This week could bring both the Fed "put" and Trump "put" back into play, post-Feb jobs report. Last Friday's "stocks rise on bad news" was a good sign. Array ( [cookie] => 28da63-207526-6b8ea8-7bd44b-406bde [current_usage] => 1 [max_usage] => 2 [current_usage_crypto] => 0 [max_usage_crypto] => 2 [lock] => [message] => [error] => [active_member] => 0 [subscriber] => 0 [role] => [visitor_id] => 75821 [reason] => Usage under limits [method] => ) 1 and can accesss 1

VIDEO: This week is shaping up to be a critical week, when there could be panic about a bad jobs report (fri) but this brings both the Fed “put” and Trump “put” back in play

Please click below to view our Macro Minute (duration: 8:08).

This coming week is an important week for equities. In a way, we believe the stage is set for stocks to set the bottom for the first half 2025 and rally, fueled by the return of the Fed “put” and Trump “put.” And, aided by a rebound in Bitcoin. Let me explain:

• The setup, in our opinion, is as follows:
  – this past Friday, stocks rose on “bad news” = good sign
  – this coming Friday, we see downside risk to Feb jobs report, consensus +160k
  – Thu, Scott Bessent speaks NY Economic Club 12pm ET and the Trump “put” is back if Feb jobs report weak
  – Friday, Fed Chair Powell speaks Friday at 12:30pm ET and Fed “put” back if Feb jobs is weak
• So you see the setup? A panic possible this coming Friday, but this leads to a return of two key “puts.” As for the coming week, there is a ton of macro:
  – 3/3 Mon 9:45 AM ET: Feb F S&P Global Manufacturing PMI    51.6e
  – 3/3 Mon 10:00 AM ET: Feb ISM Manufacturing PMI    50.8e
  – 3/5 Wed 9:45 AM ET: Feb F S&P Global Services PMI    49.7e
  – 3/5 Wed 10:00 AM ET: Feb ISM Services PMI    52.7e
  – 3/5 Wed 10:00 AM ET: Jan F Durable Goods Orders MoM    3.1%e
  – 3/5 Wed 2:00 PM ET: Mar Fed Releases Beige Book
  – 3/6 Thu 8:30 AM ET: 4Q F Nonfarm Productivity QoQ    1.2%e
  – 3/6 Thu 8:30 AM ET: Jan Trade Balance    -129be
  – 3/6 Thu 8:30 AM ET: 4Q F Unit Labor Costs    3.0%e
  – 3/6 Thu 12:00 PM ET: Treasury Sec. Scott Bessent at NY Economic Club
  – 3/7 Fri 8:30 AM ET: Feb Non-farm Payrolls    160ke
  – 3/7 Fri 9:00 AM ET: Feb F Manheim Used Vehicle Index
  – 3/7 Fri 12:30 PM ET: Powell Speaks on the Economic Outlook
• If we get a bad jobs report, the Trump “put” comes back. Why? Because, an economy approaching stall speed risks a recession. This would require fiscal measure (spending) which negates the benefits of tariffs/austerity/etc. As we discussed last week:
  In our view, a White House “put” still exists. Let me explain, by walking through our rationale:
  – It makes sense the White House wants lower interest rates
  – Consumers benefit from lower 10-year rates = cheaper mortgages
  – Corporates want lower rates to refinance existing loans at lower cost
  – Tariffs could slow economic growth, which in turn, leads to lower interest rates
  – DOGE by cutting gov’t spending lowers employment, which lower interest rates
  – Weaker Jobs likely forces Fed off “hawkish pause” as it responds to weaker jobs
  – But White House wants to avoid Stall Speed in the economy
  – As this raises recession risk, and would require fiscal stimulus (reversing the above)
  – thus, a White House “put” is still in play before economy hits “stall speed”
• Similarly, the market-based measures are already pricing in a more dovish path than Fed has signaled.
  – the number of rate cuts implied is 2.8 vs 2 cuts guidance by Fed
  – the odds of a May cut now 28% vs Fed saying later in 2025
  – a weak jobs report could bring this to 100% odds for May
• Why is this not actually bearish and means stocks could fall meaningfully?
• This is possible but we wonder if a lot of bad news is already baked in. Take a look this past Friday, there was a hostile press briefing with President Trump and Ukraine. And while markets initially sold off, stocks recovered and rallied to highs of the day. This is a case of stocks rising on bad news.
• Similarly, $100 billion of cash has been raised by institutional and retail investors in the past 4 weeks, a huge rise. And along with AAII % net bulls at -41.2% (worst since Sept 2022), we know sentiment is bad.
• Of course, if the US economy is slipping into a recession, then downside risks are sizable. But it seems like the economy is slowing because businesses and consumers are getting cautious due to Trump tariffs and policy uncertainty. This would be easier to unwind versus an economy exhausting itself in the business cycle.
• There was good news for Bitcoin and crypto over the weekend. Trump posted on TruthSocial that the working group was moving forward on a Crypto Strategic Reserve. This would be for Bitcoin, Ethereum and others. And crypto rallied strongly over the weekend. Bitcoin up 9% today. This Friday is also the first Crypto Summit, so there is important positive policy ahead.
• Mark Newton, our Head of Technical Strategy, sees $97,500 as critical resistance. And a failure there brings into play his cycle call of downside to $62k. And Sean Farrell sees this as constructive.
• Our Bitcoin Rule #5 comes to mind. Bitcoin makes its best gains in 10 days in any single year. And the 9% rise today is an example.

