Daily News Round Up
Wednesday, 14 May 2025
- Easing Inflation and Trade Tensions are Driving Market Optimism: Recent CPI data came in below expectations (2.3% YoY, 0.2% MoM), coupled with a significant 90-day tariff pause between the U.S. and China (tariffs reduced from 145% to 30% and 125% to 10%), has fueled a rally in risk assets. Several firms, including Goldman Sachs and Barclays, have revised down recession probabilities (Goldman to 35% from 45%, Barclays now predicts no recession in 2025) and raised growth forecasts (Goldman to 1.0% for FY2025). (FMP) (FMP) (FMP)
- Tech Sector Momentum Continues, Driven by AI and Strategic Partnerships: NVIDIA continues to benefit from the AI boom, securing substantial deals in Saudi Arabia to build AI infrastructure with a capacity of 500MW. Further, potential easing of export controls to the UAE could allow for the shipment of up to 500,000 advanced NVIDIA chips through 2027. This, combined with strong earnings from companies like NVIDIA (+5.5% stock increase) and continued investment from major players, is bolstering the sector. (FMP) (FMP)
- Corporate Earnings Present a Mixed Picture, with Sector Divergence: While some companies like Sony beat EPS expectations (147% above consensus), revenue came in below estimates, indicative of ongoing supply chain and sales pressures. Other companies faced challenges, such as UnitedHealth Group (-18% stock drop after suspending guidance), highlighting increased volatility. However, companies like Gladstone Investment beat on both EPS and revenue reflecting positive performance in certain sectors. (FMP) (FMP)
- Investor Sentiment is Shifting, but Caution Remains: The Bank of America Fund Manager Survey indicates a sharp decline in recession fears (down to 1% from 42% in April), with more managers favoring a “soft landing.” While cash balances have decreased, trade-war-induced recession risks still top concerns for 62% of managers. UBS downgraded U.S. equities to “Neutral” after the recent rally, suggesting some apprehension about sustained upside. (FMP) (FMP)
- Geopolitical and Policy Landscape Remains Dynamic: Beyond the US-China tariff pause, ongoing political negotiations and policy changes are influencing markets. President Trump’s actions concerning Saudi investments, Syria, and Iranian oil are adding complexity. The US-UK trade deal faces criticism from China. Furthermore, the changing regulatory environment, as evidenced by the CFPB’s potential registry rollback, introduces additional uncertainty. (FMP) (Fox Business)
What happened yesterday?
Macro
Commodity Prices: Oil prices decreased in Asian trade on Wednesday, following a four-day rally, with Brent (June) falling to $66.38/barrel and WTI (June) dropping to $63.01/barrel (as of 22:02 ET / 02:02 GMT). Prices retraced after a 2.5% jump on Tuesday, near a two-week high, due to a surprise rise in U.S. crude inventories reported by the API. The U.S.-China tariff truce, effective for a 90-day pause, involved the U.S. cutting tariffs on China to 30% (from 145%) and China trimming U.S. duties to 10% (from 125%). U.S. April CPI rose 2.3% year-over-year and 0.2% month-over-month. President Trump secured $600 billion in Saudi investments, vowed to lift Syria sanctions, and targeted firms shipping Iranian oil to China. (FMP)
Economic Growth: Bank of America’s May Global Fund Manager Survey indicates a sharp decrease in recession fears, with estimated recession odds falling to 1% (from 42% in April). 59% of managers now anticipate weaker global growth (down from 82%), and 61% favor a “soft landing” as the most likely outcome. Average cash balances have decreased to 4.5%, below the long-term average of 4.8%. Despite these improvements, 62% still identify a trade-war-induced recession as the top tail risk, with 43% believing it is the most probable trigger for a credit event. U.S. equity allocations are at their lowest since May 2023, while Eurozone exposure is at a seven-year high. (FMP)
