Here are five things you need to know this morning
Escalator up, elevator down: It’s one of my favourite expressions when it comes to the markets, because it accurately describes the movement of stocks so often --- and is a good reminder when we are jolted by a sudden dramatic drop. Stock markets were clobbered yesterday, in part due to worries about the economic impact of U.S President Trump’s tariff plans and cutting of public-sector jobs. Canada’s S&P/TSX Composite Index fell 1.5 per cent. In the U.S., the S&P 500 dropped 2.7 per cent. and the Nasdaq 100 lost 3.8 per cent. This morning, futures were indicating a modest rebound, as Bloomberg News reported Trump will meet with top business executives later in the day. The report says Trump’s meeting with the Business Roundtable will include chief executives from around the country, including top Wall Street firms.
Tesla plunges, then gets a boost: Tesla was one of yesterday’s hardest hit stocks, plunging by 15 per cent. The stock is now down 45 per cent so far this year. Analysts are cutting their sales forecasts for the company, amid growing concerns about demand for its electric cars – including a backlash against the political actions by company founder Elon Musk. However, the company received a vote of confidence overnight from one potential customer… in a social media posting, Trump said he’ll buy a new Tesla to support Musk.
Trump responds to power move: Meanwhile, America’s president is responding to Ontario’s decision to slap a 25 per cent surcharge on all electricity exports to the United States, threatening to “get it all back” with reciprocal tariffs on April 2. “Despite the fact that Canada is charging the USA from 250% to 390% on Tariffs on many of our farm products, Ontario just announced a 25% surcharge on ‘electricity,’ of all things, and your not even allowed to do that,” Trump wrote on Truth Social. “Because our Tariffs are reciprocal, we’ll just get it all back on April 2.” He repeated previous claims that Canada is a “tariff abuser” and suggested that the U.S. will “not be subsidizing Canada anymore.”
Airlines warn: Delta Airlines has cut it financial forecasts only months after issuing a robust outlook for travel demand and sales growth. The company is citing a recent reduction in consumer and corporate confidence, caused by increased macro uncertainty. Some traders say that comment is an indirect reference to the effect Trump’s tariff policies are having on economic confidence. Meanwhile American Airlines says it will have a larger first-quarter loss than expected as it deals with weak leisure travel demand and fallout from a fatal collision involving one of its planes. Actions by the Trump administration, including federal job cuts and the threat of tariffs that could rattle the economy, are leading some Americans to reconsider discretionary spending like travel.
Couche ‘disappointed’ with Seven and i engagement: Canadian convenience store operator Alimentation Couche-Tard says it will keep up what it calls friendly and persistent attempts to acquire the parent company of rival 7-Eleven. Couche-Tard says it has financing in place and sees a clear path to gaining antitrust regulatory approval in the U.S. Couche-Tard also says it continues to be disappointed that engagement from Seven and i Holdings has been (quote) “very limited.” Couche-Tard executives are in Japan this week to work on the potential deal.