Earnings Season: The Real Test starts Now 11/04/2025

HOT stories for today

 

US market wrap:
 

• Stocks declined on Thursday, surrendering part of the massive gains from the previous day’s rally. Despite the temporary relief, investor concerns lingered over the broader economic impact, especially as China remains targeted with significantly higher duties. Losses deepened after the White House confirmed to CNBC that the effective tariff rate on Chinese imports would reach 145%, combining a new 125% levy with an existing 20% surcharge linked to the fentanyl crisis. The S&P 500 fell 3.46%, the Nasdaq Composite dropped 4.31%, and the Dow Jones Industrial Average shed 2.5%. 
• Analysts noted that an average global tariff rate of 20–24% remains a substantial drag on international trade, even if it’s less severe than initially feared. In economic updates, U.S. inflation eased to 2.4% in March, coming in lower than expected, with core inflation hitting a four-year low—a welcome sign for markets. Meanwhile, bank earnings reports are due today, drawing further investor focus.
   

Earnings Season: The Real Test starts Now

• After a sharp selloff and surging volatility, U.S. stocks are trading at their cheapest levels in nearly 18 months, but investors aren’t rushing to buy — yet. The reason? Earnings season is here, and it could make or break the case for a rebound. With S&P 500 full-year EPS estimates slipping to $267.60, down from $271.05 in mid-March (FactSet), Wall Street is watching closely to see how corporate margins, forward guidance, and sector resilience hold up amid global uncertainty.
• Strategists at BofA estimate that earnings could fall by 15% in the face of economic headwinds, even if companies offset some impact through pricing power or accounting maneuvers. Firms may even pull guidance altogether, a move that historically spooks markets. Major banks like JPMorgan [JPM], Wells Fargo [WFC], Morgan Stanley [MS], and BlackRock [BLK] kick off the season Friday, offering the first real clues on how corporate America is navigating 2024.

 
Stocks on the move: 
      

• Harley-Davidson [HOG] — Shares of the motorcycle maker slumped 9.3% after board member Jared Dourdeville tendered his resignation, citing in a letter “grave concerns” regarding the company's current condition and leadership direction.
• U.S. Steel [X] — The steel producer's stock fell 9.5% following President Trump’s comments opposing the company’s potential acquisition by Nippon Steel, stating he did not support U.S. Steel being transferred to Japan.
• Capri Holdings [CPRI] — The stock declined 10.6% in midday trading after Prada announced its acquisition of Versace from Capri in a $1.375 billion deal, including debt, raising investor concerns over the transaction’s valuation and strategic impact.
• QuantumScape [QS] — Shares dropped 6.9% after UBS downgraded the stock from neutral to sell, citing risks tied to manufacturing scale-up and potential supply chain interruptions.
• Warner Bros. Discovery [WBD] — The media and entertainment company’s stock plunged 12.5% after China announced new restrictions on Hollywood film imports, escalating tensions in the ongoing global trade conflict.
   

Today’s action

• Asia-Pacific markets traded in mixed territory Friday following another downbeat session on Wall Street, as escalating U.S.–China trade tensions continued to stoke risk aversion. Japan’s Nikkei 225 dropped 4.19%, while the Topix shed 3.98%. South Korea’s Kospi declined 0.92%, though the Kosdaq bucked the trend, rising 1.51%. Hong Kong’s Hang Seng Index gained 0.56%, while China’s CSI 300 slipped 0.1%. Taiwan’s Taiex rose 2%.
• In U.S. futures, the S&P 500 was down 0.8%, the Nasdaq 100 fell 0.9%, and Dow futures dropped 277 points, or 0.7%, as investors looked to close out a volatile week. Tariff concerns remain front and center, after President Trump implemented a universal 10% duty—excluding China, which still faces significantly higher rates. Attention now shifts to the kickoff of Q1 earnings season, with major U.S. banks set to report on Friday. Investors are also eyeing March PPI data and the University of Michigan’s April consumer sentiment reading for further economic signals.

Watchlist: TSLA, AAPL, JPM, MS, WFC, NVDA, FAST, META

Bitcoin

• Cryptocurrencies retreated Thursday alongside the broader market, giving back much of Wednesday’s explosive gains. Bitcoin [BTC] dropped over 3% to $79,614, according to Coin Metrics, while Ether [ETH] slid nearly 8% and Solana [SOL] lost more than 6%. Despite the pullback, Bitcoin remains relatively resilient, still hovering near the $80,000 support zone that’s held for much of 2025, even amid tariff-fueled volatility.
• While Bitcoin’s recent price swings have mirrored those of the S&P 500, its typical volatility makes single-digit moves feel less impactful to crypto traders than to equity investors. Still, the correlation to risk assets remains in focus as markets stay on edge.
  Watchlist: Bitcoin: 74 000-100 000, Ethereum:1500-2600, Solana: 80-150
   

Forex
 

• EUR/USD advanced for a second consecutive session, climbing toward 1.1350 in Friday’s Asian trading after the European Union (EU) announced a 90-day suspension of planned 25% tariffs on U.S. imports. The move aims to de-escalate trade tensions and pave the way for renewed negotiations. Traders also adjusted their ECB rate expectations, now pricing a 1.8% deposit facility rate by year-end, slightly down from 1.9% last week.
• Meanwhile, the USD/JPY pair remained under pressure, hovering near 143.55, as escalating global trade tensions and concerns over an economic slowdown supported demand for the safe-haven Japanese Yen (JPY). A weaker U.S. Dollar, coupled with the Bank of Japan’s hawkish tone, further limited upside in the pair. Markets will be watching closely for additional cues from U.S. macro data and updates on trade negotiations heading into the weekend.
  Watchlist: EUR/USD: 1.0700-1.1140, USD/JPY: 143-150
   

Basic Materials

• Gold (XAU/USD) remained elevated near $3,215 in Friday’s Asian session, holding close to all-time highs as escalating U.S.–China trade tensions and a weakening U.S. Dollar (USD) continued to support safe-haven demand. Traders now await key U.S. PPI inflation data and any updates from tariff negotiations for the next market catalyst.
• Meanwhile, WTI crude oil extended losses for a second day, falling to around $59.30 per barrel. The decline follows renewed trade war anxiety after the U.S. raised tariffs on Chinese imports to a cumulative 145%, intensifying concerns over slowing global demand. Additionally, OPEC+’s announcement of a 411,000 bpd production increase for May added to fears of a growing supply surplus.
  Watchlist: GOLD 2600-3220, US Oil: 57.00-70.00
   

Key Economic Events Today:

EST time
08:30 am: USD PPI, Core PPI
10:00 am: USD Consumer Sentiment
10:00 am: USD Inflation Expectations
10:00 am: USD FOMC Member Musalem Speaks
11:00 am: USD FOMC Member Williams Speaks

Earnings

BMO (Before the US Market opens)
JPM            J P Morgan Chase& Co
WFC            Well Fargo and Comp.
MS               Morgan Stanley
BLK             BlackRock Inc.
FAST           Fastenal Company
AMC (After the US Market closes): enjoy your weekend!


The TEFS Analyst team wishes you a successful day!