BOTTOM LINE: Stocks are hit harder than we expected, but probabilities favor we are near end of selling pressure

As for stocks, the question is whether the bad news is baked in. Given the relentless selling over the past week, and the choppy trading since mid-December, the renewed selling is obviously disconcerting. But there are reasons to believe we are in the final stages of this selling:

• From a Technical Perspective, Mark Newton, believes the selling should subside soon:
  “My comments given the choppy trading on Thursday are similar to Wednesday night. I feel like lows should be in place by Monday, 3/3/25, and Equity indices should be set to bottom as February comes to a close.”
• The retail AAII survey shows % net bulls is now -41.2%, the lowest reading since Sept 2022 and the 7th worst ever reading in the survey’s 40-year history. In fact, the clusters of these readings were:
  – 1990s
  – March 5, 2009
  – 2022
• And the average 12M forward gain post- -40 or worse, is +22%, with only 1 negative 12M return (April 2022). So, the risk/reward from this AAII is positive.
• Similarly, the crash in momentum MTUM -2.22%  points to signs that selling is overdone:
  – MTUM -2.22%  is down 6 of last 7 days
  – down 5 consecutive days -5.5% today
  – this is the 7th worst ever decline in past 12 years
  – the other 6 worst instances (ex-2022), average 22% forward 12M gain (all positive)
• The point is that this selling is so sizable and intense, that signs of exhaustion should be emerging.

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Key incoming data March:

• 3/3 9:45 AM ET: Feb F S&P Global Manufacturing PMI
• 3/3 10:00 AM ET: Feb ISM Manufacturing PMI
• 3/5 9:45 AM ET: Feb F S&P Global Services PMI
• 3/5 10:00 AM ET: Feb ISM Services PMI
• 3/5 10:00 AM ET: Jan F Durable Goods Orders
• 3/5 2:00 PM ET: Mar Fed Releases Beige Book
• 3/6 8:30 AM ET: 4Q F Non-Farm Productivity
• 3/6 8:30 AM ET: Jan Trade Balance
• 3/6 8:30 AM ET: 4Q F Unit Labor Costs
• 3/7 8:30 AM ET: Feb Non-Farm Payrolls
• 3/7 9:00 AM ET: Feb F Manheim Used Vehicle index
• 3/10 11:00 AM ET: Feb NY Fed 1yr Inf Exp
• 3/11 6:00 AM ET: Feb Small Business Optimism Survey
• 3/11 10:00 AM ET: Jan JOLTS Job Openings
• 3/12 8:30 AM ET: Feb CPI
• 3/13 8:30 AM ET: Feb PPI
• 3/14 10:00 AM ET: Mar P U. Mich. Sentiment and Inflation Expectation
• 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

Key incoming data February:

• 2/3 9:45 AM ET: Jan F S&P Global Manufacturing PMI Tame
• 2/3 10:00 AM ET: Jan ISM Manufacturing PMI Tame
• 2/4 10:00 AM ET: Dec JOLTS Job Openings Tame
• 2/4 10:00 AM ET: Dec F Durable Goods Orders Tame
• 2/5 8:30 AM ET: Dec Trade Balance Tame
• 2/5 9:45 AM ET: Jan F S&P Global Services PMI Tame
• 2/5 10:00 AM ET: Jan ISM Services PMI Tame
• 2/6 8:30 AM ET: 4Q P Non-Farm Productivity Tame
• 2/6 8:30 AM ET: 4Q P Unit Labor Costs Tame
• 2/7 8:30 AM ET: Jan Non-Farm Payrolls Tame
• 2/7 9:00 AM ET: Dec F Manheim Used Vehicle index Tame
• 2/7 10:00 AM ET: Feb P U. Mich. Sentiment and Inflation Expectation Hot
• 2/10 11:00 AM ET: Jan NY Fed 1yr Inf Exp Tame
• 2/11 6:00 AM ET: Jan Small Business Optimism Survey Tame
• 2/12 8:30 AM ET: Jan CPI Hot
• 2/13 8:30 AM ET: Jan PPI Hot
• 2/14 8:30 AM ET: Jan Retail Sales Data Tame
• 2/18 8:30 AM ET: Feb Empire Manufacturing Survey Tame
• 2/18 10:00 AM ET: Feb NAHB Housing Market Index Tame
• 2/18 4:00 PM ET: Dec Net TIC Flows Tame
• 2/19 9:00 AM ET: Jan M Manheim Used Vehicle index Tame
• 2/19 2:00 PM ET: Jan FOMC Meeting Minutes Dovish
• 2/20 8:30 AM ET: Feb Philly Fed Business Outlook Tame
• 2/21 9:45 AM ET: Feb P S&P Global Manufacturing PMI Tame
• 2/21 9:45 AM ET: Feb P S&P Global Services PMI Tame
• 2/21 10:00 AM ET: Feb F U. Mich. Sentiment and Inflation Expectation Hot
• 2/21 10:00 AM ET: Jan Existing Home Sales Tame
• 2/24 8:30 AM ET: Jan Chicago Fed Nat Activity Index Tame
• 2/24 10:30 AM ET: Feb Dallas Fed Manuf. Activity Survey Tame
• 2/25 9:00 AM ET: Dec S&P CoreLogic CS home price Mixed
• 2/25 10:00 AM ET: Feb Conference Board Consumer Confidence Tame
• 2/26 10:00 AM ET: Jan New Home Sales Tame
• 2/27 8:30 AM ET: 4Q S GDP Tame
• 2/27 10:00 AM ET: Jan P Durable Goods Orders Tame
• 2/28 8:30 AM ET: Jan PCE Deflator Tame

Economic Data Performance Tracker 2025:

Economic Data Performance Tracker 2024:

Economic Data Performance Tracker 2023: