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Trump set to ease auto tariff impact as he marks 100 days in office. (00:23) Okta set to join S&P MidCap 400. (02:03) Starbucks (SBUX) Q2 earnings preview: Eyes on international sales amid tariff uncertainties. (02:23)
This is an abridged transcript.
President Donald Trump will provide some tariff relief for automakers.
An announcement is expected today.
People familiar with the matter told The Wall Street Journal that this will include not stacking on additional levies on foreign-made cars.
That means companies that pay the 25% tariff on finished foreign-made cars won’t be charged other levies, such as those on steel and aluminum. Automakers would likely be reimbursed for any additional tariffs they’ve already paid.
The Trump administration will also amend the 25% tariff on foreign auto parts to allow automakers to be reimbursed up to an amount equal to 3.75% of the value of a U.S.-made car for one year. The reimbursement would go down to 2.75% of the car’s value the next year, and later phased out.
“This deal is a major victory for the President’s trade policy by rewarding companies who manufacture domestically, while providing runway to manufacturers who have expressed their commitment to invest in America and expand their domestic manufacturing,” Commerce Secretary Howard Lutnick said in a statement to media.
The tariff relief deal is expected to be announced today when Trump visits Michigan as he marks his first 100 days in office.
The industry had pushed back against Trump’s tariffs on foreign auto parts, warning that they would lead to higher prices for consumers and lower sales.
Auto stocks in early premarket trade: GM (NYSE:GM) +0.7%, Ford (NYSE:F) +1.1%, Stellantis (NYSE:STLA) +3.1%.
Okta (NASDAQ:OKTA) will replace Berry Global Group (NYSE:BERY) in the S&P MidCap 400 effective prior to the opening of trading on Thursday, May 1.
S&P 500 constituent Amcor (AMCR) is acquiring Berry Global Group in a deal expected to close soon, pending final closing conditions.
Now for an earnings preview of Starbucks (NASDAQ:SBUX).
The company is set to report its second-quarter results today after the closing bell.
Investors will keep their eyes on the firm’s international sales amid all the tariff talk. Traders will also focus on comments about any further turnaround plans.
The consensus EPS estimate is $0.49 (-27.9% Y/Y) and the consensus revenue estimate is $8.85B (+3.4% Y/Y).
The Seattle-based company imports coffee from more than 30 countries, including Vietnam.
Notably, Starbucks (NASDAQ:SBUX) is believed to have reduced its use of hedges against coffee price shocks; however, the company has not detailed its exposure to tariffs yet.
Investors may also be factoring in the increased recession risk in the U.S. and the impact on Starbucks (SBUX) of pressured consumers. There is also growing talk that backlash against U.S. products could start to impact international sales for Starbucks (SBUX) in upcoming quarters.
SA analyst Luca Socci said I believe this earnings call is particularly dangerous, especially for a company that doesn’t issue guidance anymore due to its internal difficulties. Therefore, I keep rating Starbucks as a convincing sell, Socci added.
The company has been going through a major transformation under new CEO Brian Niccol that appeared to have been trending in the right direction before the tariff and recession wildcards appeared.
“We reiterate our view that only an audacious, visionary reimagining of Starbucks will restore its good fortunes. Brian Niccol is not the leader to do that,” Seeking Alpha analyst J.G. Collins said.
The firm beat both its top and bottom line estimates in the last quarter.
Over the last 2 years, SBUX has beaten EPS estimates 38% of the time and has beaten revenue estimates 25% of the time.
Starbucks is down 8% since the start of the year.
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Meta Platforms (META) will hold its initial LlamaCon event. The developer conference will be dedicated to generative AI, with a particular focus on open-source advancements through its Llama family of models. Analysts expect major announcements, including details on the upcoming Llama 4 model, advancements in multimodal AI (integrating text, image, video, and speech), and new AI-powered automation tools.
Now let’s take a look at the markets ahead of the opening bell. Dow, S&P and Nasdaq futures are in the green. Crude oil is down 1.2% at $61/barrel. Bitcoin is flat at $94,000. Gold is down 0.8% at $3,311.
The FTSE 100 is up 0.1% and the DAX is up 1%.
The biggest movers for the day premarket: NXP Semiconductors (NASDAQ:NXPI) -7% — Shares slid as investors reacted to a leadership shakeup, which overshadowed an otherwise solid Q1 performance and positive Q2 guidance.
On today’s economic calendar:
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