Closing Breadth

S&P 500 Sectors

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As of 3:30 p.m.:

Breadth

S&P 500 Sector ETFs

Written during the depths of today's decline: 

Dougie Kass

Ludacris Day? Anything is possible..

With Coca-Cola KO down by more than $2 I am covering the balance of my short at $70.30.

I purchased some more Amazon AMZN under $200 this morning.

I am selling what I bought earlier at $205.31 for a $5+ gain.

With Nasdaq futures now up on the day (and the S&P getting back 2/3 of its losses), I have sold out yesterday's Index common long rentals.

I am now back to delta neutral in SPY and QQQ.

From the article below:

Bessent-as-a Meme

The money line is: “TRUMP: “NOT CONCERNED ABOUT MARKET REACTION AROUND TARIFFS…. This comment just keeps coming back to me. Interesting stat by JP Morgan: In Trump’s first term, he tweeted out 156 times about the Stock Market. Now, he only posted once (on Truth Social).“

In his first term, Trump was obsessed with the equity markets, probably to the detriment of sound policy. Now, oddly, it seems to be much less the case.

Bessent as well. Bessent basically seems to be saying the wealthy and equities have done well for a long time, now the focus is on everyone else:

Treasury Secretary Scott Bessent has dismissed worries about a Wall Street Trump tariff selloff after the White House declared a trade war on Canada, China, and Mexico that has spooked investors. Bessent told Fox & Friends that the commander-in-chief’s top priority is living the living standards of ordinary Americans despite market concerns over his move to slap tariffs of between 20% and 25% tariffs on three of this country’s main trading partners. “Over the medium term, which is what we’re focused on, it’s a focus on Main Street. Wall Street’s done great, Wall Street can continue to do fine, but we have a focus on small business and consumers,” the former hedge fund mogul said. “So we are going to rebalance the economy.”

https://www.msn.com/en-us/money/economy/treasury-secretary-scott-bessent-shrugs-off-wall-street-s-trump-tariff-selloff/ar-AA1AePs2?ocid=BingNewsSerp

I this article from August 2024 about Bessent (https://archive.is/SzdDz),  Bessent was quite bearish before taking the job. He also reiterated the theme regarding the middle and lower class: 

Trump ally, hedge fund chief Scott Bessent says stocks will fall on ‘precarious’ economy. “Right now we view the U.S. economy as being in a precarious, emerging market-style equilibrium,” Bessent told clients in a letter earlier this month. The government’s large deficit and debt issuance using shorter-term instruments have fueled asset bubbles in stocks and real estate, he wrote, adding that “every emerging market exhibiting these characteristics, especially during an election cycle, has experienced a downside economic shock.”While the jump in equities and real estate prices have benefited wealthier individuals, stagnating wages and higher prices for food, shelter and other necessities have walloped lower-income groups, he wrote. That’s led to both more borrowing and rising delinquencies on consumer loans, a state he predicts will extend to people earning higher incomes when the asset bubbles deflate.

So far, quite different than the last few decades, going back to Greenspan. Having said all of that, one would still think there is a Trump put. Wish I knew what, when and the price where it stands. When I figure it out, I will tell everyone, after... 

Out of the balance of today's SPY and QQQ long trading rentals:

Gaboy

Dr.Dougie, any medicinal words for those of us in MSOS icu?

Dougie Kass

I added more across the board today.

Many Tier 2 and 3 cannabis stocks are now long term call options-

• Debt holders dont want the keys
• Rescheduling still remains a possibilty.
• I see forced margin sales all week
• Some companies, like Terrascend are trading less than their real estate assets

I like MSOS (GTBIF and Trulieve rule the roost - great operating metrics even in light of tough market conditions)

If there was a fear/greed gauge it would be so fearful as to be off the charts.

At $70.83, covering some of the additional KO I recently shorted for a small gain.

* For a profit...

and...

* Extreme fear...

