Pre-opening Comments for Monday April 7th
U.S. equity index futures were sharply lower this morning in response to tariff wars. S&P 500 futures were down 119.00 points to 4,955.08 at 8:30 AM EDT.
JP Morgan raised chances of a recession in the U.S. to 60%.
World equity markets were sharply lower this morning. The Hang Seng plunged 3,021 to 19,828. The Nikkei plunged 2,633 to 31,136. The Frankfurt DAX plunged 778 to 19,866. The Paris CAC plunged 340 to 6,943.
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EquityClock’s Market Outlook for April 7th
The S&P 500 Index has broken below its intermediate-term rising trend channel, bringing an end to the bull market path that supported domestic equities since October of 2022. See:
https://equityclock.com/2025/04/05/stock-market-outlook-for-april-7-2025/
Technical Scoop from David Chapman and www.EnrichedInvesting.com
https://enrichedinvesting.com/library/
The Bottom Line
World equity markets were “Trumped” last week. Equity indices around the world dropped sharply after the close on Wednesday when President Trump announced higher than expected tariffs on goods entering into the U.S. Weakness in world equity markets escalated on Friday when countervailing tariffs were announced by China. Other countries are expected to announce countervailing tariffs this week.
Downside technical action by top U.S. listed securities (i.e. U.S. sector ETFs and individual equities included in the Dow Jones Industrial Average, S&P 100 Index and NASDAQ 100 Index) was extraordinary on Friday. Forty five stocks broke intermediate support on Friday, an increase from 28 stocks that broke support on Thursday. The CNN Fear and Greed Index dropped to 4 out of 100, a record low indicating “Extreme Fear”. See https://www.cnn.com/markets/fear-and-greed According to Market Watch “U.S. stocks saw biggest 2-day wipeout in history” The Volatility Index (VIX) jumped 15.29 to close at 45.31 on Friday, but has yet to show signs of peaking.
Analysts started to reduce their target prices for U.S. equity indices. On Friday, RBC lowered its target price for the S&P 500 from 6,250 to 5,500.
Downside technical action by TSX 60 stocks also was extraordinary. Another seven TSX 60 stocks broke intermediate support/ set downside trends on Friday after five stocks broke support on Thursday. Breakdowns on Friday included Brookfield, Cameco, Cenovus, WSP Global, Manu Life Financial, National Bank and Suncor. The TSX Composite Index completed a classic Head and Shoulders pattern on Friday on moves bellow 24,250.02 and 24,145.59. The TSX 60 Index and its related ETFs (e.g. XIU.TO) completed a similar pattern. Ditto for Canada iShares trading in the U.S.: EWC!
Technical signs of a short term low by world equity indices have yet to surface.
Positive technical action was notable by U.S. Treasury Bonds on Friday. 20+ Treasuries iShares (TLT) broke above $92.46 and $93.52 completing a reverse Head & Shoulders pattern.
Consensus for Earnings and Revenues for S&P 500 companies
Source: www.factset.com
Analyst estimates for earnings gains for 2025 recorded modest declines last week. Estimates for revenue gains were unchanged. Consensus for first quarter earnings calls for a 7.0 % increase on a year-over-year basis, down from 7.3% last week. Consensus for first quarter revenues growth remained at 4.2%. Consensus for second quarter earnings gains slipped to 9.1% from 9.3% last week. Consensus for second quarter revenue gains remained at 4.6%. Consensus for third quarter earnings gains slipped to 11.7% from 11.9% last week. Consensus for third quarter revenue growth remained unchanged at 5.4%. Consensus for fourth quarter earnings gains slipped to 11.2% from 11.4% last week. Consensus for fourth quarter revenue gains remained unchanged at 6.0%.
For all of 2025, earnings are expected to increase 11.3%, down from an 11.5% increase last week. Consensus for revenue gains was unchanged at 5.4%.
Economic News This Week
February U.S. Wholesale Inventories released at 10:00 AM EDT on Tuesday are expected to increase 0.3% versus a 0.8% gain in January.
March U.S. Consumer Price Index released at 8:30 AM EDT on Thursday is expected to increase of 0.2% versus a 0.2% gain in February. Excluding food and energy, March CPI is expected to increase 0.2% versus a 0.2% gain in February.
March U.S. Producer Price Index released at 8:30 AM EDT on Friday is expected to increase 0.1% versus no change in February. Excluding food and energy, March PPI is expected to increase 0.3% versus a 0.1% drop in February.
Selected Earnings News This Week
Fiscal first quarter reports by S&P 100 companies start appearing this week. Focus is on reports reported by Financial Service companies on Friday.
