Stocks plunge as tariff uncertainty, growth fears prompt big risk-off move. (0:15) XPeng promises flying cars and humanoid robots in '26. (3:58) Hedge funds bail on China trade. (4:55)Show NotesHas the government forgotten what a real recession is? Episode transcripts: seekingalpha.com/wsb Sign up for our daily newsletter here and for full access to analyst ratings, stock quant scores, dividend grades, subscribe to Seeking Alpha Premium at seekingalpha.com/subscriptions.
Chapter 1: What is the current market outlook according to Seeking Alpha?
Welcome to Seeking Alpha's Wall Street Lunch, our afternoon update on today's market action, news, and analysis. Good afternoon. Today is Monday, March 10th, and I'm your host, Kim Kahn. Our top story so far. The White House may have forgotten what a real recession looks like, according to one economist, but the financial markets are on full alert for a slowdown.
Chapter 2: Why are stock and bond yields tumbling?
Stock and bond yields are tumbling again as the prospect of a soft landing for the U.S. economy looks further away amid on-and-off-again tariff announcements and the potential impact of mass government layoffs. The S&P 500 is off 2%, and the Nasdaq is down 3.5%. Both are testing lows not seen since September.
Chapter 3: What are economists saying about the U.S. economy and recessions?
Dario Perkins, economist at TS Lombard, says, Both Scott Besson and Elon Musk have said it might be necessary to inflict some pain on the U.S. economy in 2025, in the hope that it will emerge stronger from any short-term downturn. They've said activity is being inflated by government spending, and perhaps a dose of detox can force public debt onto a more sustainable trajectory.
This is fueled talk of a beset put in U.S. bonds, not equities, and is amplified talk of a potential recession, and that sort of thinking is risky, Perkins adds. Perhaps the new U.S. administration has forgotten what a real recession is like. There hasn't been a real U.S. recession in 17 years, and the fake COVID-19 downturn may have given them an inflated sense of omnipotence. The U.S.
rebounded quickly from the pandemic and returned to full employment without any long-term scars. But that is only because, one, the recession was largely man-made, the result of lockdowns, and two, officials deployed the biggest fiscal and monetary policy response since World War II, he added.
In the bond market, the 10-year Treasury yield is back down near 4.2% and just 30 basis points above the 2-year yield. Kathy Jones, chief fixed income strategist at Schwab, noted, "...it looks like the bond market has decided to bypass short-term inflation concerns of trade barriers and immigration limits and focus on the long-term prospects of slower growth."
Chapter 4: How are tariffs impacting market volatility?
In addition, the VIX Volatility Index, also known as the Fear Gauge, is back setting new highs for 2025. David Bonson, CIO of the Bonson Group, says stock market volatility is much less about the bad news of tariffs and much more about the uncertainty of tariffs, while talk of tariffs is in a lot of ways worse than the implementation of them.
The tariff talk, reversal, speculation, and chaos only fosters uncertainty.
He says he does not believe the administration knows how the tariff situation will play out, but adds, if I were a betting man, I would say that it will persist long enough to do damage to economic activity for at least a quarter or two and ultimately result in a deal with different countries that make everyone wonder why we went through all the fuss.
Among active stocks today, Rocket, parent of Rocket Mortgage, agreed to acquire real estate broker Redfin in a deal valued at $1.75 billion that will combine one of the most visited brokerage websites with the largest mortgage lender.
The online lending platform will pay $12.50 per Redfin share in an all-stock transaction, representing a premium of about 63% over the volume-weighted average of the stock for 30 days through Friday. Also in M&A, Varan and Whitecap Resources will combine in an all-stock transaction valued at about $15 billion, including debt, to create a leading light oil and condensate producer.
Varon shareholders will receive 1.05 common shares of Whitecap for each Varon common share. The company will have 370,000 barrel equivalents per day of combined production and become the largest Canadian light oil-focused producer as well as the seventh largest producer in the Western Canadian sedimentary basin.
And Susquehanna upgraded Credo Technology to positive from neutral, keeping its $60 price target and noting that the company has a growing portfolio of key AI connectivity technologies that are underappreciated. Analyst Christopher Rowland said, In other news of note, Back to the Future promised us flying cars in 2015. Blade Runner promised Nexus 6 replicants by 2019.
Xpeng wants to bring us both next year. The Chinese EV maker is planning to mass-produce flying cars by 2026, CEO He Xiaoping told state-owned newspaper China Daily. We are integrating vehicle control with AI to develop a new flight control system into such flying cars, making it safer and more user-friendly, he said.
Xpeng aims for its Level 3 autonomous driving technology to surpass global competitors across the board this year. By 2026, XPeng aims to explore L4 driverless capabilities in parking scenarios, including fully driverless parking and vehicle retrieval in parking lots.
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