Now, more than ever (and at a new time!), Dan and Guy on MRKT Call at 11 a.m. ET:

Here is the link. (1) mrkt call on X: 

Run, don't walk to listen to value added, transparent and refreshingly honest commentary.

Added to SPY at $573.34

I moved to medium-sized AMZN at $200.72.

From Peter Boockvar:

Real yield watch/For Powell, May '26 can't come soon enough/US$ action/Other good stuff

I'm sure you'll be seeing these stats all day but will mention it here just in case. In 2024, the US imported about $413b worth of goods from Canada, $505b from Mexico and $440b from China, including iphones. From what I've seen so far, in terms of retaliation against the US, it looks like the American farmer has been specifically targeted again with tariffs on US soybeans, sorghum, pork, beef, chicken, wheat, corn and cotton too by China. The US farmer by the way also imports about 85% of their potash needs from Canada which just got 25% more expensive. They were targeted too in the Trump 1.0 tariffs in 2018 and 2019 that led to a financial package given to them. As the US consumer still has PTSD from the 2022 inflation spike, even higher food prices are going to come quickly as they are VERY short cycle items. In three weeks, Canadian tariffs will come on its imports of US cars, trucks, steel and aluminum.

I'm hopeful, as we all are, that these Canadian and Mexico tariffs are quickly removed in some sort of announced 'deal.'

The interest rate drop across the yield curve is, I believe, a stagflationary response to the tariffs and the expected slowing growth. And with regards to the Fed and the about 2 ½ 25 bps of rate cuts now priced in this year, how can they have any confidence on anything? Imagine if they start cutting but then tariffs are taken off right after? What happens if they start cutting as the tariffs stay on and the dollar weakens in response and no longer becomes a mitigating factor for US importers? What happens if they do nothing and economic growth continues to weaken? Will we just see a repeat of 2019 when they starting cutting rates because inflation was then tame? Jay Powell, I'm sure May 2026 can't come soon enough for you.

Real 10 yr TIPS yield pointing to a stagflationary belief

Now with respect to the dollar, which is now even more important to watch, especially against the countries we slap tariffs on. In the academic textbook, the country putting on the tariffs should see a stronger currency (on the belief that its trade deficit will shrink) that would offset the cost of the tariff which importers are logistically paying to the Customs Bureau. What happens if the dollar, after its post election rally, now starts to weaken because foreigners decide to take their money home? What if foreign ownership of the Mag 7 shrinks and that money is taken home, something I mentioned a few weeks ago? Then we end up eating more of the tariffs in terms of higher costs.

The US dollar index, heavy with euro and yen which regions have yet to be tariffed, is today trading at its weakest level since December 9th 2024. The Canadian dollar is still trading near its lowest level since the March 2020 Covid shutdowns however and 2016 before that but keep a watch on it from here as it's up today. The peso is weaker today at the lowest level since August 2022 vs the US dollar. The offshore Chinese yuan is stronger today by .4% and obviously something to watch too.

DXY

Canadian $ (higher is weaker CAD)

Mexican Peso (higher is weaker peso)

Offshore Yuan

US vehicle sales in February totaled 16mm at a seasonally adjusted annualized rate. The estimate was 16.14mm and that compares with 15.81mm in February 2024 (which had the extra Leap Yr day) and vs 16.56mm in February 2020. That we are still selling less cars than 5 years ago I'll argue will continue to keep used car prices elevated.

Target slightly beat the comp estimates with a 1.5% gain. They said, "Comp sales trends in Apparel and Hardlines accelerated by nearly four percentage points as compared to the third quarter." They saw particular strength in toys and electronics, in addition to apparel and beauty too.

They had this warning for Q1 though, "In light of ongoing consumer uncertainty and a small decline in February Net Sales, combined with tariff uncertainty and the expected timing of certain costs within the fiscal year, the Company expects to see meaningful y/o/y profit pressure in its first quarter relative to the remainder of the year."

