March 11, 2025

After last week’s miserable showing, the market basically collapsed yesterday, as things cut deeper as to how much pain the President will let the economy endure through tariffs and other policies in order to get what he wants.

‍

The Dow collapsed by 890 down to 41,911 after having recovered from an 1,189 wipeout at 3:10pm in order to relieve some of the downside suffering that investors are going through. And once again, some of the old-time consumer staples stocks were able to show some nominal gains as apparently people are moving into these underperformers while getting out of the higher moving technology stocks which have completely collapsed altogether, and these names included once again JNJ, 3M, KO and PEP.

‍

The S&P did worse as at the same time of 3:10pm it had completely cratered to a hard to believe 203 point meltdown before coming back a little to end 155 lower to 5614. It has now closed 9% below its all-time high which was set just last month. At the lows it was one track for its worst day since 2022. That is when the highest inflation in generations was shredding budgets and raising worries about a possible recession that ultimately never came. And now 350 of the 500 members have declined by 10% or more, so things do not look well at the present time.

‍

The Nasdaq as usual did the worst, at one point lower by 898 before that little relief rally got it back to “only” 727 down to 17,468 as you know who led the way down.

‍

The hopeless Russell 2000 Index of small stocks fell apart by 56 down to 2018 and the VIX continued it upside misery with a gain up to 27.86.

‍

It was the worst day yet in a scary stretch where the S&P 500 has swung more than 1%, up or down seven times in eight days because of Trump’s on and off again tariffs. The worry is that the whipsaw moves will either hurt the economy directly or create enough uncertainty to drive U.S. companies and consumers into an economy-freezing paralysis.

‍

The economy has already given some signals of weakening, mostly through surveys showing increased pessimism.. And a widely followed collection of real-time indicators compiled by the Federal Reserve Bank of Atlanta suggests the U.S. economy may already be shrinking.

‍

Asked over the weekend whether he was expecting a recession in 2025, Trump told Fox News that “I hate to predict things like that. There is a period of transition because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing.” He then added, “It takes a little time. It takes a little time.”

‍

Trump says he wants to bring manufacturing jobs back to the United States, among other reasons he’s given for tariffs. His Treasury secretary, Scott Bessent, has also said the economy may go through a “detox” period as it wears off an addiction to spending by the government. The White House is trying to limit federal spending, while also cutting the federal workforce and increasing deportations, which could hinder the job market.

‍

The U.S. job market is still showing stable hiring at the moment, , and the economy ended last year doing well. But economists are marking down their forecasts for how the economy will perform this year.

‍

In response to the market sell-off, a White House spokesman noted that a number of companies have responded to Trump’s “America First” economic agenda with “trillions in investment commitments that will create thousands of jobs.”

‍

The worries have so far been hurting some of its biggest stars the most. Big Tech stocks and companies that rode the AI frenzy in recent years have slumped sharply.

‍

NVDA fell another 5% to bring its loss for the year so far to more than 20%. This is a steep drop-off from its nearly 820% surge over 2023 and 2024.

‍

Elon Musk’s TSLA fell 15% to deepen its loss for 2025 to 45%. After getting an initial post-election bump on hopes that Musk’s close relationship with Trump would help the electric-vehicle company, the stock has slumped on worries that its brand has become intertwined with Musk. Protests against the government’s efforts to reduce its workforce and other moves have targeted TSLA dealerships, for example.

‍

Stocks of companies that depend on U.S. households feeling good enough about their finances to spend also fell sharply, with cruise-ship operators and airlines selling off.

‍

It is not just stocks that are struggling. Investors are sending prices lower for all kinds of investments whose momentum had earlier seemed nearly impossible to stop at times, such as bitcoin. The cryptocurrency’s value dropped below $80,000 from more than $106,000 in December. This comes after the meeting at the White House on Friday where various crypto “experts” attended, including the C.E.O. of MSTR, whose stock has completely collapsed to 249 from 540 as he keeps repeating the outlook for this one, and as I have said many times, selling high calls on this one has been a complete winner for many weeks now.

‍

Instead, investors have bid up U.S. Treasury bonds as they look for things whose prices can hold up better when the economy is under pressure. That has sent prices for their yields lower.

‍

The 10-year Treasury tumbled again to 4.22% from 4.32% late Friday. It has been dropping since January, when it was approaching 4.80%, as worries about the economy have grown, and this is a major move.

‍

Indexes fell in Hong Kong and in Shanghai after China said consumer prices dropped in February for the first time in 13 months. It is the latest signal of weakness for the world’s second-largest economy, as persistent weak demand was compounded by the early timing of the Lunar New Year holiday.

‍

Earnings reports this week will see: today – MTN higher and ASAN,ORCL, DKS, KSS and Dow component VZ lower; tonight – CASY; Wednesday – ADBE, IRT; Thursday – DOCU, DG, ULTA

‍

Economic reports will importantly show: today – January JOLTS report came in at 7.7 million; Wednesday – February CPI; Thursday – February PPI; Friday – March mid-month U. of Michigan Consumer Sentiment Index.