Economic Growth: Goldman Sachs analysts have reduced the estimated probability of a U.S. recession in 2025 to **35%**, down from **45%**, following a U.S.-China tariff pause. The firm raised its full-year GDP growth forecast to **1.0%**, a **0.5 percentage point** increase. The tariff reductions involve decreasing U.S. levies on Chinese imports from **145% to 30%** and China’s duties on U.S. goods from **125% to 10%**, effective for **90 days**. Goldman now anticipates **three** Fed rate cuts in 2025-2026, scheduled for **December 2025** (previously July), **March 2026**, and **June 2026**. Citigroup (NYSE: C) has also pushed back rate-cut expectations. Investors should monitor Q2 GDP revisions and personal consumption data, as well as Fed communications, for potential December rate adjustments. (FMP)
Economic Growth: Much to the surprise of many on Wall Street, the S&P 500 has managed to erase all of its losses from earlier in the year, and the Dow Jones Industrial Average isn’t far behind. (Market Watch)
Inflation: U.S. stock futures were little changed on Tuesday evening: S&P 500 Futures were +0.1% at 5,908.0, Nasdaq 100 Futures were unchanged at 21,290.50, and Dow Jones Futures were +0.1% at 42,265.0. On Tuesday, the S&P 500 closed +0.7% and the Nasdaq Composite closed +1.6%. April’s CPI data showed a year-over-year increase of 2.3% (versus an expected 2.4%), a month-over-month increase of 0.2% (versus 0.3% expected), and a core month-over-month increase of 0.2%. The Dow Jones Industrial Average fell -0.6%, dragged down by UnitedHealth Group (UNH), which dropped nearly 18% after suspending its full-year financial forecast and announcing the resignation of CEO Andrew Witty. A 90-day tariff truce between the U.S. and China was also a market driver, reducing U.S. tariffs on Chinese goods to 30% from 145% and China’s tariffs on U.S. goods to 10% from 125%. (FMP)
Inflation: U.S. consumer prices rose 2.3% year-on-year in April, a 2.3% increase compared to the previous year and the slowest pace since February 2021. The monthly change was +0.2%, below the expected +0.3%. Core CPI (excluding food and energy) increased 2.8% year-on-year and 0.2% month-on-month, in line with expectations. Shelter costs accounted for over half of the monthly increase. U.S. and Chinese tariffs were temporarily lowered from 145% to 30% and 125% to 10%, respectively, on Monday. Upcoming indicators include the Producer Price Index (PPI), retail sales, and consumer sentiment, alongside remarks from Fed speakers. (FMP)
Inflation: U.S. stock futures were largely unchanged Tuesday evening: S&P 500 Futures +0.1% at 5,908.0, Nasdaq 100 Futures flat at 21,290.5, and Dow Jones Futures +0.1% at 42,265.0. In regular trading, the S&P 500 rose 0.7%, the Nasdaq jumped 1.6%, while the Dow fell 0.6%. April’s headline CPI rose 2.3% year-on-year, below the expected 2.4% and the slowest since early 2021, with a 0.2% month-on-month increase versus a forecast of +0.3%. Core CPI also increased 0.2% month-on-month, below the 0.3% consensus. U.S. tariffs on China fell from 145% to 30%, while China’s duties on U.S. goods dropped from 125% to 10% for 90 days. (FMP)
Inflation: On Tuesday, the S&P 500 climbed 0.7%, the Dow Jones Industrial Average fell 0.6%, and the Nasdaq Composite jumped 1.6%. April’s Headline CPI rose 2.3% year-on-year (lowest since February 2021) and 0.2% monthly, compared to expected 2.4% and 0.3% respectively. Core CPI increased 2.8% year-on-year and 0.2% month-on-month, below the 0.3% consensus. The U.S. and China agreed to a 90-day tariff pause, with U.S. levies cut from 145% to 30% and China’s duties reduced from 125% to 10%. Goldman Sachs reduced its U.S. recession odds to 35%. Key corporate movers included Boeing (+2.3%), NVIDIA (+6% following an 18,000-GPU sale to HUMAIN for 500 MW), UnitedHealth (-18% after suspending full-year guidance), Under Armour (+3%), and Coinbase (+4%), which will join the S&P 500 on May 19. (FMP)
