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Deutsche Bank says the market sell-off has another 6% to go

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Traders work on the floor of the New York Stock Exchange during morning trading on March 14, 2025 in New York City. 

Michael M. Santiago | Getty Images

The market sell-off is not over yet as consumer and corporate confidence take a dive on tariff uncertainty, according to Deutsche Bank.

“We see the selloff in US equities as having further to go,” Binky Chadha, chief strategist at Deutsche Bank, wrote Saturday. “With trade policy uncertainty likely to continue to weigh, at least until April 2, we expect positioning to continue to unwind.”

“A move to the bottom of the positioning band which is where it went to in the last trade war, would take the S&P 500 down to 5250,” Chadha added.

The S&P 500 level highlighted by Chadha points to another 6.9% decline from Friday’s close of 5,638.94. The benchmark was last about 8% below the all-time high it reached just last month.

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At the center of the strategist’s call are concerns of an economic slowdown amid tariff uncertainty that are unlikely to abate for at least the next several weeks. The latest earnings season showed CEOs are slashing capital expenditures and cutting their earnings forecasts.

Chadha also expects the idea of a “Trump put” — in which the president will ease on his policies that have destabilized the market — will not be realized until a marked turn lower in Trump’s approval ratings.

“Compared to the level of consumer confidence, the current approval rating is high, implying plenty of room for downside with negative growth or inflation developments likely to speed the catch down,” Chadha wrote. “We expect the net approval rating has to turn more significantly negative, at least -5%, before the administration starts to consider responding.”

Still, Chadha — who held one of the more bullish outlooks heading into 2025 — said that it’s “too early to throw in the towel” on his year-end target of 7,000, a move that’s more than 24% higher from Friday’s close. He thinks stocks can bounce back sharply in the latter part of the year if there’s a resolution on tariff uncertainty.

On Monday, at least, the broad index rose slightly as it tries to claw back its recent losses. The move came after the latest U.S. retail sales report showed consumers are still spending though at a slower pace than expected.

“While the risks have grown, for now we maintain our year-end S&P 500 target of 7000,” he said.

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Slower economic growth is likely ahead with risk of a recession rising, according to the CNBC Fed Survey

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Federal Reserve Chair Jerome Powell testifies before the Senate Banking Committee in the Hart Senate Office Building on Capitol Hill on February 11, 2025 in Washington, DC. 

Chip Somodevilla | Getty Images News | Getty Images

Respondents to the March CNBC Fed Survey have raised the risk of recession to the highest level in six months, cut their growth forecast for 2025 and raised their inflation outlook.

Much of the change appears to stem from concern over fiscal policies from the Trump administration, especially tariffs, which are now seen by them as the top threat to the US economy, replacing inflation. The outlook for the S&P 500 declined for the first time since September.

The 32 survey respondents, who include fund managers, strategists and analysts, raised the probability of recession to 36% from 23% in January. The January number had dropped to a three-year low and looked to have reflected initial optimism following the election of President Trump.  But like many consumer and business surveys, the recession probability now shows considerable concern about the outlook.

“We’ve had an abundance of discussions with investors who are increasingly concerned the Trump agenda has gone off the rails due to trade policy,” said Barry Knapp of Ironsides Macroeconomics. “Consequently, the economic risks of something more insidious than a soft patch are growing.”

“The degree of policy volatility is unprecedented,” said John Donaldson, director of fixed income at Haverford Trust.

The average GDP forecast for 2025 declined to 1.7% from 2.4%, a sharp markdown that ended consecutive increases in the three prior surveys dating back to September. GDP is forecast to bounced back to 2.1% in 2026, in line with prior forecasts.

“The risks to consumers’ spending are skewed to the downside,” said Neil Dutta, head of economic research at Renaissance Macro Research. “Alongside a frozen housing market and less spending across state and local governments, there is meaningful downside to current estimates of 2025 GDP.”

