Early Look

Thursday, April 3, 2025

Global stock markets tumble overnight along with U.S. futures doing a sharp about face late yesterday after the close, tumbling to new weekly lows (below 5,500 overnight for S&P futures) after President Donald Trump unveiled global reciprocal tariffs during an event at the White House as promised that was steeper than Wall Street was hoping for. The tariffs were steep, aggressive and caught markets off guard, sending stock market prices lower and bond prices/gold higher (topped $3,200 an ounce) before gold retraced. Fears about growth and inflation are front of mind, while investors are also dealing with a new level of risk related to volatility and positioning. Several stock sectors hit very hard amid the reciprocal tariffs including metals and mining, retailers that manufacture products overseas (NKE, W), discount stores hit hard (FIVE, DLTR, DG) semiconductors hit very hard overnight, and the list goes on.

Among the headlines from President trump last night were: 1) U.S. to set baseline tariff rate of 10% for all countries (which is better than the 20% bogey mentioned earlier this week by some media reports) – says reciprocal rate will be half their tariff rate/won’t be full reciprocal; 2) effective midnight, the U.S. will impose a 25% tariff on all foreign-made automobiles (which was known last week); 3) break down of some tariffs on countries include China reciprocal rate at 34%, U.S. to apply 26% tariff on imports from India, U.S. to apply 25% tariff on imports from South Korea, announces a 20% tariff on EU, to apply 31% tariff on imports from Switzerland, to apply 10% tariff on imports from United Kingdom, to apply 24% tariff on Japan, and to apply 32% tariff on imports from Taiwan (all in all was more than 60 names on the list); 4) Trump calls on other countries to drop tariffs, barriers.

In Asian markets, The Nikkei Index tumbled 0989 points or 2,77% to 34,735, the Shanghai Index fell -8 points to 3,342, and the Hang Seng Index declined -352 points to 22,489. In Europe, the German DAX is down around -2% to 438 points to 21,952, while the FTSE 100 falls -118 points to 8,490. Other fallout for the tariff moves, The Euro is up 2% on the day to 1.108 vs. the US dollar while the dollar index (DXY) slides -1.05% to 102.06 after tariff announcements; the Japanese Yen with a 1.8% move to 146.55. WTI Crude falls -4.76% to $3.40 to $58.30 while Brent slides -4.3% to $71.71. June gold prices drop -1.3% to $3,124 an ounce after hitting highs of $3,201 late yesterday. The CBOE Volatility index spikes 22.8% to 26.42 and Bitcoin -2.65% back below $84,000.

• The Dow Jones Industrial Average rose 235.36 points, or 0.56%, to 42,225.32
• The Nasdaq Composite gained 151.16 points, or 0.87%, to 17,601.05
• The Russell 2000 Index advanced 33.12 points, or 1.65% to 2,045.36

• 8:30 AM ET                  Weekly Jobless Claims…est. 225K
• 8:30 AM ET                  Continuing Claims…est. 1.87M (prior 1.856M)
• 8:30 AM ET                  International Trade for February…est. (-$123.5B)
• 9:45 AM ET S&P Global Composite PMI, March-final…prior 53.5
• 9:45 AM ET S&P Global Services PMI, March-final…prior 54.3
• 10:00 AM ET ISM Non-Manufacturing PMI for March…est. 53.0
• 10:30 AM ET                Weekly EIA Natural Gas Inventory Data
• 12:00 PM ET                Fed’s Jefferson Gives Keynote on Communication

• Earnings After the Close: GES SLP

• Lucid Motors (LCID) said in Q1 produced 2,212 vehicles, plus over 600 additional vehicles in transit to Saudi Arabia for final assembly; the Company delivered 3,109 vehicles during the same period; files to sell $1B of convertible senior notes due 2030; guides Q1 revs $232M-$236M vs. est. $256.3M.
• Lyft (LYFT) downgraded to Underperform from Buy at Bank America and cut tgt to $10.50.
• Nike (NKE) and Addidas (ADDYY) shares tumble after the 46% Vietnam tariff announced yesterday where many of these companies manufacture goods (watch AEO, Wayfair) as well – CNBC
• RH Corp. (RH) Q4 net revs $812.4M below consensus $829.6M and EPS $1.58 vs. consensus of $1.91; guides FY25 revenue growth of 10%-13% and Q1 revenue growth of 12.5%-13.5%; said expects a higher risk business environment this year due to uncertainty caused by tariffs, market volatility & inflation risk
• Ross Stores (ROST) upgraded to Buy from Neutral (tgt $146) and TJX (TJX) upgraded to Buy from Neutral at Citigroup (tgt to $140 from $128) saying tariffs are likely to create significant disruption in the market, greatly increasing the availability of products available to the off-price retailers at attractive prices.

• Eastman Chemicals (EMN) upgraded to Outperform from Neutral at Mizuho with a PT of $105, which represents ~18% upside from current levels saying forward earnings for EMN have been rolling higher in recent quarters, unlike most of the basic chemical stocks under Mizuho’s coverage.
• Landstar System (LSTR) forecasts Q1 rev at or near mid-point of guidance; noted during Q1 2025, Co identified significant supply chain fraud that remains under investigation; says fraud may adversely affect Q1 EPS by $0.35-$0.50. as cuts Q1 EPS view to $0.90-$0.95 from $1.05-$1.25 prior.
• MSC Industrial (MSM) Q2 adj EPS $0.72 was in-line with consensus on revs $891.72M vs. est. $908.3M.
• Paccar (PCAR) says Harrie Schippers, President and CFO, to retire from Paccar; Brice Poplawski promoted to senior VP and CFO at Paccar.

• Serina Therapeutics (SRNA) files for a mixed shelf of up to $100M.
• Drugmaker stocks (AZN, SNY, NVO) gained a temporary reprieve on Thursday as U.S. President Donald Trump spared pharmaceutical products from reciprocal tariffs. Trump imposed a 10% tariff on most U.S. imports, as well as much higher levies on dozens of rivals and allies alike, but temporarily exempted some goods, including pharmaceuticals, benefiting major exporters including India, Japan and Ireland.
• Medical Device stocks (DXCM, GHHC, BSX, ABT) under pressure after Trump imposed an additional 34% tariff on China, 20% tariff on EU which imposed on these geographies could hurt R&D spending, availability of certain devices and cause supply chain disruptions for these device manufacturers, as per Citi.

• GigaCloud (GCT) increases share repurchase program by $16M.
• PDD Holdings (PDD) Pinduoduo plans to invest over $13B in capital, traffic, and other resources over the next three years to support merchants – WSJ reports.
• Penguin Solutions (PENG) Q2 adj EPS $0.52 vs. est. $0.38; Q2 sales rose 29% y/y to $366M vs. est. $345.1M; Q2 GAAP gross margin of 28.6%, down 20 bps y/y and Non-GAAP gross margin of 30.8%, down 70 bps y/y.