The Kobeissi Letter

BREAKING: Gold prices have officially crossed above $3,000/oz for the first time in history.

It's official, the S&P 500 just CLOSED in correction territory and the Nasdaq 100 is 7% away from its first bear market since 2022 (Part 2). For the first time in years, the US is LAGGING global markets. Since President Trump's inauguration, the MSCI USA Index has lagged the MSCI World ex USA index by ~15 percentage points. This is one of the most significant underperformances in years for US stocks. Bullish inflation data did not help. Headline and core CPI/PPI inflation FELL by more than expected in February. Yet, the rallies were sold as President Trump threatened 200% tariffs on EU. As we have noted multiple times now, Trump is welcoming near-term economic weakness. The question becomes, how long will this downturn last? First, it depends on whether this is a simple market correction or the beginning of a bear market. On average, stock market crashes that lead to bear markets last around ~338 days. Corrections are significantly shorter. The main difference between the trade war under Trump 1.0 and Trump 2.0 is duration. In his first term, Trump's tariffs were taken to be more of a posturing tactic. This time around, markets are pricing-in tariffs for longer on more trade partners. This is a material change. As recession fears are rising, rate cut odds have followed. But now, markets are not rallying on the prospect of rate cuts because its at the cost of economic weakness. Markets see AT LEAST 3 interest rate cuts in 2025 now. 2 months ago, markets saw <1 rate cut this year. There's only one certainty in this market: more volatility is coming. The Volatility Index, $VIX, is now up +63% over the last month but has yet to see a major breakout. Until we have a day where the $VIX surges above 50+, the market has not seen real panic selling. These changes in the macroeconomic backdrop will have market-wide implications. There has been a clear MAIN takeaway from Trump's first few weeks in office. He is willing to see short-term pain for long-term gain. The market is pricing-in both uncertainty and change, a lethal combination. Follow us, The Kobeissi Letter, for real time analysis as this develops.

It's official, the S&P 500 just CLOSED in correction territory and the Nasdaq 100 is 7% away from its first bear market since 2022 (Part 1). Over the last 16 trading days, the S&P 500 has erased an average of -$340 billion PER trading day. Here's what you need to know. Let's begin with an updated timeline (you can see it below). While the trade war ramped up into February 1st, the market PEAKED on February 19th. Even as more tariffs went live in early-March, the real turning point was March 6th. This was when Trump said he's "not watching the stock market." Dip buyers have been crushed in this downturn. The S&P 500 has not seen a back-to-back gains for 15 consecutive trading days, the longest streak since April 2024. This is also the 5th longest stretch since the 2020 pandemic. Market uncertainty is at its highest since 2020. Here's the current drawdown in the Magnificent 7: 1. Tesla, $TSLA: -50% 2. NVIDIA, $NVDA: -25% 3. Alphabet Inc./Google, $GOOGL: -22% 4. Amazon, $AMZN: -20% 5. Meta, $META: -20% 6. Microsoft, $MSFT: -19% 7. Apple, $AAPL: -19% Almost ALL Mag 7 stocks are in bear market territory. Hedge funds sold global stocks at their fastest pace in 4 years on March 7th and 10th. Not even the 2022 bear market recorded such a sharp drop in exposure. The S&P 500 declined -10% from its ATH in less than 3 weeks. This is the fastest drop of such magnitude since 2020. Below you can see a comparison of Trump 1.0 vs Trump 2.0: At this point in Trump's first term, the S&P 500 was up +5%. It's currently down -8% since January 20th which exceeds any drawdown seen in Trump 1.0's first year. There has clearly been in a shift in Trump's approach. Furthermore, sentiment has shifted in the complete opposite direction. The AAII survey now has a bearish reading of 59.2%, per SubuTrade. Bears have been above 55% for 3 weeks in a row. This has only happened 1 other time in history: March 4th, 2009. (This discussion written by Adam Kobeissi will continue in a following post, LinkedIn limits the length of the post. Note by Mauro Alberico.) Follow us, The Kobeissi Letter, for real time analysis as this develops.

BREAKING: US stocks saw a whopping -$1.1 billion in outflows last week, according to Bank of America data. By comparison, equities experienced +$2.3 billion in inflows on average over the last 12 weeks. Individual stocks recorded $2.2 BILLION in net withdrawals last week, excluding ETFs. The technology sector experienced the biggest outflow of -$1.4 billion, the most since October 2024. This was followed by the financial sector's -$1.3 billion withdrawal, the highest since July 2024. Institutional investors dumped stocks last week.

BREAKING: The Nasdaq 100 is now down -400 points today, less than 6% away from our first bear market since 2022. Buckle up. Almost all of the Magnificent 7 stocks are now in bear market territory. Large cap technology names have been hit the hardest so far. Volatility continues to surge. Follow us, The Kobeissi Letter, for real time analysis as this develops.

BREAKING: President Trump says "I think the annexation of Greenland will happen." "We are going to have to make a deal on Greenland."

Institutional selling has rarely been greater: Hedge funds sold global stocks at their fastest pace in 4 years on March 7th and 10th. Not even the 2022 bear market recorded such a sharp reduction in exposure. The majority of transactions were selling of long positions in single stocks, according to Goldman Sachs data. As a result, the S&P 500 declined -9% from its all-time high in less than 3 weeks. This marks the fastest drop of such magnitude since the 2020 pandemic crash. Institutional exits are moving?markets.

BREAKING: The S&P 500 falls to a new low of 2025, now in correction territory, as President Trump says he not going to "change [his] mind" on April 2nd tariffs. Trump says the US does not need Canadian cars, energy or lumber.

BREAKING: Putin says Russia agrees to stop fighting in Ukraine, but it should lead to long-standing peace. Putin thanked President Trump for attention to the Russia-Ukraine conflict. We are on the brink of a ceasefire for the first time since fighting began in February 2022. A Ukrainian government official commenting on the deal just now: "Kyiv understands it cannot recover all its territory by military force right now and will need to do this diplomatically over time." Follow us, The Kobeissi Letter, for real time analysis as this develops.

At some point, you have to ask yourself: If physical gold holdings are rising at a faster pace than the pandemic (one of the largest crises in US history), are we in a crisis right now?