quarters. Read More

🔍 Deep Dive: Bond Yields Explained – Why They Matter for Markets 📊📉

Bond yields are one of the most important indicators in finance, yet many investors overlook how they work. Today, we’ll break it down step by step and explain how recent movements in China’s and U.S. bond markets reflect economic shifts.

What Are Bond Yields? 🤔

A bond is essentially a loan. When governments or companies need money, they issue bonds, which investors buy in exchange for regular interest payments (called a coupon) and the promise of repayment at the bond’s maturity date.

A bond yield is the return an investor gets from holding the bond.

📌 Key Rule:
Bond prices and yields move in opposite directions – when bond prices rise, yields fall, and when bond prices fall, yields rise.

Why Do Bond Yields Change?

Think of a bond as a fixed-income investment:

  • If demand for bonds is high, prices go up, and yields drop (because investors are willing to accept a lower return).

  • If demand is low, prices go down, and yields rise (because investors require higher returns to compensate for lower demand).

Why Are China’s Bond Yields Rising? 🇨🇳

Recently, China’s 10-year bond yield surged to 1.865%, its highest level this year. What’s happening? Read More

1. More Bonds = Lower Prices = Higher Yields

China’s government announced a larger fiscal deficit (4% of GDP) and an increase in bond issuance to fund economic stimulus. When a government issues more bonds, it increases supply in the market. This lowers bond prices, causing yields to rise.

2. Delayed Interest Rate Cuts

Investors had expected China’s central bank to cut interest rates. However, officials delayed easing to support the yuan currency. Since lower interest rates usually push bond prices up and yields down, the delay caused bond yields to rise instead.

3. Investors Moving to Stocks 📈

With optimism about China’s economy improving, investors sold bonds and shifted into stocks, driving up equity prices while pushing bond prices down—leading to higher yields.

Why Are U.S. Bond Yields Falling? 🇺🇸

Meanwhile, U.S. bond yields are dropping—the 10-year Treasury yield fell 7 basis points to 4.244%, and the 2-year yield dropped below 4%. Read More

1. Rate Cut Expectations

Investors are closely watching inflation data and the Federal Reserve. If inflation slows, the Fed may cut interest rates—which makes bonds more attractive, driving prices up and yields down.

2. Economic Slowdown Concerns

Over the weekend, President Trump and Treasury Secretary Scott Bessent hinted that the U.S. economy might be weakening due to reduced government spending. When investors worry about economic slowdowns, they buy bonds for safety, pushing prices up and yields down.

3. Global Yield Divergence

While China’s bond yields are rising, U.S. bond yields are falling. This creates a contrast in investor expectations:

  • China is issuing more debt and delaying rate cuts → Yields rise

  • U.S. faces possible economic slowdown and rate cuts → Yields fall

Big Tech Has Spent Billions Acquiring AI Smart Home Startups

The pattern is clear: when innovative companies successfully integrate AI into everyday products, tech giants pay billions to acquire them.

Google paid $3.2B for Nest.
Amazon spent $1.2B on Ring.
Generac spent $770M on EcoBee.

Now, a new AI-powered smart home company is following their exact path to acquisition—but is still available to everyday investors at just $1.90 per share.

With proprietary technology that connects window coverings to all major AI ecosystems, this startup has achieved what big tech wants most: seamless AI integration into daily home life.

Over 10 patents, 200% year-over-year growth, and a forecast to 5x revenue this year — this company is moving fast to seize the smart home opportunity.

The acquisition pattern is predictable. The opportunity to get in before it happens is not.

Past performance is not indicative of future results. Email may contain forward-looking statements. See US Offering for details. Informational purposes only.

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Disclaimer: This information is for educational purposes only and should not be construed as financial advice. Always conduct your own research or consult with a financial advisor before making investment decisions.