Closing Recap

Monday, March 10, 2025

Absolutely no letup in stock market selling pressure until the final hour as a late bounce helped pare losses. Overall though, it was a brutal day on Wall Street as U.S. stocks plunged to kick off the week, an unfortunate theme the last few weeks as recession fears amid uncertainty and risk related to Trump policy impacts have weighed heavily on US stock markets, supported by weaker macro data (dollar and Treasury yields have been falling). Nasdaq fell by as much as -4.9% before paring losses late, its worst day since 2022 with stunning moves for the SOX index (-5%) as well as Mag 7 names with TSLA falling -15% (down more than -50% from all-time highs in December), ang big drops for AAPL, GOOGL, META all falling over 4%. The Nasdaq at lows today marked a more than -12% decline from December highs as the selling pressure in the technology sector (XLK -10% YTD) continues and the Consumer Discretionary space (XLY) is down over -11% for the year. Nasdaq fell over 700 points to 17,460, its 4th pullback of more than 400 points in its last 8-trading sessions, and firmly below 200dma support of 18,404 in a rout of tech stocks. The AI trade that thrived in 2024 is suffering the last few weeks with chip names tumbling (NVDA, AVGO, ARM), taking out power stocks as well (CEG, OKLO, NRG, PWR, TLN, VST) and data center names (VRT, DELL, ETN). Very few places to hide today as precious metals, Bitcoin (fell -4.8% to $79K), oil prices, all fell along with US stock markets as the S&P 500 index (SPX) posts its first close below its 200dma since November of 2023 (down -7% in less than 3-weeks)!

Today’s sector market leaders were Energy and Utilities while Consumer Discretionary, Communications and Technology were crushed and weighed heavily on broader markets. Financials and Materials also posted losses of over 2%. The risk-averse mood can be seen across several asset classes on Monday as stocks declined, adding to March weakness, along with a more than 6% drop in bitcoin to lows below $78,000 this afternoon before paring losses and as the dollar also extends monthly losses, now down over -5% this month to the euro and other counterparts.

Recession fears hitting the market following comments from President Trump in a Fox on Sunday interview after being asked in a “Sunday Morning Futures” if he was expecting a recession this year, Trump replied: “I hate to predict things like that. There is a period of transition, because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing, and there are always periods, it takes a little time; re inflation, You may get it. In the meantime, guess what? Interest rates are down.” Overall, uncertainty on the economy and economic policy is elevated as evident in recent market commentary/data, which is keeping major averages under pressure and investor fears high.

Given the market breakdown, some interesting stats of note for today:

1) for VIX, Mr. Derivatives tweets: “$VIX Today will mark the longest streak of closes above 20 at 6 days since Yenmaggedon (7 days). If we surpass 7, then we have to go all the way back to March 2023! Eesh!”

2) sentiment trader tweets: “There has been a massive shift in investors’ preferences over the past 2 months. The shift has been dramatic enough to push the ratio of consumer staples stocks to consumer discretionary from a multi-year low to a multi-month high. Similar shifts over the past 100 years showed continued outperformance in staples during the following several months.”

3) bespoke invest tweets: “Back-to-back to back Monday drops of 1%+ for the Nasdaq 100, with each one more extreme: 2/24: -1.2%, 3/3: -2.2%, 3/10: -3.8%. 11/21/22-12/5/22 was the last time we saw three straight 1%+ Monday drops for the Nasdaq 100. Prior to that it was May-June 2019.”

4) bespoke invest tweets: “31 of the last 32 times that $SPY has opened down 1%+ and then fallen another 1%+ from the open to the close, it has been up 3 months later (65 trading days). The only drop was -0.59% following the 5/5/22 occurrence.”

5) @kpak82 tweeted, “$SPX $ES_F daily RSI most oversold since covid crash. $QQQ $NQ_F daily RSI more oversold than covid crash, lowest since December 2018. This will reset over the next 2-3 days. Don’t know exactly how but it means further downside will be difficult.”

In the lone piece of economic data today, the NY Fed said February one-year ahead expected inflation 3.1% vs 3% in January, the three-year ahead expected inflation unchanged at 3% and the five-year ahead expected inflation unchanged at 3%. The NY Fed said the expected probability of missing debt payment was highest since April 2020 and expected spending growth accelerated. The data comes ahead of the consumer price index (CPI) on Wednesday, the producer price index (PPI) on Thursday and the University of Michigan inflation expectations on Friday.

