From Correction to Comeback: Navigating Trade Tensions, Recession Risks & Rising Bond Prices
Dive into the market analysis for the upcoming week of March 16, 2025 and the week’s key economic data. Stay ahead with expert insights and forecasts.
Market Report
Stocks had a rough week as various events raised concerns about the economy and trade. The S&P 500 slipped into correction territory (declines by more than 10%), and the Nasdaq continued to decline after President Trump warned that the economy is in a "period of transition," which stoked fears of a recession.
Trade tensions spiked when Trump announced a 50% tariff on Canadian steel and aluminum—doubling the initially planned rate—after Ontario hit the U.S. with a 25% tariff on electricity exports, and he also hinted at a possible 200% tariff on European beverages in response to EU tariffs on American whiskey. These events, combined with softer-than-expected inflation data, have unsettled investors, leading many to shift from riskier stocks into safer bonds, pushing bond prices higher and yields lower.
What is next?
Stock market corrections can be daunting, but they also present opportunities for disciplined investors. During a downturn, it's crucial to sell underperforming stocks and protect profits by adhering to clear sell rules, such as cutting losses early or selling into strength when gains begin to erode. This defensive strategy helps preserve capital and ensures that you’re positioned to reenter the market when conditions improve.
At the same time, corrections offer a chance to build a watchlist of fundamentally strong stocks that show resilience amid market weakness. By monitoring chart patterns and keeping track of companies with solid earnings and sales growth, investors can be ready to jump in once the market transitions into an uptrend. This balanced approach—staying defensive during corrections while preparing for the next rally—helps mitigate risk and positions you for long-term success.
Weekly Market Heatmap
Weekly Sector Performance
Looking Ahead to the Upcoming Week
A busy week lies ahead, with multiple economic releases and a packed earnings calendar. It begins Monday with core retail sales, retail sales, and the Empire State Manufacturing Index, followed on Tuesday by the FOMC meeting that includes the Federal Funds Rate decision, Economic Projections, and Press Conference.
On Thursday, investors will watch for unemployment claims and the Philly Fed Manufacturing Index, before wrapping up on Friday with existing home sales. On the earnings side, XPEV reports Tuesday before the market opens, with Macy’s and Five Below following on Wednesday (the latter after the close). Thursday brings results from American Express and Accenture before the bell, while Nike, FedEx, Lennar, and QUBT release earnings after the close. Finally, NIO and Carnival cap off the week on Friday, offering insights into consumer spending, corporate health, and overall economic conditions.
Economic Events
Earnings Event
Market Health
Based on our Market Internals, the market continues to be in a Sell Mode.
Sell Mode is when a weak market repeatedly fails to break out due to insufficient buyer strength.
Broader Market Analysis
Nothing has changed since last week, as all four major ETFs—SPY, QQQ, IWM, and MDY—are trading below their 10-day and 20-day SMAs, indicating short-term weakness, and either sitting near or below the 200-day SMA, hinting at a longer-term bearishness. Their repeated inability to sustain breakouts above these moving averages underscores a “sell mode” environment, as buying pressure remains insufficient. Rallies may be short-lived unless price and volume can decisively break and hold above these key levels.
Based on the current market environment: Higher chance of this rally being a dead cat bounce with continuation downwards.
Market Theme
Weekly +20%
Monthly +30%
Quarterly +50%
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