Macrosynthesis

TLDR

• Tariff Countdown Reshapes Markets – Hedge funds pulled $22B from equities over four weeks, while hedge funds rotated into defensive stocks. The tariffs—expected to raise costs above 10%—may disrupt global trade flows and strain U.S. alliances with Germany, Canada, and Japan.
• Fed Trapped Between Inflation and Recession Risk – The Fed held rates steady but flagged rising stagflation concerns, citing weaker growth and tariff-driven supply shocks. Powell warned that monetary tools may be ineffective if trade wars amplify inflation without boosting output. The updated dot plot reflects downgraded growth and persistent inflation, deepening the Fed’s policy dilemma.
• Sentiment Slumps as Confidence Diverges from Data – Despite steady labor markets and industrial output, consumer and business confidence are deteriorating. Surveys show inflation fears and tariff anxiety weighing on expectations. The Fed is in wait-and-see mode, while markets brace for PCE inflation data, GDP revisions, and $183B in Treasury issuance this week.
• Lighthizer Defends Tariffs as Middle-Class Lifeline – In a high-profile interview, former U.S. Trade Rep Robert Lighthizer argued tariffs are vital to restoring U.S. manufacturing, closing trade deficits, and protecting workers from predatory foreign policies. He called globalization a “national emergency” and said Trump’s trade agenda is a generational opportunity to rebuild middle-class prosperity through economic nationalism.

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Calm Masks Deeper Rotations Ahead of April 2 Tariff Line

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Despite a quiet finish in equities, the market is repositioning ahead of April 2, when President Trump is set to announce a wave of “reciprocal tariffs” targeting trade imbalances. Long-only funds sold another $4B in equities last week, bringing four-week outflows to over $22B. Hedge funds cut net exposure to multi-year lows, favoring defensive plays like financials and energy over tech and consumer names.
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April 2 looms as a key pivot. Trump’s “Liberation Day” plan will impose tariffs on countries with tariffs against U.S. goods—what officials call the “dirty 15.” While narrower than feared, the tariffs are designed for immediate impact and could strain ties with allies like Japan, Germany, and Canada. Officials say this approach is meant to steer investment back to U.S. manufacturing and raise trillions in revenue to offset future tax cuts.
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Markets, meanwhile, are bracing for impact. Goldman calls the current tape a “nauseating grind,” with sentiment shifting daily amid inflation fears and tightening liquidity. Next week’s PCE data, GDP revisions, and $183B in Treasury supply will test risk appetite just as Trump’s trade reset hits.
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While some sector-specific tariffs (like autos) may be delayed, the broader shift is clear: global trade flows are being re-priced. For investors, April 2 isn’t just a headline — it’s a structural turning point in how capital is deployed, supply chains are routed, and policy risk is priced.

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Trump Pushes for Cuts as Powell Warns of Stagflation Storm

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The Fed held rates steady this week, but the messaging was anything but neutral. While Chair Jerome Powell pointed to supply-side inflation—driven in part by President Trump’s escalating tariffs—Trump immediately turned the heat back on the Fed, demanding rate cuts “as tariffs start to transition into the economy.” The clash underscores a growing disconnect between monetary policy and fiscal direction, with Trump pursuing economic nationalism while the Fed tries to preserve price stability.
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Behind the scenes, Powell’s comments hinted at a more serious risk: stagflation. “Weaker growth, higher inflation,” is how Powell summarized the evolving outlook, a warning that rising prices paired with slowing output could undermine the Fed’s dual mandate of max employment/low inflation. Though he refrained from direct confrontation, Powell’s remarks painted a sobering picture—where trade wars could stoke inflationary pressures without delivering real economic gains. The Fed is caught in a trap: cut rates, and you fuel more inflation; hike them, and you crush fragile growth. It’s a policy corner with no clean exit. However, the likely scenario is tariffs, and fear of their impact, will destroy demand, weakening economic output which lowers inflation, enabling rate cuts.