Trader’s Corner
Equity Indices and Related ETFs
Daily Seasonal/Technical Equity Trends for April 4th 2025
Green: Increase from previous day
Red: Decrease from previous day
Source for all positive seasonality ratings: www.EquityClock.com
Commodities
Daily Seasonal/Technical Commodities Trends for April 4th 2025
Green: Increase from previous day
Red: Decrease from previous day
Sectors
Daily Seasonal/Technical Sector Trends for April 4th 2025
Green: Increase from previous day
Red: Decrease from previous day
Hap Sneddon’s Top Picks
Hap appeared on BNN on Friday. Following is a link to his “Top Picks”
https://www.bnnbloomberg.ca/investing/2025/04/04/hap-sneddons-top-picks-for-april-4-2025/
Changes last week
Links offered by valued providers
Michael Campbell’s Money Talks for April 5th
Michael Campbell’s MoneyTalks – Complete Show (mikesmoneytalks.ca)
20 Year Depression Could Follow This Post Bubble Contraction: Bob Hoye
20 Year Depression Could Follow This Post Bubble Contraction – HoweStreet
Trading Desk Notes for April 5, 2025: Victor Adair
Trading Desk Notes for April 5, 2025 – HoweStreet
Economist David Rosenberg on Trump admin: ‘These people don’t understand what a tariff is’
Economist David Rosenberg on Trump admin: ‘These people don’t understand what a tariff is’ – YouTube
Stocks plunge on Trump tariffs: Here’s what you need to know
Stocks plunge on Trump tariffs: Here’s what you need to know – YouTube
JPMorgan raises recession odds for this year to 60% — here’s why
JPMorgan raises recession odds for this year to 60% — here’s why – YouTube
Market Meltdown Will Lead to Great Buying Opportunities: Mark Leibovit
Market Meltdown Will Lead to Great Buying Opportunities – HoweStreet
CHART THIS with David Keller, CMT Friday 4/4/25
https://www.youtube.com/watch?v=AEp445Cliy0
Market Drop Compared to 2020? What You Need to Know Now
Market Drop Compared to 2020? What You Need to Know Now – YouTube
Tariffs to Take US Tech Back a Decade, Wedbush’s Ives Says
Tariffs to Take US Tech Back a Decade, Wedbush’s Ives Says – YouTube
Tariffs are NOT Reciprocal: Martin Armstrong
Tariffs are NOT Reciprocal – HoweStreet
S&P 500 Momentum Barometers
The intermediate term Barometer plunged 19.40 on Friday and 22.20 last week to 13.00. Daily trend is down. It is extremely oversold, but has yet to show signs of bottoming.
The long term Barometer plunged 14.00 on Friday and 19.40 last week to 23.40, lowest level since October 2022. It is extremely oversold, but has yet to show signs of bottoming.
The short term (20 day) Barometer plunged 24.40 on Friday to 6.40. It is extremely oversold and has reached a level where significant recoveries have occurred. No signs of a recovery yet!
TSX Momentum Barometers
The intermediate term Barometer plunged 21.10 on Friday and 27.06 last week to 22.94. It changed from Neutral to Oversold on a move below 40.00. Daily trend is down.
The long term Barometer plunged 13.30 on Friday and 21.56 last week to 34.40. It changed last week from Neutral to Oversold on a drop below 40.00. Daily trend is down.
Short term (20 days) Barometer plunged 32.57 to 11.01 on Friday. It is extremely oversold, but has yet to show signs of bottoming.
Disclaimer: Seasonality ratings and technical ratings offered in this report and at
www.equityclock.com are for information only. They should not be considered as advice to purchase or to sell mentioned securities. Data offered in this report is believed to be accurate, but is not guaranteed
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April 7th, 2025 at 8:26 am
The “Trump Crisis” caused by the complete stupidity of one man and his sycophantic cronies will rank in history right up there with the 2008 financial crisis. The business community has refrained from criticism due to fear of being targeted by the Trump Administration. Well are they going to keep silent now? Trump has put himself into an impossible political situation. He has to reverse course or else we all suffer economic catastrophe. When he reverses course he is going to put a clown hat on himself and look like the biggest failure to ever occupy the office of president.
April 7th, 2025 at 9:16 am
I saw Ed Yardeni on CNBC this morning say that Trump is now at a point where he needs a win (cant take back this bs tariff war). Countries are going to say they want to negotiate with USA and maybe Trump will claim victory by saying he got them to the bargaining table. All that was needed was a big stock market selloff.
April 7th, 2025 at 9:43 am
TESLA has to be getting close to a margin call !
