Things you need to know.
– Rumors of more tariffs sent stocks reeling.
– VIX up, bonds down, oil up, gold up & kisses a new century.
– At 5 pm – Trump announces 25% tariffs on Autos (not unexpected).
– Global markets under pressure – US futures are higher!
– Try the Frittellona
***Markets are anxious, and that can make you uncomfortable….Click on the link https://slatestone.com/contact-us/ to send me a message to discuss your plan….or feel free to call me at 561-244-2504.
Ok – sports fans – strap in…. the games have begun…. Trump announces a 25% tariff on any automobile NOT manufactured in the US (which was expected) …. effective April 3rd…..targeting only ‘fully assembled vehicles. Do I need to tell you that auto stocks are down? On the other hand – companies that do not want to pay tariffs are ‘pouring into our country’ setting up manufacturing facilities to produce in America! So, let’s consider these headlines….
AAPL has a $500 bill investment promising 20k jobs, TSMC $100 billion, Stellantis $5 billion to upgrade facilities creating 1500 jobs, NVDA has promised ‘hundreds of billions’, LLY – $27 billion, Honda, GE Aerospace $1 bil, MRK $8 bil, GE Vernova $600 mil, Diageo $400 mil and the list goes on…..
Reciprocal tariffs are still scheduled to hit on April 2nd. He also threatened more tariffs if Canada and the EU try to cooperate and ‘do economic harm’ to the US – warning that the tariffs would be ‘permanent with no exceptions. Key trading partners – from the EU, Canada, South Korea & Japan are considering their response…..let’s be clear – this is a long game – expect immediate reactions to visceral, but I like many expect responses to adjust and markets to adjust as well. Remember – chaos creates opportunity for the long-term investor.
Markets around the world are mixed….in Asia – Japan lost 0.6%, Hong Kong +0.4%, China +0.3%, Australia – 0.4%, Taiwan -1.4%, South Korea -1.4%.
In Europe – Germany – 0.9%, UK – 0.7%, France and Eurostoxx – 0.6%, Spain and Italy down 0.4%.
US futures are mostly HIGHER…. (after yesterday’s dubbing). Dow futures + 80 pts, S&P’s +3, Nasdaq down 6 while the Russell is +5.
Ok – yesterday….
PARTS of the market suffered a back hander (that is important)….as investors, traders and algo’s remain a bit anxious… – the Dow lost 133 pts or 0.3%, the S&P down 65 pts or 1.1%, the Nasdaq gave back 375 pts or 2%, the Russell lost 21 pts or 1%, the Transports bucked the trend rising 85 pts (but they got whacked on Tuesday), the Equal Weight S&P gave back 14 pts or 0.2% while the Mag 7 gave back 738 pts or 3%.
The VIX rose by 7%, the VIXY rose by 3%, the contra trades were mixed…..the DOG fell by 0.3%, the PSQ +0.9%, SH + 0.45%, SPXS +3.5%, SARK (short Disruptive Tech) + 9.5%.
Utilities gained 0.7%, Energy + 0.6%, Consumer Staples + 1.5%, Basic Materials + 0.2% while Real Estate gained 0.5%. Our (Slatestone) Enhanced Dividend Growth Strategy gained 1.1%, Oil Exploration and Production +0.5% etc.…
Now, let’s be honest – there were losers but not a lot of damage across the whole market….…..Tech in the lead – 2.2%, Consumer Discretionary – 1.3%, Communications – 0.9%, the rest of the S&P major sectors came in like this….Industrials – 0.7%, Financials – 0.3%, Healthcare – 0.4%.
Gold is UP…. $40 at $3091- kissing another new century $3100….. and this goes right to the ‘safety trade’…..period the end….when anxiety builds, investors run for safety…..We have been discussing this…in fact yesterday I told you that the next move will be driven by what happens with the VIX…..if fear rises – then expect stocks to decline and the safety trade to benefit…. Bingo!
Oil moved up and through one trendline resistance at $69.70 only to kiss the second trendline resistance at $70.10 before stalling. This morning oil is trading at $69.60 – leaving us in between the two trendlines….and my sense is that they want to take it up…..but the trendlines will prove to be difficult to pierce…. on the first attempt….
Even Bonds sold off…. the TLT and TLH were down 0.7 and 0.5% respectively. I’m guessing that is because some investors are just moving to ‘cash’ – Period! The 2 yr now yields 4.03% while the 10 yr is yielding 4.38%. Now – recall what happened in the UK yesterday…. They announced major budget cuts BECAUSE of rising borrowing costs with UK Gilts now yielding 4.75%…….. Recall that many expect US treasuries to yield between 4.5% & 5% in the near future.
On the economic front –
Durable goods orders were stronger than expected and that runs counter to what the Consumer Confidence numbers told us on Tuesday….
Yesterday’s Durable Goods orders came in stronger than expected, with new orders for manufactured durable goods rising 0.9% month-over-month in February, (the expectation was for a 1% decline). Core durable goods (excluding transportation) also beat forecasts, up 0.7% against an expected 0.2%. This suggests solid demand for long-lasting goods like machinery and equipment, hinting at business confidence in future economic activity despite tariff threats and uncertainty.
