Daily News Round Up
Monday, 12 May 2025
- US-China Trade Tensions Ease, Boosting Market Sentiment: The U.S. and China have agreed to reduce most tariffs for a 90-day period, sparking a broad rally in global markets, particularly in tech and chip stocks. This temporary truce provides a much-needed reprieve from trade uncertainty and could support corporate earnings, although questions remain regarding the long-term sustainability of the agreement. (CNBC) (WSJ)
- Inflationary Pressures Remain a Key Concern: Despite a slowing economy, core CPI is projected to reach 3.6% this summer and 4% by year-end, driven by the impact of recently imposed tariffs. Import price data this week is expected to provide additional insight, potentially exceeding CPI/PPI reports in signaling future inflation trends, which could prompt further scrutiny from the Federal Reserve. (Seeking Alpha) (Seeking Alpha)
- Interest Rate Outlook and Treasury Yield Dynamics are Shifting: A divergence is emerging in Treasury yields, with longer-term yields remaining elevated while short-term yields have decreased, complicating borrowing costs. This, coupled with a slightly hawkish stance from the Federal Reserve, continues to add volatility to bond markets and indicates potential challenges for economic growth. (WSJ) (Seeking Alpha)
- Consumer Spending Shows Resilience Despite Economic Headwinds: Despite macroeconomic uncertainty related to tariffs and broader economic concerns, pockets of increased consumer spending are emerging. This is particularly relevant for equity markets as it suggests continued demand, potentially buoying retail and consumer discretionary sectors though additional data is needed to confirm the trend. (Market Watch)
- Sector Performance Diverging on Trade & Earnings: The agreement between the US and China has benefited the Technology sector, while the pharmaceutical sector is under pressure from anticipated price controls. Positive earnings announcements in certain sectors like internet commerce and aerospace are offsetting weakness in others, leading to a mixed picture, highlighting the importance of selective stock picking. (Seeking Alpha) (Seeking Alpha)
What happened over the weekend?
Macro
Consumer Spending: Even in an uncertain macroeconomic environment fueled by tariff concerns, there have been hints of an uptick in consumer spending. (Market Watch)
Economic Growth: I hate to be the one to break it to you, but the economy and the markets are not working efficiently. It’s been that way for at least all of my adult life (2008), and maybe a handful of years before that. (ETF Trends)
Economic Growth: Barry Ritholtz discusses the impact of fiscal stimulus on the US economy, and the arbitrary nature of the 2% inflation target. Unpredictable nature of tariffs leading to significant market drawdowns. (Seeking Alpha)
Inflation: The import/export release on Friday may provide critical insights into future inflation trends, potentially more impactful than the CPI and PPI reports. April’s CPI is expected to rise by 0.3% m/m, but import prices could show the first signs of inflation due to increased tariffs. (Seeking Alpha)
Inflation: The core CPI could spike to 3.6% this summer, and to 4% by the end of 2025, despite the slowing economy due to the tariffs imposed in April. The risk to this outlook is to the upside, if the reciprocal tariffs are re-imposed on July 9th. (Seeking Alpha)
Interest Rates: Longer-term Treasury yields have climbed, keeping borrowing costs elevated, even as short-term yields have dropped. (WSJ)
Interest Rates: Wall Street on Friday ended marginally lower for the week, as market participants digested a slightly hawkish interest rate decision from the Federal Reserve. That was offset to an extent by positive sentiment on trade after U.S. President Donald Trump announced a deal with the United Kingdom. (Seeking Alpha)
Interest Rates: The abrupt unwinding of a popular “Trump trade” in the Treasury market likely fueled April’s market tumult, says the Fed’s securities-portfolio manager. (Market Watch)
International relations: UBS strategists led by Sean Simonds have a timely note about how now the questions will be less on policy uncertainty and more on outcome uncertainty. (Market Watch)
International relations: The U.S. and China agree to slash tariffs for 90 days, Trump renews push for most-favored nation drug pricing, April consumer price index, and more news to start your day. (Barrons)
International relations: The Trump administration announced it had reached a trade agreement with China following trade negotiations in Switzerland over the weekend. Under the deal, so-called reciprocal tariffs will drop from over 100% to 10% on both sides for 90 days. (CNBC)
