A daily market update from FS Insight — what you need to know ahead of opening bell.
“Be fearful when others are greedy, and greedy when others are fearful.” — Warren Buffet
Chart of the Week
Good morning!
Is it hurting yet? Are you rethinking your investment strategy? Forcing yourself to not look at your portfolio in hopes of avoiding bad news (and maybe even bad decisions)?
Welcome to 2025’s stock market. CNN’s Fear and Greed index is at its lowest level since August, suggesting that investors are getting perhaps a little too skittish. Crypto is down, while tech darlings are leading the sell-off.
In just a span of a few weeks, everybody and their mom has turned sour on the U.S. economy and the stock market. At first, it seemed like it was a worry only shared by investors on Main Street, as the Fundstrat team has discussed via the American Association of Individual Investors’ sentiment surveys. But now, it is a concern being embraced more broadly by Wall Street, too, which had earlier hoped for more modest returns in 2025.
Here’s what they are saying:
- JPMorgan Chase economists raised their risk of a recession in 2025 to 40% from 30% at the beginning of the year. “We see a material risk that the U.S. falls into recession this year owing to extreme U.S. policies,” they wrote.
- Goldman Sachs economists on Friday increased their 12-month recession probability to 20% from 15%. The bank noted that its forecast could rise further if the Trump administration remains “committed to its policies even in the face of much worse data.” They also slashed their GDP outlook for this year to 1.7% from 2.4% at the start of the year, marking Goldman’s first below-consensus outlook in 2.5 years.
- Morgan Stanley economists lowered their economic growth estimates and raised their inflation expectations. The bank now expects real GDP growth of 1.5% in 2025 and 1.2% in 2026, down from previous estimates.
- BCA Research downgraded equities, citing aggressive tariffs and federal spending cuts by DOGE, which threaten to put the economy into a recession. To be clear, BCA has been calling for a recession since mid-2024.
- Vanguard lowered its 10-year U.S. equity markets forecast to a range of 2.9% to 4.9%.
- BlackRock CEO Larry Fink is also worried about elevated inflation in the short-term, citing that said mass deportations could have a severe impact on the agriculture and construction sectors.
On the bright side though, corporations don’t seem as nervous. The lowest number of S&P 500 companies are citing “recession” during earnings calls over the fourth quarter since the beginning of 2018, according to FactSet.
In markets, it’s good to be fearful in some ways. It can force you to reconsider whether you truly believe in a business’ long-term fundamentals, or if you were just holding it and hoping to cash in on the momentum. It can convince you to put more money to work in hopes of maximizing your chances of getting a good deal. It also tests your resolve. One could even make the argument that fearful markets make us better investors.
While it feels difficult to stomach this volatility, keep pushing through it is what we recommend. Or, as Tom Lee puts it: “Stay on target.”
Catch Up With FS Insight
Equities failed to follow through from Friday’s bounce. We discuss several important events this week including the Biz Roundtable Tue and Wed CPI.
TECHNICAL
Overall, our recent selloff has proven far more orderly and concentrated than desired for investors seeking evidence of capitulation. While that still might be ahead of us this week, SPX should be closing in on lows based on Elliott-wave structure and cycles despite the lack of DeMark exhaustion present.
CRYPTO
As we patiently wait for signs of a crypto market turnaround, we highlight two key bright spots—strong high-yield credit performance and an impending MSTR bid.