Contrast that with the Conference Board’s Consumer Confidence Index, which tanked to 92.9 in March, down from 100.1, marking its lowest level since January 2021. The Expectations Index, at 65.2, is flashing recession warning lights (below 80), reflecting consumer gloom about jobs, income, and the economy’s trajectory—driven by fears of tariffs, inflation, and policy shifts.
So, who do we believe? It’s not about picking one over the other; they’re measuring different pulses. Durable goods orders reflect business behavior—firms investing in capital goods based on current orders and near-term projections. That strength could mean companies are front-loading purchases to dodge anticipated tariffs or betting on sustained demand. Consumer confidence, though, captures household sentiment, which is more ‘emotional and forward-looking’, swayed by headlines, price pressures, and job market vibes. The disconnect suggests businesses might be acting on today’s reality while consumers are concerned about tomorrow’s risks.
Historically, durable goods can stay robust even as confidence wanes—think late 2022, when orders held up despite sentiment dips. But if consumer pessimism continues and drags spending down (especially on big-ticket items), it could eventually hit manufacturing. For now, the hard data (durable goods) feels more tangible than the soft data (confidence), but both are true in their own lanes. Watch retail sales and employment numbers next—they’ll tip the scales on whether this is a blip or a trend.
So let’s move on…..Eco data today includes final revision to 4th qtr. GDP at +2.3%, Personal Consumption of +4.2% (unchanged), Initial Jobless Claims of 225k, Cont. Claims of 1.885 mil down from 1.892 mil….Pending Home Sales of -3.5% (not a surprise) and the Kansas City Fed Manufacturing Activity of -5. Tomorrow brings us the prize – the FED favored inflation gauge – the PCE index…….and that is expected to be unchanged m/m and y/y – so that is a positive. Now if it veers off that path – then we can talk, but otherwise I do not expect it to surprise me or anyone else.
Like I said – futures are actually higher…. they are not falling out of bed or off a cliff. My sense is that there isn’t anything that we did not expect…. remember – markets move in advance (on the expectation) so now we have the clarity (he told us last night) and so investors, traders and algo’s can make new decisions…..
Have we already seen the move? Remember – the indexes have all been moving lower but appear to be stabilizing….the Dow had traded down 9% but has recouped 4%, the S&P lost 10% but has taken back 4%, the Nasdaq lost 14% but regained 3%, the Russell gave up 18% but has regained 3%, the Transports lost 20% but has regained 4%, the Equal Weight S&P lost 10% but regained 4%, while the Mag 7 lost 21% but is now only down 17%.
There are only 3 more trading days in the quarter….anything could happen…..My guess is that we will see more churn lower…..since the data is suggesting caution….there is no reason to ‘rush out’ and be an aggressive buyer….patience is a virtue. ‘Tariff Reciprocal Day’ – otherwise known as ‘liberation day’ is on April 2nd (one week away), now the auto tariffs are on April 3rd, Earnings season is April 11th and tax day is April 15th….April tends to be weaker in the first half of the month – and I don’t think that this trend changes this year.
The S&P closed at 5712 down 65 pts…5743 did not provide any support – recall I said it was at best weak support…. We are now once again below the long term trendline….at 5756….. so, the new range is once again 5500/5756…..if early April becomes more anxious – then the March low of 5500 would be the next stop.
I still think that we need to ‘fill the gaps’ created on Monday…..that means that the S&P would need to trade down to 5670 to close it…while the gap on the Nasdaq means that index would need to trade down to 17,790 (it closed at 17,899 last night).
Get comfortable by being a bit uncomfortable, stay defensive while being cautiously optimistic. Stick to your plan, don’t panic and if the recent pullback is causing you undue stress then maybe you need to reconsider your plan….…. Call me to discuss.
Take good care,
Sources: Bloomberg, CNBC, Reuters, Wall Street Journal
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The market commentary is the opinion of the author and is based on decades of industry and market experience; however, no guarantee is made or implied with respect to these opinions, which may not necessarily align with our firm’s standpoint.
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Frittellona di Patate Filante – essentially it’s a cheesy potato pancake!
So easy and so goooooooood.
For these you need – peeled yellow potatoes, fresh grated parmegiana, breadcrumbs. Corn starch, Scamorza (a semi soft Italian cheese – kind of like Mozz), butter, olive oil and s&p.
Begin my grating the raw potatoes on a grater (the side with the bigger holes).
In a large mixing bowl – add the grated potatoes, season with s&p, add in 3 tbls of corn starch and 1 cup of parmegiana cheese and if you want any other spices – feel free to add now, I do not, I like it simple.
Now mix well.
In a large sauté pan – melt ¼ stick of butter with a splash of olive oil on med high heat. …..place one layer of the potato mixture in the pan and spread it out to cover bottom of the pan. Now add in the sliced Scamorza and cover with the rest of the potato mix. Now sprinkle with breadcrumbs a splash of olive oil.
Cook for 10 mins…on medium…. or until the bottom is nice and browned…golden really.
Flip the ‘pancake’ using a large plate. Place on top of the pan and flip the pan – add the pancake back to the pan and cook the other side for 10 mins…or until golden brown.
Remove and cut into pizza like slices. It’s good ANYTIME…breakfast with eggs, lunch (as is) or a side dish at dinner. And guess what? It won’t break the bank…$20 max….
Buon Appetito
