A daily market update from FS Insight — what you need to know ahead of opening bell.
“I don’t believe all this nonsense about market timing. Just buy good value and when the market is ready that value will be recognized.” — Henry Earl Singleton
Good morning!
A good deal seems like a rare find these days, even with the recent market declines.
The S&P 500 has tumbled 2.4% this year, while the Nasdaq 100 is down 4.6%. The declines have picked up steam over the past month—the broad-based index has tumbled 5.7% and the tech-focused index has slid 7.9%—with investors nervous about the potential fallout from an all-out trade war on the U.S. economy, which has defied all expectations of a slowdown over the past few years.
Many investors, including Fundstrat Head of Research Tom Lee, have recommended investors to take advantage of the declines to put money to work in the market, but some are hesitant to get in to maximize chances of getting the best bang for their buck.
It’s important to remember during these times that investors should avoid timing the market. Lee stressed the same earlier this week, adding that, “the stock market makes most of its gains in 10 trading days in any single year.” He said that investors are better off with a buy-and-hold strategy rather than trying to tactically time entry and exit points.
For example, let’s take a look at forward valuations, which show that stocks remain expensive despite this past month’s sell-off. Currently, companies in the S&P 500 are trading at about 21 times their projected earnings over the next 12 months, above the 3-year average multiple of roughly 19.3.
By that measure, even the usually cheap defensive sectors look pricey (reference our Chart of the Day below), thanks to a recent run-up in prices for stodgy sectors of the economy. Many investors worry that this “rush to safety” trade is a page straight out of a recession playbook. But here’s the kicker: If the recession trade is on, why don’t stocks look cheaper?
Of course, the intent of today’s note is not to make you think that you may have missed the boat but rather to reinforce the idea that if you’re looking for “the best deal”, you’ll be waiting for a while.
We leave readers with the following quote from the legendary financial advisor Nick Murray:
“Timing the market is a fool’s game, whereas time in the market is your greatest natural advantage,” he said.
Catch Up With FS Insight
Yesterday saw the first signs that the “Trump put” might be returning. But growth worries weigh on stocks.
TECHNICAL
Market cycles seem to make the case for a bottom in SPX by March 14 at the latest. However, some evidence of breaking the current downtrend is necessary before having much confidence.
CRYPTO
We explore the recent signs of capitulation and deleveraging in the crypto market over the past two weeks. We’ll also revisit the risks we highlighted in early February that could impact crypto prices and update our stance on whether these concerns still apply.
News We’re Following
Breaking News
- U.S. payroll growth totals 151,000 in February, less than expected CNBC
- Clashes in Syria’s coastal region between government forces and Assad loyalists kill more than 70 AP
- European leaders agree €800 billion defense spend in ‘watershed moment’ SEM
Markets and economy
- Donald Trump’s crypto project netted $350mn from presidential memecoin FT
- Trump’s first White House Crypto Summit has VIPs pushing for favorable laws CNBC
- Howard Marks expects a lower return from the S&P 500 over the next decade. Here’s what he likes better. MW
- Treasury Secretary Bessent says there’s no Trump ‘put,’ but their policies should boost market CNBC
Business