International relations: After weeks of negotiating, the Trump administration announced a trade deal with the UK last week. The dollar remains in a short-term downtrend but appears to be setting up for a countertrend rally. (Seeking Alpha)
International relations: U.S. stocks have underperformed their European rivals this year — and strategists at JPMorgan say it’s just the start. (Market Watch)
International relations: Global technology and chip stocks rallied on Monday after the U.S. and China agreed to pause most tariffs on each other’s goods. Tech firms with exposure to China — including Amazon and Apple — rose sharply. (CNBC)
International relations: Japanese investors sharply ramped up their overseas equity purchases in April, shifting away from bonds as they rebalanced portfolios amid global market volatility triggered by U.S. tariffs, and capitalizing on discounted international shares. (Reuters)
International relations: Officials from the U.S. and China concluded the weekend’s high-stakes trade talks, with Washington touting progress toward a deal. (WSJ)
International relations: The White House said Sunday afternoon a trade deal was reached with China, though the Trump administration did not provide further details following a meeting between American and Chinese officials in Geneva that Treasury Secretary Scott Bessent said yielded “substantial progress.” (Forbes)
International relations: Treasury Secretary Scott Bessent said the U.S. delegation made “substantial progress” in discussions with their Chinese counterparts, promising a complete briefing Monday morning. (Barrons)
International relations: A Nobel Prize-winning economist has told Sky News the recently announced UK-US trade deal “isn’t worth the paper it’s written on”. (Skynews)
International relations: Japanese Prime Minister Shigeru Ishiba reiterated on Sunday that he will aim for the elimination of all tariffs in trade negotiations with the United States. (Reuters)
International relations: U.S.-China trade talks are underway in Geneva, led by Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng. Can they de-escalate the trade war? (Investors Business Daily)
International relations: Markets have rallied, financial conditions have loosened, and debt markets have reopened. Crisis dynamics take fateful turns when perceived safe and liquid ‘money’ succumbs to a crisis of confidence and panic. (Seeking Alpha)
International relations: The economic and political stakes are high. (Barrons)
International relations: Market sentiment improves amid US-China trade talk optimism, despite concerns over tariff impacts on the global economy. Key economic data releases are expected across Asia, Europe, and the US, with a focus on inflation and retail sales. (Seeking Alpha)
International relations: The stock market, including the Dow Jones, fell. Treasury Secretary Bessent is set to meet Chinese counterparts for trade talks. (Investors Business Daily)
International relations: Global equity funds attracted the smallest weekly inflows in four weeks in the week through May 7, amid concerns about the impact of tariffs on the global economy and as investors awaited anticipated U.S.-China trade talks for more clues. (Fast Company)
International relations: Stocks were buoyed Thursday by a U.S.-U.K. trade agreement, the first deal to come out of a month of negotiations. Now the question is: Can future deals continue to impress Wall Street? (Investopedia)
Investment: Another U.S. Investment – IBM has announced plans to invest $150 billion into the U.S. over the next five years, which includes a $30 billion investment in research and development for quantum computers (source: Reuters). Dominating DoorDash – DoorDash, a U.S.-based meal delivery service, has submitted a $3. (ETF Trends)
Market Sentiment: The S&P 500 could reach 5900, driven by a FOMO rally as professional money managers re-enter the market. Positive newsflow, better-than-expected earnings, and stable inflation could sustain the rally, tempting traders and professionals to join in. (Seeking Alpha)
Policy: Wall Street’s focus next week will be on trade, a busy economic calendar, a speech by Federal Reserve chair Jerome Powell, and the first quarter earnings season. (Seeking Alpha)
Policy: The complex investing landscape requires multi-asset class allocation, with gold, treasuries, and America-first equities offering refuge amidst macroeconomic challenges like tariffs, shrinking GDP, and potential inflation. Treasury Secretary Bessent’s approach emphasizes trade, tax cuts, and deregulation to achieve non-inflationary growth and reduce government size. (Seeking Alpha)
