Finance

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

Published

4 weeks ago

March 17, 2025

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. .SPX YTD bar S & P 500 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.

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.

S&P 500

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.

Finance

Stocks making the biggest moves midday: Frontier Group, JPMorgan, Apple, Stellantis, BlackRock and more

Published

1 day ago

April 11, 2025

Business Finance News

These are the stocks posting the largest moves in midday trading.

Finance

March inflation drops to lowest point in more than 3 years

Published

2 days ago

April 11, 2025

Business Finance News

Egg prices keep soaring, but inflation is moving in the right direction. (iStock)

Consumer prices fell 0.1% in March, according to the Consumer Price Index (CPI) released by the Bureau of Labor Statistics (BLS). This is the first monthly drop since July 2022.

Annual inflation increased 2.4% compared to a 2.8% increase registered in February. Core inflation, which excludes volatile energy and food prices, grew at a pace of 2.8% over the last year, the smallest 12-month increase since March 2021. A decline of 6.3% in gas prices more than offset increases in the indexes for electricity and natural gas. Food, however, rose 0.4% in March. The meats, poultry, fish and eggs index rose 7.9% over the last 12 months and the price of eggs alone jumped 60.4%.

Inflation continues to move towards the Federal Reserve’s 2% target rate. Still, the impact of President Donald Trump’s implementation of new tariff measures could derail this progress and hinder economic growth, according to Jim Baird, Plante Moran Financial Advisors’ chief investment officer.

“As consumers brace for the impact of tariffs on prices on a host of staples and discretionary goods, there’s considerable uncertainty on what that near-term magnitude of the impact will be for growth and inflation, although the direction for each is clearer,” Baird said. “That’s sent economists scrambling to update their forecasts to lower growth and increase expected inflation for the duration of the year.”

Despite concerns about the effects of President Trump’s tariffs, the Fed continues to hold interest rates steady, and it’s not expected to make any significant changes soon, including a potential rate cut. While tariffs could lead to higher inflation and slower economic growth, the Fed is waiting for more clarity on the full impact of these policies before deciding on any course of action.

If you are struggling with high inflation, consider taking out a personal loan to pay down debt at a lower interest rate, reducing your monthly payments. Visit Credible to find your personalized interest rate without affecting your credit score.

MORTGAGE RATES HIT A TWO-MONTH LOW THIS WEEK, REMAIN UNDER 7%

Recession risks increasing

President Trump’s tariffs are also contributing to an increased risk of recession. Several major financial institutions, including Goldman Sachs and J.P. Morgan, have raised their recession probabilities. According to Baird, part of the problem is that as prices rise due to tariffs, consumers may decide to curb their spending.

“Sentiment has soured in recent months, and there are already signs of not only a more cautious mood but more constrained spending,” Baird said. “Prices may rise, but that doesn’t mean that consumers will pay any price for any product. Some may grumble but continue to spend, but many are much more likely to trade down to cheaper alternatives or delay discretionary purchases.

“That reality raises the probability of a more notable slowdown in the pace of the economy, with the risk of recession also rising,” Baird continued.

You can take out a personal loan before future rate hikes to help pay down high-interest debt. Visit Credible to find your personal loan rate without affecting your credit score.

CALIFORNIA’S HOMEOWNERS INSURANCE INDUSTRY FACES ROUGH ROAD AHEAD AS WILDFIRES CONTINUE

Spring homebuying season looks promising

March shelter inflation data showed it dropped to 4.0% from 4.2% in February. That’s good news since shelter inflation has been a major force in keeping inflation elevated in recent years and could help move the needle on interest rates.

Mortgage rates continue to trend down, remaining under 7% for the twelfth consecutive week and could boost spring sales, according to Freddie Mac Chief Economist Sam Khater.

“As purchase applications continue to climb, the spring homebuying season is shaping up to look more favorable than last year,” Khater said.

The average 30-year fixed-rate mortgage was 6.62% for the week ending April 10, according to Freddie Mac’s latest Primary Mortgage Market Survey. That’s a decrease from the previous week, when it averaged 6.64% and lower than the 6.88% it was a year ago.

“Unfortunately, inflation remains painfully stubborn, well above the Fed’s 2% target for lowering rates,” said Gabe Abshire, Move Concierge CEO. “Considering the housing sector has lower exposure to the current global trade environment, it would be helpful for the Fed to lower rates and boost the Spring and Summer home buying market.”

If you want to become a homeowner, you can find your best mortgage rates by shopping around. Visit Credible to compare your options without affecting your credit score.

FHFA ANNOUNCES HIGHER MORTGAGE LOAN LIMITS FOR 2025

Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

Finance

Tariff turmoil and bond market shock: More challenges ahead?

Published

2 days ago

April 11, 2025

Business Finance News

Inside the mystery of rising bond yields and why the sector is still attractive

A global trade slowdown tied to U.S. tariffs will likely create a more challenging environment for bond fund managers, according to financial futurist Dave Nadig.

“All of these capital holding requirements that led to buying U.S. Treasurys are kind of unwinding at the same time,” the former ETF.com CEO told CNBC’s “ETF Edge” on Wednesday. “So, the traditional math of things are bad for stocks, [and] everybody is going to buy bond just isn’t working out this time because the kind of shock we’re seeing is one we’ve never seen before.”

The benchmark 10-year Treasury Note yield increased to 4.4% on Thursday. The yield is up more than 10 percent just this week. Last Friday, it touched 3.86%.

Nadig thinks slowing trade will continue to impact market activity.

“When you have less trade, you need to finance less trade,” he said. “Historically, people have needed to finance dollars. That’s why every country in the world buys U.S. Treasurys. It helps them manage their international trade with the United States. So, if we’re slowing down the amount of international trade, we should expect in aggregate the holdings of bonds to probably come down.”