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Stocks are broadly lower to start today's session following sell-offs on Thursday and Friday following the Trump administration's tariff rollout last week. The hope going into this past weekend was that perhaps there might be some relief, if not from a policy standpoint, but at least in terms of the rhetoric on the Sunday shows. Unfortunately, comments from President Trump and his advisers sounded more like they are not planning to course correct in the near term.

• One change we did notice was that more Republicans were speaking out against the tariffs including both business leaders, like Jamie Dimon and Bill Ackmann, and members of Congress like Senator Rand Paul and Congressman Don Bacon of Nebraska to name a few. There are also efforts to introduce legislation to return tariff decisions to Congress. However, getting a 2/3 majority to survive a likely Trump veto seems difficult.
• Despite this, some stocks have been holding up fairly well. TJX traded to new all-time highs this week, even as other retailers fall sharply today. On its last call, TJX said it has seen tariffs before and it's confident it can navigate through them. Also, direct imports from China are an extremely small percentage of its business. Other off-price retailers have not performed as well in recent weeks, including BURL and especially ROST.
• Dollar store stocks are doing fairly well today, with Dollar Tree (DLTR) and Dollar General (DG) both trading higher on Citigroup upgrades. In fact, Dollar General has been ramping nicely since early March. On its last call, it said that it was well positioned to mitigate the impact of tariffs in 2025 after successfully doing so in 2018-2019. Also, Five Below (FIVE) was upgraded by JPMorgan.
• Clearly, analysts are starting to see some value down here in these beaten up names with the idea being that consumers will continue to trade down for value. If Trump were to suddenly change course on tariffs, especially with China/Vietnam, these stocks would likely see a big move. However, if SNAP benefits are cut, that would reduce general buying power for their core lower income customers.

Looking ahead, it is hard to predict what is going to happen with tariffs. Many had hoped Trump administration officials would have done more to calm nerves over the weekend. However, the theme was more of the same, basically that the near term pain in the market is justified for longer term economic gains. On a final note, we are set to begin earnings season in the coming weeks, with some banks set to report late this week. We suspect that companies are going to be cautious with guidance, the hope is that much of that sentiment has been priced in already.