Daily News Round Up
Thursday, 19 Jun 2025
- Geopolitical Risks Drive Market Caution: Increased tensions in the Middle East, coupled with concerns over a potential U.S. military strike on Iran, are fueling risk aversion in global markets. Asian markets experienced significant declines, and U.S. futures were down during Asian hours. This uncertainty is prompting investors to steer clear of risky assets. ((FMP), (WSJ))
- The Federal Reserve Signals a Cautious Approach to Rate Cuts: Despite holding rates steady, the Fed revised its longer-term rate trajectory upwards and now projects only two rate cuts in 2025, citing concerns about persistent inflation driven by factors like tariffs and a tight labor market. This hawkish stance weighed on financial markets, particularly those sensitive to interest rate movements. ((FMP), (WSJ))
- European Economic Recovery Continues & Attracts Capital: Europe’s economic recovery remains on track, marked by a record 16 consecutive months of gains in the Bank of America’s European CMI, leading to outperformance among recovery-style stocks. This positive momentum is attracting investor capital, with significant inflows into European equity funds, particularly those focused on size factor stocks and Industrials. ((FMP))
- Shifting Economic Landscape: Demographic Headwinds and the Rise of Tech: Concerns are growing regarding the long-term implications of shrinking global populations on consumption growth. This poses risks to traditional consumer staples, but tech companies with global reach (like those in the QQQ) are expected to be more resilient, benefiting from their wider market access. ((Seeking Alpha))
- Corporate Earnings Mixed Amidst Macro Uncertainty: Corporate earnings reports present a mixed picture, with companies like Aurora Cannabis missing estimates, while others like Darden Restaurants and Equifax exceeding expectations. Upgrades and price target revisions by analysts (e.g., BofA on Silicon Motion, Truist on Darden & RXO) indicate selective opportunities within the market, but overall sentiment remains cautious amidst broader macroeconomic concerns and tariff uncertainty. ((FMP), (FMP))
What happened yesterday?
Macro
Economic Growth: Bank of America’s European Composite Macro Indicator (CMI) advanced in June, extending Europe’s Recovery-style cycle for a record 16 consecutive months. A basket of top Recovery-style stocks outperformed bottom-ranked names by 4.5% last month. The indicator strength was driven by a rise in Germany’s IFO index, improved European 10-year bond yields, and upgraded European GDP forecasts, while European PPI inflation fell. Europe-focused equity funds saw net inflows of $3.21 billion over the last four weeks, with passive funds experiencing inflows of $5.98 billion and active funds outflows of $2.76 billion. Biggest inflows were into size factor stocks ($2.87 billion), Industrials ($1.54 billion), and Switzerland ($0.26 billion). UK equities experienced outflows of -$2.66 billion, while Quality stocks saw outflows of -$0.44 billion and Financials -$0.07 billion. (FMP)
Economic Growth: Consumer companies rose after the Federal Reserve cited the resilience of the U.S. economy in general and the labor market in particular. (Market Watch)
Economic Growth: Three decades ago, a president squarely focused on middle-out growth realized, much to his frustration, that the best thing to do for the nation’s working class would hurt him politically — at least in the short term. The first Democrat to be elected President after (Forbes)
Economic Growth: Shrinking global populations threatens long-term consumption growth, posing risks to markets, especially in countries like Japan and Germany. Tech companies with global reach, such as those in QQQ, will be more resilient to demographic headwinds than traditional consumer staples or domestic-focused firms. (Seeking Alpha)
Geopolitics: Asian stock markets fell sharply on Thursday, driven by heightened geopolitical risks and inflation concerns. Japan’s Nikkei dropped 0.7%, while the broader TOPIX fell 0.6%. Hong Kong’s Hang Seng Index declined over 1%, adding to losses from earlier in the week. The potential for a U.S. military strike on Iran, possibly as early as this weekend, and President Trump’s remarks contributed to the downturn. U.S. stock futures were also down during Asian hours. The Federal Reserve held interest rates unchanged but Chair Jerome Powell warned of tariff-driven inflation over the summer. (FMP)
Geopolitics: Investors continued to steer clear of risky assets amid geopolitical concerns centered on the Middle East while the U.S. markets were closed for the Juneteenth holiday. (WSJ)
