The hottest sectors endured the most significant drawdowns yesterday, partly because people are trying to cash in while still gaining and partly because of the fear narrative.

Those recession stories feed on themselves. Interestingly, the economy has been slowing down, and the consumer has also been tapped out.

Grounded Consumer

As I’ve written, the consumer has been partying and living in the moment. The Street continues to say the consumer is strong, but I don’t buy it. Admittedly, the resolve has been impressive, but at some point, the smoke clears, and the mirror cracks.

Americans discovered travel for vacation, and everyone hit the road, and many got a passport.

Those vacation ambitions peaked in 2023 and have been beating a hasty retreat ever since.

Delta’s Wings Clipped

Airline stocks remain under pressure after Delta’s (DAL) lowered their outlook.

Heat Map

It's a sea of red with the biggest waves of amber across the once-invincible mega-cap Technology (XLK) and Communication Services (XLC) names.

Most investors raced to the sidelines, while some retreated to Consumer Staples (XLP), drug markets, and Energy (XLE) names. 

None of the extended factors worked yesterday.

The considerable debate isn’t whether the selling is overdone, because it is overdone, but when the selling stops.  Most “experts” say this isn’t capitulation because the volume is too light. Although that is the traditional script, I’ve seen quiet bottoms put in and big rebounds ignored.

The relative strength index (RSI) and rate of change (ROC) are screaming oversold, even if the volume is orderly.

Today’s Session

Equity futures have struggled to regain footing this morning.  This is a media-driven event that is taking on a life of its own – as planned. I said last year the economy was slowing, but that doesn’t mean recession.  That said I do not like the action in banks – especially big banks.

Comments

While I agree with CP that tariffs aren’t the end of the world I also remember the old saying, perception is reality. Trump may need to back off some. Mark on 3/11/2025 12:03:05 PM

I agree that Trump may have to back off on Tariffs - but not abandon the principle of equalizing tariffs. Dave Brower on 3/11/2025 1:15:07 PM

Canadian socialists are welcome to get pumped. Michael Supplee on 3/11/2025 2:11:31 PM

I think President Trump is starting to look a little unhinged with his manic tariff back and forth. By complaining when trading partners push back, he looks like an angry bully. David Lee on 3/11/2025 3:22:41 PM

Tweet

 

Home | Products & Services | Education | In The Media | Help | About Us | Disclaimer | Privacy Policy | Terms of Use | All Rights Reserved.