MW The bond market is predicting a recession within a year. These stock funds can help you ride it out.

By Philip van Doorn

Also: a stock for which the timing might be perfect, what might happen with your student loans if the Department of Education is shuttered, and where to look for career stability during a period of government layoffs

On Thursday, the Federal Reserve Bank of Atlanta's GDP Now model was indicating that the U.S. economy contracted at an annual rate of 2.4% during the first quarter. A recession is typically defined as starting with two consecutive quarters of economic contraction. But any expectation for a contraction is alarming to investors, who were more than content with the Bureau of Economic Analysis's estimates that the U.S. gross domestic product increased at an annual rate of 2.3% during the fourth quarter and at a rate of 2.8% for all of 2024.

So we don't know if a recession has started, but the bond market's recent action has made it clear that investors expect one. This chart shows the movement of yields on 10-year U.S. Treasury notes BX:TMUBMUSD10Y and 3-month Treasury bills BX:TMUBMUSD03M over the past 12 months:

When the Federal Reserve was focused on tamping down inflation by keeping the federal-funds rate in a target range of 5.25% to 5.50%, the Treasury yield curve was inverted. Investors could earn higher yields overnight than they could by purchasing 10-year government paper. But after the Fed began a cycle of three short-term rate cuts on Sept. 18, bringing the federal-funds rate down to its current target range of 4.25% to 4.50%, long-term rates rose quickly enough for the rate curve to go back to a normal slope, with the 10-year yield well above the 3-month yield in mid-January.

But that action has now reversed - the bond market always looks ahead. Demand for long-term bonds has increased as institutional bond investors want to lock in the highest rates they can, because they anticipate a significant further reduction in short-term rates as the Fed shifts its policy to spur economic growth. Higher demand means higher bond prices. When bond prices rise, their yields fall, and vice versa. And the newly inverted yield curve indicates that investors expect a recession.

Greg Robb: Will Trump's tariffs push the U.S. economy into recession? Many economists think so.

Joy Wiltermuth: Fallout from Trump's trade war is spilling over into corporate bonds at a crucial moment

Friday update: The U.S. economy added 151,000 jobs in February. That's decent. But the outlook is darkening.

Stock-market warnings

Joseph Adinolfi explained how options traders were trying to protect themselves from a possible stock-market crash.

William Watts dug into Thursday's decline for the Nasdaq Composite Index COMP, which entered a correction, and further bearish signals for investors to keep an eye on.

On Thursday, the Nasdaq 100 Index NDX (the largest 100 companies in the full Nasdaq, excluding financials) fell 2.8%, with 80 stocks showing declines. The worst decliner was MongoDB Inc. (MDB), which fell 28%. MongoDB is the smallest company in the Nasdaq 100, based on its market capitalization of $14.4 billion.

Barron's: MongoDB Stock Plummets After Earnings. Why Wall Street Still Says Buy.

The second-worst performer in the Nasdaq 100 on Thursday was Marvell Technology Inc. $(MRVL)$, which sank 20% as investors showed disappointment even though the company's quarterly results came in ahead of analysts' expectations.

Michael Brush outlined four reasons the stock market's selloff isn't over yet.

Funds for stock-market investors who are worried

Long-term investors who are making regular contributions to retirement accounts to invest in stock funds can ride through market declines by showing patience, because they pay lower prices during downcycles, which ultimately enhances their investment returns as markets recover.

But waiting through a period of market weakness is no fun. Some investors don't want to face the daily turmoil. But if they move all of their money to the sidelines, the tendency is to return to the market late, after a recovery has started. This is why investment advisers tend to recommend against trying to time the market.

In this week's ETF Wrap newsletter, Isabel Wang looked at low-volatility exchange-traded funds designed to help jittery investors stay in the market through cycles, with slower declines during bad periods and some capture of the upside when the market recovers. These funds have held up better than the broad market lately as investors have reacted to rapid changes in economic policy - especially tariffs - by President Donald Trump's administration.

Not every stock will fall. This could be the perfect time to scoop up shares of this company.

Tomi Kilgore used technical analysis to make the case that this copper-mining company's stock is likely to rise soon, in light of government policy and rising demand for the metal during the build-out of computer hardware to support the development of artificial-intelligence technology.