Policy: History suggests that President Donald Trump’s new “Too Late” nickname for Fed Chair Jerome Powell has a strong chance of coming true. Fed leaders have been criticized as slow to act absent compelling data showing them something needs to be done. (CNBC)
Policy: The president says big news about drug pricing is coming next week. (Barrons)
Policy: The U.S. Consumer Financial Protection Bureau issued a list on Friday of nearly 70 policy and regulatory guidance documents stretching back more than a decade that the agency plans to rescind. (Reuters)
Trade: The trade war puts profit outlooks by companies on shaky ground, and with them the S&P 500’s valuation. (WSJ)
Trade: The U.S. Trade Secretary Scott Bessent said neither the U.S. nor China want to see a decoupling in their relationship, as each agree to lower tariffs for 90 days. (Market Watch)
Trade: U.S. stock futures soared, the dollar hit a one-month high and Treasury yields rose early Monday in Europe after the U.S. and China agreed to suspend most tariffs. (WSJ)
Trade: The U.S. and China announced on Monday that tariffs against one another will be reduced for an initial 90-day period after officials held trade negotiations in Geneva. (Fox Business)
Trade: The U.S. and China on Monday announced they would significantly cut back tariffs placed on each other’s goods for at least 90 days as both sides plan to continue negotiations on a trade deal, triggering a major surge in U.S. stock futures and global markets. (Forbes)
Trade: The US and China have agreed to slash tariffs on each other as they seek to end their trade war. (Skynews)
Trade: The U.S. and China on Monday agreed to suspend most tariffs on each other’s goods in a move that shows a thawing of trade tensions. (CNBC)
Trade: Analysts expect economic uncertainty to loom large over a softer television ad-buying season. (WSJ)
Trade: U.S.-China strike trade deal in Geneva, but no tariff relief announced. Traders await Monday’s briefing for clues on market impact and next steps. (FXEmpire)
Trade: Owners are laying off staff and withdrawing personal savings, trying to hold on and hoping for a trade deal with China. (WSJ)
Trade: Deals may matter more than data, including inflation readings, for stock-market investors looking for clarity around President Donald Trump’s tariff plans in the week ahead. (Market Watch)
Trade: Hints of tariff relief danced through the headlines, but with more hemming than harmony, investors kept their feet mostly still. After two weeks of climbing on cautious optimism, the market decided to pause and ask whether the good news was real, or just lightly disguised hope. (Seeking Alpha)
Trade: Driving south from Los Angeles along the coast, you can’t miss the San Pedro port complex. Dozens of red cranes pop up from behind the freeway. (Skynews)
Trade: President Donald Trump said on Friday that the U.S. will maintain a baseline 10% tariff on imports even after trade deals are struck, adding there could be exemptions when countries offer significant trade terms. (Reuters)
Trade: Welcome to tariff purgatory, a deceptive calm between the panic of Liberation Day and whatever comes next. (Barrons)
Trade: Trump tariffs on Chinese goods are putting pressure on small businesses, leading to rising costs and uncertainty. Will trade talks provide clarity? (Investors Business Daily)
Trade: Renewed trade tensions, mixed economic signals, and a cautious Federal Reserve kept Wall Street on edge this week. (Schaeffers Research)
Trade: Trade news remains the main focus for investors, but economic data will still be watched closely for indications of how tariff uncertainty has impacted U.S. economic activity. (WSJ)
Trade: President Donald Trump has made a fresh move in his trade war with China, saying that an 80% tariff on Chinese products “seems right” but determining the correct level is up to Treasury Secretary Scott Bessent. Here’s how to think about it. (Market Watch)
Trade: Investors want trade deals, but the state of negotiations remains fragile. Much of the good news appears to be already reflected in the stock market. (Barrons)
Trade: Investors have already been told to expect billions of dollars in lost corporate profits due to new tariffs. (Market Watch)
Industry
Defense: Barron’s recently wrote positively about shares of Northrop Grumman and L3Harris Technologies. Those aren’t the only defense shares Wall Street likes. (Barrons)
Energy: The decline in oil prices and U.S. shale production potentially peaking by 2026-2027 will shift global oil supply and price volatility. CEOs of Occidental Petroleum and Diamondback highlight the economic and geological challenges now facing U.S. shale, predicting the arrival of peak U.S. oil production. (Seeking Alpha)
Pharmaceuticals: Novo Nordisk, which generates around 60% of its sales in the U.S., is among the biggest losers in early European trade. (WSJ)