"During February, we saw record performance around Valentine's Day. However, our topline performance for the month was soft, as uncharacteristically cold weather across the US affected apparel sales, and declining consumer confidence impacted our discretionary assortment overall."

From Best Buy:

"As we enter FY26, we believe consumer behavior will be largely similar to last year - remaining resilient - but still dealing with high inflation that is driving expenses up across their lives, making them value focused and thoughtful about big ticket purchases. And, at the same time, we continue to see a consumer that is willing to spend on high price point products when they need to or when there is technology innovation." They forecast comp growth this fiscal year of 0-2%.

The visual and musical experience of a concert at the Sphere is unforgettable and I highly recommend making a trip to Las Vegas to see it. This was from their earnings call yesterday:

"In Las Vegas, the Sphere Experience saw improvements in sell through and stronger sequential results in the December quarter."

"We also continue to see interest from a diverse set of artists who want to play the Sphere. Our first country artist Kenny Chesney begins a 15 show run in May and the Backstreet Boys will start an 18 show residency this summer."

Apartment List released its February new lease data and rents rose .3% m/o/m after 6 straight months of declines. They are still down .4% y/o/y "but is slowly inching back toward positive territory." New rents are up 20% over the past 4 years.

The supply side continues to keep a lid on rents, particularly in the sunbelt where rents are falling the most in Austin and Raleigh but also in a non sunbelt state, Denver. The vacancy rate rose to 6.9%, the highest since at least this data was first kept in 2017.

As I've been arguing, enjoy the rent decline while it's here because it's not going to last. Apartment List agrees and said, "With the supply wave now getting past its peak, it appears that the era of declining rents could be nearing its end."

South Korea's February manufacturing PMI fell to 49.9 from 50.3. S&P Global said "The outlook for the coming months appears uncertain, as firms recorded the steepest decline in employment levels since July 2022, along with a renewed decrease in outstanding business. Confidence regarding the upcoming year was also relatively weak."

Also of note, "there was a further steep increase in input prices for South Korean manufacturers. Higher raw material prices were noted, and unfavorable exchange rate fluctuations also contributed to cost burdens."

With tariffs and the possibility of more flying all around the world's manufacturers, I don't see how anyone has much visibility right now for 2025.

With S&P cash -57 handles, I am adding to trading long rental in SPY $578.02 and QQQ $492.86.

Asaxelrod

8 minutes ago

CNBC has manifest a classic ability to garner the visibility of the pump masters like Saylor and Irwin Simon of Tilray and previous of HAIN, that guy is a master of the pump and dump and CNBC is complicit

DK

Dougie Kass

STAFF

Just Now

That is precisely my point.

Business media, Fin TV, journalists have a responsibility.

That responsibility is not to cheerlead or lob soft balls but to ask hard hitting and penetrating questions.

Look 100% of company CEOs will go on and deliver an optimistic message on FIN TV - that is what they do.

CNBC et all should produce bonafide queries, tough questions or you end up with interviews with SBF a month before the fraud was uncovered or Saylor (MSTR from $543 to $250). Where is the value add?

These perfunctory interviews are insane and a waste of time.

Producers are lazy, moderators and panelists are lazy = because it is hard to uncover penetrating questions, its easy to nod in agreement.

And those that criticize me for bringing this up are also insane, frankly.

Because no one else does - and when the tide goes out we see the immense damage. 

Upside:

-OKTA +13% (earnings, guidance)

-CAPR +12% (announces FDA Acceptance and Priority Review of Deramiocel BLA for treatment of Duchenne Muscular Dystrophy)

-CDZI +7.6% (signs Letter of Agreement with a Lead Investor for an Investment of up to $175M in Mojave Groundwater Bank Project)

-SE +6.9% (earnings, guidance)

-DAVE +5.8% (earnings, guidance)

-ONON +5.5% (earnings, guidance)

-WBA +5.0% (reporting that deal from Sycamore to go private for $10B EV at $11:30-11:40/shr could come as early as Thurs)

-WVE +4.3% (earnings)

