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“No room left” rattles auto industry as tariff tantrum sends stocks spiraling lower. (00:24) Walgreens (WSB) gains on reports of Sycamore nearing $10B takeover. (02:40) 23andMe (ME) committee rejects new Wojcicki proposal to take company private. (03:25)
This is an abridged transcript.
We’ve talked about tariffs on this show and you’re hearing a lot about where they stand on any given day, especially today. Some of the areas taking a hit are auto stocks, suppliers, and ancillary industries.
Monday President Trump made his commitment to 25% tariffs on Canada and Mexico a reality, saying during a press conference that there’s “no room left” to make a deal before the midnight deadline.
His remarks sent shock waves through an already tariff-sensitive market, driving the Dow down 650 points in its aftermath and shares of Detroit’s Big 3 — General Motors (NYSE:GM), Ford (NYSE:F), and Stellantis (NYSE:STLA) — along with Tesla (NASDAQ:TSLA) spiraling lower into the close.
GM fell nearly 3.6%, Ford 1.7%, Stellantis dropped 3% and Tesla 2.8%.
The reaction wasn’t isolated to just automakers. Suppliers like Aptiv (APTV), Lear Corp (LEA), BorgWarner (BWA), Magna International (MGA), and Autoliv (ALV) were also under heavy selling pressure. Dana Incorporated (DAN), which makes transmissions, driveshafts, and motion systems for Ford (NYSE:F) and Stellantis (NYSE:STLA) vehicles, as well as parts for the mining and construction industry, experienced a ~4.7% drop in its share price to a 6-week low.
Adient plc (ADNT), which makes seats and interior components, saw its shares fall almost 7%, while shares of Ohio-based Goodyear Tire & Rubber (GT), the largest tire maker in Canada, buckled by 6.5%.
The knee-jerk reaction to President Trump’s comments underscored Wall Street’s sensitivity to tariff shocks. According to data cited by CNBC, the majority of U.S. autos are made domestically, with just 16% made in Mexico and a little over 7% from Canada. However, a 25% tax on imports from those countries (along with components imported from outside the U.S.) will raise the cost of a vehicle by an average of $6,250, an additional cost that will most likely be absorbed by both manufacturers and consumers.
Both Mexico and Canada have vowed to retaliate against U.S. tariffs.
Walgreens Boots Alliance (WBA) is up 5.8% in premarket action after the Wall Street Journal reported that Sycamore Partners was closing in on a deal to acquire the U.S. pharmacy chain for about $10 billion.
According to the report, the agreement could be completed as soon as Thursday, barring any last-minute complications.
Private equity firm Sycamore Partners is expected to pay between $11.30 and $11.40 per share in cash, with potential additional value tied to performance-based targets, the report said.
If the deal proceeds, Sycamore is likely to retain Walgreens’ core U.S. retail operations while selling off or taking public other parts of the company.
A special committee of the 23andMe board has rejected a new proposal from CEO Anne Wojcicki to take the company private.
Monday, Wojcicki filed an amended Schedule 13D that offered $0.41 per share to current stockholders for shares she does not already own.
The committee pointed out that the latest offer is 84% less than the $2.53 per share in a previous proposal offered by Wojcicki and private equity firm New Mountain Capital on Feb. 20.
The committee said it unanimously rejected the new proposal, which would have had Wojcicki provide $30M in unsecured financing at 7% interest.
23andMe closed Monday down 33%, and is down 2.7% in premarket trading.
What’s Trending on Seeking Alpha:
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Catalyst watch:
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The post-IPO quiet period ends for Sionna Therapeutics (SION) and Titan American (TTAM) to free up analysts to post ratings.
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Yum! Brands (YUM) will hold a special event for the Taco Bell chain to unveil innovation plans and new products in the works.
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Target (TGT) will hold its earnings call at 9am. Options trading implies a share price swing of 9% for Target after the report is released. Notably, Target slumped 21% after its last earnings report. JAKKS Pacific (JAKK), Carter’s (CRI), and Mattel (MAT) are three suppliers that trade in tandem with Target the week after earnings more than 75% of the time.
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AT&T Inc.(T) CEO John Stankey will participate in a fireside chat at the Morgan Stanley Technology Media & Telecom Conference.
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Verizon (VZ) CFO Tony Skiadas will present at the Morgan Stanley Technology, Media & Telecom Conference.
Now let’s take a look at the markets ahead of the opening bell. Dow, S&P and Nasdaq futures are in the red. Crude oil is down 0.8% at $67/barrel. Bitcoin is down 9.2% at $83,000.
In the world markets, the FTSE 100 is down 0.3% and the DAX is down 2.2%.
The biggest movers for the day premarket: Illumina (NASDAQ:ILMN) -4% – Shares fell after China banned the company from exporting its gene sequencers to the country in response to the U.S. doubling tariffs on Chinese goods. The ban follows Beijing’s decision to add 10 U.S. firms to its “unreliable entity” list, restricting trade and new investments.
On today’s economic calendar:
Editor’s Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.
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