News We’re Following
Breaking News
- Bags Will No Longer Fly Free on Southwest Airlines WSJ
- Trump calls Tesla boycott ‘illegal’ and says he’s buying one to support Elon Musk CNBC
- US, Ukrainian officials gather for peace talks as Moscow hit by drone attack SEM
Markets and economy
- Wall Street Fears Trump Will Wreck the Soft Landing WSJ
- The Mounting Case Against U.S. Stocks WSJ
- 2-year Treasury yield hits lowest level since October amid recession fears CNBC
Business
- How ‘inference’ is driving competition to Nvidia’s AI chip dominance FT
- Trump’s tariffs create the ‘Wild West’ on Wisconsin’s factory floors RT
Politics
- Trump Promised Americans Booming Wealth. Now He’s Changing His Tune. NYT
Overseas
- Portugal’s government on brink of collapse FT
- Ursula von der Leyen says €150bn EU defence loans should be spent in Europe FT
Of Interest
- Manchester United reveals plans for new 100,000-seater stadium FT
| Overnight |
| S&P Futures +26
point(s) (+0.5%
) overnight range: -63 to +29 point(s) |
| APAC |
| Nikkei -0.64%
Topix -1.11% China SHCOMP +0.41% Hang Seng -0.01% Korea -1.28% Singapore -1.88% Australia -0.91% India +0.17% Taiwan -1.73% |
| Europe |
| Stoxx 50 -0.00%
Stoxx 600 -0.45% FTSE 100 -0.33% DAX +0.28% CAC 40 -0.10% Italy +0.04% IBEX -0.51% |
| FX |
| Dollar Index (DXY) -0.36%
to 103.52 EUR/USD +0.69% to 1.0909 GBP/USD +0.38% to 1.2928 USD/JPY -0.21% to 147.58 USD/CNY +0.35% to 7.2348 USD/CNH +0.38% to 7.2358 USD/CHF -0.10% to 0.8819 USD/CAD +0.30% to 1.4397 AUD/USD +0.22% to 0.6292 |
| UST Term Structure |
| 2Y-3
M Spread widened 2.8bps to -37.8bps
10Y-2 Y Spread narrowed -0.6bps to 32.0bps 30Y-10 Y Spread narrowed -0.8bps to 31.6bps |
| Yesterday's Recap |
| SPX -2.70%
SPX Eq Wt -1.41% NASDAQ 100 -3.81% NASDAQ Comp -4.00% Russell Midcap -2.34% R2k -2.72% R1k Value -1.48% R1k Growth -3.97% R2k Value -2.73% R2k Growth -2.70% FANG+ -4.75% Semis -4.69% Software -5.07% Biotech -1.21% Regional Banks -3.95% SPX GICS1 Sorted: Tech -4.34% Cons Disc -3.90% Comm Srvcs -3.54% SPX -2.70% Fin -2.29% Materials -2.11% Indu -1.60% Healthcare -1.10% REITs -1.02% Cons Staples -0.69% Energy +0.94% Utes +1.04% |
| USD HY OaS |
| All Sectors -4.2bps
to 354bps All Sectors ex-Energy -4.3bps 325bps Cons Disc -3.5bps 333bps Indu -5.0bps 267bps Tech -4.6bps 361bps Comm Srvcs -4.2bps 545bps Materials -3.8bps 317bps Energy -5.1bps 357bps Fin Snr -4.3bps 301bps Fin Sub -3.5bps 225bps Cons Staples -6.2bps 232bps Healthcare -3.3bps 378bps Utes -4.1bps 253bps * |
| Date | Time | Description | Estimate | Last |
|---|---|---|---|---|
| 3/11 | 10:00 AM | Jan JOLTS | 7600 | 7600 |
| 3/12 | 8:30 AM | Feb CPI m/m | 0.3 | 0.5 |
| 3/12 | 8:30 AM | Feb Core CPI m/m | 0.3 | 0.4 |
| 3/12 | 8:30 AM | Feb CPI y/y | 2.9 | 3 |
| 3/12 | 8:30 AM | Feb Core CPI y/y | 3.2 | 3.3 |
| 3/13 | 8:30 AM | Feb PPI m/m | 0.3 | 0.4 |
| 3/13 | 8:30 AM | Feb Core PPI m/m | 0.3 | 0.3 |
| 3/14 | 10:00 AM | Mar P UMich 1yr Inf Exp | 4.2 | 4.3 |
| 3/14 | 10:00 AM | Mar P UMich Sentiment | 63.1 | 64.7 |
| 3/17 | 8:30 AM | Feb Retail Sales m/m | 0.8 | -0.9 |
| 3/17 | 10:00 AM | Mar Homebuilder Sentiment | 42 | 42 |