• Brent Crude futures settle at $69.28/bbl, down $1.08, or 1.53%.
• April gold fell -$14.70 to settle at $2,899.40 an ounce and selling accelerated in futures trading afterwards.
• The CBOE Volatility Index (VIX) rises over 26% to 29.45, the highest level since the 12-18-24 high of 28.32 (which marked the yen carry trade unwind time period).
• Bitcoin extends losses for a fifth consecutive session after President Donald Trump’s long-awaited order to create a strategic Bitcoin reserve disappointed the market and weighed on digital currencies. Bitcoin got off to a solid start in March, hitting highs above $94k last Sunday (3/2) but fell -6% today below $78K
• The Dollar/yen hits new five-month low of 146.625, last down 0.8% at 146.91 Yen.
• Treasury yields tumbled as the 10-year yield falls 10.4 bps to 4.213% and the two-year loses 10.6bps, its largest one-day decline since September, to 3.895%.

• In Restaurants: As per Piper, citing Blackbox data, total restaurant industry traffic was down -5.7% in February; and was down -8.1% on a two-year basis. The firm said interestingly, the two-year trend across both January and February were basically identical, at down -8.2% and -8.1%, respectively, which represented the worst two months of two-year traffic out of the last 14. CBRL was upgraded to buy from hold at Truist, believing that the restaurant chain’s turnaround efforts are showing sustained improvement.
• In Food & Beverages: Defensive food and consumer staple stocks outperformed amid a further rotation out of tech, with big gains for KLG, UTZ, CAG, CPB, GIS, HSY in food and PG, KMB, CLX in staples; Piper notes among their covered food companies had -1.2% average US measured retail sales declines in the latest four weeks ending 1/26/25, vs. -0.7% declines in the prior four weeks. TSN’s sales drop decelerated to -0.4%, while MDLZ’s sales gains turned negative (-0.3%). KHC’s sales declines accelerated ~85bps sequentially to -4.8%. STZ and SAM’s sales gains turned negative. KO’s sales growth decelerated to +2.2% in the latest four weeks (ended 2/23/25), from +7.1% in the four weeks prior; CELH’s US measured retail sales declines advanced in the latest four weeks to -7.1%, from -4.1% in the four weeks prior; HSY’s US measured retail sales growth accelerated in the latest four weeks to -3.0%, from -1.9% in the four weeks prior.

• In Autos: TSLA shares tumble again, with the stock now down more than 50% from all-time highs of $488.54 on December 18th as the selling pressure has accelerated in recent weeks.

• In Oil Names: OXY was downgraded to Outperform from Strong Buy at Raymond James and decreasing its target price to $64 primarily due to the significantly weaker oil strip since its last publication. In pipelines, PBA was upgraded to Buy from neutral following 12% pullback in shares and sees a stream of positive catalysts emerging that should close the performance gap.
• In Transports: KNX was upgraded from Sell to Neutral at Citigroup with $53 tgt saying Knight has been a bellwether for early-cycle transports sentiment, rallying 11% to start the year. It has fallen 20% since its January 27th peak, including an outsized selloff on Friday (-4%), which was not driven by any fundamental factors.
• In Building Products: BECN and QXO confirm discussions regarding potential transaction; QXO, Inc. and Beacon Roofing Supply, Inc. confirmed today that they are in discussions about a potential combination in which QXO would acquire Beacon for $124.35 per share in cash, or total consideration of approximately $11B.
• In Chemicals: SHW was downgraded to Hold from Buy at Jefferies and cut tgt to $380 from $423 saying leading indicators already suggested a softening outlook for housing turnover in 2025, and a demand shock from U.S. policy shifts appears increasingly likely to make current Street forecasts a best case for Sherwin-Williams. PPG was downgraded to Hold from buy at Argus as continues to expect lackluster demand and a challenging macroeconomic environment in the near term and expect unfavorable currency impacts through 2025.
• In Distributors: William Blair upgraded shares of GWW and FAST to Outperform from Market Perform as views both companies as a port in the storm that should benefit from a short-cycle recovery trade; notes during periods of stock market volatility and growth concerns, both typically outperform as a safety stock.
• In Industrials: Barclays said they favor HVAC, Aerospace, Defensive self-help while wary of AI / Electricals, Industrial capex (inc. O&G), Non-resi buildings exposure. The firm lowered price targets on a number of Short Cycle Industrial / Industrial capex related names and downgraded EMR to Underweight from Equal Weight (tgt to 4110 from $135) noting the company has the highest sales exposure in the group to oil and gas, where the capex outlook could be soft for the rest of this decade. In terms of specific stocks, they think the risk / reward is attractive at CARR, GTES, HON, LII, MMM, while see downside risk at EMR, ETN, OTIS, ROK, VRT.

