Taking Trump's Stance on China in Stride

The weekend brought us more color on the “massive layoffs” initiated by the White House on Friday as part of its plan to pressure Democrats amid the ongoing shutdown.

So far, more than 4,000 layoff notices have been issued across the departments of Health and Human Services, Energy, Homeland Security, Education, Treasury, Commerce, and Housing and Urban Development. While not inconsequential, so far that figure isn’t quite the “massive” number hinted at by President Trump, but it is possible that the longer the shutdown goes, the more layoffs we could see.

In Friday’s Weekly Roundup, we shared prediction market site Kalshi pegged the shutdown at 30 days, but as we enter the trading week, it now flags it at 33.4 days, which puts it into November. The longer the shutdown persists, the larger the economic speed bump it will present for the current quarter and the greater impact it will have on consumer spending and the holiday shopping season. We will continue to track progress on ending the shutdown, but based on recent headlines, we’re not holding our breath, especially with Trump out of the country.

The other development we are keeping a close watch on is the one that roiled markets on Friday – renewed trade tensions with China. China signaled Sunday that it would not back down in the face of a 100% tariff threat from Trump slated for November 1, urging the U.S. to resolve differences through negotiations instead of threats.

On Monday morning, we are seeing equity futures signal a market bounce back after Trump shared that trade relations with China “will all be fine.” That comment came after the president’s Sunday Truth Social post suggested he may not follow through on his threat to post a “massive increase of tariffs” on China.

To us, this all sounds very much like Trump is once again pulling from his "The Art of the Deal" playbook:

Leverage and Push
Maximize Your Options
Use Publicity and Promotion
Fight Back
Enjoy the Ride

We will see what happens between the two countries as we approach the Asia-Pacific Economic Cooperation (APEC) summit in late October, and whether Trump and Chinese President Xi Jinping will meet. Based on what develops between now and then, we will adjust the Portfolio’s positioning as needed.

We would share that we are reading that, according to some, China’s announcement last week and Trump’s response are part of the negotiation ahead of their actual meeting. As it’s explained, it’s classic game theory: The other side is going to evaluate your response if they renege. And the thinking goes that if they think you’re chicken, they’re just not going to adhere to the deal.

Our take is that we’ve seen this bluster before, and calmer heads, as well as some horse trading, tend to emerge. With that, we will take Friday’s selloff and Monday's rebound in stride as we share with you an updated Portfolio table with updated consensus EPS expectations, panic points and pick-up points.

Before we get to that table, two housekeeping items:

First, odds are that Monday's trading volume will be a bit lighter than usual, given the Columbus Day holiday. Yes, the market is open, but to many, it is still a long weekend. It will be a quick return to business tomorrow as the Financials report their September quarter results.

Second, because I’m braving the weather and traveling to New York this afternoon, our next set of Portfolio Office Hours will be between 4 p.m. to 5 p.m. ET on Monday, October 20. I’m sure we’ll have quite a bit to talk about, but between now and then, be sure to use the Forum and Comment sections in the alerts we’ll be sharing with you.

Updated Consensus EPS Expectations

The 2026 consensus EPS for Alphabet (GOOGL) is now at $10.67, up from $10.62.

Labcorp’s (LH) expected EPS for this year is now expected to clock in at $16.36 versus the prior $16.31.

Wall Street now forecasts Meta (META) to deliver EPS of $30.08 in 2027, up by a nickel from the previous consensus figure.

Consensus EPS expectations for Morgan Stanley (MS) have risen to $9.01 and $9.85 for this year and next year from $8.92 and $9.62, respectively.

United Rentals (URI) also saw increases for both this year and next. Wall Street’s 2025 EPS expectation grew to $43.43, while for the one for 2026 was lifted to $48.11 from $47.83.

Panic Point Adjustments

We are resetting our panic point for SuRo Capital (SSSS) shares to $7.50, up from $7.00.

The one for United Rentals shares is reset at $775, up from $740.

Pick-Up Points

Updated levels for each position can be found in the Portfolio below. Following Friday’s sell-off, we have some holdings, such as Amazon (AMZN) , Axon (AXON) , Dutch Bros (BROS) , Costco (COST) and others, that are in close proximity to those pick-up points. Given what looks to be a quick snap back on Monday morning, it may be tough for some to grab shares at those levels.

However, let’s remember that the brunt of the September quarter earnings season is almost upon us, and other uncertainties remain. We have our levels, and as we know, fortune favors the prepared.

Price Targets Under Review

With the shares of Apple (AAPL) , Alphabet, Nvidia (NVDA) , United Rentals and Vulcan Materials (VMC) approaching our established price targets, we are once again putting pencil to paper and revisiting additional upside potential. Stay tuned for more on this front.

More Pro Portfolio

At the time of publication, TheStreet Pro Portfolio was long GOOGL, LH, META, MS, URI, SSSS, AMZN, AXON, BROS, COST, APPL, NVDA and VMC.