Morning Brew March 11 2025

Good morning,

In a move close to panic, stocks were sold yesterday. The Dow lost 2.08%, the S&P 500 2.70%, and the Nasdaq 4.00%. The centre of attention was Tesla, which lost 15%. Coinbase and MicroStrategy each lost more than 15%, while Robinhood lost almost 20%. The Magnificent 7 all lost around 5%. Tesla has lost more than 50% from its high.

Donald Trump wrote that he thinks it is unfair Tesla is under pressure and would buy a Tesla himself to support the company.

The VIX exploded, and volumes were high but less than one might have imagined, at 18.7 billion shares versus the 20-day average of 16.4 billion.

Novo Nordisk lost 8% yesterday and is now almost 50% below its high. SAP gave up almost 5%.

The cause of the selloff was a combination of factors, ranging from DJT talking about the possibility of a recession, HSBC lowering guidance for US equities due to erratic trade regulation, and overall nervousness.

Falling equities and the recession risk have led the year-end Fed rate expectation to fall 85 bps from the current level, even if there is only a minute probability of a cut next week.

The USD Index fell on falling rates and is now at 103.60, after it was at 110 just a little while ago. EUR/USD is 1.0875, GBP/USD 1.2907, and USD/JPY 147.10. Gold and silver lost a little yesterday but held up decently; we are now at 2900 for gold and 32.25 for silver.

This morning, we are seeing risk sentiment improve in equities, with indications approximately 0.4% higher for the DAX.

We have seen very strong recoveries after selloffs in recent history – let's see if it happens again.

Today is a fairly quiet day for economic data. The JOLTS job openings are of interest, and there will not be any Fed comments as they are on lockdown before the rate decision next week.

Negotiations in Saudi Arabia have the potential to move sentiment as well.

Our Strats team was very efficient in the analysis:

Jacob:

Not so Magnificent? Why the 'Magnificent Seven' are struggling and what investors can do

• Tech sell-off and bear market for the magnificent seven: The  Magnificent Seven index has entered a bear market, falling over 20% from its highs, with Tesla and Nvidia among the hardest hit.
• Panic is not a strategy: Avoid emotional selling during market downturns; focus on fundamentals and long-term investment strategies instead.
• Stay disciplined and diversified: Maintain a balanced portfolio, diversify investments, and use the current volatility to potentially buy strong companies at discounted prices.
  
  

• From highs to lows: Why the market dip is no reason for long-term investors to panic | Saxo
  Stay disciplined: Despite recent volatility, long-term investors should avoid panic and stick to their investment strategy, as history shows markets often recover from downturns.
• Look beyond the noise: Market pullbacks are normal. Focus on long-term goals, maintain diversification, and consider the current market dip as a potential opportunity to invest in quality assets at lower prices.
• Embrace the boring: Defensive sectors like consumer staples and utilities can provide stability during market turbulence, proving that "boring" can be the best strategy in uncertain times.

Koen: Markets are tumbling - time to sell premium | Saxo

Tuesday, March 11, 2025

• US NFIB Small Business Optimism exp. 101
• US JOLTS Job Openings exp. 7665k

Wednesday, March 12, 2025

        •       Japan GDP

Thursday, March 13, 2025

        •       Eurozone: Industrial Production MoM/YoY (Jan).

        •       U.S.: Producer Price Index (PPI) Final Demand (Feb).

Friday, March 14, 2025

        •       U.S.: University of Michigan Consumer Sentiment Prelim (Mar).

        •       China: New Yuan Loans and Total Social Financing (Feb).