Macrosynthesis

TLDR

‍

Liquidity Crisis Deepens as Stocks Sink – The average stock is down 30% from its 52-week high, with hedge funds aggressively de-risking amid a 65% drop in top-of-book liquidity. Momentum stocks have plunged 21%.
‍

Trump Tariffs Add to Economic Uncertainty – The administration’s 25% tariffs on Mexican and Canadian imports are rattling supply chains. Meanwhile, tariffs on Chinese goods have doubled, escalating trade war tensions and inflation risks.

Broadcom Surges on AI Growth – Shares jumped 16% after Q1 earnings beat expectations, with AI revenue up 77% YoY. CEO Hock Tan sees continued AI semiconductor strength despite tariff concerns.

‍

Nvidia Leads AI Stock Selloff – NVDA dropped 5.7% (-18% YTD) as investors question AI demand sustainability. Weak guidance from Marvell Technology (-20%) intensified concerns, triggering sector-wide losses.

‍

Market Chaos: Stocks Down 30%, Hedge Funds in Survival Mode

‍

The average stock is now down 30% from its 52-week high, marking a brutal stretch for equities as hedge funds scramble to de-risk. Liquidity is vanishing, with Goldman Sachs reporting a 65% drop in top-of-book liquidity - a measure of trading volume - making it increasingly difficult for large trades to execute. This is fueling wild swings in stock prices and amplifying downside risks. Meanwhile, hedge funds are still heavily leveraged, with gross exposure sitting at historically elevated levels. Despite aggressive selling, leverage remains sticky, suggesting further unwinding could be ahead.
‍

We called the market top spot on in our February 23rd issue and its been downhill from there. The good news is the market was overvalued and there are starting to be real bargains for longer term investors.
‍

On the technical front, the S&P 500 just suffered one of the fastest reversals from overbought to extreme oversold in just eight trading days. Sentiment indicators remain mixed. While the RSI suggests a potential buying opportunity, investor positioning still leans defensive. With seasonal trends signaling potential market lows, traders are eyeing March 14th as a possible inflection point. However, without a clear macro catalyst, the risk of prolonged selling remains high.

‍

Liquidity Collapse: A Buyer’s Strike is Draining the Market

‍

A full-blown liquidity crisis is unfolding in equities, with institutional buyers stepping away and retail traders exhausted. Hedge funds are actively selling, with Goldman reporting the largest 2-week net selling in a decade. The effect? A brutal market selloff with momentum stocks down 21% from their peak. While this suggests the unwind may be in its late innings, gross hedge fund leverage remains stubbornly high, meaning more de-risking could still be ahead.
‍

Meanwhile, the options market is exacerbating the selloff, with $2.7 trillion in expirations last week leading to forced selling and intensified downside pressure. The VIX spiked to its highest level since mid-December, signaling heightened fear. If liquidity remains tight and buyers stay on the sidelines, markets could struggle to find a floor. Traders are now watching corporate buybacks, which are running at $5 billion per day, as a potential stabilizing force.

‍

Europe Leads as Value Stocks Take the Throne

‍

The European stock market is outperforming the U.S., marking a rare shift in global equity leadership. Year-to-date, European indices have surged 10%, driven by a strong rotation into value stocks. The shift has seen banks, autos, and mining stocks gain momentum, with the value factor returning 8.6% on a long-only basis—trouncing growth stocks, which have risen just 2.9% in comparison.
‍

Strategists at JPMorgan note that for Europe’s rally to continue, earnings growth needs to turn positive. While regional markets have historically lagged the U.S. due to weaker earnings, recent fiscal stimulus measures in Germany and China are fueling optimism. Higher bond yields have also played a role, boosting financial stocks without yet squeezing margins. Meanwhile, valuations remain attractive—value stocks are still trading at a 50% discount to growth peers, offering further room to run. But with some sectors already rallying hard, traders are keeping an eye on tariff risks and slowing economic growth.

‍

Can the Value Trade Keep Running, or Is a Pullback Coming?