Myra P. Saefong: Why Trump's move to boost the U.S. copper market is a 'pipe dream' that could raise prices

What if there is no Department of Education?

Trump has said he wants to eliminate the Department of Education. This would be a complicated move, not only because the department disburses so much money to states and universities, but because of its role in student lending.

Jillian Berman outlined what could happen to student loans if the Department of Education is shut down.

Job insecurity

There may have been a time when you considered a job with the federal government to be safe, with generous benefits. But Trump has started his second term by challenging that notion, with waves of layoffs or buyouts announced in various departments.

If stability is your main career concern, where should you look now? Venessa Wong, Andrew Keshner and Aarthi Swaminathan looked at industries projected to grow over the next decade, while also explaining how you might prepare for an unstable career environment.

Has Nvidia's stock fallen too far?

During the Nasdaq rout on Thursday, shares of Nvidia Corp. $(NVDA)$ declined 6%. Through that trading session, the stock was down nearly 18% for 2025.

So now investors might be asking if Nvidia has fallen hard enough for this to be a good entry point. Based on rolling 12-month consensus earnings-per-share estimates among analysts polled by FactSet, Nvidia's stock trades at a forward price-to-earnings ratio of 23.7, down from 31.3 at the end of 2024. In comparison, the S&P 500 SPX trades at a weighted forward P/E of 20.8, down slightly from 21.6 as of Dec. 31. The index was down 2.2% this year through Thursday, with dividends reinvested.

Now take a look at projected compound annual growth rates for revenue and earnings per share for Nvidia and for the S&P 500 through 2026. These projections are based on consensus estimates as adjusted by FactSet for companies (such as Nvidia) whose fiscal reporting periods don't match the calendar:

   Company or index   Forward P/E   Two-year estimated sales CAGR through 2026  Two-year estimated EPS CAGR through 2026 
   Nvidia Corp.          23.7                                            40.7%                                     41.1% 
   S&P 500               20.8                                             6.0%                                     13.5% 
                                                                                                         Source: FactSet 

We cannot know whether or not the revenue or profit growth estimates for Nvidia or the S&P 500 will hold up, but based on these numbers, one might argue that Nvidia has become a bargain stock.

When should you refinance your mortgage loan?

While 10-year Treasury yields have been climbing, mortgage-loan interest rates have been coming down. Aarthi Swaminathan broke down the math to help you decide when and if you should refinance your home.

Advice: My daughter bought a $350,000 home and took out $20,000 in personal loans. She's fallen behind on payments. What now?

Paying up for retirement planning and investing - or not

In the Help Me Retire column, Alessandra Malito answered a question from a reader building up a retirement nest egg: Should they pay for an investment adviser? One can easily pay 1% of assets under management per year for this service, with more fees for any funds the money is invested in. Here is what to consider when making this crucial decision.

More: If you're disabled and self-employed at 66 - is Social Security the only option?

A threat to benefits? House Speaker Johnson just said more than most realize about Medicare and Social Security cuts

A positive spin on market turmoil for retirement savers and investors

Beth Pinsker writes the Fix My Portfolio column. This week she interviewed David Stinnett, the head of strategic retirement consulting at Vanguard, who said he was seeing "a steady marching in the right direction of how people are investing" to prepare for their golden years.

Investing, trading or gambling?

Gordon Gottsegen explained how new financial products and services have been blurring the lines between investing and gambling, with some people wagering on events rather than investing in stocks.

More: Nasdaq wants to launch 24-hour trading Monday through Friday. Here are the challenges it faces.

The Moneyist wades into troubled waters

Quentin Fottrell - the Moneyist - tackles the type of problems many of us would rather not be asked for advice about. Here are some from the past week:

-- My husband gave his credit card to his son to pay for 'medical bills.' Does this kind of support send the wrong message?

-- 'I'm an endless honey pot': My wife and I are in our 70s. We gave our son $40,000 for his L.A. wedding. Now he wants more.

-- 'I've yelled, screamed and cried': My mother gave $400K to online scammers. She still gives them Apple gift cards. What can I do?

MW The bond market is predicting a recession within a year. These stock funds can help you ride it out.

