Breakfast News: Tech Tariff Reprieve
April 14, 2025
| Friday's Markets |
|---|
| S&P 500 5,363 (+1.81%) |
| Nasdaq 16,724 (+2.06%) |
| Dow 40,213 (+1.56%) |
| Bitcoin $83,812 (+5.32%) |
Source: Image created by Jester AI.
1. Temporary Exemptions Boost Tech Stocks
Smartphones, chips, computers, and other electronics have been exempted from reciprocal tariffs -- for now. On Saturday, the White House deputy press secretary stated that President Donald Trump "has made it clear America cannot rely on China to manufacture critical technologies," and the temporary reprieve allows companies time to shift production to the U.S. S&P 500 and Nasdaq futures both rose over 1% this morning in response.
- "Apple(AAPL +1.05%) has managed to dodge its biggest crisis since the pandemic." Bloomberg notes that 125% tariffs on imports from China would disrupt supplies for iPhones, Macs, and other Apple products. About 80% of smartphones sold in the U.S. are imported. Ranked 10th on TMF's Moneyball database, Apple stock lifted over 5% in pre-market trading.
- "There was no Tariff 'exception' announced. ... They are just moving to a different tariff 'bucket.'" The outlook remains uncertain, however- on Sunday, the president posted on social media that he's looking at the "whole electronics supply chain," as Commerce Secretary Howard Lutnick said semiconductor tariffs will come in "probably a month or two," reinforcing that the exemptions are temporary.
2. Next Up: Meta Trial and Macro Trends
An antitrust trial against Facebook owner Meta (META +0.40%) starts today to probe the company's 2012 acquisition of Instagram and WhatsApp in 2014. The Federal Trade Commission alleges an intent to stifle competition, and the case could force Meta to sell off both.
- Consumers may be stocking up: The March retail sales print, due Wednesday, will give us an idea of the reaction to tariff uncertainties. Forecasts suggest a 1.2% rise, up strongly from 0.2% in February, ahead of feared price rises.
- "We already have at least a whiff of stagflation right now." Former Federal Reserve Vice Chair Richard Clarida previously warned of the possible effects of inflation, ahead of Wednesday's industrial production figures, expected to show a monthly fall of 0.2% after February saw a 0.7% rise.
3. Prepare for a Rocky Earnings Season
Sanmeet Deo, CFA
Many companies, like Delta Air Lines (DAL +2.75%) and CarMax (KMX +0.62%), are withdrawing or modifying financial guidance, creating an "information vacuum" leading to market volatility, making informed investment decisions difficult, and prompting analysts to make their own predictions. Some expect more companies to stop providing forecasts. This is going to lead to a rocky earnings season with some potentially big stock swings. While this is troubling, as long-term investors, we need to understand that guidance cuts are estimations and do not change the business fundamentals. Stay invested.
Jamie Dimon said he "expects many companies will remove guidance when they report earnings in the coming weeks." For the companies you own and have on your watch list, keep an eye on this and be ready to add to positions if you still believe in the long-term outlook for the business.
3. Key Earnings to Watch This Week
Goldman Sachs (GS +1.29%) will report its first-quarter earnings for fiscal 2025 before today's opening bell. The banking giant strongly beat revenue and earnings expectations in Q4 2024.
- Thrice recommended in Dividend Investor: Prologis (PLD +0.47%) will release Q1 earnings Wednesday, as analysts predict steady earnings per share (EPS) rises across the year. Investors should look for further cash rent growth to help keep the dividend rising, with a 4.2% yield forecast for the 2025 fiscal year.
- Beating the S&P 500 by 107% since November 2019 Stock Advisor recommendation: Netflix (NFLX 0.68%) reports first-quarter figures Thursday. Q4 2024 EPS doubled year over year, as the company added almost 19 million paid subscriptions in Q4 2024. Watch for updates on 2025 revenue guidance, previously put at $43.5 billion to $44.5 billion.
4. Foolish Fun
Twenty years ago, The Motley Fool Radio Team interviewed Reed Hastings, then-CEO of Netflix, amid speculation of an approach from Amazon (AMZN +0.20%). He responded, "We are growing extremely fast, and that makes us both an interesting acquisition and interested in staying independent."
Which rapidly growing publicly listed company do you think might soon be in Amazon's crosshairs, and why? Debate with friends and family, or become a member to hear what your fellow Fools are saying.