‍

Despite the recent surge, the value rally is approaching a critical juncture. Earnings have been the key driver, with banks and energy stocks leading the charge. Basic resources and auto manufacturers have also remained resilient, seeing relatively few downward revisions to their earnings estimates.
‍

European banks, one of the biggest winners, may be vulnerable to profit-taking after their steep climb. UBS strategists warn that potential tariff escalations could hit financial stocks hard, advising traders to hedge through options. Meanwhile, Bank of America remains bullish on value, arguing that its discount to growth stocks remains too steep to ignore. As markets enter a potential recovery phase, the debate is whether value’s momentum can sustain or if headwinds—like slowing fiscal support—will trigger a reversal.

‍

‍

‍

‍

U.S. Recession Seems Innevitable as Economic Data Deteriorates

‍

After months of warning signs, the U.S. economy seems to have slipped into recession - defined as two straight quarters where GDP growth is negative. The Federal Reserve recently changed its GDP growth projection for Q1 to -2.4 percent. As Trump and Musk pause, block, and eliminate tens of billions in government spending, including government jobs, the economic over-stimulus from the Biden-COVID days is being systematically unwound.
‍

On a recent podcast, Musk stated the Federal budget, including entitlements, looks like a $1 trillion dollar scam. The estimate includes $100 billion in annual social security fraud.
‍

This isn't the first time the U.S. government has been accused of fraud. A report put out during the Biden administration by a Congressional agency, the GAO, estimated that the federal government loses between $233 billion and $521 billion annually to fraud. That is larger than the budgets of all but two government agencies yet would account for 28% of the $1.8 trillion dollar FY24 federal deficit (the different between revenues and expenses).

‍

‍

Pulling that much money out of circulation will have a ripple effect on the economy quite rapidly. It's already having an impact on the Washington D.C. housing market, with existing homes for sale increasing rapidly over the past few weeks. Likewise, there's been a huge spike in the D.C. area of Google searches with the words "criminal defense attorney" over the past 30 days.
‍

With consumer sentiment slipping by 10% and tariffs rising, consumers and businesses will likely pause or pull back on spending, further eroding GDP.  Private consumption accounts for about 68% of U.S. GDP.

‍

‍

‍

‍

Despite these budget cuts, some good news has been coming in. The Trump administration is securing large amounts of new investments into the U.S. economy. Apple recently agreed to invest a half trillion dollars to reshore some of its manufacturing in Texas. Softbank, the word's largest venture capital fund, will invest $100B into US AI startups and infrastructure to create 100K tech jobs over the next 4 years. Nippon Steel, also from Japan, shifted from a blocked $14.9 billion acquisition to investing in U.S. Steel, with Trump stating in February 2025 they would "invest heavily" instead of purchasing, though the exact amount remains unspecified.
‍

The impact of these investments will be slower than the impact from the Trump/DOGE cuts, however. And data is showing this. The February jobs report, while slightly stronger than January’s dismal figures, confirmed that job growth is decelerating. Only 151K jobs were added, missing expectations. The unemployment rate ticked up to 4.1%, with retail, manufacturing, and government sectors shedding jobs.
‍

Many market pundits are saying that the Federal Reserve remains trapped, unable to cut rates as inflation remains stubbornly high due to tariff-driven price pressures. However, the Fed's other mandate - maximizing employment - will take priority over inflation killing if the unemployment rate continues rising. With the Trump administration causing fear in markets and cutting spending rapidly, we're more likely to see additional fed rate cuts than believed just a few months ago.
‍

Markets have responded accordingly. The S&P 500 erased all gains since Trump’s re-election, while bond markets are flashing distress signals. A Reuters poll found that 70 out of 74 economists now expect recession conditions to deepen, with U.S., Canadian, and Mexican economies all under pressure from the chaotic implementation of Trump’s tariffs. With corporate investment on pause, consumer confidence decreasing, and inflation sticky, all eyes are on how the White House chooses to spin the downturn.
‍

