Just When Will The Dip Stop Dipping? 

The market carnage extended for a fourth straight week, dragged down by investors wrestling with a flip-flopping tariffs policy and intensifying recession fears. This week, the S&P 500 tumbled 2.3% and the Nasdaq Composite fell 2.4%. Both sharply rebounded Friday but failed to exit correction territory—defined as a drop of 10% or more from a recent high. 

While there is pain, Fundstrat Head of Technical Strategy Mark Newton reminded investors that the declines are in line with what is historically noted during the first quarter of any new administration. Besides, it was a mere 17 trading days ago that the S&P 500 set a fresh all-time high, he pointed out. 

“The economy arguably is still in very good shape, the earnings picture is good—even as fear levels are higher,” Newton said during the weekly huddle. “I don’t think we can jump to conclusions and talk ‘recession’ just based on these declines.”

Stocks’ “dire” situation is not shared by bonds, Head of Research Tom Lee said. Sure, Treasury Secretary Scott Bessent said that there is no Trump put for stocks, but “there may be one on the economy,” meaning that the White House could be forced to turn around its policies if it sees the economy deteriorate too much, Lee highlighted. 

The bond market is also pricing in odds of 3.4 interest-rate cuts from the Federal Reserve this year, up from 1.5 previously, he said. The divergence between stocks and bonds has historically been a “pretty good entry point for stocks,” said Lee, citing data from Renaissance Macro Research. 

On the technical side, Newton has been encouraged to see stocks down to the same levels of oversold territory as the ones that coincided with bottoms seen in August and April of 2024. “People are disgruntled, but we’re certainly not seeing evidence of true fear,” he said. 

He expects that lows to this sell-off could be “achieved within the next two weeks from a timing perspective, and prices are nearing possible support.”

Just When Will The Dip Stop Dipping? 

Chart of the Week

Just When Will The Dip Stop Dipping? 

Putting the recent declines into perspective, Fundstrat Head of Research Tom Lee said that the 10% correction noted in the S&P 500 is the fifth-fastest in the past three quarters of a century, taking 20 days. The median gain from all prior declines was 21% over the next 12 months. The quickest was from the Covid decline, prompting Lee to say, “Is this worse than the global pandemic? I don’t think so.”

Recent ⚡ FlashInsights

To me, the silence (or lack of bashing) of Trump on China and Mexico is telling
  • I would put >50% probability that a deal with one of those 2 countries is announced within the next 2 weeks
This would end talk of “White House wants a recession” Stay the course
Mar 14 · 12:09 PM
If one needed evidence that U Mich survey is polluted by political leanings, see the latest survey results of 1-yr inflation – Dems now +6.5% – Republicans +0.1% Feb Core CPI showed inflation tanking
Mar 14 · 11:26 AM
Last night’s data on Equity Put/call did in fact get back into the zone of fear, reaching 0.94, the highest reading since January. I had discussed last night that seeing a spike in Equity Put/call ratio was important in showing some evidence of capitulation which henceforth had been lacking despite the chronic bearishness. While the volume readings haven’t yet produced abnormally high readings on the downside via the TRIN, or Arms index, seeing nearly an Equal level of Put options being traded as Calls is an important piece of the sentiment puzzle that suggests that market lows are growing close.
Mar 14 · 10:58 AM

FS Insight Video: Weekly Highlight

Just When Will The Dip Stop Dipping? 

Key incoming data

  • 3/3 9:45 AM ET: Feb F S&P Global Manufacturing PMI Tame
  • 3/3 10:00 AM ET: Feb ISM Manufacturing PMI Tame
  • 3/5 9:45 AM ET: Feb F S&P Global Services PMI Tame
  • 3/5 10:00 AM ET: Feb ISM Services PMI Tame
  • 3/5 10:00 AM ET: Jan F Durable Goods Orders Tame
  • 3/5 2:00 PM ET: Mar Fed Releases Beige Book Tame
  • 3/6 8:30 AM ET: 4Q F Non-Farm Productivity Tame
  • 3/6 8:30 AM ET: Jan Trade Balance Tame
  • 3/6 8:30 AM ET: 4Q F Unit Labor Costs Tame
  • 3/7 8:30 AM ET: Feb Non-Farm Payrolls Tame
  • 3/7 9:00 AM ET: Feb F Manheim Used Vehicle index Tame
  • 3/10 11:00 AM ET: Feb NY Fed 1yr Inf Exp Tame
  • 3/11 6:00 AM ET: Feb Small Business Optimism Survey Tame
  • 3/11 10:00 AM ET: Jan JOLTS Job Openings Tame
  • 3/12 8:30 AM ET: Feb CPI Tame
  • 3/13 8:30 AM ET: Feb PPI Tame
  • 3/14 10:00 AM ET: Mar P U. Mich. Sentiment and Inflation Expectation Hot
  • 3/17 8:30 AM ET: Feb Retail Sales Data
  • 3/17 8:30 AM ET: Mar Empire Manufacturing Survey
  • 3/17 10:00 AM ET: Mar NAHB Housing Market Index
  • 3/19 9:00 AM ET: Mar M Manheim Used Vehicle index
  • 3/19 2:00 PM ET: Mar FOMC Decision
  • 3/19 4:00 PM ET: Jan Net TIC Flows
  • 3/20 8:30 AM ET: Mar Philly Fed Business Outlook
  • 3/20 10:00 AM ET: Feb Existing Home Sales
  • 3/24 8:30 AM ET: Feb Chicago Fed Nat Activity Index
  • 3/24 9:45 AM ET: Mar P S&P Global Manufacturing PMI
  • 3/24 9:45 AM ET: Mar P S&P Global Services PMI
  • 3/25 9:00 AM ET: Jan S&P CoreLogic CS home price
  • 3/25 10:00 AM ET: Mar Conference Board Consumer Confidence
  • 3/25 10:00 AM ET: Feb New Home Sales
  • 3/26 10:00 AM ET: Feb p Durable Goods Orders
  • 3/27 8:30 AM ET: 4Q T GDP
  • 3/28 8:30 AM ET: Feb PCE Deflator
  • 3/28 10:00 AM ET: Mar F U. Mich. Sentiment and Inflation Expectation
  • 3/31 10:30 AM ET: Mar Dallas Fed Manuf. Activity Survey
Just When Will The Dip Stop Dipping? 

Stock List Performance

Just When Will The Dip Stop Dipping? 
Just When Will The Dip Stop Dipping? 

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