March 31st Market Overview

Happy Monday.

Markets tanked early then bounced back. Trump confirmed tariffs will hit "all countries" on Wednesday, not just the rumored 10-15 nations. Gold broke $3,100 as a safe haven play. We're closing a rough March down 5.6% on the S&P.


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Let's dig in...

Executive Summary

• President Trump confirmed tariffs will target “all countries,” not just the 10-15 nations originally rumored
  

• Goldman Sachs cut its year-end S&P target to 5,700 from 6,200 and slashed Q1 GDP estimates to just 0.2%
  

• Consumer inflation expectations have reached multi-decade highs ahead of Wednesday’s tariff announcement
  

Market Overview

Key Market Drivers

1. Tariff Uncertainty Dominates: President Trump rejected the idea that tariffs would target only 10-15 countries with large trade deficits, stating they would apply to “all countries.” The Wall Street Journal reports Trump has pushed advisors to be more aggressive with tariff implementation.
   

2. Economic Growth Concerns: Goldman Sachs cut its Q1 GDP estimate to just 0.2% and reduced its full-year 2025 forecast by 0.5% to 1.0%. CNBC’s Rapid Update survey points to first-quarter expansion of only 0.3%, well below Q4’s 2.3% growth.
   

3. Rising Inflation Expectations: Consumer fears about long-term inflation have reached levels not seen since the early 1980s, with 5-year expectations at multi-decade highs. Goldman raised its year-end 2025 core PCE forecast by 0.5% to 3.5%.
   

4. Market Positioning Shifts: Bank of America reports trend followers have significantly increased U.S. equity short positions ahead of the tariff deadline, with S&P 500 shorts now at their largest since February 2016.
   

Stock Spotlight

Newsmax ($NMAX ( ▲ 0.54% )): The conservative cable network skyrocketed over 500% in its first trading day on the NYSE. After pricing at $10 per share, the stock opened at $14 and closed around $66.

Mr. Cooper ($COOP ( ▼ 1.29% )): Rose sharply after Rocket Companies ($RKT) announced a $9.4B all-stock acquisition. The deal gives Rocket control of a $2.1 trillion servicing portfolio covering about one in six U.S. mortgages.

CoreWeave: The Nvidia-backed cloud provider tumbled in its second trading session. The company, which rents out Nvidia GPUs to other tech companies, has faced challenges with its recent market debut.

Moderna ($MRNA ( ▼ 2.09% )): Fell following the resignation of the FDA's top vaccine regulator Peter Marks, who cited "misinformation and lies" around immunization as the reason for his departure.

Big Name Updates

Nvidia ($NVDA ( ▲ 1.35% )): GB200 server cabinet assembly has proven more complex than expected, with system installs taking up to a week and crashing frequently. This is pushing GB300 test samples to late Q4 2025, likely delaying mass production until 2026.

Tesla ($TSLA ( ▲ 0.7% )): Stifel maintained its buy rating but lowered its price target to $455 from $474. Separately, Elon Musk's xAI acquired his social media platform X in an all-stock deal valuing xAI at $80B and X at $33B.

Apple ($AAPL ( ▼ 0.19% )): iPhone shipments in China rose 9% year-over-year in February, maintaining leadership among foreign brands. However, France imposed a €150M fine over iOS app data tracking consent violations.

Amazon ($AMZN ( ▼ 1.39% )): Evercore reiterated its outperform rating with a $270 price target, highlighting key seller insights on TikTok, tariffs, and ad strategy.

Other Notable Company News

Hut 8 ($HUT ( ▼ 5.54% ) ): Announced a new majority-owned subsidiary called American Bitcoin, formed with investors including Eric Trump and Donald Trump Jr., who will retain a 20% stake in the venture.

Canada Goose ($GOOS ( 0.0% ) ): Barclays downgraded to underweight from equal weight, citing global macro pressure, increasing competition, and potential tariff exposure. The firm's high exposure to production in Canada makes it particularly vulnerable to tariff risks.

U.S. Steel ($X ( ▲ 1.17% ) ): BMO Capital Markets downgraded to market perform from outperform as the company's deal with Nippon Steel remains uncertain. Despite the 26.5% rally this year, analyst Katja Jancic believes the stock is approaching fair fundamental value.

Wingstop ($WING ( ▼ 3.6% )): Jefferies upgraded to buy from hold with a $270 price target, noting the stock appears oversold and that same-store sales moderation overlooks underlying traffic strength and low-teens unit growth.

CAVA Group ($CAVA ( ▼ 0.8% )): Bank of America initiated coverage with a buy rating and $112 price target, stating the company "has built a model that delivers strong value to customers while translating consistent topline growth into high and rising returns."

Sector Watch

Bond Market

• Market remains cautious as traders assess potential inflationary impact of Trump's tariff plans

• VIX term structure shifted into backwardation, signaling heightened near-term risk perception

• Consumer inflation expectations have reached multi-decade highs, with 5-year expectations at levels not seen since the early 1980s

• Goldman Sachs raised its year-end 2025 core PCE forecast by 0.5% to 3.5%, directly citing tariff-driven price increases

Policy Watch

• Wednesday's "Liberation Day" tariff announcement remains the market's central focus

• White House Press Secretary Karoline Leavitt: "It's time for reciprocity, and it's time for a president to take historic change to do what's right for the American people"

• Barclays warns April 2 could bring "the BIGGEST wave of U.S. tariffs in history," potentially targeting 15-25 countries under Section 338 or IEEPA

• Geopolitical tension: Trump stated he's "pissed off" at Putin and threatened 25-50% secondary tariffs on Russian oil absent a Ukraine ceasefire deal

• Kremlin response indicates Putin remains open to dialogue while working to maintain bilateral ties
  
  

What to Watch

1. Wednesday’s Tariff Announcement: Watch for which countries/products face highest levies, any exemptions or phase-in periods.

   • Watch for market sector rotations as winners and losers emerge

   • Monitor currency markets for signs of competitive devaluations
     

2. Friday’s Jobs Report: March employment data will provide crucial insights into economic health amid growing recession concerns.

   • Look beyond headline numbers to wage growth and labor force participation

   • Any significant miss could amplify recession fears and trigger further market volatility
     

3. Earnings Warning Season: As Q1 closes, watch for companies issuing guidance updates that factor in the new tariff landscape.

   • Companies with global supply chains will be first to signal impacts

   • Retailers and consumer goods firms may provide early warnings on pricing pressures
     

4. Russia-Ukraine Developments: After Trump’s threat of secondary sanctions on Russian oil, monitor diplomatic channels for signs of movement toward a ceasefire.

   • Energy markets could see significant volatility based on headlines

   • Defense sector stocks may react to changing geopolitical calculations

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- John