The S&P 500 sectors experienced a broadly negative week, with Financials leading the declines at -5.9%, followed closely by Consumer Discretionary (-5.4%) and Information Technology (-3.4%), signaling weakness in growth-oriented sectors. Energy (-3.8%), Telecom (-2%), and Industrials (-1.6%) also faced notable losses, reflecting broader market caution. Utilities (-2.4%), Consumer Staples (-1.5%), Materials (-1.2%), and Real Estate (-1.7%) saw declines as well, suggesting defensive sectors failed to provide much of a safe haven. Healthcare (+0.2%) was the sole gainer, showing resilience amid market volatility as the VIX rose 20% over the week.  
‍

Among industries, stand outs were the goldminer stocks, which rose +5%, and regional bank stocks, which fell -7%. Homebuilder, agricultural, and solar stocks all were slightly positive with everything else ending down for the week.

‍

Trump Dismisses Recession, Calls It a “Detox Period”

‍

Despite markets, economists, and corporate leaders signaling alarm, Trump and his economic team remain defiant, dismissing recession concerns as growing pains in the transition to a private-sector-led economy. Treasury Secretary Scott Bessent framed the downturn as a “necessary detox” from years of government-driven economic growth, arguing that deregulation and tariffs will ultimately create a stronger, more resilient economy.
‍

But Wall Street isn’t happy. JPMorgan’s recession probability model has jumped from 17% to 31% since November, with key economic indicators—factory activity, consumer confidence, and spending—showing clear signs of contraction. Meanwhile, Trump’s tariff strategy remains unpredictable, with repeated reversals leaving businesses scrambling to adjust. In a Fox Business interview, Trump suggested that tariffs “could go up over time,” signaling that the White House remains committed to an aggressive trade stance—despite its mild inflationary effects and damage to business sentiment. As the administration fights the narrative of a failing economy, markets are left navigating uncertainty, volatility, and a deteriorating economic backdrop.

‍

Trump’s Tariff Walkback: A Temporary Reprieve, But Uncertainty Lingers

‍

President Trump’s partial tariff suspension on Canadian and Mexican goods under the USMCA offers a short-term reprieve, but many products remain subject to steep import duties. While auto imports and potash received exemptions, nearly 40% of U.S. imports from these countries do not qualify under USMCA rules and will continue to face 25% tariffs on non-compliant goods and a separate 10% duty on some Canadian energy products.
‍

The fact remains that both Mexico and Canada are far more dependent on the U.S. than the U.S. is on them. Canada exports 77% of its goods to the U.S., so tariffs on those goods will burn them badly. Only 17% of U.S. goods go to Canada. It's a similar story for Mexico, which exports 87% of its good to the U.S. but accounts for only 16% of U.S. imports. This means Trump has the leverage he needs to get a deal done quickly.
‍

Meanwhile, tariffs on Chinese imports have doubled to 20%, intensifying tensions between Washington and Beijing. China has vowed to retaliate against U.S. economic pressure, escalating risks of a prolonged trade war. With the White House preparing to introduce a sweeping “reciprocal tariff” strategy on April 2, markets remain rattled, and businesses are hesitant to make long-term investment decisions.

‍

‍

‍

‍

‍

Trump Pushes Republicans to Back Spending Bill, Avoid Shutdown

‍

With a March 14 government shutdown deadline looming, President Trump is urging Republicans to unify behind a 99-page spending bill that would fund the government through September. The bill maintains current spending levels, increases defense funding by $8 billion, allocates $6 billion for veterans' healthcare, and reduces non-defense spending by $13 billion.
‍

House Speaker Mike Johnson (R-LA) has scheduled a vote for Tuesday, daring Democrats to oppose it. Trump’s message is clear: “NO DISSENT”, emphasizing that delaying a shutdown battle could strengthen their position in future negotiations. While key programs like Social Security and Medicare would continue, a prolonged shutdown could stall economic data releases, delay federal worker pay, and temporarily dent GDP growth. Markets remain wary, as previous shutdowns under Trump’s administration saw significant political and economic fallout.