Fed rate cut outlook

Most continue to believe the Fed will cut rates at least twice and won’t hike rates, even if faced with persistently higher prices and weaker growth. Three-quarters forecast two or more quarter-point cuts this year. Part of the reason is that two-thirds believe that tariffs will result in one-time price hikes rather than a broader outbreak of inflation. But the policy uncertainty has created a wider range of views on the Fed than normal with 19% believing the Fed won’t cut at all.

Still, higher tariffs and weaker growth are a dilemma for the Fed.

“Powell is really stuck here because of the tariff overhang,” said Peter Boockvar, chief investment officer, Bleakley Financial Group. “If he gets more worried about growth because of them and cuts rates as unemployment rises but then Trump removes all the tariffs, he’s jumped the gun.”

More than 70% of respondents believe tariffs are bad for inflation, jobs and growth. 34% say tariffs will decrease US manufacturing with 22% saying they will result in no change. Thirty-seven percent of respondents believe tariffs will end up in greater manufacturing output. More than 70% believe the DOGE effort to reduce government employment is bad for growth and jobs but will be modestly deflationary.

“A global trade war, haphazard DOGE cuts to government jobs and funding, aggressive immigrant deportations, and dysfunction in DC threaten to push what was an exceptionally performing economy into recession,” said Mark Zandi, chief economist, Moody’s Analytics.

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Study shows how long Social Security, $1.5M nest egg would last in 50 states

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Retirement nest eggs and Social Security benefits are key sources of funds for many Americans as they live out their golden years in the state of their choosing. 

A recently-released study from GOBankingRates looked at the financial runway that retirees would have in each state with Social Security benefits and $1.5 million socked away for retirement, finding West Virginia offered the most years before living costs would deplete their retirement savings.

The Mountain State ranked No. 1 with $1.5 million in retirement savings expected to sustain retirees there for a whopping 54 years while facing about $27,800 in living costs each year after Social Security benefits, according to the study. 

The Social Security Administration (SSA) allows Americans to access their Social Security retirement benefits early starting at age 62, though payments “will be reduced a small percentage for each month before your full retirement age” if they do that, according to the SSA. One’s “full retirement age” depends on when a person was born. 

SOCIAL SECURITY PAYMENTS TO INCREASE FOR PUBLIC PENSION RECIPIENTS

GOBankingRates said it used data from a slew of sources, including the Bureau of Labor Statistics, the SSA and Missouri Economic Research and Information Center, to determine its rankings of how states stack up in terms of the amount of time that Social Security and $1.5 million in retirement would last retirees residing in them.

Overall, the study indicated that those two sources of funds would provide different amounts of years of “financial security” for retirees in states across the country. States’ cost of living after Social Security ranged from $27,803 to $87,770 per year, it found. 

401(K) BALANCES HIT SECOND HIGHEST ON RECORD: FIDELITY

GoBankingRates found the number of years that $1.5 million and Social Security would sustain retirees in each state was:

West Virginia: 54 years ($27,803 post-Social Security cost of living per year)

Charleston West Virginia

Charleston is the capital and largest city of the U.S. state of West Virginia. Slightly processed using HDR technique (iStock / iStock)

Kansas: 52 years ($28,945 post-Social Security cost of living per year)

Mississippi: 51 years ($29,426 post-Social Security cost of living per year)

Oklahoma: 51 years ($29,666 post-Social Security cost of living per year)

Alabama: 50 years ($30,207 post-Social Security cost of living per year)

Missouri: 50 years ($30,327 post-Social Security cost of living per year)

Arkansas: 49 years ($30,237 post-Social Security cost of living per year)

Tennessee: 49 years ($30,928 post-Social Security cost of living per year)

Iowa: 48 years ($31,168 post-Social Security cost of living per year)

Indiana: 47 years ($31,709 post-Social Security cost of living per year)