Inflation: Rising housing costs were a big contributor to the most recent increase in consumer prices. (Market Watch)
Inflation: Asian currencies consolidated against the dollar in the early session as traders assess U.S. CPI data released overnight. (WSJ)
Inflation: CPI comes in relatively good – does it matter? (InvestorPlace)
Inflation: Inflation affects everything from grocery bills to rent, making the Consumer Price Index one of the most closely watched economic indicators. What does inflation mean at the micro level — specifically to your household? (ETF Trends)
Inflation: Rents and home prices aren’t going up like crazy anymore, but they are still one of the biggest sources of U.S. inflation. (Market Watch)
Inflation: US consumer prices rose moderately in April, offering a dose of relief to investors and policymakers concerned about persistent inflation and the potential economic fallout from new tariffs. The Consumer Price Index (CPI) increased 0.2% month-over-month and 2.3% year-over-year in April, marking the lowest annual increase since February 2021. (Proactive Investors)
Interest Rates: JGBs consolidated in the morning Tokyo session. Japan’s government bond market could lack direction today, Mitsubishi UFJ Morgan Stanley Securities said. (WSJ)
International relations: Asian FX markets were subdued on Wednesday following softer U.S. inflation data and a U.S.-China tariff truce. U.S. April CPI rose 2.3% year-over-year and 0.2% month-over-month, below expectations of 2.4% and 0.3%, respectively. The U.S. will cut tariffs on China to 30% (from 145%), while China will lower tariffs to 10% (from 125%) for 90 days. The Japanese yen rallied, with USD/JPY down 0.5%, due to expectations of Bank of Japan (BOJ) policy tightening, supported by April wholesale inflation climbing 4.0%. Other Asian currencies showed muted movements: USD/CNH increased by 0.2%, USD/CNY was flat, USD/KRW was flat, USD/SGD was flat, AUD/USD rose by 0.1%, and USD/INR remained muted. (FMP)
International relations: Prolonged Negotiations: U.S.-China trade talks may extend months to years, with a 78% chance by the 90-day deadline (Polymarket, as of 2025, May 14th). Market Risks: In a worst-case scenario, the U.S. stock market could face multiple drawdowns, potentially mirroring the 8–12% Nasdaq 100 declines seen in 2018–2019. (Seeking Alpha)
International relations: China criticized the trade agreement reached between the U.S. and the U.K. last week as it could potentially push Chinese products out of British supply chains. (Fox Business)
International relations: DAX’s winning streak continues on easing trade tensions, strong earnings, and soft US inflation. Will the rally hold? (FXEmpire)
International relations: The Geneva trade negotiations mark the beginning of China-Asia dominance in world affairs. (Market Watch)
International relations: Sunday’s announcement that the US and China will sharply reduce tariffs and continue to negotiate sparked a monster rally in equities around the world. US stocks, however, remain the odd man out vs. (Seeking Alpha)
Policy: Following a U.S.-China tariff de-escalation, Barclays now forecasts no recession in 2025 and expects just one 25 bp Fed rate cut in December 2025. Reciprocal tariffs will decrease from 155% to approximately 40% and are expected to remain at those levels in the medium term. Core PCE inflation for 2025 has been revised down to 3.3% from 3.8%. GDP growth is projected at 0.5% in 2025 and 1.5% in 2026 (Q4/Q4). The peak unemployment rate is estimated at 4.3%. Barclays anticipates three additional 25 bp rate cuts in 2026 (March, June, and September), bringing the funds rate to 3.25%–3.50% by year-end. (FMP)