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Dot Plot Dilemma: Forecast Shifts Mask Deeper Concern

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This week’s updated Fed dot plot shows a subtle but telling shift: a slight downgrade in expected growth and an upward revision to inflation forecasts. Most notably, rate cuts for the end of 2025 were marked up, signaling the Fed’s growing unease about tightening further in a weakening environment. But the real message lies between the lines.
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Despite Powell’s public insistence that inflationary spikes may prove “transitory,” the new projections reflect a cautious recalibration. Officials now expect slower GDP growth and stickier inflation than they did in December. That combo—rising prices with sputtering output—is a stagflation setup. Yet, the Fed isn’t ready to sound the alarm. Instead, it’s hoping the data holds steady long enough to avoid choosing between inflation-fighting rate hikes or recession-averting stimulus.

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Confidence vs. Conditions: Tariffs Fuel Sentiment Slump, Not Collapse

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Even as labor markets remain firm and factory activity stabilizes, a wave of pessimism is washing over consumers and businesses. Surveys from the University of Michigan and The Conference Board show rapidly deteriorating expectations for personal finances and inflation—fueled by fears of higher costs from tariffs and potential global retaliation.
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Trump’s hardline trade stance—including threats of 200% tariffs on European spirits—has spooked markets and sparked hoarding in sectors like agriculture and alcohol. Yet while investor sentiment weakens, underlying economic data remains relatively steady. The Fed is holding rates, choosing patience over panic. The question now: will shaken confidence spiral into real economic softness—or can Trump’s structural reset push through the turbulence and deliver on its long-term promises?

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Why Tariffs Are Central to Saving the American Middle Class

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In a sweeping interview on The Tucker Carlson Show, former U.S. Trade Representative Robert Lighthizer made the most comprehensive case yet for why tariffs—once dismissed as relics of the past—are now essential tools to restore national prosperity, defend working-class Americans, and rebalance a global trading system he argues has been rigged against the United States for decades. At the heart of Lighthizer’s argument is a simple but sobering diagnosis: the current global trade regime is hollowing out America. Trade, he explains, is supposed to operate on mutual benefit—countries export what they do best and import what others produce more efficiently. But this model has collapsed. Instead, nations like China, and increasingly Germany and others, pursue aggressive industrial policies that prioritize capital accumulation, manufacturing dominance, and technology acquisition—not improving their citizens’ living standards. Meanwhile, the U.S. maintains an open trading and capital system, inviting a one-sided relationship where wealth, jobs, and production flow overseas.

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The result? The United States has hemorrhaged its industrial capacity, lost technological leadership in critical sectors, and transferred an estimated $23.5 trillion in net wealth abroad through sustained trade deficits. American workers have borne the brunt. Manufacturing towns are shattered. Wages for non-college educated workers have stagnated for 25 years. Life expectancy has fallen—Lighthizer cites research showing deaths of despair (from suicide, drugs, and alcoholism) have spiked among working-class Americans. “We are the only G7 country with a life expectancy under 80 years,” he warns. “This is not normal. This is a national emergency.”

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According to Lighthizer, tariffs are not just about punishing bad actors—they are tools to restore balance in trade flows and fairness in the rules of global commerce. The true goal is not isolation, but strategic rebalancing: forcing countries that rely on trade surpluses and manipulated markets to internalize the costs of their distortive practices. Tariffs also incentivize the reshoring of American manufacturing, creating domestic demand for steel, semiconductors, autos, pharmaceuticals, and other key sectors critical for both national security and economic resilience.

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“People say manufacturing doesn’t matter anymore,” Lighthizer says. “But manufacturing employs 80% of our engineers, drives 90% of private R&D, and spins off high-quality jobs across communities. Without it, we can’t innovate. We can’t defend ourselves. And we can’t sustain the middle class.”