Cheers,Pat
April 7th, 2025 at 9:48 am
Bloomberg: “Tesla Falls Bellow Price Lutnick Said It Wouldn’t Drop To Again”. That didn’t take long. I haven’t seen Cramer twisting in the wind before like I am this morning on CNBC. David Faber and Carl Quintanilla are having none of it. They have been relentlessly sceptical of everything that’s going on. Peter Navarro was on. He’s in charge on the tariff file and he is a total nut-job. He’s complaining about EU VAT taxes but those are applied equally to everything. So in Canada we are going to have to get rid of HST if we are going to trade with the US? Faber is pointing out that there is no way in the world that Vietnam could ever import from the US the same dollar amount as what it exports to the US. These guys were also talking about how CEOs are afraid to speak and that only possibly they could collectively put their names on some document to get Trump to reverse course. Faber, Cramer et al are talking about how Trump can reverse course by somehow declaring victory. Cramer was calling 4800 for a bottom last week and now he is talking about 4,000. We are in sheer panic mode now.
April 7th, 2025 at 9:57 am
Hey guys,
Hope you have bought some protection with some inverse etfs. or took some money off the table.
First off Trump can’t back down otherwise he and his billionaires croonies will look like complete idiots and will loose all credibility and all the laws that they will want to pass will be outvoted.
Unless their idea is to be able to buy stocks at a better deal, if this is the case shouldn’t the SEC be on there case and put them all in jail for rigging the market like the CEO of DOGE. or is money able to keep them out of jail.
In my opinion they should all be locked up.
With the current situation I Wonder if the american citizens will go up in arms as they did on january 6th.
If he were a smart cookie he would have imposed a 10% tarrif across the board and we would have seen a small sell off and everything would have resumed normally.
April 7th, 2025 at 10:18 am
Something must have changed a few minutes ago (7:15 Pacific) I guess we will find out!
April 7th, 2025 at 10:24 am
Hey Larry,
For the CEO’s not talking well they were so scared of defying Trump they where going to shit in their pants. But now they have it so bad they need diappers. and you see it across the board no CEO is willing to speak up. I think the US as shot itself in the foot.
For the times i had a chance of hearing one ceo speak up and say it as it is I think Buffet is the one who will sepak up.he’s probably grocery shopping is portfolio so when will he speak up I don’t know. And at his age he doesn’t really care.
I remember when Charlie Munger talked about the bitcoins that it was a ponzi scheme.
April 7th, 2025 at 10:28 am
Hey Pat,
Its the 10 o’clock break, so don’t worry you won’t lose being short the market.
Better place to buy more protection.
April 7th, 2025 at 10:47 am
Pat,
I just read that Kevin Hassett said FOX, 50 countries are willing to negotiate.
Don,t believe the B.S coming out of his mouth supposedely he was on vacation in alberta last summer and outside his hotel he saw an ambulance pickup someone who od and later saw on is way to the restaurant people attacking police officers for fentanyl. First off is he a doctor to have diagnosed an OD? and secondly i don,t think he sleeps at a pity motel.
Last night on cnbc the india segment were mentionning they were going to make deals with other countries.
April 7th, 2025 at 11:16 am
No deal coming anytime soon with China. The Chinese intend to teach Donald Trump and the US a lesson. I would not try to bottom fish here and rather completely stay out of this market. Worst case scenarios keep getting more likely.
https://www.cnbc.com/2025/04/07/chinas-counter-tariffs-raise-the-specter-of-an-intense-trade-war-with-us.html
April 7th, 2025 at 12:45 pm
Agree Larry, at this point too many unknowns and no short term way to evaluate where market support lies. I am thinking we will continue on the downward trajectory into the summer (with maybe a number of rebounds towards to 50MMA once it gets around 5000). However, 4500 or lower as mentioned are not crazy targets. Potentially this week or next gold with bottom along with miners as people begin to buy back this insurance policy once we have a little corporate earning (or lack of clarity where a number of businesses are going). With OPEC+ update on production the 50 range for oil could also be a target soon and I am not sure we will get a rebound before 2027.
April 7th, 2025 at 3:31 pm
What a day so far. Big 10am rally that had the S&P swing 8%. Seeing on CNBC right now that there’s talk that Trump might want to pivot from the tariff nonsense. Also, some of the experts (Torsten Slok) are saying there is a fear that foreigners may sell US treasuries in protest.
Larry, you’re right about Peter Navvaro being a nut job, he is insane if he thinks manufacturing can come back to the USA.
And Tony, I think many cabinet members are trading the market. Maybe even took short positions before the tariff announcement.