Stocks Attempt to Stabilize Amid Policy Shifts and Seasonal Tailwinds
Markets wrapped up a rough week of selling but showed some signs of capitulation on higher volume, raising hopes that a near-term washout might be behind us. Meanwhile, President Donald Trump’s address to Congress (akin to a State of the Union) on March 4 is expected to emphasize economic stimulus, trade/tariff policies, energy, healthcare reform, and infrastructure, potentially impacting market sentiment.
The Week That Was
Volatile Selloff & Potential Washout
Equities extended declines on weaker consumer data and geopolitical uncertainty. However, a end of week spike in volume and an intraday reversal suggests potential capitulation. Historically, a convincing washout often precedes at least a tradable bounce.
Growth Concerns & “Risk Off”
Treasury yields dropped further as investors sought safety. Markets also digested lowered forecasts from the Atlanta Fed’s GDPNow, which suggests negative GDP growth this quarter.Key Takeaway
Despite bearish price action, oversold technical conditions may support near-term rebounds—especially as late March can be seasonally favorable for equities. Back above 50day for seasonal winds.
Outlook for Next Week
Potential Seasonal Upswing
The second half of March often sees improved equity performance, especially if markets start oversold. Monitor whether last week’s “washout” becomes a springboard
Post-SOTU Policy Themes
President Trump’s March 4 address (9:00 p.m. ET) could fuel volatility. Specific mentions of tax cuts, tariffs, energy/fossil fuels, healthcare reforms, and infrastructure spending may shift sector sentiment (e.g., energy, manufacturing, pharmaceuticals).Primary Forecast: Volatile—Headlines around trade, Trump’s address, and Friday’s jobs report can spur big intraday moves.
Secondary Outlook: Bullish—If policy details please markets or if economic data surprises on the upside.
Other Potential Market-Moving Catalysts
Economic:
Monday (3/3): Construction Spending, ISM Manufacturing; EU inflation data
Tuesday (3/4): Possible Canadian/Mexico tariff news; Trump’s address to Congress (9 p.m. ET)
Wednesday (3/5): ADP Employment, Factory Orders, ISM Services
Thursday (3/6): Jobless Claims, Productivity (Revised), Trade Balance
Friday (3/7): Nonfarm Payrolls, Unemployment Rate, Average Hourly Earnings
Earnings:
Monday (3/3): Okta (OKTA), GitLab (GTLB)
Tuesday (3/4): CrowdStrike (CRWD), Sea Ltd. (SE), Target (TGT)
Wednesday (3/5): Marvell Technology (MRVL), Veeva Systems (VEEV), Zscaler (ZS)
Thursday (3/6): Broadcom (AVGO), Costco (COST), Kroger (KR)
Friday (3/7): Genesco (GCO)
Investors should watch for guidance that either confirms or challenges the broader slowdown narrative—especially from retail (Target, Costco) and tech/cyber (Broadcom, CrowdStrike).
Economic Data, Rates & the Fed
Recent Data suggests continued consumer caution (Consumer Confidence, Personal Spending), with jobless claims edging higher and the Atlanta Fed slashing Q1 GDP estimates.
Rates: Bond yields declined further; rate-cut expectations for mid-to-late 2025 are firming. However, any upside surprise in the upcoming jobs report could rekindle debate over the Fed’s timeline.
Technical Take
Washout Signal?
Last week saw notably higher-volume selling and an intraday reversal—often a prelude to at least a short-term bounce, provided the lows hold.Seasonal Tailwind
Historically, mid-to-late March can offer bullish momentum, especially if oversold conditions exist heading in.Trading Focus
Tactical Longs in oversold quality names.
Intraday ES Trades: Expect big swings around data releases or policy headlines.
Single-Name Opportunities: Retail, energy, and healthcare could be especially reactive to Trump’s address.
Cryptocurrency News
Over the weekend, Bitcoin and other major cryptocurrencies rallied sharply after President Donald Trump announced a new U.S. Crypto Reserve, confirming his campaign promise to bolster digital assets. In a post on Truth Social, Trump indicated that Bitcoin (BTC), Ethereum (ETH), XRP, Solana (SOL), and Cardano (ADA) would be part of the reserve, stating he wants the U.S. to be the “Crypto Capital of the World.”
Price Surge:
Bitcoin (BTC) jumped 8% intraday, pushing above $92,000.
Ether (ETH) rose 10%, XRP 23%, SOL 19%, and ADA 50%.
Market Commentary:
Investors are now waiting for further policy details from the White House on how the new “Crypto Strategic Reserve” will be implemented and regulated.
Stock Spotlight: TDG
TransDigm Group (TDG) – a leading designer and producer of aircraft components – has caught traders’ attention for its resilient performance amid market turmoil:
Resilient Fundamentals: TDG’s aerospace niche benefits from steady defense spending and commercial travel recovery.
Potential Growth Drivers: Any U.S. infrastructure bill that includes aviation upgrades, as hinted by post-SOTU chatter, may indirectly support aircraft component demand.
Technical View: TDG remains near its recent highs, showing relative strength. Traders eyeing a breakout may watch how the stock reacts to broader market volatility and news flow surrounding defense budgets.
Created with TradingView
Final Thoughts
Post-SOTU Impact: Trump’s March 4 address may spark sector swings—especially fossil fuels, manufacturing, healthcare, and retail (if tariffs return to the spotlight).
Potential Bounce: Last week’s heavier-volume reversal could mark a washout low, with the second half of March historically more supportive for equities.
Tactical Mindset: Prioritize single-name setups and intraday futures trades, watching for intraday reversals and following fundamental/technical signals closely.
As always, this commentary is for educational purposes only. Assess your own risk tolerance, use appropriate position sizing, and consider consulting a qualified professional for personalized advice.
Great stuff.