By coinnews 
00:00 Speaker A
US stock futures falling this morning as the sell-off enters a third day after wiping out nine and a half trillion dollars in value from global equities. The S&P 500 facing growing risk of entering a bear market as tariffs roil markets, prompting a slew of strategists to cut year-end targets. Joining us now with what investors need to know to kick off the trading day, we’ve got Yahoo Finance executive editor Brian Sozzi. We’ve also got here joining for the chat markets reporter, Josh Shafer here. So, once again here, we’re seeing markets continue, at least pre-markets, to try and get an idea of what could play out this week as even more of the turmoil is anticipated. Taking a look at the futures here this morning.
01:06 Brian Sozzi
Yeah, Brad, I mean, you go through the weekend, and I just don’t think anything really changed, right? If anything, if I was an investor and I thought maybe I’d get some sort of incremental news on the administration backing off these tariffs, I maybe feel less confident now on Monday morning than I felt going into the weekend. And so, when you think about the narrative going into the weekend, as we were selling off last week, it was, all right, I want to hear something either from the administration that means we are going to see less tariffs than we see right now, or I want to hear something from the Federal Reserve that’s going to make me feel more confident about the state of the economy. You are not seeing either of those puts in this market right now, and that is what investors are looking for. And I think broadly across Wall Street strategists right now, the argument is, until one side makes a move here, they just see the S&P 500 and stocks more broadly continuing to go lower.
02:16 Josh Shafer
You’ve heard squat, Josh. You’re so, you hear an administration across the board come here and dig in. And I know we’re all looking here for for playbooks and what to do, and, you know, I’ve been up for the past seven hours, uh, ingesting recession notes, price target cuts, like Josh mentioned. Uh, I talked to Judith Shelton, former Fed nominee, this morning on on the opening bell podcast. Everything I heard, it’s this comment from Wedbush analyst Dan Ives. Uh, in an email I just got, he says, Brian, where’s the E? Everybody’s looking for what earnings will be over the next year, and nobody could really figure this out. And until you can get a sense of what earnings will be for corporate America, especially the magnificent seven that is a driver of this market historically, you cannot necessarily come in here and buy this dip with any sense of confidence. So, I look at what Amazon, uh, couple days ago, or I say two days ago, Eric Sheridan over at Goldman Sachs, really enjoy his work. Said Amazon could see a $5 billion to $10 billion operating hit, uh, to its, uh, operating profits because of Trump tariffs. $10 billion, that’s huge. That’s not chump change, as you would say. Uh, I have a good chart here from Charlie Bilello, uh, over at Creative Creative Planning. Look at these P/E ratios across the board for the Mag 7. I mean, they have really, really compressed since the start of the year in large part because investors are trying to figure out what the future earnings for companies will be. And as you sit here on Monday morning, can’t figure that out at all.
04:22 Speaker B
We can’t figure it out, and we should mention, just to contextualize the sell-off, that I know we were all talking about this weekend, one of these moments where the stock market breaks the fourth wall, and people you never hear talking about it are talking about it because they’re terrified about their 401Ks. The S&P 500 is currently on track for one of its worst three-day stretches on record. We have the potential for the S&P 500 to open in a bear market this morning and here, we have that chart that you were talking about.
04:53 Josh Shafer
Yeah, some of the some of the biggest multiple compressions, and I have a story going up shortly on yahoofinance.com, uh, digging into this a little bit more. Tesla, Nvidia, Apple, these have been the biggest market drivers over the past one year, two years, three years, four years, five years across the board. If these stocks are not going to work, because nobody knows how much they’re going to earn, it’s hard to come in here and buy, not only these names on this dip, but the other 493 names in the S&P 500.
05:17 Brian Sozzi
You you could say that about the broad index.
05:19 Josh Shafer
Absolutely. Two sides, right?
05:20 Brian Sozzi
We’re talking about the P/E for the S&P 500 coming down. You’ll hear people talk about maybe stocks getting cheaper right now.
05:26 Josh Shafer
Well, the E just hasn’t come down yet, right? We haven’t sort of figured out what the overall earnings are going to be for the S&P 500 as you bring those earnings estimates actually down over the next year, right?
05:41 Speaker B
Still looking for growth. Earnings, 10% growth this year. Good luck achieving that.
05:44 Brian Sozzi
Right. It’s going to come down, right? And the real question is just how much does it come down and how quickly? And how do companies figure that out? And again, circling back to the start of this conversation here, when the numbers just feel like they’re sort of made out of thin air and they might move again tomorrow, if you’re a management company, I don’t know how you really deal with that, right?
06:08 Speaker A
Well, that’s why at the beginning of the year, too, you typically have that reset where companies will come out and give what is largely, at that point in time, seen as their worst case scenario. That is the the marker that is so easy for them to commit to that they could soar above that potentially, or even if they just come in at the same year-over-year type of growth expectations that the market will have relief by the numbers that they’re putting forward. Here are the real numbers that were anticipated at least for Q1 of 2025, as we’re going to start to get those reports this week. 7% is what FactSet is looking for. If that is the actual growth rate for the quarter, it’s going to mark the seventh straight quarter of year-over-year earnings growth reported by the index.