At 4:16 p.m.:

Volume

- NYSE volume 4% below its one-month average;

- NASDAQ volume 2% above its one-month average;

- VIX index: up 2.36% to 22.16

Closing Breadth

S&P 500 Sectors

% Movers

Nasdaq 100 Heat Map

As noted earlier this morning (see below) the potential for a large reallocation trade out of bonds and into equities was present given the dramatic underperformance of stocks vs. fixed income.

I suspect the afternoon rally has been a front run of the reallocation trade and might be about done ...

From the AM:

Something to Keep in Mind Today

Keep in mind that today is quarter end — and the substantial outperformance of bonds vs. equities means that a large asset allocation out of fixed income and into stocks could occur at the close of trading.

By Doug Kass Mar 31, 2025 7:50 AM EDT

* I am getting more optimistic about the short-term upside to cannabis shares...

"President Donald Trump’s choice to serve as the next White House drug czar has called medical marijuana a “fantastic” treatment option for seriously ill patients and said she doesn’t have a “problem” with legalization, even if she might not personally agree with the policy."

- Marijuana Moment (this afternoon)

Given the positive news from the Trump administration and the low prices for constituent companies in the MSOS ETF, the Trade of the Week is MSOS.

* Buying MSOS calls now...

Break in on cannabis.

This is signficant for the space!

S&P cash is now UP by +4 handles after being nearly -90 lower in the morning.

I will take off this morning's buys done in the hole for a quick profit.

I also sold some index calls short (for April) against a portion of my long common.

I plan to buy weakness.

Here are Monday's "things":

*Buys: AMZN $188.26, AXP $260.44, CRLBF $0.72, CURLF $0.91, FRPT $81.77, GS $530, GTBIF $5.53, JPM $237.44, META $557.91, MS $112.43, MSFT $369.48, MSOS $2.52, QQQ $458.33, SPY $547.27, TCNNF $3.69.

*Short Cover: TSLA $248.84

Changing Breadth

Nasdaq 100 Heat Map

Advance-Decline

Large-Cap % Advancers 

Large-Cap % Decliners

It's been an active trading day. I will do my best to publish a "Things Today" near the close.

Out of my Tesla TSLA short - covered between $247.90 and $249.79.

- NYSE volume is 2% above its one-month average;

- Nasdaq volume is 13% above its one-month average

- VIX is up 6.79% to 23.12

* Just when the herd is panicking, reward vs. risk has begun to improve and now stands positive for the first time in many months.

* My strategy is not governed by sentiment or emotion.

* I base my strategy with a calculator in hand.

* It is time to begin to gradually expand one's long exposure.

"When the time comes to buy, you won't want to."

- Wally Deemer "When The Time Comes To Buy, You Won't Want To: Timeless pieces of wit and wisdom compiled by a Wall Street legend"

With the pummeling of stock prices over the last two trading sessions, the S&P Index is now down close to 6.5% and the Nasdaq Index is down nearly 12% lower year to date.

The March 2025 performance of the S&P Index (-7.5%) and the Nasdaq Index (-10%) are the worst monthly performances since the third quarter of 2022 and only the second losing three-month period since then for the S&P Index:

When I started the year I thought the S&P upside was only about +5% compared to downside risk of between -10% and -15%.

The consensus of strategists was far more optimistic.

Thus and as a result of the recent market weakness the ratio of upside reward to downside risk of the senior averages has improved measurably from unattractive to modestly attractive.

But that is the big picture (of the Indexes) - a number of individual equities are now becoming far more attractive.

I am gradually but steadily buying today's weakness.

With S&P futures down by over -85 handles I have aggressively bought tech, financials and the indexes.

Prices later - as I am too busy buying...

I'm back in the office.

Upside:

-CORT +94% (Primary Endpoint Met in Corcept’s Pivotal Phase 3 ROSELLA Trial of Relacorilant in Patients with Platinum-Resistant Ovarian Cancer)

-COOP +25% (to be acquired by Rocket Companies in all-stock $9.4B deal, expected to be accretive to Rocket's adjusted EPS immediately after closing)

-CDT +20% (receives U.S. Patent Approval for AZD1656, lead Asset Targeting Autoimmune Diseases)

-APRE +7.2% (doses patient with HPV+ Head and Neck Squamous Cell Carcinoma (HNSCC) in Ongoing ACESOT-1051 Trial)

-WKHS +5.6% (earnings)

-EH +3.6% (EH216-S eVTOL Operators Obtain Air Operator Certificates from Civil Aviation Administration of China)

-EBS +3.4% (announces $50M stock repurchase program)

Downside:

-PCVX -34% (topline results from Phase 2 dose-finding study evaluating the safety, tolerability and immunogenicity of VAX-24)

-SRFM -16% (announces $5M Registered Direct Offering of common stock at $2.50/shr)

-TSHA -12% (FDA’s Director of Center for Biologics Evaluation and Research Dr. Peter Marks resigns)

-MRNA -10% (FDA’s Director of Center for Biologics Evaluation and Research Dr. Peter Marks resigns)

-SRPT -6.3% (RBC Cuts SRPT to Sector Perform from Outperform, price target: $87)

-TSLA -5.8% (weakness ahead of Q1 deliveries in conjunction with tariff fears)

-RDDT -5.3% (hearing price target cut at Wells Fargo)

