Big sell-off, rising inflation concerns and some market stabilization (0:35). Bitcoin down, gold up - on brand for this market (2:35).Episode transcripts: seekingalpha.com/wsbShow links: S&P on track to end in correction territory, Nasdaq slumps more than 2%February sees surge in short interest for crypto stocks led by MSTR, COINSign 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 focus of today's market analysis?
Brian Stewart, welcome to a special Thursday edition of Wall Street Lunch in place of Kim's temporary absence. Great to have you on during the work week. Welcome back.
Great to be here. Glad for the extra chance to talk to everybody.
Yes, yes, as are we. So talk to us. Here we are, March 13th. What would you say you're most focused on the markets today?
Chapter 2: Why did the market experience a big sell-off at the start of the week?
So obviously we started this week with a big sell-off. There were rising inflation concerns. This was stoked over the weekend by some comments Trump made about moving into a transitionary period with the changes that he's making.
Chapter 3: How are rising inflation concerns affecting the market?
Chapter 4: What are the potential risks of Trump's economic policies?
In his administration, there's rising worry that he's going to kind of shove the market off a cliff by doing severe job cuts in the public space and by putting tariffs into place. So the general idea that Trump is OK with a recession kind of sent people in. into a panic. The market has stabilized since then.
Chapter 5: Have we hit the bottom of the market downturn?
I mean, one of the good points about going down quickly is the faster you go down, the sooner you hit bottom. So there's the debate going on about whether we've hit the bottom or whether we've kind of just settled on a ledge somewhere, just sort of waiting for the next step lower.
Chapter 6: What current market movements should investors be aware of?
And what are you seeing out of the markets today? Can you contextualize some of the movements that you're seeing today for investors?
So if we just look at the markets for today, we're not seeing anything dramatic. It's down again, down about 1% on the S&P 500. So there hasn't been a major snapback yet. So there's not a wave of buyers coming back to the market. So there's generally feeling
waiting for either the next shoe to drop or the next piece of data to send the market higher, something that's going to give some sort of idea that we've gotten all the selling out of our system. So I would look for the Fed next week as a major catalyst. Unfortunately, there's not a lot of earnings coming out, so there's probably not going to be a good corporate catalyst for the market in general.
There might be individual stories that come out, but not something that's going to move the entire market. So you're probably looking to the middle of next week before you see anything concrete. Otherwise, between now and then, we're probably just moving on momentum and just overall sentiment.
And in closing, let's give a minute or two on the crypto market, gold, treasuries, where you see those numbers, what that means for investors a little bit.
So Bitcoin's down today, gold's up a little bit, oil's down a little bit. So honestly, that's just sort of on brand for how the market has been lately. Crypto, along with some of the major tech names, has been sort of the big story on the down side. downside as we've been selling off lately.
As you and I talked about last week, the Bitcoin situation is kind of interesting in the sense that longer term, if there's going to be a strategic Bitcoin reserve, if there's going to be larger sort of institutional buy-in for that, that provides a floor for Bitcoin and a long-term catalyst to push it forward. But in the near term, it moves like a high risk asset.
So you're seeing it being treated like that in the market lately. So it was a big decliner when stocks were down earlier this week and it's continuing, it's moved down. So I think that if you're looking at Bitcoin, you should probably look at it in that light for the near term, just sort of seeing it as a proxy for overall kind of risk sentiment within the market.
And so if you see that turnaround, that might be a good sign that buyers are starting to step into the higher risk assets.
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