Breakfast Bites - Uncertainty

Delta lowers forecast on Macro Uncertainty; Small Business survey show rising uncertainty

Mar 11, 2025

Rise and shine everyone.

After quite the sell-off yesterday, US Equity Futures are looking a little more stable. The Nasdaq had one of the worst days since 2022, and we’re now in correction territory. The SPX is yet to get there.

This morning, we haven’t recovered yesterday’s drawdown, but markets did move towards oversold levels so a bounce is likely in order.

Positioning is becoming increasingly negative in the market, and uncertainty persists. So, the underlying causes of this sell-off continue to weigh on markets, as companies struggle to make capital allocation decisions or any decisions, for that matter.

Yesterday, Delta Airlines (DAL) fell -18% post-market close, after they announced a reduction in profit estimates. Sure, Delta has been going through it’s own share of troubles but the statement they put out is anything but company-specific:

“Delta expects to deliver total revenue growth for the March quarter of 3 to 4 percent year-over-year. The outlook has been impacted by the recent reduction in consumer and corporate confidence caused by increased macro uncertainty, driving softness in Domestic demand. Premium, international and loyalty revenue growth trends are consistent with expectations and reflect the resilience of Delta’s diversified revenue base. - Delta 8K filing”

Overall though, we are seeing a relief bounce across equities globally. Volatility across the Nikkei remains high after relatively strong economic data has pushed yields higher. The USD/JPY dropped to its lowest level since October earlier today.

European markets gained bullish momentum in the first hour of trading, led by the DAX rising about 1.0%, reversing a mixed open. The FTSE 100 remains flat after early losses.

The Euro is trading at a four-month high near $1.09, while the US dollar index has weakened to a four-month low of around 103.3. Market attention is on German coalition politics as the Greens signal optimism over a defense deal this week, a key factor for the SPD/CDU-led coalition’s ability to pass reforms, including adjustments to the debt brake.

House Speaker Johnson may face multiple GOP holdouts on the continuing resolution to prevent a government shutdown. Trump is lobbying House Republicans, and Vice President JD Vance is making a final push at a GOP meeting later today.

Later today, around 17:00 ET, President Trump is set to deliver remarks at the Business Roundtable quarterly meeting. His speech comes ahead of the expected implementation of new 25% tariffs on steel and aluminum imports starting tomorrow.

Chart of the Day - Small Businesses not so Optimistic

After President Trump won the election, Small Business optimism spiked. But now it would seem that we’ve seen the peak in December. February’s NFIB Small Business Optimism Index dropped by -2.1 points to just over a 100.

Looking at some of the details, we see that Business Uncertainty is increasing, with readings of 100 and 104 in January and February respectively. (No Suprise)