Pharmaceuticals: European drugmakers stocks fell in early trading on Monday after U.S. President Donald Trump said he would sign an executive order on reducing prescription drug and pharmaceutical prices. (Reuters)
Retail: Pop culture icons like Beyoncé and Taylor Swift are driving a resurgence in western wear, boosting brands like Levi Strauss (LEVI) and Boot Barn (BOOT). The western wear market is projected to grow from $80B in 2022 to $136B by the end of 2031, reflecting significant economic potential. (Seeking Alpha)
Retail: Shoe stocks are rallying in the face of upcoming tariffs as companies work to shift supply chains. Crocs, Skechers among winners. (Investors Business Daily)
Semiconductors: Artificial intelligence has been referred to as the fourth industrial revolution. The technology is expected to advance society to the degree that things like the steam engine, electricity and the internet once did. (Market Watch)
Corporate
AMC Networks: AMC Networks (NASDAQ:AMCX) shares fell 8% intra-day following first-quarter results that missed expectations. Adjusted earnings per share were $0.52, below the $0.79 analyst estimate. Revenue decreased 6.9% year-over-year to $555.2 million, compared to a consensus of $573.1 million. Domestic operations revenue declined 7.2% to $486.3 million, while the streaming segment grew 8% to $157 million. Total subscribers remained at 10.2 million, unchanged from the prior year. International revenue decreased 7.5% to $69.9 million. (FMP)
AngloGold Ashanti (NYSE:AU): AngloGold Ashanti (NYSE:AU) shares increased over 6% intra-day after reporting first-quarter revenue of $1.93 billion, surpassing analyst forecasts of $1.86 billion. Gold production rose 22% year-over-year to 720,000 ounces, with the average realized gold price increasing 39% to $2,874 per ounce. Earnings per share were $0.88, $0.04 below estimates. Total cash costs increased 4% to $1,223 per ounce, and all-in sustaining costs rose 1% to $1,640 per ounce. Full-year 2025 guidance remains unchanged: targeting gold production of 2.9–3.225 million ounces at all-in sustaining costs between $1,580 and $1,705 per ounce. (FMP)
Aramco: Saudi Arabia’s national oil company reported a marginal profit beat for the first quarter as weaker oil prices caused by global economic uncertainty dragged on earnings. (WSJ)
Barclays PLC: Barclays PLC (NYSE:BCS) maintains an “Equal-Weight” rating, advising investors to hold the stock as of May 9, 2025, when the price was $16.52. Currently, the stock price is $16.53, a $0.18 (1.10%) increase, with daily fluctuations between $16.36 and $16.54. Over the past year, BCS has ranged from $10.17 to $16.57. The company’s market capitalization is $58.99 billion, and the trading volume is 13.25 million shares. Barclays has partnered with Ant International to enhance global treasury management using AI, including Ant’s Time-Series Transformer (TST) AI FX Model. (FMP)
BILL Holdings: BMO Capital raised its price target on BILL Holdings (NYSE:BILL) to $52 from $47, maintaining a Market Perform rating. The adjustment follows the company’s Q3 earnings report. Bill.com’s fiscal 2025 is characterized by strategic investment aiming for approximately 20% annual core growth, though a full rebound is now expected to push meaningful acceleration into fiscal 2026. BMO trimmed estimates but highlighted potential growth drivers like pricing initiatives and enhanced ACH offerings, alongside stronger-than-expected free cash flow generation. (FMP)
Cloudflare (NYSE:NET): Cloudflare (NYSE:NET) reported Q1 2025 revenue of $479 million, exceeding the estimated $469 million, with adjusted EPS of 16 cents compared to the expected 17 cents. The company secured a contract valued over $100 million. Projected Q2 2025 revenue is between $500 million and $501 million, with adjusted EPS of 18 cents. Full-year 2025 revenue guidance remains at $2.09 billion to $2.094 billion, with adjusted EPS between 79 and 80 cents. Following the announcement on May 9, 2025, shares rose 2.1% to $124.30, and currently trade at $133.08, a 7.05% increase ($8.77) from the previous close. The stock’s 52-week range is $66.24 to $177.37, and its market capitalization is approximately $46.19 billion, with a trading volume of 5.86 million shares. Needham maintains a “Buy” rating for the stock, previously priced at $133.03. (FMP)
Disney / AppLovin / HIMS / Carvana / Bumble: Disney’s strong earnings and streaming efforts, along with plans for a new park in Abu Dhabi, signal confidence in travel. Internet commerce stocks like AppLovin, HIMS, Carvana, and Bumble surged on strong earnings, reflecting continued consumer engagement and benefits from AI efficiencies. (Seeking Alpha)
