Breakfast News: Market Correction
March 14, 2025
| Thursday's Markets |
|---|
| S&P 500 5,522 (-1.39%) |
| Nasdaq 17,303 (-1.96%) |
| Dow 40,814 (-1.3%) |
| Bitcoin $80,672 (-2.85%) |
Source: Image created by Jester AI.
1. S&P 500 Dips Into Correction
Tariff-induced volatility has pushed the S&P 500 down over 10% from recent highs, putting the index in correction territory.
- "The greatest investors tend to welcome market pullbacks": Fool analyst Yasser El-Shimy explains that corrections tend to create incidental discounts on high-quality/high-conviction companies. "Warren Buffett's famous quote is: "Be fearful when others are greedy, and be greedy when others are fearful." No one calls bottoms and tops perfectly, so staying invested and seizing opportunities matter most."
- Nvidia trades below its five-year historic average of 40 times per-share earnings expected over the next 12 months: For investors convinced by the long-term prospects offered by exceptional companies, these stocks appear on sale today. For instance, Nvidia (NVDA +2.12%) is currently trading at 23.3x. In the Magnificent 7, only Alphabet (GOOG +0.94%) is cheaper, at 17.9x.
2. "As Stock Investors, We Feel It"
Andy Cross, Chief Investment Officer
U.S. stocks hit the correction zone [Thursday] by falling 10% over the last 16 trading days. This is the 7th fastest 10% drop since 1929 according to Bloomberg research. But the average stock in the index is down more than 20%. And as stock investors we feel it.
We pick individual stocks looking for market-beating performance. The price we pay (often) is out-sized volatility. What we can do is manage our temperament, stay invested in quality businesses, and look for opportunities when they come knocking.
Because when no one wants stocks, that's precisely the time when we should.
3. Tesla Plans Cheaper Car for China Boost
Tesla (TSLA +1.50%) is reportedly looking to produce a Model Y for the Asian market that will cost up to 20% less than the current vehicle, in an attempt to recapture share in its second largest market.
- Tesla's China EV market share dropped from 11.7% to 10.4% last year: Reuters reported the codenamed project E41 will start mass production out of the Shanghai factory in 2026. The existing Model Y is China's best-selling car, but has come under increasing pressure from competitors.
- "U.S. exporters are inherently exposed to disproportionate impacts": Tesla management co-wrote a letter to the U.S. Trade Representative's Office, warning of the threat of retaliatory tariffs from other nations.
4. What You Might've Missed on Thursday
Stock Advisor recommendation RH (RH +2.94%) fell over 10%, as the company continues to grapple with tough property market conditions alongside ongoing legal issues with potential securities fraud.
- Falling to October 2020 lows: Dave & Buster's Entertainment (PLAY 1.70%) dropped almost 10%, as the company got caught up in the general market rout, with consumer discretionary stocks under pressure on concerns about the future outlook of the U.S. economy
- "Results exceeded all guided metrics": Rubrik (RBRK 3.58%) stock surged over 20% in after-hours trading. It achieved a first full year of positive free cash flow, alongside a 29% annual increase in clients with annual recurring revenue (ARR) of over $100k.
5. Next Up: Key Consumer Sentiment Data
The Michigan Consumer Sentiment Index data for March will provide investors with an updated grasp on how people are feeling in the current economic environment. The survey focuses on expectations for future financial conditions.
- February reading lowest since November 2023: The forecast is for a reading of 63.4, down from 64.7 last month. A higher reading reflects improving sentiment, with a lower index result seen as concerning for investors.
- Worsening vibes becoming evident: The recent fall in consumer sentiment is being felt in areas such as convenience-store sales. Volumes fell by 4.3% in the year ending February, according to market-research firm Circana.
6. Foolish Fun
Albert Einstein was born on this day in 1879. Which of these famous quotes attributed to him best reflects your attitude toward investing? Debate with friends and family, or become a member to hear what your fellow Fools are saying!
- "Life is like riding a bicycle. To keep your balance, you must keep moving."
- "The important thing is not to stop questioning. Curiosity has its own reason for existing."
- "Anyone who has never made a mistake has never tried anything new."
- "I have no special talent. I am only passionately curious."
