Hey Snackers,
Raise your hand if you also just learned yesterday that the US imports billions of dollars of electricity from Canada. While the US-Canada trade war moved from figurative power plays to literal power moves faster than our electricity bills rise in a heat wave, even President Trump seemed shocked that three US states get a significant chunk of their power from our northern neighbor. For now, Canada has powered down the energy tariffs until the two countries meet tomorrow.
Stocks whipsawed yesterday as Trump floated fresh tariffs on Canada. Investors ditched the safer stocks that had been holding up well while beaten-up names caught a bid. Basically, if a stock had been getting creamed since February 19 (the S&P 500’s most recent closing high) through March 10, then it did well Tuesday. Conversely, if a stock had been holding up well through the carnage, it ceded ground. See the chart and go deeper.
Canary in the Kohl’s mine
Yesterday, the S&P Retail Select Industry Index hit a 52-week low, despite retail’s strong Q4 earnings. But while last holiday season delivered, retailers have started to take a more cautious outlook as they brace for a possible slowdown ahead.
Kohl’s shares sank 24% after a bleak earnings call yesterday: it slashed its quarterly dividend and issued guidance that’s worse than even the most pessimistic analyst had expected.
Like many retailers, Kohl’s is feeling the squeeze as more shoppers pull back on nonessentials. While inflation has eased, Kohl’s management noted that those earning under $50,000 — and even those under $100,000 — are cutting back, with the potential for more pullback in the coming months.
Looking ahead, it’s not pretty. Kohl’s expects net sales to fall 5% to 7% this year, well below expectations.
THE TAKEWAY
The discount department store may be a bellwether for lower-income US consumers. Retail executives are already bracing for more challenging times ahead, as two-thirds of those surveyed in Deloitte’s 2025 US Retail Industry Outlook report expect consumers to shop more often but with smaller baskets, focusing on essentials.
This could be bad news not only for retail chains but the economy as a whole, since consumer spending makes up nearly 70% of US GDP.
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The captain has turned on the “fasten seatbelt” sign
Delta dropped just over 7% yesterday after reporting that it’ll be slashing its revenue forecast, and that has pretty big implications for the economy as a whole. One reason? Delta flagged that it’s not just consumer confidence it’s seeing decline, but the big one: corporate confidence.
For the airline industry, those corporate customers are the real ball game. Sure, many people might interact with Delta every now and then en route to a vacation, but corporate business is where airlines live and die. That’s why a decline in corporate confidence has airline investors so jittery, and is one reason for pause in general. The US spent $421.1 billion on business travel in 2022, which is about double the revenue of Amazon. If the companies providing fuel for the engine that is corporate travel start skimping, that’s going to trigger some real problems down the runway.
For Delta, the folks in the cockpit are telling investors to buckle their seatbelts because they’re in for some rough turbulence. As recently as January 10, revenue was projected to increase 7% to 9%, but yesterday’s forecast has that all the way down to 3% to 4%.
THE TAKEWAY
The worrying thing? This probably isn’t just Delta. If Delta’s spotting a serious enough deterioration in corporate spending that it’s worth yanking its earnings guidance, a real cutback to business travel is the kind of symptom that could represent a major underlying condition for the economy.
Heck, that might even be why a rival airline also announced a fairly drastic move that passengers are definitely going to hate.
The Best Thing We Read Today
Tesla’s terrible ride in 5 charts
From stock price declines to S&P ranking, a look at Tesla’s performance this year.
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Yesterday's Big Daily Movers
Verizon warned of weak sales, saying it’s had a “challenging quarter,” sending the stock down over 6%
Dick’s Sporting Goods scored a Q4 earnings beat but fumbled its outlook
Hesai, a maker of three-dimensional light detection and ranging solutions (you might know it as lidar), soared 50% after signing a deal with Mercedes-Benz
What Else We're Snackin'
Good news: the average American workday is 36 minutes shorter than it was in 2022
Bad news: the US Economic Policy Uncertainty Index is the highest it’s ever been (pandemic excluded)
Glass half full: safe stocks are getting dumped as the momentum stock fever breaks
Sunny outlook: hedge funds are paying up to $1 million for weather modeling experts
Snack Fact of the Day
The US imported nearly $57 billion worth of passenger cars, trucks, buses, and vehicle parts from Canada last year.
Wednesday's Events
February Consumer Price Index
Earnings expected from Adobe and American Eagle
1 Reservations do not require purchase of a Casita and there is no assurance of how many will result in actual purchases.
2 The minimum investment is $1,000. This is a paid advertisement for the Boxabl Inc. Regulation A offering. Please read the offering circular and related risks at www.boxabl.com/invest#circular.
Investing in private company securities is not suitable for all investors because it is highly speculative and involves a high degree of risk. It should only be considered a long-term investment. You must be prepared to withstand a total loss of your investment. Private company securities are also highly illiquid, and there is no guarantee that a market will develop for such securities.
DealMaker Securities LLC, a registered broker-dealer, and member of FINRA | SIPC, located at 105 Maxess Road, Suite 124, Melville, NY 11747, is the Intermediary for this offering and is not an affiliate of or connected with the Issuer. Please check our background on FINRA's BrokerCheck.