Speedy Alka-Seltzer was a brand mascot for Alka-Seltzer from 1953 to 1964. He was a cheerful character who appeared on television and printed ads, delivering a promise to relieve headaches and upset stomachs. 

The market breathed a sigh of relief, but for purists, the headache continues.

There is a chance we will begin next week with fewer tariffs on Canadian and Mexican products, but European tariffs are teed up for next month.

I’m far less concerned about tariffs and far more concerned about the economy. I think there is a problem in the labor market that will begin to reveal itself. Moreover, the consumer is not strong or healthy. The good news is that the market has gotten cheaper. The bad news is devastating, especially for individual Technology (XLK) names (see the reaction to earnings for Rigetti Computing, Inc. (RGTI) and Marvell Technology (MRVL)).

The Technology sector decline isn’t about a fundamental change as value propositions have become more attractive. The decline in Tech names is reflective of depressed sentiment. Work from Ned Davis of Ned Davis Research suggested a sharp rebound is around the corner.

Meanwhile, new sectors like Materials (XLB) and Industrials (XLI) get a chance to shine.

Top Advancers

There was just one cult Tech name among the top advancers yesterday, Palantir Technologies (PLTR).

Finally, Green

The Heat Map was encouraging, with vast swaths of green, including in Technology (XLK) and Communication Services (XLC).

The same tide lifted all factors.

Beware of the latest hunch. Wall Street piled into mid-caps this year, and everyone looked brilliant for a couple of weeks. Since then, it's been a total disaster. It looks oversold, but only for traders.

Portfolio Approach

This morning, we closed a Technology position (AVGO) in the Hotline Model Portfolio.

Today’s Session

There is a ton of economic data to comb through this morning. I want to point out the spike in goods and trade deficit ostensibly, to get ahead of tariffs, and yet companies are saying they must hike prices.

The ode to "short-termism" and fealty to corporate profits, at any cost, has already had a major cost on society.

This market is being driven by emotions, but there is also a clear weakness among consumers. This means stocks will get super cheap and on sale, but timing can be tricky.

Comments

Some of these prices suggest another data center will never be built. At least it seems that way to me! Charles Lucente on 3/6/2025 11:13:20 AM

Any effective quick action to curb the out of control spending and reduce our deficit is going to result in pain and likely a Recession. The sooner the better. Paul on 3/6/2025 11:13:23 AM

Thank you! Thank for publishing the Hotline Model Portfolio! I use it the most! Lisa on 3/6/2025 1:10:14 PM

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