Yellowstone: from exploitation to preservation
February 25, 2025
Topic of the week:
By Fernanda Barbosa
In the 19th century, the United States was in the midst of growth. The gold rush led miners and railroad entrepreneurs to look for land to mine and roads to build. For this reason, in the early 1970s, Congress asked Ferdinand Hayden, a geologist renowned for his participation in geological expeditions, to investigate the Yellowstone lands. Hayden then assembled the best scientists from various fields of knowledge to accompany him. His goal was to search for mineral developments that would benefit the U.S. and to find routes to build railroads connecting the Mississippi River to the Pacific Ocean.
However, when Hayden and his group learned about the region, they realized that their goals would change. The samples collected would have a new purpose: to document a place that needed to be preserved for future generations. Hayden therefore modified his reports, focusing them on the defense of this large area of land with the goal of preserving it. After months of expedition and numerous parliamentary discussions in the U.S. Congress, President Ulysses S. Grant signed The Act of Dedication into law on March 1, 1872, establishing Yellowstone as the first U.S. national park and the first in the world.
Yellowstone National Park is located in the states of Idaho, Wyoming and Montana, and is situated on a supervolcano, which is the best known at present, and poses one of the main threats to our planet in the event of an eruption. The park has an area of almost 9,000 km² and is well known for having geysers (about 62% of the total existing on the planet), hot springs, waterfalls and a great variety of wild animals such as wolves, cougars, grizzly bears, bison and elk. Although there are other national parks in the United States, Yellowstone is one of the most special in terms of wilderness and unique landscapes.
Its creation provided a framework and influenced the overall growth of national parks. For a territory to be considered a National Park, it must meet criteria established by the laws of each country. Although each has its own history of origin, they share the same objective: to protect biodiversity, ecosystems and minimize human intervention, contributing to a sustainable future for our planet.
As for tourism, thousands of people visit them every year, and paying to enter the parks helps to maintain them. In this way, they take care of the infrastructure and also allocate resources for species protection, environmental awareness and restoration of natural habitats. However, controlling massive and uncontrolled tourism is crucial to guarantee the future of these areas, and requires collaboration between visitors, governments and local communities.
There are currently more than 4,000 National Parks around the world, such as the Northwest National Park in Greenland, the Kruger National Park in Africa, the Sierra Nevada National Park in Spain and the Amazon National Park in Brazil. Those are just a few that we can find around the world, but they have the same purpose that Hayden had more than 150 years ago: Preserve them.
The beacon of the markets:
Equity markets closed Friday with slight profit-taking after the achievement of new all-time highs in representative indices such as the S&P 500, the Nasdaq 100 and the Euro Stoxx 50 in the middle of the week. The falls occurred mainly in Friday’s session and especially in the United States during the last hours of the session. The cause, macroeconomic data generating doubts about the economy’s growth, with the services PMI standing out at 49.7, i.e. in contraction territory for the first time since February 2023. In addition, advance inflation data continues to show solid levels, clearly above 3%. On the positive side, we had manufacturing PMI above estimates and employment data that continues to show strength.
The S&P 500 closed at 6,013.13 points down 1.66% on the week, while the Nasdaq 100 closed at 21,614.08 points or 2.26% lower. In Europe, corrections were more moderate, due in part to the fact that the market was already closed when the United States accelerated its selling, and also because European macro data hardly surprised the market.
In the fixed income markets, weekly variations were minimal, but clearly reflected the change in managers’ perceptions regarding the maneuvering capacity of central banks. The FED seems to have more room for maneuver to lower interest rates in 2025, up to 0.75% according to some houses, while the ECB may not have as much room for maneuver as is believed, and could still be left with three rate cuts during the year. Thus, the 10-year Treasury closed with a yield of 4.43% or 5 bps lower, while in Europe the Bund saw its yield increase by 3 bps and the Bono by 4 bps to end the week at 2.45% and 3.14% respectively.
In the commodities markets, the trend of recent weeks has continued. Gold continues its strength and is very close to 3,000 USD/Oz, where it should be noted that this past week it set a new all-time high at 2,973.40 USD/Oz, and at the close of Friday it was up 1.81%. For its part, Brent repeated the movement of the last three weeks, oscillating in a range between 74 and 77.25 USD/b, to end practically unchanged at 74.43 USD/b. The possibility that the conflict in Ukraine is coming to an end, would favor the falls together with the fear of a weaker US economy, while the delay in the OPEC production increase causes the price rises.
Investors’ attention will be focused this week on price data developments. Yesterday we heard the European CPI which confirmed provisional data of 2.5% for CPI and 2.7% for core inflation, and on Friday the US PCE will be released. Both indicators will be key for the evolution of financial markets in the short term. In addition, we will know what the ECB minutes and the revision of the fourth quarter GDP in the United States say, together with the Conference Board’s consumer confidence indicator, data that will allow us to analyze whether the economy is really slowing down noticeably.
As for the development of the results season, as of last Friday, 429 S&P 500 companies had presented their results, with an average EPS growth of 12.9% (7.5% had been expected). Seventy-seven percent of the companies surprised positively versus 16% that disappointed. Nvidia will release its results on Wednesday, and everything it reports will be scrutinized in detail after the DeepSeek breakout, as any negative note could trigger further profit taking.
The frase:
And we say goodbye with the following sentence by Albert Schweitzer, French-German physician, philosopher, theologian and musician, medical missionary in Africa and Nobel Peace Prize winner in 1952: “The first step in the evolution of ethics is a sense of solidarity with other human beings”.
Summary of the performance of major financial assets (2/24/2025)
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