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While critics warn that tariffs risk sparking inflation or trade wars, Lighthizer dismisses these fears. He points to the previous Trump administration’s 2018-2019 tariffs, which were implemented without spiking inflation. He argues inflation is primarily a monetary phenomenon, and that restoring domestic production will enhance price stability over the long term by reducing reliance on volatile foreign supply chains.

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For Lighthizer, Trump’s second term represents a once-in-a-generation opportunity to rewrite the rules.

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“The goal isn’t punishment,” Lighthizer concludes. “It’s restoration. Restoration of dignity, prosperity, and hope for the people who built this country—and who deserve to see it work for them again.”

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Hartnett Ends “Sell” Signal, Warns April 2 Could Spark New Drop

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Michael Hartnett of Bank of America has officially withdrawn his “sell” signal for U.S. equities, citing a surge in fund manager cash allocations—from 3.5% to 4.1%—as a sign that the worst of the recent correction may be over. That move follows a rapid 10% decline in the S&P 500, a sharp 14% drop in the Nasdaq, and a broader pullback in mega-cap stocks. While he doesn’t believe a full bear market is underway, Hartnett warns that another potential shock looms: Trump’s anticipated tariff announcement on April 2.
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Despite cautious signals in sentiment surveys—such as record-low U.S. equity allocations—Hartnett points to contradictory behavior in fund flows. Recent data show the largest weekly inflow into equity funds so far this year and a steady accumulation of U.S. stocks by private clients. According to Hartnett, investors are nervous but not fleeing risk en masse.
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Hartnett’s forward-looking stance favors bonds, international stocks, and gold, reflecting a view that U.S. markets are more exposed to policy shocks. While fiscal tightening may dominate in the U.S., he expects continued stimulus-driven inflation abroad—especially in China, Japan, and Europe. As the market braces for April 2, Hartnett notes that uncertainty is intensifying. In his words, the tone on Wall Street may hinge less on macro forecasts—and more on who’s influencing Trump the day before tariffs go live.

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Last Week's Market Performance

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U.S. equities posted modest gains for the week ending March 21, as markets attempted to stabilize following a volatile start to the month. The Dow Jones rose 1.2% to close at 41,985, while the S&P 500 gained 0.5% to reach 5,667. The Nasdaq added 0.2%, finishing at 17,784. The Russell 1000 also advanced 0.6%, snapping a multi-week losing streak. Despite the rebound, all major indexes remain in negative territory year-to-date, with the Nasdaq down -7.8%, the S&P 500 off -3.3%, and the Dow Jones trailing -0.9%.
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Sector performance was mixed. Energy led the market with a 3.2% weekly gain, followed by financials (+1.9%) and healthcare (+1.1%). Information technology and consumer discretionary stocks were flat, continuing their underperformance in 2025. Meanwhile, utilities and materials slipped 0.2%, and real estate ended the week unchanged. In terms of style trends, large-cap value stocks outpaced small-cap growth once again, reflecting continued investor caution toward speculative segments.
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Volatility declined significantly, with the CBOE Volatility Index (VIX) falling -11.5% to 19.3, as investor sentiment steadied following tariff-driven market jitters earlier in the month. Gold continued to climb, Bitcoin prices were flat, and the biggest S&P 500 gains were Boeing (+10%), Domino's (+8%) and Southwest Airlines (+10%).

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Upcoming Events This Week

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This week, investors are watching for remarks from multiple Federal Reserve officials and a slate of major U.S. economic reports. Key data includes personal income and spending figures, inflation readings from the PCE index, and the final estimate of Q4 GDP growth. Updates on consumer confidence, manufacturing activity, and durable goods orders will also be closely tracked, along with housing market indicators such as new and pending home sales and the S&P/Case-Shiller Home Price Index.

