March 10, 2025

After the supposed “death cross” around mid-day where the S&P falls below the 200 day moving average (around 5700) for the 50-day price, which is supposedly a near-term bearish signal. But from an intraday low of 5666 it made a very strong comeback to end with a closing gain of 31 to finish at 5770, which would be a nice signal but unfortunately these one-day gains have come in the context of a very negative market recently as the market has lost $3 trillion since the inauguration of the current President. It is now more than 6% below its all-time high set last month.

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In fact, the S&P and Nasdaq suffered their worst performing week since last September as the Dow also made a rare upside turnaround from a loss to end 222 points higher led once again by the consumer staples type of issues such as CAT, CVX, KO, SHW, MCD, PG plus others such as CLX, PEP and T.

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The Nasdaq also followed the same pattern with a large gain of 301 to 18,196 led by some gains in the formerly beaten-down tech leaders such as AAPL, NVDA, ORCL, AVGO on a very good report. The Russell 2000 Index of small stocks got pushed up a little higher with a 9 point gain to 2075.

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The VIX, which had been pushing higher on the recent weakness in equities, came down from an intraday high of 26.50 on the mid-day market lows, and ended at 23.37.

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The day was a fitting ending to a brutal week of wild swings dominated by worries about the U.S. economy and uncertainty about what the President will do with tariffs.

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The market came back from a punishing stretch where it swung more than 1%, up or down, for six straight days.

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The Fed Chair Jerome Powell helped ease the market’s worries on Friday afternoon after saying he thinks the economy looks stable at the moment, and he doesn’t feel pressure to cut interest rates at the present time in order to prop it up.

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Traders in recent weeks had been building bets the Fed would have to cut its main rate more than three times this year following a stream of weaker-than-expected reports on the economy. But Chair Powell pushed back on speculation he and other Fed officials could feel pressure to act soon.

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“The costs of being cautious are very, very low” right now, Powell said about holding steady on interest rates. “The economy is fine. It doesn’t need us to do anything really. We can wait, and we should wait.”

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The highly anticipated non-farm payroll report released Friday morning may have given him leeway to do just that. The U.S. Labor Department said 151,000 more jobs were added last month. That was slightly below economists’ expectations, but it was an acceleration from what took place in January.

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Surveys released recently had shown souring confidence for U.S. businesses and households because of uncertainty around Trump’s tariffs, and economists were waiting to see if Friday’s report would show if that was translating into real pain for the economy and job market.

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Some economists, though, also warned the jobs data included concerning details underneath the surface that could imply trouble ahead. The number of people working part time who would rather be full time rose 10% in February from January, for example.

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The whiplash actions from the White House on tariffs, first placing them on trading partners and then exempting some and then doing it again. have raised uncertainty for businesses.

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That sparked fears businesses might freeze in response to what they have described as “chaos” and pull back on hiring. U.S. households, meanwhile, are bracing for higher inflation because of tariffs, which is weakening their confidence and could hold back their spending which could take more energy from the economy.

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Trump said Friday he wants tariffs to bring jobs back to the United States, and he gave no indication more certainty is imminent for financial markets. “There will always be changes and adjustments,” he said in comments from the Oval Office.

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“There could be some disturbance,” Trump said about the effect on the economy before saying, “I solved a little bit of that” by giving a one-month reprieve on tariffs for Mexican and Canadian imports for automakers.

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In the bond market, Treasury yields initially fell after the jobs report but rose after Powell’s comments pushed traders to take away expectations for four or more cuts to rates this year.

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The 10-year Treasury yield fell as low as 4.22% before climbing to 4.30%, up from 4.28% late Thursday. It’s been generally sinking since January, when it was nearing 4.80%, as investors have ratcheted back expectations for the economy’s growth.

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WBA climbed 7.5% after the pharmacy and drug store chain agreed to be acquired by private equity firm Sycamore Partners. The buyout would take the struggling chain private for the first time since 1927 and give it more flexibility to make changes to improve its business without worrying about investor reaction.

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AVGO gained 9% after delivering stronger profit and revenue for the latest quarter than analysts expected. The chip company also gave a forecast for upcoming revenue that topped analysts’ exception thanks in part to strong demand for its AI offerings.

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They helped offset HPE, which slumped 12% after reporting profit for the latest quarter, which fell just short of analysts’ expectations. And COST sank 6. after the retailer reported a weaker profit for the latest quarter than expected.

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In stock markets abroad, German stocks lost 1.8% to give back some gains from earlier in the week sparked by a seismic shift in its policy on debt. The traditionally debt-averse German government appears willing to allow for much more borrowing and higher growth rates as Europe now appears ready to send more support to Ukraine.

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Earnings reports this week will see: tonight – ORCL; Tuesday – CASY, DKS, KSS; Wednesday – ADBE, IRT; Thursday – DOCU, DG, ULTA

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Economic reports will importantly show: Wednesday – February CPI; Thursday – February PPI; Friday – March mid-month U. of Michigan Consumer Sentiment Index.

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After Friday’s nice upside turnaround, things are expected to start out lower again today , once again on the possibility of a potential recession amid the proposed reciprocal tariffs proposal and the mass layoffs largely triggered by the Department of Government Efficiency (DOGE) under Elon Musk. The Atlanta Federal Reserve model suggested that economic growth might be negative in the first-quarter of this year.

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Trump did not rule out the possibility of economic hardship, arguing that the economy and the U.S. population will have to adjust to the changes being made.

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“I hate to predict things like that,” he said, when asked if he is expecting a recession this year. “There is a period of transition, because what we’re doing is very big. We’re bringing wealth back to America. There are always periods of… it takes a little time. It takes a little time. But I think it should be great for us.”

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When pushed for more detail on tariffs, stating that businesses want “clarity” and predictability for shareholder purposes amid Trump’s proposed tariffs and, more specifically, his decision to delay some of those tariffs on Canada and Mexico.

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He said that businesses will have clarity after April 2nd, when his reciprocal tariffs are set to be put in place. But he also said that the tariffs may well rise over time.

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“The tariffs could go up as time goes by, they may go up…” he said. “This country has been ripped off from every nation in the world, every company in the world. We've been ripped off at levels never seen before, and what we're going to do is get it back.”

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Trump went on to reaffirm his belief that more business and production should be carried out on American soil. “Build it here, there’s no tariff,” he said.