-HSII +4.0% (earnings, guidance)

-SPIR +3.6% (earnings, guidance)

-CON +2.8% (earnings, guidance)

Downside:

-SPGC -34% (shareholders approve 1-for-30 reverse stock split)

-TNYA -33% (prices 75M units at $0.70/unit for gross proceeds ~$52.5M)

-GCT -22% (earnings, guidance)

-DSP -17% (earnings, guidance)

-LUCD -17% (files to sell 13.9M shares at $1.10/shr in $15.3M registered direct offering)

-SENS -17% (earnings, guidance)

-QSI -15% (earnings)

-EBS -14% (earnings, guidance)

-SOUN -13% (files to delay 10-K annual report)

-BDSX -8.4% (earnings, guidance)

-PLUG -8.0% (earnings)

-SMCI -7.7% (downside momentum)

-IONQ -7.5% (downside momentum following CEO change, Board reconstitution)

-RKLB -6.1% (downside momentum)

-GUTS -5.8% (files $300M mixed shelf)

-TSLA -4.7% (reports prelim Feb China deliveries)

-ATEC -4.2% (files to sell $300M Convertible Senior Notes Offering)

-NVDA -3.5% (tariff concerns)

-TGT -2.5% (earnings, guidance)

-BBY -2.0% (earnings, guidance)

Most active premarket ETFs as of 8:09 a.m. ET:

Premarket percentage movers at 8:13 a.m. ET:

This table is a valuable resource for momentum-based short-term traders:

* This tweet would have made "Meet the Press'" Tim Russert proud...

From JPMorgan:

US: Futs are flattish as the trade war escalates but the downward reaction is muted given the significant, expected impact on the economy and earnings expectations. Canada, China, and Mexico are rolling out their retaliatory measures. Investors may be waiting to see what Trump says in his State of the Union speech tonight (final hope for an off-road?). Pre-mkt, Mag7 names are mixed with AAPL, AMZN, GOOG, and NVDA flat to up. Bond yields are mixed as the curve twists steeper and USD comes for sale. Cmdtys are weaker with precious outperforming. There are no major macro data releases today and the Fed’s Williams speaks ~2.20pm EST.

and...

EQUITY AND MACRO NARRATIVE: Late in the session yesterday, Trump confirmed that the 25% tariffs on Canada and Mexico are going live, and he said that there is no room left to do a deal. He announced an additional 10% on China. In all cases, we have seen retaliatory measures. Given this escalation, we enter another period of uncertainty since there does not appear to be a pathway to negotiation based upon Trump’s comments. Given the lack of a potential end to this escalation, the expectation is that tariffs of these magnitude with drive both Canada and Mexico into a recession. Look for US GDP growth expectations to crater and for earnings revisions to be materially lower, forcing a re-think of year-end forecasts. With this in mind, we (US Mkt Intel) are changing our view to Tactically Bearish.

A US recession is not our base case but the undetermined length of tariffs and the potential for the trade war to see an acceleration in new tariffs, we think stocks will be challenged as US GDP growth estimates are cut. Given the uncertainty, positioning, and potential for a negative feedback loop to push people to using the recession playbook, we think the bearish position makes the most sense.

I have previously highlighted this issue before — too many chips are still going to China thru indirect means.

https://www.cnbc.com/2025/03/03/nvidia-unofficial-exports-to-china-face-scrutiny-after-singapore-arrests.html

Bonus — Here are some great links:

Why We Expect Green in March (Because You Always Do, Ryan?)

Game, Set Bitcoin

Breadth Expansion Continues to Fuel the Markets (On What Planet, JC?)

Where Is the Weakness in Discretionary

One of the Most Bearish Charts

Wolf Street howls about "slugflation."

Wolf Street howls about oil production. 

The S&P Short Range Oscillator has slipped into a deeper oversold, moving to -3.16% from -1.81%.

With the oscillator turning oversold, I am adding modestly to my trading long rentals:

* SPY $582.93

* QQQ $497.04