• In Financial Services: in the mortgage space, RKT agrees to a $1.75B deal for real estate broker RDFN in an all-stock transaction with a value of $12.50 per share. Under the terms of the agreement, each share of Redfin common stock will be exchanged for a fixed ratio of 0.7926 shares of Rocket Companies Class A common stock.
• Financial Technology: PAYC was upgraded to Overweight at Keybanc as come away from recent mgmt meeting with new CFO with greater confidence in 1) top-line growth acceleration potential; 2) international growth opportunities; and 3) EBITDA margin upside.
• In Payments: FOUR was upgraded to Strong Buy from Outperform at Raymond James and add it to the Analyst Current Favorites list following the recent pullback (-29% vs S&P Mid-Cap 400 -7% since Q4 print) coupled with greater appreciation of the Global Blue deal as well as its view the initial 2025 outlook is conservative.
• In Exchanges: CME was upgraded to Outperform at Raymond James with a $287 price target saying its suite of risk management tools positions the company well in a volatile global macroeconomic and geopolitical backdrop, as reflected in its strong quarter-to-date trading volumes.
• In Crypto: MSTR files for offering of up to $21B of 8.00% series a perpetual strike preferred stock; COIN, MSTR, MARA, HOOD and other names that move on Bitcoin trade lower to start the week as Bitcoin prices as low as $78,000 overnight.
• In REITs: outperforms (XLRE) early before paring gains, helped by lower Treasury yields/rates boosting dividend paying sectors; Jefferies upgraded CPT, IRT to Buy from Hold, based on improving supply forecasts. This is evident in better YTD blended spreads (vs Q424) from recent multifamily updates. With Sunbelt job & population growth exceeding Coastal’s broadly, at the same time supply finally recedes, Sunbelt rent growth should accelerate in ’26/’27. 2H25 should show stronger signs of stabilization, driving earnings and multiple expansion closer to historical premiums.

• CKPT shares rise after the immunotherapy and targeted oncology company agreed to be acquired by Sun Pharmaceutical Industries in a $355M deal, with holders to receive $4.10 per share.
• DXCM said late Friday it had received a warning letter from the U.S. FDA following inspections of its two manufacturing facilities in San Diego, California and Mesa, Arizona.
• INCY presented data from its pivotal Phase 3 TRuE-PN1 trial studying Opzelura cream in prurigo nodularis as the study achieved statistical significance in its primary endpoint, with 44.6% of patients achieving a clinically meaningful improvement over placebo, while meeting all secondary endpoints measuring itch burden.
• IONS and AZN’s WAINZUA gets EU approval for ATTRv-PN treatment.
• MLYS said two trials of its experimental hypertension medicine, lorundrostat, met their main goals, sending shares sharply higher initially.
• NVO shares fall after released fresh trial results for its CagriSema developmental weight-loss drug; said CagriSema helped obese or overweight type 2 diabetics lose an average 15.7% of their weight in a late stage trial.
• PTGX shares rise after reporting positive topline results from a Phase 2b study of icotrokinra, conducted by partner JNJ said the study met its primary endpoint of clinical response in all icotrokinra dose groups evaluated.
• TREVI said its therapy, Hada statistically main goal in a mid-stage trial testing in patients with a type of chronic cough; says therapy showed statistically significant reduction in 24-hour cough frequency.

• DOCU upgraded to Neutral at JP Morgan and raised tgt to $75 from $70 noting the stock has also declined well off of its recent peak in early Dec since reporting FQ3 earnings, trading down 25% since then (vs. the SPX down 5% over the same period), and has done little to recover over the last ~3.5 years.
• IOT was upgraded to Outperform at BMO Capital saying the pullback creates opportunity – notes shares have been on the firms shopping list, and despite a dynamic external environment, the outsized retracement following Q4 results provides a tactical opportunity to upgrade.
• NOW said it would buy artificial intelligence company Moveworks for $2.85 billion, marking the software maker’s largest-ever acquisition as it looks to expand its product portfolio and attract more customers.
• SAIL was initiated with an Outperform, $26 PT at BMO Capital as believes that security remains a top IT spend priority, identity is one of the most important areas within security, and SailPoint is one of the key players in the identity market.
• Quantum computer names hammered again as momentum clearly to the downside after mass move higher in 2024: QMCO down -80% YTD, QUBT down -71% YTD, RGTI down -46.5% YTD and IONQ (down -54% YTD)