LikeFolio Weekly Roundup

The stock market experienced a turbulent week as investors reacted to significant trade policy shifts and labor market data. 

On Tuesday, the U.S. imposed a 25% tariff on imports from Canada and Mexico and raised tariffs on Chinese goods to 20%, up from 10% last month. In response, China placed a 15% tariff on select U.S. agricultural products. A day later, the White House paused automotive tariffs at the request of Ford, GM, and Stellantis. By Thursday, the administration temporarily suspended tariffs on Canadian potash, energy exports, and certain automotive products from both Canada and Mexico until April 2nd, following discussions with North American leaders.

The market’s response to these developments was mixed. 

The S&P 500 fell below its 200-day moving average for the first time since November 2023, marking its second consecutive week of declines exceeding 2%. The Nasdaq Composite dropped more than 10% from its recent high, entering correction territory. Meanwhile, bond markets saw renewed demand, with U.S. government debt rallying and yields falling as traders recalibrated expectations for Federal Reserve policy.

February’s jobs report added another layer of uncertainty. The economy added 151,000 jobs, missing the expected 160,000, while the unemployment rate inched up to 4.1% from 4.0%. Hiring gains in healthcare, financial services, transportation, and social assistance were offset by a 10,000-job decline in federal employment. 

Retail traders bought $5.5 billion in stocks on Wednesday, stepping back in after a record $1.2 billion first-hour sell-off on Tuesday, according to J.P. Morgan. Meanwhile, total money market fund assets hit a record $7.03 trillion, as other investors moved to cash, seeking safety amid market uncertainty.

Here’s an overview of the biggest news and largest movers in our portfolio in the last week through close on Thursday, March 6:

Infinite Hold Update

Tesla (TSLA): Tesla's European sales have been under pressure, with reports indicating a 71% drop in Germany and a 44% decrease in France for February. These declines are partially attributed to CEO Elon Musk's political activities, which have sparked public protests and potential consumer backlash. 

We see these protests as short-sighted noise. Many analysts agree. 

Dan Ives of Wedbush Securities added Tesla to the firm's "best ideas" list, maintaining a Buy rating with a $550 price target. Ives believes that concerns over Musk's political involvement are overblown, estimating that such issues would impact less than 5% of Tesla's sales. He emphasizes the company's ongoing technological advancements, predicting that developments in autonomous driving and robotics will drive Tesla's valuation beyond $2 trillion.

Bitcoin: This week marked a historic milestone for Bitcoin and the broader cryptocurrency market. President Donald Trump signed an executive order establishing a U.S. Strategic Bitcoin Reserve. This initiative aims to bolster American economic competitiveness by leveraging Bitcoin's fixed supply and strategic advantages. The reserve will initially comprise approximately 200,000 bitcoins, valued at around $17 billion, accumulated through legal seizures. The executive order also mandates exploring budget-neutral strategies for acquiring additional Bitcoin without burdening taxpayers.

The White House is hosting its first-ever cryptocurrency summit today, bringing together industry leaders to discuss the future of digital assets in the U.S. economy.

Amazon (AMZN): Amazon is gearing up for its annual Spring Sale, expected to take place in mid-to-late March. While the exact dates have yet to be confirmed, reports suggest that the sale will offer substantial discounts across various categories, including tech, fashion, beauty, home, and garden essentials. Unlike Amazon Prime Day, this event is open to all customers, not just Prime members, potentially attracting a broader audience and boosting sales.

Portfolio Update

Stocks with crypto exposure were some of our biggest winners of the week:

• MicroStrategy (MSTR): +19%

• Marathon Digital (MARA): +9%

On the flip side, we did see some profit taking and large-scale market weakness from other names in our portfolio: 

Paysafe (PSFE): -20%

Paysafe reported its fourth quarter earnings on Tuesday. Paysafe’s total payment volume increased 12% and its revenue grew 1% YoY. Despite having strong growth in the past quarter, the company issued a weak outlook for the start of 2025, anticipating Q1’25 to be its softest quarter. Paysafe’s adjusted EBITDA was down 1% YoY due to a $15 million increase in credit loss expenses last quarter and accelerated merchant exits. 

Dutch Bros (BROS): -18%

Dutch Bros’ has been on a tear, up over 100% on the year with the latest boost coming from a strong quarterly report last month. However, this has also pushed the company’s price ratios much higher, with its P/E ratio at 224 at the start of this week. Our data shows continued acceleration on the digital front, with app usage popping +18% higher YoY in January (an acceleration from +10% in December). We’re not surprised to see some near-term volatility in the stock as the market is tested, but our underlying bullish thesis remains unchanged.

Magnite (MGNI): -13%

Magnite appears to be largely driven by broader market sentiment rather than any specific negative company news. Small- and mid-cap growth stocks have faced pressure due to rising yields and inflation concerns, leading to compression across the sector. Magnite reported quarterly earnings late last month featuring solid topline growth, but a moderate outlook for 2025. 

Robinhood (HOOD): -10%

Robinhood (HOOD) is down this week primarily due to a broader financial sector selloff and economic uncertainty weighing on fintech and brokerage stocks. While there’s no major company-specific negative news, regulatory developments and mixed reactions to new product offerings may have contributed to the decline. However, Cantor Fitzgerald initiated coverage with an "Overweight" rating and a $69 price target, citing Robinhood’s strong engagement among younger investors and multiple growth drivers. Data on our end remains resilient:

Best Buy (BBY): -12%

Best Buy reported its quarterly earnings on Tuesday, with strong digital sales growth and growing digital presence through its app. However, Best Buy’s CEO Corie Barry shared a pessimistic outlook for the tariffs, suspecting that tariff costs would get passed on to retailers, and increasing prices for American consumers. While the impacts of trade policy may dictate fear in the near-term, digital traffic suggests consumer demand and digital adoption is strong right now:

We’re waiting to see how tariffs play out before making any portfolio changes.