March 18th Market Overview

Happy Tuesday.

Rough day in the markets as we're watching stocks slide again. Tech taking the biggest hit while everyone's eyes are on tomorrow's Fed meeting. Israeli airstrikes resumed in Gaza pushing oil and gold up.

Let's dig in...

Executive Summary

• Equities declined sharply with tech leading losses as tariff uncertainty and upcoming Fed decisions weigh on market sentiment.
  

• Geopolitical tensions escalated with renewed Israeli airstrikes in Gaza, pushing oil and gold higher on safe-haven demand.
  

• $GOOGL announced its largest-ever acquisition, purchasing cybersecurity firm Wiz for $32 billion.
  

• Markets show 99% likelihood of no rate change at the Federal Reserve's meeting concluding tomorrow.
  

Market Overview

Key Market Drivers

1. Tariff Uncertainty: Trump administration tariff debates intensify with April 2 set as a critical decision date, particularly regarding potential exemptions for Canada and Mexico.
   

2. Geopolitical Tensions: Israeli airstrikes resumed in Gaza following collapsed ceasefire negotiations, elevating regional instability and driving oil and gold prices higher.
   

3. Fed Meeting Focus: The two-day Federal Reserve policy meeting kicked off today, with markets pricing in a 99% probability of rates holding steady.
   

4. Investor Sentiment Shift: BofA's Fund Manager Survey revealed the fifth fastest rotation out of global equities this century and seventh largest surge in global macro pessimism in over 30 years.
   

Stock Spotlight

$TSLA ( ▲ 0.7% ) fell after RBC lowered its PT to $320 from $440, citing competitive challenges from Chinese rivals and revised expectations on autonomous driving profitability.

$GOOGL ( ▼ 1.74% ) acquiring cybersecurity startup Wiz for $32 billion, bolstering its cloud security capabilities with a firm serving nearly half of America’s top 100 companies.

$NVDA ( ▲ 1.35% ) down ahead of CEO Jensen Huang’s keynote at the GPU Tech Conference; Huang promises “lots of surprises” beyond AI announcements.

$PLTR ( ▲ 6.24% ) slid as Jeffries reiterated an underperform rating with a $60 PT, remaining skeptical over valuation at current levels.

$COIN ( ▼ 0.57% ) rallied with Bernstein initiating coverage with a bullish $310 PT, betting on favorable US crypto regulatory outlook under the Trump administration.

Big Name Updates

$AAPL ( ▼ 0.19% ): Evercore ISI raised PT from $260 to $275, maintaining Outperform, citing sustained mid-single-digit sales growth and strong EPS visibility.

$PEP ( ▼ 2.66% ) : Downgraded by Barclays to Equalweight, cautioning on volume recovery concerns within the core US snacks business; PT lowered from $168 to $156.

$LCID ( ▼ 3.56% ) : Upgraded to Equal Weight by Morgan Stanley, optimism hinged on a fresh AI strategy; PT remains $3.

$RL ( ▲ 0.75% ) : Goldman Sachs upgraded from neutral to buy, highlighting significant growth opportunities with limited tariff exposure; PT raised to $286.

Other Notable Company News

$GLW ( ▲ 0.41% ) : Increased guidance on successful execution of “Springboard Plan,” expecting additional $4B annual sales with 20% operating margin.

$GRAB ( ▲ 2.01% ) : Reportedly advancing takeover discussions with competitor GoTo according to Bloomberg.

$NIO ( ▲ 0.28% ) : CATL investing $345 million to expand Nio’s battery-swap network.

$COST ( ▼ 0.25% ) : Applying pressure on Chinese suppliers to cut prices following tariff hikes, similar to actions taken by Walmart.

$HIMS ( ▲ 4.06% ) : Bank of America maintained Underperform with a $22 PT, warning that semaglutide now represents nearly 50% of sales, creating “significant execution risk.”

Sector Watch

Bond Market

Treasuries are remaining cautious ahead of tomorrow’s Fed decision. Increased market volatility sustained demand for bonds as folks sought lower-risk assets. Today’s bond action was relatively muted, with yields stable as traders await clarity from tomorrow’s Fed policy guidance.

Policy Watch

• Federal Reserve: The two-day policy meeting began today, with near-certainty (99%) of rates remaining unchanged. Guidance from Chair Jerome Powell tomorrow will shape expectations on monetary policy direction.

• Tariff Deadline: President Trump’s April 2 deadline looms large, as markets stay attuned to risks around tariff exemptions for Canada and Mexico imports.

Also noteworthy, Treasury Secretary Scott Bessent assured today there’s “no fundamental economic reason compelling a recession,” despite recent investor anxieties. President Trump’s planned call with Russian President Putin takes place today between 1300 and 1500 GMT, with “a wide range of topics” on the agenda according to Kremlin sources.

What to Watch

1. Fed Decision & Powell Press Conference:

   • Watch for subtle language shifts in the policy statement

   • Powell’s tone during the press conference could signal timing of potential rate cuts

   • Rate-sensitive sectors will likely show the strongest reaction

2. Trump-Putin Call Outcomes:

   • Ukraine discussions could impact defense stocks

   • Energy markets sensitive to global oil production talks

   • Watch for shifts in risk sentiment based on geopolitical developments

3. April 2 Tariff Deadline:

   • Companies with Chinese supply chain exposure face increasing pressure

   • Retail sector divergence based on sourcing strategies

   • Potential market rotation if tariff policy clarity emerges

P.S. 

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Thanks for reading 🙂

- John