VIDEO: What We're Expecting From Trump Tariff 'Liberation Day'

Getting us ready for the final week of trading in the March quarter, in today’s Daily Rundown video, Chris Versace ticks off the quarterly earnings reports the market will be focusing on leading up to the March quarter earnings season.

Chris explains why he expects to see at least some negative earnings pre-announcements in the next few weeks and what that could mean for the market. He also walks through this week’s economic data, sharing why we’ll be paying more attention to Fed speakers after Monday’s March Flash PMI report.

Our eyes will be on the CoreWeave IPO to see if it re-opens the IPO window as well as on Washington, D.C. ahead of President Trump’s now potentially less-than-feared reciprocal tariffs targeted for April 2.

More Pro Portfolio:

Transcript

CHRIS VERSACE: Hey, folks, Chris Versace here. It is Monday, March 24. And we are kicking off the last full week of trading in the current quarter. That's right. We've got about six trading days left before we kick off the second quarter of the year. Hard to believe. But so far, the S&P 500 year to date is down about 3.6%, and the NASDAQ composite exiting last week was down almost 8% year to date.

Now, you've probably noticed that the start of today, it appears to be another positive one for the market. And believe me, we would like for that to be true, but we have to be mindful that we've been here more than a few times over the last few weeks. So we're going to want to continue to tread carefully.

But the question is, what is helping lift the market this time around? And it's reports that upcoming April Trump tariffs will be more targeted than previously thought, not widespread, but more focused. I think that's the right word that we can use. And it's going to be on countries with large trading imbalances with the US, again, not something more widespread.

And the tariff rate is sounding like around 15% or so. I think we're going to know a lot more in the coming days. Remember, President Trump is targeting April 2. So that's the middle of next week. But let's remember that there's usually a shoe to drop in all of this. And in this case, the question we're going to have to think about and the answer we're going to have to wait for is, how will those countries that are being targeted by these tariffs-- how will they respond?

And let's remember, too, the European Union, they've already said that they have tariffs that they're going to launch on the US in mid-April. So needless to say, while the market may be once again enjoying something that we'll call less than feared, we're going to get a lot more information ahead of April 2 and then more probably in the ensuing days.

So let's just be mindful of this, tread carefully, and, as we've been saying, continue to pick our spots. Now, let's talk about what we know is going to happen over the next couple of days. So we've got a couple corporate earnings coming at us, McCormick, Lululemon, Winnebago. There'll be some more insights on the consumer.

We'll be listening for what they say about input costs and, of course tariffs. With Lululemon in particular, though, we do want to pay close attention to this because of what Nike said last week. If you remember, their outlook was just not that inspiring. I guess that's the right word. We know that they're losing share to Adidas, Hoka, and others.

And that's on the footwear side. It'd be interesting to size up Lululemon against Nike to see if they're losing also on the apparel side. We also have Jefferies reporting this week. And you know that given our positions in Morgan Stanley and Bank of America, we're going to want to pay very close attention to what Jefferies has to say about its investment banking outlook, whether it's IPOs, and I'll have more on that in a second, but also M&A.

And what's their pipeline look like? And what do they think the tone of the business will be in the June quarter compared to the March quarter? That's really what we'll be focusing on with Jefferies. But at the same time, let's remember where we are, six trading days, like I said, till the end of the quarter. And then a week to 10 days later, we'll start to see the March quarter earnings season.

What this means is that companies are starting to roll up their books. They're in their quiet periods now. And one of the things that we're going to want to be watching for, be mindful for, will be earnings preannouncements, positive, perhaps, but given what we've heard most recently, Fedex, Nike, Accenture, but also the swath of retailers before then will be more mindful about negative earnings preannouncements, really, between today and April 10.

Why April 10? Well, that's when the big banks start to report, with JP Morgan, once again, blazing the earnings path forward. Now, if we get these negative earnings preannouncements, what are we going to do? Well, we'll do what we always do. We will try to understand what is driving the negative earnings preannouncements at that particular company.

