What We're Watching on Tariffs as Trump Circles Semiconductors, Pharma and More
Plus, we're set to collect some key data points from earnings reports today.
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Just ahead of Tuesday's market open, U.S. equities look to a rebound following Monday's sharp sell-off, with shares of the four stocks we picked up on Monday poised to move higher out of the gate.
Other than some rear-view facing November housing price data and December Durable Goods Orders, the market focus today will remain on corporate earnings, including those from Portfolio holding Lockheed Martin LMT, and potential Trump tariffs as it waits for Wednesday's outcome of the Fed’s latest two-day policy meeting.
Asked about a report from Monday morning that incoming Treasury Secretary Scott Bessent favored starting with a global rate of 2.5%, Trump said that he didn’t think Bessent supported that and that he wouldn’t favor it himself. Trump went on to say he wanted a rate “much bigger” than 2.5%, indicating potential tariffs on semiconductors, pharmaceuticals, steel, copper and aluminum as well as automobiles from Canada and Mexico.
In what has become typical Trump fashion, the president appears to be keeping his options open, sharing, “I have it in my mind what it’s going to be but I won’t be setting it yet, but it’ll be enough to protect our country…”
On the campaign trail last year, Trump indicated tariffs as high as 20%, but that is viewed as an extreme position.
Growing speculation calls for a gradual introduction with moderate increases rather than stiff penalties out of the gate. Our view is Trump and his administration need to walk and talk tough to bring about new trade deals but not sabotage the economy or add to what appears to be renewed inflation pressures. That’s a high tightrope to walk and, like many high-wire acts, there is likely to be some drama along the way. As we discussed in Monday's video, rather than spin our wheels in endless speculation, we’ll focus on the details of announced tariffs as they are formally announced, course-correcting the Portfolio as needed.
Coming up next, is our first look at Lockheed Martin’s December quarter ahead of its 11 a.m. ET earnings call.
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At the time of publication, TheStreet Pro Portfolio was long LMT.