- Tesla’s Fortunes Fall as Musk Rises in Trump World WSJ
- Costco says customers could stay cautious due to inflation and tariffs. ‘When it rains, it rains on everyone,’ CEO says. MW
- Blackstone Raises Largest Commercial Property Debt Fund With $8 Billion Haul WSJ
Politics
- Donald Trump restrains Doge as concern mounts over scale of job losses FT
- Trump’s Policies Have Shaken a Once-Solid Economic Outlook NYT
Overseas
- Pope Francis speaks from hospital as prognosis uncertain SEM
Of Interest
- The US penny costs nearly 4 cents to make. But for one sector of souvenir sellers, it’s a living AP
- The secret history of Syria’s new leader, Ahmed al-Sharaa FT
- Active managers keep lagging the market: Why it’s so tough to beat the indexes CNBC
| Overnight |
| S&P Futures +18
point(s) (+0.3%
) Overnight range: +4 to +28 point(s) |
| APAC |
| Nikkei -2.17%
Topix -1.56% China SHCOMP -0.25% Hang Seng -0.57% Korea -0.49% Singapore -0.07% Australia -1.81% India +0.03% Taiwan -0.61% |
| Europe |
| Stoxx 50 -0.89%
Stoxx 600 -0.69% FTSE 100 -0.52% DAX -1.5% CAC 40 -1.0% Italy -0.32% IBEX -0.55% |
| FX |
| Dollar Index (DXY) -0.43%
to 103.62 EUR/USD +0.74% to 1.0865 GBP/USD +0.34% to 1.2926 USD/JPY -0.32% to 147.5 USD/CNY -0.11% to 7.2335 USD/CNH -0.15% to 7.2332 USD/CHF -0.68% to 0.878 USD/CAD +0.1% to 1.4311 AUD/USD -0.38% to 0.6309 |
| Crypto |
| BTC -0.63%
to 89273.1 ETH -0.76% to 2196.75 XRP -2.41% to 2.5419 Cardano -3.98% to 0.8824 Solana -0.41% to 143.77 Avalanche -1.02% to 20.77 Dogecoin +0.99% to 0.2037 Chainlink +1.68% to 17.18 |
| Commodities and Others |
| VIX -0.32%
to 24.79 WTI Crude +1.48% to 67.34 Brent Crude +1.48% to 70.49 Nat Gas -1.91% to 4.22 RBOB Gas +1.24% to 2.127 Heating Oil +1.12% to 2.249 Gold +0.24% to 2918.81 Silver -0.23% to 32.57 Copper -1.01% to 4.731 |
| US Treasuries |
| 1M -2.9bps
to 4.2728% 3M -0.7bps to 4.2917% 6M -2.0bps to 4.2034% 12M -2.0bps to 3.9966% 2Y -0.7bps to 3.952% 5Y -1.2bps to 4.0435% 7Y -1.0bps to 4.1587% 10Y -1.0bps to 4.2686% 20Y -0.8bps to 4.6122% 30Y -0.9bps to 4.5699% |
| UST Term Structure |
| 2Y-3
M Spread narrowed 1.8bps to -36.8
bps 10Y-2 Y Spread narrowed 0.1bps to 31.4 bps 30Y-10 Y Spread widened 0.0bps to 29.9 bps |
| Yesterday's Recap |
| SPX -1.78%
SPX Eq Wt -1.11% NASDAQ 100 -2.79% NASDAQ Comp -2.61% Russell Midcap -1.86% R2k -1.63% R1k Value -0.94% R1k Growth -2.74% R2k Value -1.08% R2k Growth -2.15% FANG+ -4.11% Semis -4.19% Software -3.77% Biotech -0.87% Regional Banks -1.62% SPX GICS1 Sorted: Energy +0.5% Cons Staples -0.11% Healthcare -0.28% Materials -0.53% Indu -0.92% Fin -1.67% SPX -1.78% Utes -2.05% Comm Srvcs -2.17% Tech -2.65% REITs -2.78% Cons Disc -2.93% |
| USD HY OaS |
| All Sectors +12.2bp
to 346bp All Sectors ex-Energy +11.2bp to 320bp Cons Disc +12.3bp to 317bp Indu +11.0bp to 259bp Tech +13.1bp to 345bp Comm Srvcs +11.9bp to 534bp Materials +13.4bp to 312bp Energy +14.1bp to 352bp Fin Snr +11.6bp to 286bp Fin Sub +4.6bp to 222bp Cons Staples +11.0bp to 308bp Healthcare +10.6bp to 370bp Utes +12.9bp to 246bp * |
| Date | Time | Description | Estimate | Last |
|---|---|---|---|---|
| 3/7 | 8:30AM | Feb AHE m/m | 0.3 | 0.5 |
| 3/7 | 8:30AM | Feb Unemployment Rate | 4.0 | 4.0 |
| 3/7 | 8:30AM | Feb Non-farm Payrolls | 160.0 | 143.0 |
| 3/10 | 11AM | Feb NYFed 1yr Inf Exp | n/a | 3.0 |
| 3/11 | 6AM | Feb Small Biz Optimisum | 100.9 | 102.8 |
| 3/11 | 10AM | Jan JOLTS | n/a | 7600.0 |
| 3/12 | 8:30AM | Feb CPI m/m | 0.3 | 0.5 |
| 3/12 | 8:30AM | Feb Core CPI m/m | 0.3 | 0.4 |
| 3/12 | 8:30AM | Feb CPI y/y | 2.9 | 3.0 |
| 3/12 | 8:30AM | Feb Core CPI y/y | 3.2 | 3.3 |
| 3/13 | 8:30AM | Feb PPI m/m | 0.2 | 0.4 |
| 3/13 | 8:30AM | Feb Core PPI m/m | 0.3 | 0.3 |