Policy: Retail investors bounced from heavy US equity selling to gradually buying stocks in April, likely reflecting a mixed and uncertain reaction to the Trump administration’s tariffs announced early in the month. In the first week of April, as President Trump announced higher tariffs on nearly all global trading partners, retail investors sold off more than a net $7.48 billion, and bought a net $7.32 billion over the following 3 weeks. (Seeking Alpha)
Policy: Probabilities of Positive Outcomes Have Increased SUMMARY Tariff policy has softened, and earnings have been resilient over the past month, in our view. We believe odds of recession or stagflation have fallen. (ETF Trends)
Policy: President Donald Trump repeated his criticism of Federal Reserve Chair Jerome Powell as being “too late” in cutting interest rates, while inflation remains above the 2% target. (Fox Business)
Policy: The U.S. Consumer Financial Protection Bureau is proposing to do away with a registry of nonbank corporate offenders, which was created under the Biden administration to track companies caught violating consumer laws, according to a notice submitted on Tuesday to the Federal Register. (Reuters)
Trade: UBS downgraded U.S. equities from “Attractive” to “Neutral” on Tuesday, citing diminished upside potential after the S&P 500 surged 11% since early April, including a 3.3% gain on Monday. The downgrade occurred following a 90-day tariff truce where the U.S. tariff on China was cut to 30% from 145%, and China’s levy on U.S. goods decreased to 10% from 125%. UBS originally upgraded U.S. equities on April 10. Despite the downgrade, UBS still recommends a full strategic allocation to U.S. stocks and expects higher prices 12 months from now and maintains “Attractive” ratings on Communication Services, Technology, Health Care, and Utilities sectors. The firm highlights a 90-day tariff reprieve and anticipates monitoring corporate earnings, Fed policy, and potential sector rotation between defensive plays and tech-driven sectors. (FMP)
Trade: On Wednesday, Asian equity markets showed mixed performance. Hong Kong’s Hang Seng advanced by 1.1%, while South Korea’s KOSPI rose by 1.5%. Japan’s Nikkei 225 declined by 0.8%, with the yen trading at ¥148.20/$1. China’s A-Shares (CSI 300 & Shanghai Composite) remained flat. Following a Monday tariff truce, where U.S. tariffs on Chinese goods were reduced to 30% (from 145%) and Chinese duties on U.S. imports were lowered to 10% (from 125%), the rally lost momentum. April CPI data revealed a headline CPI (YoY) of 2.3% versus an expected 2.4%, and a core CPI (MoM) of 0.2% versus an expected 0.3%. NVIDIA’s deal to sell 18,000 AI GPUs to Saudi Arabia’s HUMAIN subsidiary boosted tech stocks. (FMP)
Trade: The levies are likely to achieve some of President Donald Trump’s goals, but at a price. (Barrons)
Trade: Getting behind the wheel is about to get more expensive, with tariffs poised to raise the price of car insurance by nearly 10% later this year. (Fox Business)
Trade: India is considering placing tariffs on some goods produced in the U.S. to counter the Trump administration’s duties on steel and aluminum products. (New York Post)
Trade: How “tariff zero” would expand opportunities for American exporters and help U.S. companies sell to the world. (Market Watch)
Industry
Consumer Electronics: Chinese e-commerce platforms JD.com and Tmall are offering significant discounts on Apple’s iPhone 16 to boost sales following a weaker Q1 in China. The iPhone 16 Pro (128 GB) is discounted by 2,530 yuan (approximately $351) on JD.com, bringing the price down to 5,469 yuan from an official price of 7,999 yuan. The iPhone 16 (256 GB) is available for 5,469 yuan on JD.com, a discount of 1,530 yuan. Tmall offers the iPhone 16 Pro (128 GB) for 5,499 yuan after applying coupons and subsidies. These discounts are being leveraged with government subsidies on digital goods and anticipation of the “618” festival on June 18. The goal is to stimulate demand after Q1 shipments underperformed and to capture market share during a period that rivals Singles’ Day in turnover. Investors can use the Industry P/E Ratio API to benchmark Apple against peers in the Consumer Electronics sector. (FMP)
