To The Moon

Market Mood: A Big Fat Swollen Blue Face , But We’ll Cheer It Up 

The S&P 500, NASDAQ, and Dow Jones all started the day with a pout, dropping more than 1%. Why the long faces? Well, it’s a mix of tariff troubles (like when your mom says no dessert unless you finish your veggies), a global bond yield surge (bonds are like the safe, boring cousin of stocks, and they’re stealing the spotlight), and some big tech companies not meeting their report card expectations. It’s like when your team loses a game you thought they’d win—disappointing!

The market’s worries started with tariff concerns, especially hitting the furniture industry. It’s like when you have to share your toys, and suddenly, everyone’s grumpy. Then, on Tuesday evening, Germany’s chancellor made a big announcement: they want to change some rules to spend more on defense, like buying a new car for the family. The bond market didn’t like this idea and reacted by pushing up German bond yields a lot—marking the biggest drop since 1990, like a record-breaking tantrum. This spread to Europe, Japan, Australia, and the US, making everyone a bit jittery.

For some European countries with lots of debt, this is bad news. It’s like having a big credit card bill and the interest rates going up—ouch! Germany seems to be reacting to what the US and Russia are doing, like when your neighbor has a party, and you have to join in to not feel left out.

Tech Troubles: Not All Sunshine and Rainbows

Now, let’s talk tech. Some big names didn’t do as well as expected in their earnings reports. Earnings are like how much money they make, and when it’s less than what people thought, their stock prices go down. Take $Marvell Technology(MRVL)$ , which makes custom chips. Their revenue was up 27% to $18.21 billion, slightly better than expected, but the market was hoping for something amazing, like a superhero landing. So, their stock price dropped a lot today, like when you think you’ll get a perfect score but end up with a B. They mentioned AI chip production is in full swing, but inventory levels are up, and if orders slow, it could be risky—like having too many cookies and no one to eat them.

Another company, $Broadcom(AVGO)$ , is set to report soon, and people are biting their nails, worried it might not be great either. But wait, Broadcom actually reported after the market closed, and guess what? Their Q4 FY25 revenue was $149.2 billion, up 25%, beating expectations of $146.1 billion, and their net profit tripled to $55 billion from $13.3 billion last year. Their stock price went up after hours, like a surprise party, especially since it had dropped 25% recently. Analysts think this shows AI spending is still hot, which is cute—like finding a hidden treasure.

$Alibaba(BABA)$ , released a new AI model, Marnis Agent, that’s supposed to be really good and cheap. That’s making some US companies nervous, like when a new kid in school has the coolest toy, and you’re worried yours isn’t as good. This added pressure on US chip stocks, with the tech-heavy index continuing to decline.

Layoffs and Options: A Nervous Nibble

There’s also news that US companies laid off 172,000 people in February, the highest since July 2020, and year-to-date, it’s 221,800, up 33% from last year. That’s like the jungle experiencing a drought; fewer resources mean less food for everyone. Investors are worried about tomorrow’s job report, and they’re buying a lot of put options, which are like bets that the market will go down. The put-to-call ratio is 2.18, meaning lots of raincoats are being worn, and that’s making the market even more stormy, with daily swings of 1% to 1.5%.

This covered call situation will stick around until the S&P 500 gets back to 5,980, which is like waiting for the sun to come out. But here’s the cute part: when the market is this scared, it’s often a good time to buy. The Fear and Greed Index is at 17, showing extreme fear, and historically, that’s like finding candy when no one else is looking. Morgan Stanley’s global risk gauge is at -2.7, close to its 10-year low of -3.2, and Highwin’s volatility pressure index is at 29, which often marks local lows. So, it might be a good time to scoop up some deals, like buying toys on sale.

Political Ping-Pong Ball: Tariffs and Tensions

Trump tried to cheer everyone up by hinting at delaying tariffs on US-Mexico agreement goods until April 2nd, like promising to do chores later. The market had a brief rally, but it didn’t last. Trump did delay the 25% tariff until next month, but said car tariffs won’t wait, and Canada’s Prime Minister, nicknamed “small potato,” said they won’t back down unless all tariffs are canceled. It’s like a little brother finally saying, “No, I’m not doing that anymore.” So, the tariff situation isn’t resolved, and the market’s still disappointed.

Stock Spotlight: Who’s Up, Who’s Down?

Let’s look at some specific companies. $MongoDB Inc.(MDB)$  had a good earnings report—revenue up 20% to $5.48 billion, better than expected, and they turned a profit of $158 million from a loss last year. But their future outlook was meh, so their stock dropped 27%, like getting a good grade but knowing you have a tough test next week. If it drops more, it’s almost back to 2020 levels, which might be a buying opportunity.

Bitcoin and cryptos had a quick rally on Monday due to Trump’s proposed crypto reserve including Bitcoin, Ethereum, Ripple, Solana, and Cardano, but that fizzled out with tariff worries. Some think tomorrow’s crypto roundtable won’t boost prices much, but a rebound is likely, just a matter of time—like waiting for your favorite show to come back on.

Applovin dropped over 18% today for no clear reason, which is confusing, like when your phone suddenly stops working. It’s halved in three weeks, and while tempting to buy, there might be underlying issues not known. Individual stocks can be wilder than indices, so be careful.

Looking Ahead: A Glimmer of Hope?

The S&P 500 tested its year’s support levels and even dipped below the 200-day moving average for the first time since 2023, which is concerning, like tripping on a step. But it held steady by the end, and with consecutive sharp declines, market sentiment is at extreme fear levels. From a long-term view, buying now could yield good returns in a few months, like planting a seed and watching it grow.

The S&P 500 is near its long-term uptrend line from the bull market start. If it breaks, it could mean a downtrend or sideways movement, like a detour on a road trip. Traders are watching this closely, and before it tests this line, any rebounds might be buying opportunities for stage lows.

As we head into 2025, both retail and institutional investors have record-high allocations to US stocks, which could be a headwind, like having too many people in a small car. The S&P 500 tried to break 6,100 multiple times but failed, so this correction is necessary to shake out weak hands and set the stage for the next leg up. Wall Street’s using uncertainties to clean house, like spring cleaning.

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