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Company News

LevelFields AI Stock Alerts Last Week

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• LITM Soars +31% on $10M Buyback Authorization – Snow Lake Energy (LITM) shares surged +31% (1D) after the company approved a $10 million share repurchase program aimed at enhancing market presence and shareholder value. The move reinforces confidence in the company’s financial strength and long-term uranium strategy.
• ATER Rallies +28% Following $3M Share Buyback Plan – Aterian (ATER) stock jumped +28% (1D) after announcing a two-year, $3 million share repurchase program. CEO Arturo Rodriguez cited the stock’s undervaluation and improved financial outlook as key drivers. The buyback signals a shift toward capital return while supporting long-term growth efforts.
• Signet Jumps +17% After Dividend Hike – Signet Jewelers (SIG) stock popped +17% (1D) after the company raised its quarterly dividend by 10% to $0.32 per share. The increase reflects confidence in earnings momentum and a commitment to rewarding shareholders amid broader retail sector volatility.

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Nvidia’s AI Ambitions Clash With Street's Caution Despite Bold Vision

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At GTC 2025, Nvidia CEO Jensen Huang laid out an aggressive roadmap featuring the Blackwell Ultra (2025), Vera Rubin (2026), and Rubin Ultra (2027)—offering up to 14x performance gains. He argued that agentic AI now requires 100x more compute than last year, reinforcing Nvidia’s central role in a $1 trillion AI infrastructure buildout by 2028.
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Still, Nvidia shares fell during the week, down over 13% YTD and flashing a technical “death cross,” as Wall Street remains cautious. Concerns include potential AI capex slowdowns, competition from Broadcom’s ASIC chips, and Trump-era tariff risks. Huang pushed back, calling ASICs unreliable and touting Nvidia’s U.S.-based chip production plans to navigate geopolitical headwinds.
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The company also hosted its first “Quantum Day,” aiming to reframe its role in quantum computing after Huang’s earlier 15-year timeline rattled the sector. Yet, despite his more optimistic tone and GPU-quantum integration efforts, quantum stocks like D-Wave and IonQ still slumped.
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Until Nvidia delivers on revenue growth and margin stability, investors may hesitate—despite the company’s unmatched AI hardware roadmap and long-term tailwinds.

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Earnings Reports & Weak Forecasts from FedEx, Micron and Nike

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This week, three major companies—FedEx (FDX), Micron Technology (MU), and Nike (NKE)—drew attention with their quarterly earnings reports. The parcel delivery leader reduced its full-year revenue forecast for the third quarter in a row. At the same time, memory chip manufacturer Micron (MU) projected a drop in its adjusted gross margin for the current quarter. Lastly, the global leader in footwear provided a cautious outlook with its guidance.

Tesla Stock Caught in Political Crossfire

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Since Elon Musk’s appointment to lead the Department of Government Efficiency (DOGE), Tesla dealerships and charging stations across at least nine states have been hit with arson, gunfire, and vandalism—including incidents involving Molotov cocktails and hate graffiti. The FBI confirms the attacks appear to be the work of “lone offenders,” though investigations remain ongoing. President Trump has labeled the acts “domestic terrorism” and warned that perpetrators and financial backers could face up to 20 years in prison or even extradition to El Salvador. Meanwhile, Tesla CEO Elon Musk has publicly blamed left-wing activists and reposted warnings on his social media platform, escalating tensions further.
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Adding fuel to the fire, Minnesota Governor Tim Walz mocked Tesla’s stock decline during a town hall, while CNBC's Kevin O'Leary was quick to point out the Minnesota Pension Fund owns 1.6 millions shares of Tesla.
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Tesla’s stock is now down 48% year-to-date, and four senior executives recently sold over $100 million in shares, deepening investor anxiety. The only winner emerging from this mess seems to be Rivian. Watch Rivian Video
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Upcoming Earnings

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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.

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MON.

KB Home (KBH)

TUES.

McCormick & Company (MKC), GameStop (GME)

WED.

Dollar Tree (DLTR), Paychex (PAYX), Petco Health and Wellness (WOOF), Verint Systems (VRNT)

THURS.

Lululemon Athletica (LULU), AAR Corp (AIR)

FRI.

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No Notable Earnings

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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.
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