EchoStar Corporation: EchoStar Corporation (NASDAQ:SATS) reported a net loss of $0.71 per share for the first quarter, missing analyst forecasts of $0.66 per share. Revenue totaled $3.87 billion, a decrease of 3.6% from $4.01 billion year-over-year, falling short of the $3.88 billion consensus. Pay-TV revenue declined to $2.54 billion from $2.73 billion year-over-year. The wireless segment added 150,000 net subscribers and saw a year-over-year improvement in churn, which decreased to 7.2%. (FMP)
Essent Group Ltd.: Essent Group Ltd. (NYSE:ESNT) reported its financial results for the first quarter of 2025 on May 9, 2025. The company achieved an EPS of $1.69, exceeding the Zacks Consensus Estimate of $1.66, representing a 1.81% earnings surprise and a slight decrease from the $1.70 EPS in the same quarter last year. Revenue reached approximately $317.6 million, surpassing the estimated $315.7 million and marking a 2.03% increase over the Zacks Consensus Estimate, as compared to $298.36 million in the same period last year. Key financial metrics include a debt-to-equity ratio of 0.088, a current ratio of 1.06, a P/E ratio of 8.37, a price-to-sales ratio of 4.75, an enterprise value to sales ratio of 5.03, an enterprise value to operating cash flow ratio of 7.40, and an earnings yield of 11.94%. The company has exceeded consensus EPS estimates twice in the past four quarters and consensus revenue estimates in three recent quarters. (FMP)
Essential Utilities, Inc.: Essential Utilities, Inc. (WTRG) will release its quarterly earnings on May 12, 2025, for the quarter ended March 2025. Analysts project earnings per share (EPS) of $0.80 and revenue of $690 million. Over the last two quarters, WTRG has had an average earnings surprise of 5.11%. In the most recent quarter, the company reported $0.67 per share against an anticipated $0.66, a 1.52% surprise. The previous quarter’s reported earnings were $0.25 per share versus a consensus estimate of $0.23, resulting in an 8.70% surprise. Current financial metrics include a P/E ratio of 18.75, a price-to-sales ratio of 5.38, an enterprise value to sales ratio of 9.08, an enterprise value to operating cash flow ratio of 24.59, a debt-to-equity ratio of 1.25, a current ratio of 0.50, and an earnings yield of 5.33%. (FMP)
Lisi: Lisi remains a buy due to strong growth prospects in the aerospace and medical segments, despite near-term automotive market weakness. Aerospace sales grew 16.6% in Q1, driven by higher production rates, notably from Airbus, while medical sales rose 12.6% due to improved raw material availability. Automotive sales declined 5.7%, but Lisi is divesting less profitable businesses and exploring acquisitions to bolster its Clipped Solutions business. (Seeking Alpha)
Starwood Property Trust: Starwood Property Trust (NYSE:STWD) reported first-quarter adjusted earnings of $0.45 per share, meeting analyst consensus. Revenue totaled $325.47 million, falling short of the projected $493 million. The company deployed $2.3 billion in investments, including $1.4 billion in commercial lending and a record $700 million in infrastructure lending, with an additional $1.3 billion closed after the quarter. Starwood maintained its $0.48 per share quarterly dividend and reported $1.5 billion in liquidity with no corporate debt maturities for over a year. Commercial lending originations this year already exceeded full-year 2024 levels. (FMP)
TMX Group: TMX Group (PNK:TMXXF), based in Toronto, operates exchanges including the Toronto Stock Exchange, TSX Venture Exchange, and Montréal Exchange, with a market capitalization of approximately $10.98 billion. Following the May 6, 2025 Annual and Special Meeting, all director nominees were elected; Stephanie Cuskley received 99.98% of votes in favor, while William Linton had 6.53% of votes withheld. On May 7, 2025, Scotiabank maintained a “Sector Perform” rating for TMXXF and raised the price target from C$56 to C$57, with the stock price at $39.49. The stock’s daily range is $39.49 – $39.67, with a 52-week high of $40.51 and a low of $26.37. Current trading volume is 100 shares. (FMP)
US Foods Holding: CFRA increased its 12-month price target for US Foods Holding (NYSE:USFD) to $59 from $58, while maintaining a Sell rating. The new target is based on a 16x multiple applied to a 2025 earnings estimate of $3.69 (up from $3.63) and a 2026 estimate of $4.13 (up from $4.12). The valuation is below US Foods’ historical average of 19x earnings. Q1 results were below expectations, attributed partially to poor weather in January and February. Restaurant traffic rebounded since February, and April saw strong new customer acquisition. (FMP)
Walmart Inc: All eyes will be on Walmart’s results this week. (Market Watch)
