Welcome to Schr dinger's Stock Market By Spencer Jakab

Will investors Netflix and chill? The streaming pioneer leads a big day for earnings . After a tech-driven selloff Wednesday, futures indicate a strong open for U.S. stocks. The stock market will be closed for Good Friday and Markets A.M. will take the day off too-I'll be back in your inbox Monday.

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"Fly the random skies" doesn't quite have the same reassuring ring to it as its actual slogan, but United Airlines broke the corporate mold this week .

Most large companies provide investors with financial guidance-forecasts for profit or other key items. If those numbers start looking iffy then executives might drop hints that business is weak, nudging analysts to trim forecasts. If it's really bad then they'll either issue a formal profit warning or sit on the bad news until results are released. Both can send their shares plunging.

It's safe to say that tariffs and recession fears have raised the odds of lousy days like that. British drinks company Diageo was among the first to drop guidance back in February. Since airlines are especially sensitive to changes in economic assumptions, both Delta and Frontier followed suit this month.

United took a different tack: It said that it could earn as much as $13.50 a share this year or as little as $7.00-a laughably large range. But those are actually the high and low ends of two separate forecasts: One is for a "stable" and the other a "recessionary" environment.

It's neither and it's both-sort of like the famous Schr dinger's Cat thought experiment in quantum physics. A cat is inside a box with a vial of poison. A random atomic event could cause the vial to spill but, until you open the box, the cat's both dead and alive.

For analysts whose jobs have always been coming up with a single number, United's approach is nearly as mind-bending as undead cats are to Physics 101 students. Other companies have hedged expectations in less-radical ways: Before gritting their teeth and providing a very wide sales range for the year, bosses at chip equipment maker ASML said of tariffs that "the end-state will be unknown for a while."

The last time lots of companies dropped forecasts was when the pandemic hit. United's move doesn't just highlight uncertainty today-it raises the question of whether giving guidance is even helpful. In a letter to The Wall Street Journal seven years ago, Jamie Dimon and Warren Buffett, CEOs of JPMorgan Chase and Berkshire Hathaway, respectively, argued that companies should just end the practice since it encourages short-termism.

Clearly that hasn't hurt either stock's appeal, or that of Apple, which stopped giving explicit forecasts. Even for a sector as volatile as airlines, analysts have enough information to make educated guesses. Instead of providing profit numbers, companies can let them know how sensitive they are to traffic and fuel prices. Misses would be bigger but, if more companies ditched the practice, they'd also become routine.

That would be one less thing for both executives and investors to worry about.

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Stocks I'm Watching

Hertz : Shares in the car-rental company shot up about 25% in premarket trading. The stock had surged 56% Wednesday when Bill Ackman's Pershing Square Capital Management disclosed a stake in the original meme stock.

Nvidia ; AMD : Shares in both chip companies edged up premarket, after selling off Wednesday on the news that their exports would be restricted.

Alcoa : The aluminum producer said it incurred about $20 million in tariff-related costs last quarter; the charge is expected to rise to $90 million in the current one. Alcoa said it was impractical to increase U.S. production in the short-term. Shares fell nearly 3% ahead of the open.

American Express , Blackstone and a clutch of regional banks including Fifth Third and Regions Financial are due to report earnings before the bell. Netflix results are due after the close.

Hermès : The Birkin bag maker's quarterly revenue growth fell short of forecasts, weighed down by Chinese demand. Hermès, one of Europe's most valuable companies, said it would respond to tariffs by raising its U.S. prices. Shares edged lower in Paris.

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The Post-Covid Era of Ultra-Calm Markets Is Over

Stocks steadily marched higher for much of the past two years, clinching dozens of records. Selloffs were brief and infrequent: Last year, the S&P 500 completed a 356-session streak without a daily decline of 2% or more, its best such stretch since one that ended in February 2007. Those happy times are over .

What I'm Reading New U.S. chip-export limits that rocked global markets on Wednesday are the clearest sign yet from the Trump White House that whatever advances China makes in AI will have to happen without America's help. ( WSJ ) More on the export curbs: Nvidia's position in artificial-intelligence computing is strong enough that even the company's bottom-shelf chips have plenty of demand. In the trade war, that isn't proving to be a good thing. ( WSJ [https://Nvidia's position in artificial-intelligence computing is strong enough that even the company's bottom-shelf chips have plenty of demand. In the trade war, that isn't proving to be a good thing. (WSJ)]) Investors are already fretting about the safety of the dollar and Treasury debt. With a ruling that could affect Federal Reserve independence, the Supreme Court might be about to give them even more reason to worry. ( WSJ ). Meanwhile, Fed Chair Jerome Powell warned that the central bank could have less flexibility to quickly cushion the economy from the fallout of President Trump's trade war than past sources of economic stress. ( WSJ ) Delisting of Chinese stocks that trade in the U.S. is a real possibility. ( Barron's ) Beyond the Newsroom

Buy Side from WSJ: See our guide to current Heloc rates, and how to get the lowest ones .

About Me

My name is Spencer Jakab and I've been musing about money and markets for more than 30 years, including editing The Wall Street Journal's Heard on the Street column for a decade, writing two investing books and running a team of stock analysts at a global investment bank.

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This article is a text version of a Wall Street Journal newsletter published earlier today.

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April 17, 2025 06:41 ET (10:41 GMT)

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