‍

Trump’s Ukraine Strategy: Pressure, Sanctions, and Diplomatic Stalemate

‍

President Trump is escalating pressure on Ukraine while signaling a more flexible stance toward Russia, leading to global uncertainty over U.S. foreign policy. After pausing all military aid and intelligence-sharing with Kyiv, Trump is now threatening large-scale sanctions and tariffs on Russia unless a ceasefire and final peace agreement are reached.
‍

Despite Trump’s hardline rhetoric, Russia launched its largest missile attack on Ukraine’s energy grid in months last week. Ukraine, backed by European allies like France, remains defiant but vulnerable without U.S. support. Negotiations resume next week in Saudi Arabia.
‍

Amidst fears of Russia continuing westward expansion of its military campaign, and in response to Trump pulling support for Ukranian arms, European leaders are now scrambling to increase their own defenses and defense funding for Ukraine. Figures for European defense budget increases range between $800 billion to $1 trillion over the next decade, and have caused a spike in European defense contractor stocks like Rheinmetal and BAE Systems. For perspective, the U.S. spends that amount annually. The view from the Trump administration is that the U.S. has paid for the lion's share of Europe's security for too long while Europe has benefited at the expense of the United States. Apparently, that era is now over.

‍

‍

Upcoming Events This Week

‍

This week, investors will focus on key economic indicators, including U.S. inflation data, producer prices, JOLTS job openings, and consumer sentiment from the University of Michigan. In the UK, attention will be on January's GDP growth, industrial production, and the trade balance. Meanwhile, Germany is set to release its trade balance and industrial production figures, offering further insight into the region's economic health.

‍

‍

‍

‍

Natural Gas

+14.74%  (1W Chg)

+27.73% (1M Chg)

Gold

+1.91% (1W Chg)

+10.94% (YTD Chg)

Silver

+4.42% (1W Chg)

+12.56% (YTD Chg)

Eggs

-14.9% (1M Chg)

+17.98% (YTD Chg)

‍

‍

Company News

‍

LevelFields AI Stock Alerts Last Week

‍

GV Skyrockets on $1B Qatar Financing Deal – GV stock rose +186% (1D) after securing a $1 billion investment from Qatar’s Alfardan Group to accelerate research, development, and global expansion of its PEGASUS new energy vehicles. The deal signals strong institutional backing for GV’s next-gen EV technology.

‍

MYE Jumps on $10M Share Buyback Program – MYE +28% (1D) after announcing a $10 million stock repurchase program, reinforcing management’s confidence in the company’s valuation and capital allocation strategy.

‍

GENK Rallies on $50M Share Repurchase Approval – GENK +22.9% (1D) following Nexxen International’s board approval of a new $50 million share buyback program, set to begin after the current repurchase program concludes.

‍

GRRR Spikes on $1.8B Thailand Energy Deal, Then Crashes – GRRR +18.2% (1D) after announcing a $1.8 billion energy deal in Thailand, but shares later plunged nearly 50% following a short seller report from Bear Cave, raising concerns over the companies viability.

‍

‍

Broadcom Surges on Strong AI Revenue Growth and Earnings Beat

Broadcom (AVGO) shares jumped 16% after reporting Q1 2025 earnings that exceeded analyst expectations, driven by booming AI demand.

• EPS: $1.60 (vs. $1.49 expected)
• Revenue: $14.92B (+25% YoY, beating $14.61B forecast)
• AI Revenue: $4.1B (+77% YoY)

The company guided for Q2 revenue of $14.9B, exceeding Wall Street’s $14.76B estimate. Broadcom's semiconductor solutions segment grew 11% YoY to $8.21B, while software revenue surged 47% YoY to $6.7B, fueled by the VMware acquisition.

CEO Hock Tan highlighted continued AI semiconductor strength, with custom AI chip partnerships expanding to five hyperscalers. Despite Trump’s tariff concerns, Broadcom’s dominance in AI infrastructure positions it for sustained growth.

