Steven Orlowski's Top Ten Things to Watch Monday, April 7

 

Steven Orlowski's Top Ten Things to Watch Monday, April 7

1. Markets Set for a Rough Open
   After last week’s steep sell-off, U.S. stocks are once again poised for a rocky start. The latest wave of pain stems from President Trump’s sweeping 10% tariffs, which took effect Saturday. These near-universal levies will be followed Wednesday by tougher, country-specific duties—bigger than anyone expected.

2. S&P 500 on the Edge
   If the S&P 500 closes near 4,915 today, it will officially join the Nasdaq in bear market territory. I’m not panicking (as I mentioned during Sunday night’s CNBC special), but I do see more turbulence ahead. In my Sunday column, I emphasized that it’s time to rethink everything in light of these tariffs—and I laid out some strategies for doing just that.

3. Trump Touts Relief at the Pump
   In a Monday morning Truth Social post, President Trump highlighted falling oil prices and interest rates. West Texas Intermediate crude is under $60 per barrel, and the 10-year Treasury yield has dipped below 4%. That could be a welcome breather for consumers, and Trump trade adviser Peter Navarro defended the tariff move on CNBC, even hinting at “big tax cuts” on the horizon.

4. Too Late to Sell? Depends on the Stock
   "Made in America" may soon be more than a slogan—it could be a survival strategy. Worst-case scenario? If earnings fall to $230 per share and the market trades at 14 times earnings, the S&P 500 could tumble to 3,220. That’s a 36% drop from current levels. It’s not a forecast, but a real possibility—especially if Europe retaliates.

5. Earnings Season Kicks Off Friday
   Banks take the spotlight this Friday, with Wells Fargo and BlackRock leading the charge. While the new tariffs landed post-Q1, their potential ripple effects will no doubt dominate earnings calls. JPMorgan CEO Jamie Dimon, in his annual letter, warned that tariffs could fuel inflation and hurt economic growth.

6. Inflation Data Could Shift the Rate-Cut Debate
   March’s consumer and wholesale inflation reports, due this week, may help clarify whether markets are justified in betting on four rate cuts this year. But just like earnings, the full tariff impact on inflation might not show up for a few months.

7. Tesla’s China Woes Prompt Price Target Cut
   Wedbush slashed its Tesla price target from $550 to $315 per share. While that still implies 30% upside from Friday’s close, analysts warn of a severe sales slump in China, calling it a “brand crisis tornado.”

8. Citi Bullish on Danaher—But I’m Cautious
   Citi added life sciences company Danaher to its “focus list,” calling the current price an attractive entry point. They maintained a Buy rating and a $265 target—implying 46% upside. I'm not so sure, though. This could be a crowded trade.

9. Citi Downgrades AT&T’s Momentum
   AT&T was dropped from Citi’s focus list after a strong run. While the firm kept its Buy rating and $32 target (20% upside), they believe the recent gains already reflect improved fundamentals.

10. UBS Slashes Airline Price Targets
    UBS is turning cautious on airlines, slashing price targets across the board on recession fears. American Airlines got cut to $9 from $13, Southwest to $27 from $36, JetBlue to $3 from $5, United to $59 from $107, and Delta to $42 from $77. United and Delta were also downgraded to Neutral.