Wall Street waits for the big tariff announcements on Wednesday. (0:18) Tariff cheat sheet. (2?17) Musk’s xAI acquires Musk’s X. (4:29)Show Notes Earnings CalendarDividend RoundupEpisode transcripts: seekingalpha.com/wsb Sign up for our daily newsletter here and for full access to analyst ratings, stock quant scores, dividend grades, subscribe to Seeking Alpha Premium at seekingalpha.com/subscriptions.
Chapter 1: Why are global tariff announcements significant this week?
Welcome to Seeking Alpha's Wall Street Brunch, our Sunday look-ahead to this week's market-moving events, along with the weekend's top news and analysis. Hello, today is Sunday, March 30th, and I'm your host, Kim Kahn. It's not often that something can dwarf the jobs report on Wall Street, but the administration's global tariff announcements on Wednesday will almost certainly drive direction.
Tariff Tuesday would have had a better ring to it, but the fact that Tuesday is also April Fool's Day probably had something to do with White House planning. For his part, President Trump is calling Wednesday Liberation Day. But liberation rhymes with stagflation, the other word on the lips of traders.
Chapter 2: What is the relationship between tariffs and stagflation?
Nomura strategist Charlie McGillicott says, "...in light of recent shorter-term inflation data, we too are seeing a local stagflation theme, as the diciness of Trump's Phase 1 growth-negative policy mix risks pulling sentiment-slash-consumer into an even more precarious place."
Chapter 3: What challenges do current economic conditions pose for equities?
Pepperstone's Khazar Elizondia says, the combination of inflationary pressures, economic slowdown, and rising trade tensions creates a challenging environment for equities. Overall, current conditions point toward a concerning scenario with signs of stagflation, that slow economic growth coupled with persistent inflation, and a rapidly deteriorating economic sentiment.
So, what can investors expect on Wednesday? The experts agree. Who knows? Wells Fargo economists say, even as next week may bring some more answers around coming tariffs, trade-related uncertainty will likely persist as these policies take time to be enacted, are negotiated, and potentially even scale back.
Chapter 4: What can investors expect from upcoming tariffs?
It will also take time to see how tariffs dent growth and drive inflation, as uncertainty is causing most businesses to sit and await clarification. This was evident in fresh durable goods data this week, which showed a stable but hesitant trend in demand amid low intentions for new capital investment among businesses, they added.
Chapter 5: How are businesses reacting to tariff-related uncertainties?
McElligot says April 2nd is now being viewed by a lot of folks I'm speaking with as the end of the beginning. as this only kicks off a daisy chain of retaliatory tariff escalations or, in the opposite direction, potential concessions. Plus, of course, this then too starts the clock on the inevitable growth drag off the back of global trade and consumer sticker shock implications.
Chapter 6: What are the potential outcomes of the new tariff policies?
Want a cheat sheet? ING has you covered, and this will sub for the Wall Street Research Corner today. The key seven questions and answers condensed are... What tariffs will get imposed on the 2nd of April? Reciprocal tariffs are hideously complicated to do in practice. Remember, every country charges thousands of different tariffs.
Chapter 7: What is included in the tariff cheat sheet offered by ING?
It gets even more complicated still when you throw regulatory barriers and most controversially of all, VAT. Question number two, will these tariffs be long-lasting? These reciprocal tariffs could be much longer-lasting than the on-and-off Canada and Mexico measures we've seen so far.
but for all the tough talk, stock market weakness still looks like one of the more obvious trigger points for tariff de-escalation. Then, what's priced into financial markets? Higher inflation and weaker growth are opposing forces on yields, but our base case is that the U.S. long-end yields should go higher as the year wears on. Then can Europe deal with President Trump?
Diplomatic relations are considerably worse than they were in his first term. LNG and defense procurement can help, but the focus on VAT is a real nightmare for Europe. Will tariffs pay for U.S. tax cuts?
Creating genuinely new tax breaks, even if, still a big if, Doge succeeds in cutting spending significantly, would be hard to reconcile with ambitions to lower America's 6% fiscal deficit down to 3%. Then question six, how much will US inflation rise? Passed on in full, a blanket 25% average tariff would lift the price level by more than four percentage points. Fed officials are clearly wary.
Friday's sticky core inflation data only adds to the stagflationary narrative. And finally, question seven, how damaging is all this for the US economy? Weak payrolls would feed the narrative in markets that Trump's policy negatives are increasingly outweighing the potential positives from tax cuts or deregulation.
When the jobs data comes in on Friday, the consensus is for payrolls to have risen by 145,000 in March, with the unemployment rate sticking steady at 4.1%. On the earnings calendar, Lower Holdings Progress Software and Tech Target report Monday, Universe Penguin Solutions and RH weigh in on Wednesday, On Thursday, Conagra Brands, Acuity Brands, and Lamb Weston issue numbers.
In the news this weekend, Elon Musk disclosed late on Friday that his generative artificial intelligence startup XAI has acquired his social network X in an all-stock deal. The combined deal values XAI at $80 billion and X at $33 billion, or $45 billion in equity minus $12 billion in debt.
Musk, who also owns X, acquired the social network when it was known as Twitter in October 2022 for $44 billion. The company was reportedly in talks last month to raise money at the same $44 billion valuation. And a federal judge on Friday blocked the Trump administration
from effectively shutting down the consumer finance protection bureau u.s district judge amy berman jackson issued a preliminary injunction to preserve the existence of the regulator while she decides on the merits of the lawsuits intended to preserve the bureau without an order from the court jackson ruled the administration would quickly try to shut down the cfbp which was created by congress in the aftermath of the 2008 financial crisis
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