March 8th Market Overview

Brutal Monday.

Markets getting hammered today as real recession fears took over. The Nasdaq almost* had its worst day in three years, with the tech getting crushed. Tesla's down 15%, the VIX is spiking, and everyone's talking about Trump's tariff comments over the weekend.

Not pretty out there.

Let's dig in...

Executive Summary

• Wall Street's fear gauge (VIX) spiked 19.17% to 27.85, reaching its highest level since December 2024

• The S&P 500 has now fallen 9.1% from its February 19 peak, as President Trump acknowledges economic "transition" period

• Natural gas futures surge to highest level since December 2022 amid colder weather forecasts

• Magnificent Seven" stocks led the decline with $TSLA ( ▲ 0.7% ) tumbling , while $NVDA, $AAPL, $META, and $GOOGL all shed more than 5%
  

Market Overview

Key Market Drivers

1. Tariff Policy Uncertainty: President Trump’s weekend comments on Fox News describing the economy as going through “a period of transition” while adding “You can’t really watch the stock market” fueled anxiety.

2. Treasury Comments: Treasury Secretary Scott Bessent’s Friday remarks about a potential “detox period” for the economy as government spending cuts take effect added to market concerns.

3. Consumer Financial Stress: NY Fed survey showed the perceived likelihood of missing minimum debt payments rose to 14.6%, the highest since April 2020, signaling growing household financial pressure.

4. Extreme Fear:The Fear and “Greed Index” downto 16, entering “extreme fear” territory for the first time in over a year.

Stock Spotlight

• $TSLA: Continued its seven-week losing streak (longest in its 15-year history as a public company), plunging 13% toward its worst day since 2020. The stock has now fallen over 50% from its 52-week high, with reports of dealership vandalism raising demand concerns.

• $HOOD: Dropped over 14% after Finra ordered the company to pay nearly $30 million in customer restitution plus $26 million in fines for failing to “establish and implement reasonable anti-money laundering programs.”

• $MSTR: Led Nasdaq 100 declines with a 17% drop as Bitcoin prices retreated below $80,000.

• $DASH: Bucked the negative trend on news it will join the S&P 500 effective March 24, along with $WSM (Williams-Sonoma), $TKO (TKO Group Holdings), and $EXG (Expand Energy).

• $APP: Fell 10% despite Citi maintaining a $600 price target (122% upside), with analyst Jason Bazinet calling the recent sell-off “extreme” and noting the company’s strong eCommerce pilot and aggressive share buyback program.

Big Name Updates

• $NVDA ( ▲ 1.35% ) : Extended losses after last week’s 9% decline, continuing its downward trajectory despite two years of monster gains. The AI darling has now fallen about 16% in 2025.

• $ARKK ( ▲ 0.63% ) : Cathie Wood’s flagship innovation ETF slid nearly 9%, marking its worst day since June 2022, driven largely by Tesla’s decline. The fund has now lost 25% of its value since its 2025 high.

• Banking stocks faced heavy pressure with $JPM ( ▼ 0.68% ) , $GS ( ▲ 0.78% ) , $C ( ▲ 1.76% ) , $WFC ( ▲ 2.28% ) , $BA ( ▼ 2.36% ) C, and $MS ( ▲ 1.22% ) all falling between 2-5% as recession concerns mounted.

Other Notable Company News

• BCA Research downgraded equities to underweight, citing tariffs and DOGE spending cuts as recession catalysts.

• UBS projects S&P 500 reaching 6,600 by year-end (14% upside) despite volatility, based on earnings growth and AI advancement.

• Crypto funds saw $867 million in outflows last week, totaling $4.75 billion over four consecutive down weeks per CoinShares data.

• S&P 500 additions effective March 24: $DASH ( ▼ 0.17% ) , $WSM ( ▼ 1.63% ) , $TKO ( ▲ 1.03% ) , and $EXG ( ▲ 0.07% ) , replacing $BWA ( ▼ 1.36% ) , $TFX ( ▼ 2.71% ) , $CE ( ▼ 3.22% ) , and $FMC ( ▼ 0.43% ) .

Sector Watch

Bond Market

• 10-year Treasury yield dropped 9.7 basis points to 4.221% as investors sought safety amid economic concerns.

• Natural gas futures surged to $4.901 per million BTUs, highest since December 2022, driven by cold weather and storage concerns.

Policy Watch

• Morgan Stanley: Tariffs likely to delay Fed rate cuts planned for May/June due to temporary inflation pressure.

• Alpine Macro: Recommends reducing U.S. equity exposure for European and EM stocks, as Trump's tariffs may spur fiscal expansion in other regions.

What to Watch

1. Fed's next move:

   • Wednesday's CPI numbers - need to see if inflation is cooling enough for rate cuts

   • Several Fed officials are speaking this week - any shift in tone on tariffs could signal delay in easing

2. Bond market signals:

   • 10-year yield has dropped nearly 10 basis points today to 4.221% - market expects slower growth

   • Yield curve remains key recession indicator - currently showing stress but not full inversion

3. Trump admin comments:

   • Treasury Secretary Bessent's "detox period" comments triggered today's selling

   • Watch for any walk-back or doubling down on tariff implementation details

4. Key economic data:

   • February CPI (Wednesday) - economists expect 3.1% headline inflation

   • Retail sales report will show if rising consumer debt concerns are affecting spending

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Thanks for reading 🙂

- John