Semiconductors: NVIDIA and the Kingdom of Saudi Arabia have announced agreements to build sovereign AI factories, cloud platforms, and digital-twin capabilities, aiming to establish Saudi Arabia as a hyperscale computing hub. HUMAIN, backed by the Saudi Public Investment Fund, will construct AI data centers with up to 500 megawatts of NVIDIA GPU capacity over five years, starting with an 18,000-GPU NVIDIA GB300 Grace Blackwell supercomputer. Initiatives include deploying up to 5,000 Blackwell GPUs in partnership with the Saudi Data & AI Authority (SDAIA), establishing Saudi Arabia’s first NVIDIA Omniverse Cloud environment, training thousands of engineers and developers, and building an Enterprise & Robotics Center of Excellence with Aramco Digital. The collaboration, announced during a state visit with U.S. President Donald Trump and Crown Prince Mohammed bin Salman, will begin immediately. (FMP)
Semiconductors: Inside one of South Korea’s oldest semiconductor research institutes, the cleanrooms and workshops are calm and immaculate, but outside the Seoul National University campus, a chip storm is brewing. (TechXplore)
Corporate
Amphenol Corporation: On May 13, 2025, Amphenol Corporation (NYSE:APH) Senior Vice President D’Amico Lance E sold 100,000 shares of Class A Common Stock at approximately $86.36 each, leaving him with 76,400 shares. The stock currently trades at $85.78, a 1.56% increase, with a market capitalization of $103.76 billion. Analysts have a Buy rating and a one-year target price of $87 per share. Amphenol reported 33% organic revenue growth and a 57.5% increase in adjusted EPS, primarily due to IT datacom demand. The LifeSync acquisition is expected to generate $100 million in medical device market revenue. Today’s trading volume was 6,641,606 shares, with a daily price range of $84.62 to $86.80, representing the highest price over the past year (lowest price: $54.77). (FMP)
ANI Pharmaceuticals Inc: On May 13, 2025, Cook Meredith, Senior Vice President, General Counsel & Secretary of ANI Pharmaceuticals Inc (NASDAQ:ANIP), sold 400 shares of Common Stock at $62.20 per share, retaining 79,745 shares. ANI Pharmaceuticals’ CEO Nikhil Lalwani and CFO Stephen Carey will present at the H.C. Wainwright 3rd Annual BioConnect Investor Conference, with the presentation available for 90 days. Key financial ratios include a negative price-to-earnings (P/E) ratio of -57.76, a price-to-sales ratio of 1.98, an enterprise value to sales ratio of 2.23, an enterprise value to operating cash flow ratio of 18.64, a negative earnings yield of -1.73%, a debt-to-equity ratio of 0.76, and a current ratio of 2.66. (FMP)
Chime: Fintech company Chime files for Nasdaq IPO (CNBC)
Gladstone Investment: Gladstone Investment (NASDAQ:GAIN) reported fourth-quarter results with EPS of $0.26, exceeding the $0.23 consensus estimate by 13%, and revenue of $27.55 million, surpassing the $24.38 million consensus by 13%. The company’s stock closed at $14.03, increasing 0.43% over the past 3 months and decreasing 1.27% over the last 12 months. Over the last 90 days, there has been 1 positive and 1 negative EPS revision. Higher-than-expected investment income and fee revenue drove the positive results. (FMP)
Honda Motor ADR: Honda Motor ADR (NYSE: HMC) reported first-quarter results with revenue of $36.25 billion, exceeding the $35.82 billion estimate by 1.2%. Earnings per share (EPS) was $0.19, a $0.52 miss compared to the $0.71 consensus. Honda shares closed at $29.63, up 3.3% over the past three months, but down 12.4% year-over-year. Analysts have revised EPS estimates both positively and negatively in the last 90 days. (FMP)