What are the implications for competitors, customers, suppliers? In other words, the wider focus as we look to connect the dots because when we start to get these warnings, odds are there'll be more ahead. So we'll want to be prepared for that, doing the homework. And you have to remember that we are a little concerned about the June quarter earnings season. We've talked about this in the last two roundups, but it remains.

So far, the market continues to expect S&P 500 EPS growth of more than 9% in the June quarter compared to the March quarter. That's aggressive, especially compared to last year. So again, the dynamics are a little bit different this year. Tariffs, we'll have to see.

But we're going to want to, again, tread carefully. My concern, too, is that should we see the negative preannouncements and the markets start to ratchet down expectations for the June quarter earnings growth rate, we'll see it also for the back half of the year, which is up about 14% compared to the first half of the year. So we're going to continue to watch this, update our thinking, sharing that with you.

But there are some other things that we're going to want to be paying close attention to this week. We do have another gaggle of Fed speakers. By and large, just given how close we are to the Fed policy meeting last week, normally, we would expect them to stick to the Powell script.

But this morning, we have the flash March PMI report from S&P Global. Now, this is going to be some fresh news obviously. And, yes, it's going to tell us more about the tone of the manufacturing economy, the services economy. But we'll be looking into this report, like we tend to do, for what it has to say about input-output costs, in other words, another look on inflation and on job growth. All right, remember, those are the dueling things that the Fed is looking at.

We're also going to want to be paying close attention to what it says about new-order growth across manufacturing and services. Our concern here is that, particularly with the manufacturing economy, the February data might have been a little stronger than expected because companies, fearing tariffs, might have started to pull things forward. So we're going to pay close attention to the sequential comparisons in the flash March data compared to the February data. And we'll be breaking it all down in an alert to you.

But here's the thing. Given what we see in that report, we will be paying even more attention to what Fed speakers have to say after the report because they might have to adjust their language. Again, we continue to think that the real Fed policy meeting to pay close attention to is going to be the June one. We laid it out, but again, just real quick, given the timing of potential April tariffs, even though they're a little more reduced, perhaps, and the reciprocal tariffs, we're not going to really see the impact of that until maybe a little April data, maybe more May data, that lines up with the Fed's June policy meeting.

So I'll also say that Friday, we have the February PCE price index. Candidly, we've gotten a lot of February inflation data. And I know this is the Fed's preferred inflation metric. I know. But I think that the data that we get in the flash March PMI data is going to be far more insightful. Of course, we can't ignore the February core PCE number.

However, I will share that I'm far more interested in the personal consumption data that we'll get for the month of February later this week as well. Why? Well, the retail sales report tells us that the consumer's a little more hesitant. We certainly saw that with restaurant spending.

But one of the complaints we have with the retail sales report is it's really limited in terms of the number of light items. And we get much more granular information in the personal consumption report. So we'll be digging into that to see where consumers are spending, but more importantly, where they are not spending.

Now, there is one other thing we want to pay close attention to. I referred to investment banking earlier and IPOs. Well, there is some IPO activity we will want to watch this week. CoreWeave is expected to price its IPO on Thursday. And as we shared with you last week, exiting the week, the IPO appeared to be oversubscribed. Now, that's very positive for the offering.

But let's remember it's one thing to price an IPO, but we also want to track its post-pricing performance. So I suspect that not only will we be watching this, but I can almost guarantee you that Klarna and StubHub and others in the queue are likely paying attention to this, as are their bankers. Other potential IPOs that are in the queue, so to speak, Stripe, Chime, and others.

So I suspect that there's going to be a lot of attention on the CoreWeave IPO. I suspect and I hope that the bankers price it smartly. One other thing to consider when it comes to the CoreWeave IPO, and this touches on the portfolio, let's remember that Nvidia, they own about 5% of the company. So that could be a nice little sweetener, if you will, for the stock price, but again, let's see how the transaction prices will adjust our thinking accordingly.

And that, my friends, is today's video. We've got a lot more coming at you today. So please be sure to check your emails, your alerts. We want to make sure you get our latest thoughts. And, as I like to say, if we make any moves with the portfolio, we're going to want you right there with us.