"No room left" rattles auto industry as tariff tantrum sends stocks spiraling lower. (00:24) Walgreens (WSB) gains on reports of Sycamore nearing $10B takeover. (02:40) 23andMe (ME) committee rejects new Wojcicki proposal to take company private. (03:25)Episode transcripts seekingalpha.com/wsb.Show links: Biggest stock movers Tuesday: WBA, ILMN, and moreInvestors may be riding a ‘bucking bronco’ stock market into AprilBitcoin's back to where it started after strategic reserve spikeStocks are no longer sensitive to yields, U.S. dollar – Morgan StanleySign 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: What are the recent developments with auto stocks and tariffs?
Welcome to Seeking Alpha's Wall Street Breakfast, where we cover the top news for investors every morning. Good morning. Today is Tuesday, March 4th. I'm Julie Morgan. New tariffs are shaking up auto stocks. A deal for Walgreens could become final this week. And the 23andMe board did not accept the CEO's latest offer.
So, of course, we've talked about tariffs on this show, and you're hearing a lot about where they stand on any given day, especially today. Some of the areas taking a hit are auto stocks, suppliers, and ancillary industries.
On Monday, President Trump made his commitment to 25% tariffs on Canada and Mexico a reality, saying during a press conference that there's no room left to make a deal before the midnight deadline.
His remarks sent shockwaves through an already tariff-sensitive market, driving the Dow down 650 points in its aftermath in shares of Detroit's Big Three, General Motors, Ford, and Stellantis, along with Tesla spiraling lower into the close. GM fell nearly 3.6%, Ford 1.7%, Stellantis dropped 3%, and Tesla 6%. 2.8%. The reaction was not isolated to just automakers.
Chapter 2: How are tariffs affecting the auto industry and its suppliers?
Suppliers like Aptiv, Lear Corp, BorgWarner, Magna International, and Autoliv were also under heavy selling pressure. Dana Incorporated, which makes transmissions, driveshafts, and motion systems for Ford and Stellantis vehicles, as well as parts for the mining and construction industry, experienced a 4.7% drop in its share price to a six-week low.
Adiant, which makes seats and interior components, saw its shares fall almost 7%, while shares of Ohio-based Goodyear Tire and Rubber, the largest tire maker in Canada, buckled by 6.5%. The knee-jerk reaction to President Trump's comments underscored Wall Street's sensitivity to tariff shocks. According to data cited by CNBC, the majority of U.S.
Chapter 3: What are the impacts of tariffs on U.S. vehicle costs?
autos are made domestically, with just 16% made in Mexico and a little over 7% from Canada. However, a 25% tax on imports from those countries, along with components imported from outside the U.S., will raise the cost of a vehicle by an average of $6,250, an additional cost that most likely manufacturers and consumers will take on. Both Mexico and Canada have vowed to retaliate against U.S.
tariffs. Walgreens Boots Alliance is up 5.8% in pre-market action after the Wall Street Journal reported that Sycamore Partners was closing in on a deal to acquire the U.S. pharmacy chain for about $10 billion. According to the report, the agreement could be completed as soon as Thursday, barring any last-minute complications.
Chapter 4: What is the latest news on the Walgreens and Sycamore Partners deal?
Private equity firm Sycamore Partners is expected to pay between $11.30 and $11.40 per share in cash, with potential additional value tied to performance-based targets. If the deal proceeds, Sycamore is likely to retain Walgreens' core U.S. retail operations while selling off or taking public other parts of the company.
A special committee of the 23andMe board has rejected a new proposal from the CEO to take the company private. On Monday, the CEO filed an amended Schedule 13D that offered 41 cents per share to current stockholders for shares she does not already own.
The committee pointed out that the latest offer is 84% less than the $2.53 per share in a previous proposal offered by the CEO and private equity firm New Mountain Capital on February 20th. 23andMe closed Monday down 33% and is down 2.7% in pre-market trading. Now for a look at what's trending on Seeking Alpha. Investors may be riding a bucking bronco stock market into April.
Remember our top story from Monday's edition of Wall Street Breakfast? Well, here's an update. Bitcoin's back to where it started after the strategic reserve spike. And Morgan Stanley says stocks are no longer sensitive to yields and the U.S. dollar. On our Catalyst Watch for the day, the post-IPO quiet period ends for Siona Therapeutics and Titan American to free up analysts to post ratings. Yum!
Brands will hold a special event for the Taco Bell chain to unveil innovation plans and new products in the works. Target will hold its earnings call at 9 a.m. Options trading implies a share price swing of 9% for Target after the report is released. Notably, Target slumped 21% after its last earnings report.
Jax Pacific, Carters, and Mattel are three suppliers that trade in tandem with Target the week after earnings more than 75% of the time. The CEO of AT&T will participate in a fireside chat at the Morgan Stanley Technology Media and Telecom Conference. And the CFO of Verizon will participate in that same conference. Illumina is on our list of the biggest movers of the day pre-market.
ILMN is down 2.8 percent after China banned the company from exporting its gene sequencers to the country in response to the U.S. doubling tariffs on Chinese goods. The ban follows Beijing's decision to add 10 U.S. firms to its unreliable entity list, restricting trade and new investments.
On today's economic calendar, at 2.20 p.m., the Fed's John Williams will participate in a moderated discussion at a Bloomberg Invest event. That's it for today's Wall Street Breakfast. Thanks for listening. To take full advantage of Seeking Alpha with coverage on significant stocks and ETFs, become a premium subscriber. Check out seekingalpha.com slash subscriptions. I'm your host, Julie Morgan.
Go out and make it a great day.
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