‍

Nvidia Stock Slides Amid AI Demand Concerns and Sector Sell-Off

‍

Nvidia (NVDA) shares fell 5.7% on Thursday (-11% 1W), leading semiconductor stocks lower as investor concerns over AI demand and regulatory risks weighed on the sector. The stock is now down 18% year-to-date, marking its worst monthly performance since June 2022.

• Sector Pressure: Marvell Technology’s disappointing earnings and AI guidance fueled a broader sell-off, with Marvell stock dropping 20%.
• Sentiment Shift: Analysts warn of a "crisis of confidence" in AI stocks, despite strong fundamentals and capital expenditure commitments from cloud providers.
• Competitive Risks: Reports of AI cost efficiencies and custom chip competition from Amazon and Microsoft added pressure.

Despite long-term optimism, near-term volatility continues as Nvidia faces investor skepticism over sustained AI-driven growth.

‍

‍

Rigetti Computing Rises Despite Earnings Miss

‍

Would-be quantum computing firm, Rigetti Computing (RGTI), reported Q4 2024 revenue of $2.27 million, marking a 32.8% YoY decline, and posted a net loss of $0.68 per share, significantly wider than the expected $0.09 loss. Operating expenses reached $19.5 million, while the company ended the quarter with $217.2 million in cash.
‍

Despite the terrible results, shares rose 8.5% as investors responded positively to the company’s 2025 roadmap.

‍

AeroVironment Misses Q3 Estimates, Issues Weak Guidance

‍

Military drone maker, AeroVironment (AVAV), reported Q3 2025 revenue of $167.6 million, a 10% YoY decline, impacted by supply chain disruptions from high winds and fires in Southern California. The company posted a net loss of $1.8 million ($0.06 per share), down from $13.9 million in profit last year.
‍

AVAV secured a record $763.5 million funded backlog, driven by strong Switchblade and Jump-20 orders. The company lowered full-year guidance to $780-$795 million in revenue, missing Wall Street expectations of $821 million, sending shares down 17% post-earnings.

‍

Crypto Corner: Trump Fails to Impress with Strategic Reserve

‍

President Trump finally revealed his plan for creating a strategic cryptocurrency reserve that utilizes $17 billion in seized crypto assets from criminal prosecutions as funding. The announcement noted that no tax dollars would be used to fund the reserve, which disappointed many hodlers who had hoped for a spike in crypto prices driven by large scale buying of the assets by the federal government. Bitcoin prices were flat for the week.

‍

‍

‍

‍

The chart above shows the total returns of all premium alerts sent to Level 2 members that were closed since we launched the service. Level 2 members receive 1-2 alerts per week, selected by our analysts using a combination of AI, fundamental analysis, technical analysis, and macroeconomic analysis...so you don't have to.

We're happy to share the trade log and a sample alert if you're interested in seeing it. Just enter your email at the bottom of this page to get a copy emailed to you directly.

‍

‍

‍

‍

‍

‍

Why Are People Leaving Florida?

‍Making $3900 In a Day Trade

‍Long LevelFields Tutorial

‍

Follow Us for Additional Daily Updates on Social Channels

‍

Upcoming Earnings

‍

This section is here for information only. It's not any endorsement. We will bold stocks included in previous alerts, or if they are market bellwhethers.
‍

MON.

Oracle (ORCL), Vail Resorts (MTN)
‍

TUES.

Kohls (KSS), United Natural Foods (UNFI), Casey's General (CASY)
‍

WED.

Adobe (ADBE), American Eagle Outfitters (AEO)
‍

THURS.

Dollar General (DG), Ulta Beauty (ULTA), DocuSign (DOCU)
‍

FRI.

Li Auto (LI)
‍

This is not financial advice. All information represent opinions only for informational purposes. Given the vast number of stocks we cover in these reports, assume staff covering stocks have positions in stocks discussed.
‍

Have feedback or a request for specific data? Drop us a note at support@levelfields.ai

‍