Indianapolis

Aerial view of Indianapolis downtown with Statehouse in Indiana (iStock / iStock)

Georgia: 47 years ($31,829 post-Social Security cost of living per year)

North Dakota: 47 years ($32,190 post-Social Security cost of living per year)

Michigan: 46 years ($32,310 post-Social Security cost of living per year)

South Dakota: 46 years ($32,310 post-Social Security cost of living per year)

Texas: 46 years ($32,490 post-Social Security cost of living per year)

Nebraska: 46 years ($32,610 post-Social Security cost of living per year)

Kentucky: 46 years ($32,670 post-Social Security cost of living per year)

New Mexico: 46 years ($32,670 post-Social Security cost of living per year)

Louisiana: 45 years ($33,031 post-Social Security cost of living per year)

Baton Rouge, Louisiana

An aerial view of downtown Baton Rouge from the State Capitol building, looking towards the Mississippi bridge and river. (iStock / iStock)

Montana: 45 years ($33,331 post-Social Security cost of living per year)

Ohio: 44 years ($33,827 post-Social Security cost of living per year)

Pennsylvania: 44 years ($33,872 post-Social Security cost of living per year)

South Carolina: 44 years ($34,052 post-Social Security cost of living per year)

Minnesota: 44 years ($34,113 post-Social Security cost of living per year)

Wyoming: 44 years ($34,173 post-Social Security cost of living per year)

Illinois: 44 years ($34,233 post-Social Security cost of living per year)

North Carolina: 42 years ($35,495 post-Social Security cost of living per year)

aerial view of Raleigh, North Carolina

Downtown Raleigh, North Carolina, USA Drone Skyline Aerial. (iStock / iStock)

Maryland: 41 years ($36,276 post-Social Security cost of living per year)

Wisconsin: 41 years ($36,516 post-Social Security cost of living per year)

Nevada: 41 years ($26,997 post-Social Security cost of living per year)

Delaware: 40 years ($37,057 post-Social Security cost of living per year)

Virginia: 40 years ($37,237 post-Social Security cost of living per year)

Idaho: 39 years ($38,379 post-Social Security cost of living per year)

Florida: 39 years ($38,379 post-Social Security cost of living per year)

WalletHub published a report on Monday that found the best U.S. states to retire in 2022. Florida was at the top of the list. Tallahassee, Florida, is pictured.  (iStock)

Colorado: 39 years ($38,559 post-Social Security cost of living per year)

Utah: 35 years ($42,645 post-Social Security cost of living per year)

Oregon: 35 years ($42,945 post-Social Security cost of living per year)

New Hampshire: 34 years ($43,847 post-Social Security cost of living per year)

Connecticut: 34 years ($43,967 post-Social Security cost of living per year)

Rhode Island: 34 years ($44,387 post-Social Security cost of living per year)

Arizona: 34 years ($44,628 post-Social Security cost of living per year

Maine: 33 years ($45,048 post-Social Security cost of living per year)

Washington: 33 years ($45,108 post-Social Security cost of living per year)

Vermont: 33 years ($45,409 post-Social Security cost of living per year)

New Jersey: 33 years ($45,829 post-Social Security cost of living per year)

Trenton, New Jersey

The capital statehouse of New Jersey lights up as the sun sets the Delaware River in the background city of Trenton (iStock)

Alaska: 29 years ($50,997 post-Social Security cost of living per year)

New York: 29 years ($50,997 post-Social Security cost of living per year)

California: 24 years ($63,795 post-Social Security cost of living per year)

Massachusetts: 23 years ($65,117 post-Social Security cost of living per year)

Hawaii: 17 years ($87,770 post-Social Security cost of living per year)

THIS MIDWESTERN STATE IS CONSIDERED ONE OF THE BEST PLACES TO RETIRE, NEW STUDY SAYS: SEE THE LIST

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Stocks making the biggest moves midday: INTC, TSLA, AFRM, HOOD

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