U.S. President Donald Trump arrives on the South Lawn of the White House in Washington, U.S., April 6, 2025.
Annabelle Gordon | Reuters
My top 10 things to watch Monday, April 7
1. U.S. stocks are set for another brutal open today after last week’s carnage due to President Donald Trump’s sweeping tariffs announcement. The 10% near-universal levies went into effect as scheduled on Saturday. The country-specific duties, which were larger than expected, are set to kick in Wednesday.
2. If the S&P 500 were to close today around 4,915, the broad market index would join the Nasdaq in a bear market. During last night’s CNBC special, I said I am not panicking. But I do realize there’s going to be more pain. In my Sunday column, I wrote that we need to rethink everything because of the tariffs. I detailed ways to do that.
3. Trump on Truth Social this morning touted lower oil prices and interest rates. WTI is below $60 a barrel and the 10-year Treasury yield is below 4%. That can provide some relief to consumers at the pump and on borrowing costs. Trump trade adviser Peter Navarro defended the tariffs in a CNBC interview this morning, and hinted that big tax cuts are coming.
4. Is it not too late to sell? It may depend on the stock. Made in America or else. Downside worst case, I repeat, worst case scenario: 14 times $230 earnings-per-share annual estimates puts S&P 500 at 3,220. That would be a 36% decline from here. It’s a possibility if Europe were to retaliate.
5. Earnings season kicks off Friday with the financials, including Club names Wells Fargo and BlackRock. With the tariffs announced after the quarter closed, the conference calls will be crucial. Ahead of Friday earnings, JPMorgan CEO Jamie Dimon said in his annual letter that tariffs will boost inflation and weaken the economy.
6. The March consumer and wholesale inflation readings later this week will provide clues on whether the market is right to price in four interest rate cuts this year. However, like with first-quarter earnings, we’re going to have to wait a few months to see whether the tariffs are sparking inflation.
7. Wedbush cut its Tesla price target to $315 per share from $550. Catch up call, but that still represents more than 30% upside to Friday’s close. The analysts think China sales will be cut severely, describing the situation as a “brand crisis tornado.”
8. Citi added Club name Danaher to its so-called focus list, saying shares of the life sciences company are at an attractive entry level. I am not so sure. Citi kept its buy rating with a $265 per share price target, implying 46% upside to Friday’s close.
9. Citi removed AT&T from its focus list, saying shares have had a big enough move. The analysts said an improved fundamental outlook is reflected in the stock. Citi kept its buy rating with a $32 per shares price target. Still, that PT implies 20% upside from Friday’s close.
10. UBS took down the airlines, cutting price targets on the risk of recession: American to $9 per share from $13; Southwest $27 from $36; JetBlue to $3 from $5; United to $59 from $107; and Delta to $42 from $77. The analysts also downgraded United and Delta to neutral ratings from buy.
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