Good Morning Investors,
Markets enter the week still reeling from persistent tariff shocks and the rising specter of Federal Reserve instability. While economic fundamentals haven’t collapsed, the uncertainty is high and investor confidence remains fragile. With Fed Chair Powell under political fire and Big Tech earnings kicking off, markets are searching for clarity in a fog of policy noise. The early part of this week will be shaped by Alphabet’s antitrust trial, Tesla’s affordability narrative, and market reactions to signs the U.S. might be nearing peak tariff aggression.
BEFORE THE BELL
Futures are down across the board. Dow futures fell over 1%, while S&P 500 and Nasdaq-100 futures lost 1.3% and 1.5% respectively. This follows last week’s third losing week in four for major indexes. Treasury yields rose amid expectations of extended policy confusion, while gold touched record highs above $3,400/oz. Asia-Pacific markets were mixed, as China held lending rates steady and the yuan showed some resilience.
MARKET THEMES TO WATCH
President Trump’s suggestion that he might replace Fed Chair Powell is now reverberating through markets. This undermines central bank independence at a moment when traders are looking for stability. Meanwhile, Fed officials, including Austan Goolsbee, have warned that tariffs could push the U.S. economy into a summer slowdown.
On the macro side, global trade negotiations show signs of life, with China signaling stabilization efforts and Iran-U.S. backchannel talks progressing. Oil has eased on the latter, but the dollar remains under pressure.
CORPORATE WATCHLIST
Google heads to trial in a landmark antitrust case that could force the breakup of Chrome. The outcome could reshape the internet.
Tesla faces scrutiny ahead of its earnings. Key questions loom around the affordable Model Y and robotaxi timelines. Production delays and consumer sentiment remain wild cards.
Netflix has emerged as a rare bright spot, reaffirming revenue targets and calming investor nerves amid broader tech anxiety.
Capital One and Discover received regulatory approval for their $35 billion merger, forming the largest credit card issuer in the U.S.
UnitedHealth, Ford, Intel, Toyota, and Boeing all feature heavily in today’s headlines, reflecting the global scope of tariff disruptions and supply chain reshuffling.
ANALYSTS' RECOMMENDATIONS
Netflix Inc: Piper Sandler raises price target to $1,150 from $1,100 on strong Q1 earnings and guidance.
American Express: JPMorgan lifts target to $260 from $244, citing resilient consumer spending.
Charles Schwab: TD Cowen ups target to $95 from $88 after strong Q1 results.
DR Horton: JPMorgan lowers price target to $111 from $132 on weak Spring selling season.
Abercrombie & Fitch: Barclays initiates at Equal Weight with $71 target, citing brand strength but tariff exposure.
BITCOIN: STRUCTURAL RESILIENCE AMID CHAOS
Bitcoin surged to $87,600 overnight, recovering nearly all ground lost since the April 2 tariff panic. This aligns with my previous call for a test of the $80K and $73K levels before a rebound. With equities struggling and the dollar softening on political risk, Bitcoin’s strength relative to the Nasdaq reinforces my conviction in a $150K target by year-end. If risk assets stabilize, Bitcoin could lead the charge back.
THE WEEK AHEAD: EARNINGS, ECONOMIC SIGNALS, AND CENTRAL BANK FOCUS
This week kicks off with a spotlight on two of the Magnificent Seven — Alphabet and Tesla — as they report Q1 earnings. Both stocks have been under pressure in 2025, and investors will be watching closely for updates on AI investment discipline at Alphabet and Model Y affordability from Tesla. Their guidance could set the tone for the rest of tech earnings.
Beyond that, more than 100 S&P 500 companies are due to report this week, including Boeing, Intel, Merck, IBM, Procter & Gamble, and American Airlines. The breadth of sectors represented offers a broader window into how Trump’s shifting tariff policy is affecting corporate planning and consumer demand.
On the economic front, April flash PMIs land Wednesday and could be the first hard data point reflecting tariff-driven changes in business sentiment. Friday brings the final University of Michigan sentiment reading, with inflation expectations likely to draw particular attention. Meanwhile, the Fed’s Beige Book drops Wednesday, and its language will be carefully scrutinized in light of Powell’s recent comments and Trump’s ongoing attempts to assert pressure on the central bank.
Finally, global finance takes the stage with the IMF and World Bank Spring Meetings. Expect headline risk here, as finance ministers weigh in on the viability of Trump’s “reciprocal tariff” pause and global economic projections are updated in the face of ongoing trade instability.
STRATEGIC OUTLOOK
We are likely past peak uncertainty, but not yet in a sustained recovery. Volatility will persist, and some will call this a bear market rally. I disagree. Fundamentals aren’t collapsing. Disinflation continues, earnings are holding, and the consumer is slowing but not broken.
My view remains: this is a growth scare, not a recession. As tariffs evolve from policy threat to political narrative, the Fed can remain patient. The back half of 2025 still holds promise — potential rate cuts, tax reform, and easing global tensions. For investors, this volatility remains an opportunity to position into the next cycle’s winners.
Please feel free to reach out to me on LinkedIn or by email if you would like help navigating this market environment or have any planning-related questions.
Dan Sheehan
This newsletter is for informational purposes only and should not be considered as investment advice. Please consult with your financial advisor about your specific situation.