By Philip van Doorn

Also: a stock for which the timing might be perfect, what might happen with your student loans if the Department of Education is shuttered, and where to look for career stability during a period of government layoffs

On Thursday, the Federal Reserve Bank of Atlanta's GDP Now model was indicating that the U.S. economy contracted at an annual rate of 2.4% during the first quarter. A recession is typically defined as starting with two consecutive quarters of economic contraction. But any expectation for a contraction is alarming to investors, who were more than content with the Bureau of Economic Analysis's estimates that the U.S. gross domestic product increased at an annual rate of 2.3% during the fourth quarter and at a rate of 2.8% for all of 2024.

So we don't know if a recession has started, but the bond market's recent action has made it clear that investors expect one. This chart shows the movement of yields on 10-year U.S. Treasury notes BX:TMUBMUSD10Y and 3-month Treasury bills BX:TMUBMUSD03M over the past 12 months:

When the Federal Reserve was focused on tamping down inflation by keeping the federal-funds rate in a target range of 5.25% to 5.50%, the Treasury yield curve was inverted. Investors could earn higher yields overnight than they could by purchasing 10-year government paper. But after the Fed began a cycle of three short-term rate cuts on Sept. 18, bringing the federal-funds rate down to its current target range of 4.25% to 4.50%, long-term rates rose quickly enough for the rate curve to go back to a normal slope, with the 10-year yield well above the 3-month yield in mid-January.

But that action has now reversed - the bond market always looks ahead. Demand for long-term bonds has increased as institutional bond investors want to lock in the highest rates they can, because they anticipate a significant further reduction in short-term rates as the Fed shifts its policy to spur economic growth. Higher demand means higher bond prices. When bond prices rise, their yields fall, and vice versa. And the newly inverted yield curve indicates that investors expect a recession.

Greg Robb: Will Trump's tariffs push the U.S. economy into recession? Many economists think so.

Joy Wiltermuth: Fallout from Trump's trade war is spilling over into corporate bonds at a crucial moment

Friday update: The U.S. economy added 151,000 jobs in February. That's decent. But the outlook is darkening.

Stock-market warnings

Joseph Adinolfi explained how options traders were trying to protect themselves from a possible stock-market crash.

William Watts dug into Thursday's decline for the Nasdaq Composite Index COMP, which entered a correction, and further bearish signals for investors to keep an eye on.

On Thursday, the Nasdaq 100 Index NDX (the largest 100 companies in the full Nasdaq, excluding financials) fell 2.8%, with 80 stocks showing declines. The worst decliner was MongoDB Inc. (MDB), which fell 28%. MongoDB is the smallest company in the Nasdaq 100, based on its market capitalization of $14.4 billion.

Barron's: MongoDB Stock Plummets After Earnings. Why Wall Street Still Says Buy.

The second-worst performer in the Nasdaq 100 on Thursday was Marvell Technology Inc. (MRVL), which sank 20% as investors showed disappointment even though the company's quarterly results came in ahead of analysts' expectations.

Michael Brush outlined four reasons the stock market's selloff isn't over yet.

Funds for stock-market investors who are worried

Long-term investors who are making regular contributions to retirement accounts to invest in stock funds can ride through market declines by showing patience, because they pay lower prices during downcycles, which ultimately enhances their investment returns as markets recover.

But waiting through a period of market weakness is no fun. Some investors don't want to face the daily turmoil. But if they move all of their money to the sidelines, the tendency is to return to the market late, after a recovery has started. This is why investment advisers tend to recommend against trying to time the market.

In this week's ETF Wrap newsletter, Isabel Wang looked at low-volatility exchange-traded funds designed to help jittery investors stay in the market through cycles, with slower declines during bad periods and some capture of the upside when the market recovers. These funds have held up better than the broad market lately as investors have reacted to rapid changes in economic policy - especially tariffs - by President Donald Trump's administration.

Not every stock will fall. This could be the perfect time to scoop up shares of this company.

Tomi Kilgore used technical analysis to make the case that this copper-mining company's stock is likely to rise soon, in light of government policy and rising demand for the metal during the build-out of computer hardware to support the development of artificial-intelligence technology.

Myra P. Saefong: Why Trump's move to boost the U.S. copper market is a 'pipe dream' that could raise prices

What if there is no Department of Education?

