The German federal elections on Sunday panned out mostly as expected and hoped for by financial markets with political stability still within reach after some negotiation in the coming weeks, avoiding a nasty surprise that would have hurt global stock prices.

Wall Street briefly rebounded at the open on Monday morning after a difficult prior week, but doubts about the economy soon set in again, the BTFD crowd quickly went on strike and the S&P 500 slid below 6000 to finish in the red once more. The sell-off was led by Big Tech/AI names. Interest rates continued to slide to their lowest levels of the year.

Stocks tried to slip into a nice tranquil wait-and-see mode on Tuesday with highly-anticipated Nvidia earnings on deck the following day, but a general sense of unease about recent economic data, upcoming tariff deadlines, the chaotic federal workforce shakeout and geopolitical shenanigans pushed prices lower again for a fourth straight day of losses.

Again, Big Tech/AI were the clear laggards. The Seven are looking not so Magnificent any more, collectively moving into an official correction (down 10%+ from December’s highs).

Nvidia Day arrived on Wednesday with the earnings report due after the close. Stocks jumped sharply higher out of the gate, but then turned south following confused and contradictory messaging from Trump (who, stunningly, appeared not to have read the Tariff Timeline in my market report last week) on the timing of levies on Canada and Mexico and he also vaguely alluded to possibly some sort of upcoming European Union tariffs of some kind at some point. Maybe. And then there was also the excruciating sight of Musk babbling incoherently at a US government cabinet meeting (see OTHER NEWS below). The indexes ended the day with only marginal gains, but at least ended their losing streaks.

Nvidia reported rising sales and earnings figures that generally matched most expectations and gave an upbeat revenue forecast. The stock price reaction was muted in the after-market with traders accustomed to blowout results from the chipmaker appearing unsure how to proceed with a “good-but-not-great” report.

As was becoming something of a pattern, the indexes opened higher again on Thursday morning, but swiftly collapsed to finish the session significantly lower. The large decline was the result of more of what Goldman Sachs called “headline roulette”, with Trump insisting that tariffs on Canada and Mexico are set to start the following Tuesday (and not in April, as he had stated just the day before) and also announced he was tacking on yet more additional tariffs on China.

Markets also decided that, upon further review, they didn’t like the fact that the Nvidia earnings report was decent enough but still failed to blow estimates out of the water and that the AI boom might just be failing to live up to the hype. Nvidia’s stock sank 9% on the day, dragging most Mega Cap names down with it. By the closing bell, all of the S&P 500’s 2025 gains and all of the NASDAQ’s gains since the election in November had been wiped out.

The heavy selloff and risk-off sentiment spilled into Asia and Europe overnight but by the time the baton was handed back to New York on Friday morning, investor focus had at least temporarily shifted to the Fed’s preferred read on inflation, the Personal Consumption Expenditures Price Index (PCE) which came in right where it was expected to be at a mild 2.5% annualized rate.

Once more, stocks sprang out to another positive start when the opening bell rang, with signs that automated end-of-month program trading was kicking in and dip-buyers were staging a cautious return. The rally was temporarily derailed when Ukrainian “dictator” Zelensky met with Trump and Vance at the White House in what quickly dissolved into an unhinged hostile altercation in full view of the world’s press. A publicly-humiliated Zelensky was then unceremoniously booted off the White House grounds before any deals or joint statements could be signed off on.

No media outlet seems prepared to say this yet, but it seems to me now that the only foreseeable end to the conflict now is a Russian victory and what will be essentially a Ukrainian surrender, all enthusiastically endorsed and brokered by the United States.

Once they had picked their jaws up off the floor after watching the rumble in the Oval Office, traders resumed bottom-fishing for stocks after a rough couple of weeks and we finally had a session where prices ended nicely in the green.

The bottom line here is that this is a highly uncertain and volatile environment, but the underlying fundamentals of the post-October 2022 rally (solid growth, Fed rate-cutting still on the table, inflation declining) are still just about hanging in place.

However, the S&P 500 just completed just about its weakest month since April of last year, the NASDAQ and Small Caps did even worse and everything went under water for 2025. International (particularly European) stocks are kicking the US’ ass. A new crypto rout is well under way (see OTHER NEWS below). International trade tariffs might be actually be implemented in the next couple of days. The US government is scheduled to shut down on March 14th, at a time when it is going to war with its own federal workforce. The geopolitical landscape is undergoing a once-in-a-generation seismic shift as the 80-year old western security alliance fractures before our eyes.

Welcome to March 2025.

Strap in.

OTHER NEWS ..

Au Revoir, Auf Wiedersehen, Cheerio .. An anti-Musk backlash is showing up in Tesla’s sales, which plunged by 45% last month across Europe and saw a surge in demand for its rivals’ vehicles. While the electric vehicle maker’s numbers were hit by some production line issues, the main reason is seen to be Musk’s antics repelling European consumers, including cheerleading for Nazis in Germany (where Tesla sales fell by 60% in January alone) and openly calling for the overthrow and imprisonment of recently-elected UK Prime Minister Starmer.

Showrooms have been vandalized in the UK, the Netherlands and elsewhere. Longtime Tesla owners have slapped on bumper stickers publicly apologizing for their purchase and disavowing Musk.

Meanwhile, the stock price has been pounded. It has plummeted over 40% from its high of mid-December and has lost more than $400 billion in value since Trump's inauguration, that’s more than any other automaker in the world is even worth.

Tesla carries a high weighting in the S&P 500 and NASDAQ indexes.

Another Meltdown .. Carnage in crypto-world on the back of the massive hack the previous week, falling interest rates, the Magnificent Seven stock price retreat, institutional profit-taking, retail margin calls, a meme-coin scandal in Argentina and general uncertainty in an industry that is no stranger to periodic massive meltdowns. There’s some disappointment that its hero in the White House appears to be not particularly following through on his bullish campaign rhetoric aimed at getting the crypto bros onside for the election.

Sentiment has completely rolled over and the price of Bitcoin fell below $79k last week, a more than 25% drop from its recent high of just a month earlier and is now very much in an official bear market.

ARTICLE OF THE WEEK ..

Owning individual stocks rather than ETFs can be damaging to your wealth.

Here are the 15 stocks that have destroyed the most investor wealth in the last ten years.

THIS WEEK’S UPCOMING CALENDAR ..

Tuesday and Friday this week look like the days to watch out for.

Tuesday (possibly) marks the beginning of the promised Canada and Mexico tariffs and Friday is Jobs Day. The number of new payrolls in February is expected to be around +133k with unemployment anticipated to be stable at 4.0%.

There are still some earnings reports, mostly in the retail sector, to come out this week including from Target, Best Buy, Costco, Macy’s, Kroger and Burlington Stores.

LAST WEEK BY THE NUMBERS:

Last week’s market color courtesy of finviz.com

Last week’s best performing U.S. sector: Financials (two biggest holdings: Berkshire Hathaway, JPMorgan Chase) ⬆︎ 2.8% for the week.

Last week’s worst performing U.S. sector: Technology (two biggest holdings: Apple, Nvidia) ⬇︎ 3.9% for the week.

* SPY, the S&P 500 Large Cap ETF, tracks the S&P 500 index, made up of 500 stocks from a universe of the largest U.S. companies. Its price fell 1.0% last week, is up 1.3% so far this year and ended the week 3.1% below its all-time record closing high (02/19/2025).

* IWM, the Russell 2000 Small Cap ETF, tracks the Russell 2000 index, made up of the bottom two-thirds...