-RKT -5.2% (acquiring COOP in all-stock $9.4B deal)

-GOOS -4.4% (Barclays Cuts GOOS to Underweight from Equal Weight, price target: $8)

-DJT -3.9% (downside momentum)

-NVDA -3.7% (reportedly the complexity of GB200 server cabinet assembly exceeded expectations, leading to delays and complications despite some yield improvements)

-CRWV -3.6% (downside pressure following IPO)

-TTD -3.6% (hearing price target cut at Wells Fargo)

-STLA -3.0% (to buy CO2 credits from Tesla pool in 2025; tariff concerns)

-BIDU -2.1% (XJTLU JV launched)

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

Premarket percentage movers at 8:27 a.m. ET:

* The budget, DOGE, the equity and bond markets, gold, CoreWeave and more...

* The budget is screwed.

DOGE will likely not be as effective as it should be due to the legal and political pushback (never thought I would see the day when ending wasteful government spend and fraud was not supported).

Then reality is the big problem is entitlements. If that is not cleaned up, forget it.

The whole budget looks like a mess.

Reality is taxes probably need to go up, and entitlements need to be cut. But it seems like neither will happen.

We are screwed.

This article is pretty good — and this may be why gold goes up every day now.

* And PS regarding all of this — the thing that is hard to figure out is the direction of rates (I sold my TLT for a quick gain on Friday)…

There are two opposing forces, maybe three. 

1. Economy does seem to be slowing.

2. But inflation seems quite sticky, see the Core PCE coming in hot and accelerating.

3. And at the same time the budget is a mess and we need to keep selling debt hand over fist.

Obviously, President Trump and Secretary Bessent want rates down (and a weaker $ which I don’t understand), but end of day the markets are going to market. This is not predictive from me, I have zero conviction. I can price risk, but not uncertainty. Times like this, most should shrink their book, as retail investors don’t always need to have a call. Sometimes the best strategy is to go away and hide.

* Despite being pitched as the same thing (inflation hedge, store of value, etc.), the markets have been telling us for a long time that gold and Bitcoin are NOT the same thing. Bitcoin was down -4% on Friday. Gold was up +1.2% and hit a new all-time high. See the charts below. 30-year and 1-year on gold (which has been straight fire recently), and 1-year on BTC. There are times when BTC has ripped, and gold did nothing or went down.

I am uncertain as to what exactly gold is in today’s world, but it is an actual physical asset (that cannot be hacked or electronically stolen by someone in North Korea) whose price has been on a tear.

Bitcoin to me is nothing but a speculative bet on bits in an electronic ledger in the ether. Just like pulling the lever on an electronic slot machine in Vegas. Bitcoin seems to trade right in line with other high-beta equities. Down -4% on Friday, just like every high-beta equity in the markets. If nothing else, it is just an indication of speculative frenzy and excess in the markets. Not sure how much difference there is to buying BTC vs. buying the Russell 2000 or pulling the lever on an electronic slot machine. 

Which is one more reason there should not be a strategic crypto reserve. The government should not be speculating in GameStop GME stock, and they should not be speculating on this stuff. If they confiscated GME from someone, it would be sold right back into the market, just like this stuff should be. 

Unrelated, but speaking of speculative junk, looks like CoreWeave (CRWV) closed at $40.00. Right on the number, with that little last-second surge so the IPO price was not broken. This seems unnatural, screams of the underwriters to me, but I could be wrong. 

One other thought dawned on me. Beyond the questionable business model and gimmicked financials (excluding depreciation from a capital intensive biz, etc.), it seems to me this thing is going to be a continual source of funds. Apple AAPL was a good stock for a long time, simply because of the amount of stock the company was able to buy back. Constant support/lift. I haven’t given the CRWV financials (including balance sheet and cash flows) a thorough scrub, but it seems everything in this industry, with the exception of Nvidia NVDA, is a constant money loser and keeps having to raise massive amounts of capital to stay in business. It seems like CRWV is going to be the anti-Apple. If I was an exec or early investor, I would be selling stock hand over fist. Then the business itself seems like it will have to constantly sell equity in order to fund its plans. Who wants to get in front of that? If this thing goes the way of the recent VG IPO, I would not be surprised. Might be the worst start to the IPO market in history.

Bitcoin Price

* Hard to know what to make of these numbers. Some of the money going out the door was earmarked by the prior administration. Things take time. On the other hand, for the time being, the numbers are what the numbers are. Not off to a good start, and big buckets of outlays (entitlements) remain untouched:

Headline: U.S. Treasury is on pace to spend 7.4% more in 2025 than last year

Keep in mind that today is quarter end — and the substantial outperformance of bonds vs. equities means that a large asset allocation out of fixed income and into stocks could occur at the close of trading.

* Oops, never mind.

* Technicians are now universally negative (after owning the top).

* Bearish engulfing (and pleas of "don't shoot the messenger") replaces optimism.

Bonus — Here are some great links:

Tariffs Send Prices Lower

Bear Flag Alert

Is the Bull Market Over?

The Average Stock Has a Negative Year to Date Return

Last Day of Quarter Usually Shines for Small-Caps

I will be at a breakfast meeting from 6:30 a.m. to 8:30 a.m.

The S&P Short Range Oscillator moved back into oversold at -1.00% from 2.06%.