Due to the implementation of tariff policies, the target range of -12.5% to -16.5% per share from the last analysis has been reached.
The impact of tariffs, I believe, has two parts;
One part is the substantial implementation of policies, which has already taken place. The data provided by Trump represents the biggest negative impact of the current tariff policy. Countries' countermeasures are led by China and are the most aggressive, followed by the EU's 'proposed countermeasures against US steel tariffs', Canada 'will produce countermeasures, responding with a 25% tariff on automobile tariffs', and France 'calls for a pause on investments in the US'. Other countries have made statements that hold little weight. The degree of pull and toughness among countries is basically within market expectations, so the negative impact is limited.
Another part is the 'economic recession' risk caused by tariffs. This is most intuitively represented by hard economic data, such as CPI/PCE/labor market/GDP growth slowdown, etc. The impact of this part has not yet been fully priced in, meaning the next two aspects are most important, as previously mentioned (historical patterns in the decline of US stocks and BTC - Q2 predictions).
1. Macroeconomic data for the second quarter
2. The earnings reports of the top seven technology stocks in the US.
From the information of existing technology companies, the earnings reports of the following two companies in Q1 are not very optimistic.
Tesla
In Q1 2025, deliveries were 336,000 units, down 13% year-on-year, while Wall Street expected 350,000 - 360,000 units.
Tesla's market share has declined in various countries.
Europe - from 17.9% to 9.3%
Germany - from 16% to 4%
Global - from 20% to 14%
China: Tesla sales in March -11.5%
From Tesla's January data, Q1 earnings reports should not be too good. The key lies in the guidance for Q2; the worse the current situation, the more opportunities there are for better future guidance.
Apple
The companies most impacted by tariffs are Apple, with its factories hit in India, Vietnam, Malaysia, Thailand, Hong Kong, South Korea, and Japan, leaving none untouched.
After the tariffs took effect, this round of decline in US stocks saw the greatest drop in the Seven Sisters, with a single-day decline of -9.25%, the worst drop since the outbreak of the pandemic.
If Apple does not apply for an exemption, it will pass the tariff cost to consumers, resulting in a price increase of 17%-18% for Apple, or else profits will shrink. Rosenblatt Securities estimates that Apple's potential annual tariff expenditure could reach $39.5 billion. If prices do not rise, operating profits and earnings per share will be directly reduced by about 32%.
If Apple moves 10% of its supply chain back to the United States, it will take 3 years and cost about $30 billion. Therefore, in the short term, the exemption is Apple's lifeline, but whether the fundamental issues of weak demand and competition in the Chinese market can turn around is the key to Apple's financial report.
Therefore, before there is any positive turn in long-term macroeconomic data and technology stock earnings reports, it is difficult for US stocks to achieve significant increases.
The CPI data on April 10 next week is the key to whether US stocks can rebound at this stage.
In January, the core CPI was 3%, with the main reason for the rise being the price of eggs, which increased by 15.2%, affected by avian influenza, marking the largest increase since June 2015. There were also contributions from used cars and some projects related to price increases during the New Year, such as entertainment services. The noise in inflation in January and February is quite large, along with some unrelated noise such as used cars.
In February, it was 2.8%, with the main reason for the rise in CPI being the price of eggs in food prices.
In March, the CPI decreased due to the drop in egg prices, while previously, the rise was attributed to used car factors due to seasonal reasons.
March may not exceed market expectations and previous values. For a panicking market, this is an excellent piece of good news, and the expectations for the Fed's interest rate cuts have also increased. On this basis, US stocks could rebound by 3%-5% (5300-5500 points), with BTC rising by 5% to 89000 (the increase of BTC this round is unlikely to reach a 1:3 ratio with US stocks because the negative impact of tariffs did not cause a decline in BTC, so the next round of increase is unlikely to achieve an overshoot).
If the CPI exceeds market expectations, then a decline of about 5% will follow; from the peak of 6147 points, an overall decline of -20% can be expected. Meanwhile, BTC's decline may reach 5%-10% (between 78000-72000).
After the CPI on April 10, US stock trends ↓
After April 10 CPI, BTC trends ↓
The above content does not constitute investment advice; it is the analytical basis for my daily work and learning, as well as the foundational work for my trading. I also hope that fellow experts passing by will communicate more and provide guidance!
