Monday Takeaways: $6.6 Trillion Market Wipeout

Shah Gilani|April 7, 2025

The markets have suffered a devastating blow in just two days…

With U.S. equities losing $6.6 trillion in value following President Trump’s “Liberation Day” tariff announcements.

And the pain isn’t over yet…

The global trading system faces its biggest disruption in decades, and investors are fleeing.

Meanwhile, Saudi Arabia’s move to lower oil prices could derail the “drill baby drill” campaign promise just as the administration begins.

Tune in for your Monday Takeaways. Don’t miss what’s moving your money… NOW.

Click on the image below to watch.

TRANSCRIPT

Everybody, Shah Gilani here with your Monday Takeaways.

It’s nearing 9 a.m. on this Monday, April 7.

I say good morning, but it’s not going to be a good morning because it wasn’t a good week last week. The two-day drop, Thursday and Friday, was a frightening drop in the major U.S. indexes and globally – something to be remembered. It will be a day remembered as a day of infamy.

The two-day drop for U.S. equities amounted to a loss in value of capitalization close to $6.6 trillion in two days. Now we know why: President Trump decided on Wednesday after the close, in the Rose Garden, to announce new reciprocal tariffs. The numbers were a lot higher than most people expected. I think the consensus likely was it would be a blanket 20%, and then those tariffs would be negotiated back between the countries and the United States.

It didn’t happen that way. They were more individualized, so some countries got hit really hard – Vietnam in particular, China in particular – but that is what upset the market.

The takeaway from the two-day loss is it doesn’t happen in a vacuum, and those kinds of losses don’t get bought up. In other words, there’s no reason for investors to buy this dip just yet. So the takeaway from the devastation last week is likely more to come. Now this morning, again, it’s almost 9 a.m.

Futures are down yet again, and they’re down pretty hard. They’re off of the lows earlier this morning. I mean, really early – 4:30, 5:30, 6. Even the Nasdaq was down about 4.5%, and the S&P down more than 3%, around 3.25%.

So they’ve come off their lows now in terms of the futures this morning, but still pretty bad. We’re talking about more than 2% on the S&P. We’re talking almost 3% on the Nasdaq, but they’re, again, just trying to rally into the open. Nasdaq futures now down 2%.

S&P futures down now just shy of 2%. The takeaway there is more selling. I spoke over the weekend to some bankers. I’m not going to name names, but someone at Morgan Stanley, someone at JPMorgan.

They told me that what they were worried about this Monday is margin calls, and that is a possibility here. If we don’t get some kind of relief rally fairly early on in the very early stages of the open this morning, then we fall precipitously, then those margin calls are going to take the market lower. The takeaway there is the futures don’t look good.

And if we see more margin calls this morning throughout the early part of this week, we’ll likely see maybe even lower lows. So quite devastating as far as what happened last week. Something to keep in mind: when there’s a crisis, and this is a crisis of confidence in the global system for trade and what has been established for decades now. This is an interruption of multi-decade global trade arrangements, and nobody knows where it’s going to end up.

So in a crisis like this where the whole world is wondering what’s going to happen and how things are going to move forward given the old methodologies, correlation across asset classes often goes pretty close to one. And we’re not quite there, but we’re about as close as we can get to one. In other words, all boats are falling with the outgoing tide. So correlation, I expect, will be close to one, probably for a little while longer, which means if we go down, we’re likely to continue going down across different asset classes.

You see that in oil. Oil had a very rough week. It’s having a rough morning. The Saudis came out and said they want to lower the price of oil.

So I made a call a couple of months ago that we would see $40 in WTI before we saw $75 again, and it looks like we’re heading down that path now. So I don’t know if we’re going to see $40, but that was my call. And so far, sadly, for those of you who are long oil, it’s going the wrong way.

That is good in the long term for the economy because it brings down transportation costs, brings down gasoline costs, brings down the cost of a lot of things that are petroleum-based. So in the longer run, if we can get oil prices down, that’s fine. Not so good for “drill baby drill” as far as President Trump’s campaign platform.

“Drill baby drill” is not going to happen if oil prices continue to sink because it doesn’t make sense, capital expenditure-wise, for drillers to go out there and drill, for explorers to spend the kind of money they need to explore, or even for frackers to do what they do, even with producing wells. They’re not going to pump more water into these fracking wells and bring out more crude. It’s just not going to happen because that stuff is much more expensive to refine, and it’s going to be a problem. So we’re not going to see more oil, but this is what the Saudis do.

They lower the price of oil because they want to stop drilling because they don’t want a lot of excess oil on the market or coming to market. They want to be the swing producer in terms of price. So that’s what’s going on with the Saudis lowering the price of oil. The takeaway for this week is be careful out there because I’m going to show you something real quick and it’s really ugly.

And I apologize in advance, but here’s the S&P 500.

This is a complete breakdown. This is a three-year chart. So if you want to look at it from a one-year perspective, here’s the one-year perspective on the S&P. And as you can see, it’s downright – well, it hasn’t changed, so let’s see if that goes.

There’s a one-year perspective, people, on the S&P 500. It closed on the low on Friday. All the indices closed on their lows on Friday.

That does not bode well. In other words, there was no at-the-close buying. Nobody’s buying that dip. No one’s thinking, “Oh my gosh, everything’s really cheap, I’m going to buy some stuff.” It didn’t happen. Everybody was selling into the close. Not a good thing.

This is a really ugly chart. So one-year chart, here was the trend looking very good till we broke this nice trend channel and came down, tried to get back up to the 200-day and absolutely slammed here. So we’re looking lower this morning as far as the futures go. So that’s a one-year chart.

So just for those of you who think we can turn around easily, that’s not an easy turnaround.

Now to give a little more perspective. Here’s the bull market.

So I simply extend these down here, and this is how well the bull market has been running. So this bull market’s been going on a long time as you can see, and we’ve broken down. So this bull market is now a bear market, and we are not likely to see a turnaround that’s going to take us back into that uptrending channel because that’s just not going to happen. For us to get back up, and I’m talking for us to get back up – and we’ll look at it closer on a one-year chart – the energy that’s going to take, in other words, buying power, which isn’t there.

There is plenty of money on the sidelines, but no one’s going to commit in this kind of environment to get back from where we are. And really, we need to get back to almost 6,000 to get back into this uptrending channel. That’s 1,000 points – shy of 1,000 S&P points from where we are. The takeaway there is pain, people.

Sorry to say. Sorry to have to show you this ugly chart, but the takeaway is, yeah, once again, I know you’re tired of hearing it: Be careful out there.

Got you guys next week.