Trump has said he wants to eliminate the Department of Education. This would be a complicated move, not only because the department disburses so much money to states and universities, but because of its role in student lending.

Jillian Berman outlined what could happen to student loans if the Department of Education is shut down.

Job insecurity

There may have been a time when you considered a job with the federal government to be safe, with generous benefits. But Trump has started his second term by challenging that notion, with waves of layoffs or buyouts announced in various departments.

If stability is your main career concern, where should you look now? Venessa Wong, Andrew Keshner and Aarthi Swaminathan looked at industries projected to grow over the next decade, while also explaining how you might prepare for an unstable career environment.

Has Nvidia's stock fallen too far?

During the Nasdaq rout on Thursday, shares of Nvidia Corp. (NVDA) declined 6%. Through that trading session, the stock was down nearly 18% for 2025.

So now investors might be asking if Nvidia has fallen hard enough for this to be a good entry point. Based on rolling 12-month consensus earnings-per-share estimates among analysts polled by FactSet, Nvidia's stock trades at a forward price-to-earnings ratio of 23.7, down from 31.3 at the end of 2024. In comparison, the S&P 500 SPX trades at a weighted forward P/E of 20.8, down slightly from 21.6 as of Dec. 31. The index was down 2.2% this year through Thursday, with dividends reinvested.

Now take a look at projected compound annual growth rates for revenue and earnings per share for Nvidia and for the S&P 500 through 2026. These projections are based on consensus estimates as adjusted by FactSet for companies (such as Nvidia) whose fiscal reporting periods don't match the calendar:

   Company or index   Forward P/E   Two-year estimated sales CAGR through 2026  Two-year estimated EPS CAGR through 2026 
   Nvidia Corp.          23.7                                            40.7%                                     41.1% 
   S&P 500               20.8                                             6.0%                                     13.5% 
                                                                                                         Source: FactSet 

We cannot know whether or not the revenue or profit growth estimates for Nvidia or the S&P 500 will hold up, but based on these numbers, one might argue that Nvidia has become a bargain stock.

When should you refinance your mortgage loan?

While 10-year Treasury yields have been climbing, mortgage-loan interest rates have been coming down. Aarthi Swaminathan broke down the math to help you decide when and if you should refinance your home.

Advice: My daughter bought a $350,000 home and took out $20,000 in personal loans. She's fallen behind on payments. What now?

Paying up for retirement planning and investing - or not

In the Help Me Retire column, Alessandra Malito answered a question from a reader building up a retirement nest egg: Should they pay for an investment adviser? One can easily pay 1% of assets under management per year for this service, with more fees for any funds the money is invested in. Here is what to consider when making this crucial decision.

More: If you're disabled and self-employed at 66 - is Social Security the only option?

A threat to benefits? House Speaker Johnson just said more than most realize about Medicare and Social Security cuts

A positive spin on market turmoil for retirement savers and investors

Beth Pinsker writes the Fix My Portfolio column. This week she interviewed David Stinnett, the head of strategic retirement consulting at Vanguard, who said he was seeing "a steady marching in the right direction of how people are investing" to prepare for their golden years.

Investing, trading or gambling?

Gordon Gottsegen explained how new financial products and services have been blurring the lines between investing and gambling, with some people wagering on events rather than investing in stocks.

More: Nasdaq wants to launch 24-hour trading Monday through Friday. Here are the challenges it faces.

The Moneyist wades into troubled waters

Quentin Fottrell - the Moneyist - tackles the type of problems many of us would rather not be asked for advice about. Here are some from the past week:

-- My husband gave his credit card to his son to pay for 'medical bills.' Does this kind of support send the wrong message?

-- 'I'm an endless honey pot': My wife and I are in our 70s. We gave our son $40,000 for his L.A. wedding. Now he wants more.

-- 'I've yelled, screamed and cried': My mother gave $400K to online scammers. She still gives them Apple gift cards. What can I do?

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March 07, 2025 12:00 ET (17:00 GMT)

MW The bond market is predicting a recession -2-

-- I'm 69 and only have $121,000 in my 401(k). How can I repair the damage of the past?

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-Philip van Doorn

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March 07, 2025 12:00 ET (17:00 GMT)

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