NVIDIA (NVDA): NVIDIA (NVDA) stock rose **5.5%** on Tuesday due to major AI infrastructure deals. In Saudi Arabia, NVIDIA is partnering with HUMAIN, the AI arm of Saudi Arabia’s Public Investment Fund, to deploy **hundreds of thousands** of NVIDIA GPUs over **five years**, with a total AI capacity of **500 MW**. The initial phase includes an **18,000-unit Grace Blackwell GB300** supercomputer. The Trump administration is considering easing export controls to allow the UAE to import up to **500,000** advanced NVIDIA chips annually through **2027**. Approximately **one-fifth** of these chips could go to G42 in Abu Dhabi, providing compute power equivalent to **1-1.5 million H100 GPUs**. NVIDIA’s next earnings date is pending, and analysts are tracking price targets to assess the sustainability of the stock’s growth. (FMP)
Rogers Sugar Inc.: Rogers Sugar Inc. (PNK:RSGUF) reported Q2 earnings on May 13, 2025, with earnings per share of $0.0903, missing the estimated $0.0989. The company’s consolidated adjusted EBITDA was $34.7 million, and revenue was approximately $226.7 million, below the estimated $317.95 million. Key financial metrics include a P/E ratio of 12.88, a price-to-sales ratio of 0.57, an enterprise value to sales ratio of 0.91, a debt-to-equity ratio of 1.04, a current ratio of 1.39, an enterprise value to operating cash flow ratio of 74.25, and an earnings yield of 7.76%. (FMP)
Sony ADR: Sony ADR (NYSE:SONY) reported a first quarter with an EPS of $0.22, exceeding the consensus estimate of $0.15 by 147%, but revenue of $17.79 billion fell short of the $19.69 billion estimate, representing a 9.7% miss. The stock closed at $24.54, showing a 1.7% increase over the past 3 months and a 47.0% increase over the last 12 months. The company attributed lower revenue to hardware supply constraints and softer PlayStation content sales, while EPS was positively impacted by cost controls and favorable currency translation. Analysts’ EPS revisions over the past 90 days have been mixed. (FMP)
Telefónica: Telefónica reported a €1.3 billion net loss in Q1 2025, slightly below analyst forecasts of €1.32 billion, primarily due to €1.2 billion write-downs in Argentina and €0.5 billion in Peru related to divestments. Excluding these write-downs, the core business generated an Underlying EBITDA of €0.43 billion. Revenue was €9.22 billion, exceeding the consensus estimate of €9.10 billion, representing a -2.9% year-over-year decrease. Telefónica sold its Argentine unit for $1.25 billion. The company affirmed its annual dividend payout and is focusing on investments in 5G and fiber expansions in Spain, Brazil, the U.K., and Germany. (FMP)
Tencent Music Entertainment Group: Barclays reaffirmed an Overweight rating on Tencent Music Entertainment Group (TME) with a $16.00 price target, within the consensus range of $13.04-$19.17. Q1 revenue and average revenue per user (ARPU) slightly exceeded expectations, while paying users increased by 1.9 million (versus an expected 2.1 million). The company added 6.8 million paying users in Q1 2024 through promotions. Year-to-date (YTD) stock gain is 31%. The company’s current ratio is 2.09, and it has more cash than debt. Barclays reduced its fiscal 2025 paying-user forecast from 8 million to 6 million subscribers. (FMP)
Western Digital Corp: JPMorgan reiterated an Overweight rating and $57.00 price target on Western Digital Corp. (WDC), noting a 10.7% stock increase in the past week. The company has secured orders extending revenue visibility into H1 2026 from two major cloud providers. WDC’s annual sales are $15.6 billion, with enterprise, client, channel, and retail segments accounting for 10-15% of revenue. The company has shipped 26 TB CMR and 32 TB ultra-SMR drives and plans to release 28 TB CMR and 36 TB ultra-SMR drives in H2 2025, with customer qualifications in early 2026. 16 brokers have recently revised WDC’s earnings forecasts higher. (FMP)