Geopolitics: Without a dominant headline – just wars, rates, and megatech melodrama – Wall Street did what it does best: very little. The main show remains the Middle East, where Israel’s preemptive strike on Iranian nuclear infrastructure set off alarms, but not oil shocks. (Seeking Alpha)
Geopolitics: The Tel-Aviv Stock Exchange is considering strategic initiatives, including selling its operations, as Israel’s conflict with Iran intensifies. (Market Watch)
Inflation: The Federal Reserve maintained the federal funds rate at 4.25% to 4.50% on Wednesday, marking the fourth consecutive meeting without a change. The FOMC now projects two rate cuts in 2025, but has revised its longer-term rate trajectory upwards: the 2026 benchmark rate is now forecast at 3.6% (previously 3.4%), and the 2027 rate is expected at 3.4% (versus 3.1% in March). The Fed raised its core PCE inflation forecasts to 3.1% for 2025 (up from 2.8%), 2.4% in 2026 (up from 2.2%), and 2.1% in 2027 (versus 2%). These revisions reflect concerns about stickier inflation potentially driven by tariffs from President Donald Trump’s trade policy and a crackdown on immigration. (FMP)
Inflation: Euro Pacific Asset Management Chief Economist Peter Schiff warned of stagflation and possible hyperinflation, arguing higher interest rates are needed. (Fox Business)
Inflation: Fed Chair Jerome Powell expects prices to rise in the coming months because of tariffs. (Barrons)
Inflation: Producers of metals and other raw materials fell after the Federal Reserve left interest rates unchanged and indicated that rate cuts in the coming year would be modest in scale. (Market Watch)
Inflation: The central bank’s statement and Powell’s comments show deepening concern about inflation despite signs of an economic slowdown. (WSJ)
Inflation: The central bank’s statement and the Fed chief’s comments show deepening concern about inflation despite signs of an economic slowdown. (WSJ)
Inflation: The central bank’s preferred indicators are above 3%, while other gauges have climbed a slower pace. (WSJ)
Inflation: Fed officials are weighing higher oil prices, mounting jobless claims and tariff-fueled inflation. (Investors Business Daily)
Interest Rates: HSBC now anticipates the U.S. Federal Reserve to implement three interest rate cuts of 25 basis points each between September 2024 and March 2025. The first cut is projected for September 2024, the second for December 2024, and the third for March 2025. This would lower the federal funds rate to a range of 3.50–3.75% by the end of next year, from the current range of 5.25–5.50%. HSBC cites persistent inflation above the 2% target and growing economic uncertainty as reasons for this forecast, noting potential for more aggressive cuts if labor market data deteriorates. They foresee U.S. dollar weakness influenced by U.S. trade policy, fiscal debates, and geopolitical tensions. (FMP)
Interest Rates: U.S. index futures fell as conflict in the Middle East and the Federal Reserve’s hesitance to cut interest rates weighed on markets. (WSJ)
Interest Rates: Inflation has declined since its March meeting and the outlook for the coming year indicates lower inflation than it had previously expected, the central bank said. (WSJ)
Interest Rates: The era of zero interest-rate policy is back, after the Swiss National Bank on Thursday lowered interest rates to zero. (Market Watch)
Interest Rates: The central bank reduced rates to zero as it hopes to rein in the rapidly appreciating franc, which has acted as a safe haven for investors on concerns over U.S. trade policy and Middle East tensions. (WSJ)
Interest Rates: The Swiss National Bank cut its interest rate to zero on Thursday in response to falling inflation, appreciation pressure on the Swiss franc and economic uncertainty caused by the U.S. administration’s unpredictable trade policy. (Reuters)
Interest Rates: The data will likely add weight to calls for the Reserve Bank of Australia to cut interest rates at its next policy meeting in July. (WSJ)
Interest Rates: Shares of banks and other financial institutions fell after the Federal Reserve stuck to its guns on the interest-rate projections, looking through recent softening in inflation data. (Market Watch)
Interest Rates: Shares of industrial and transportation companies were flat after the Federal Reserve kept interest rates unchanged. (Market Watch)
Interest Rates: The Fed held rates steady, and plans two cuts in 2025, but signaled slower easing in 2026-2027 due to persistent inflation and geopolitical risks. Markets expect the first rate cut in September or October; bond yields fell, while gold and commodities remain attractive amid uncertainty. (Seeking Alpha)
Interest Rates: US markets closed largely unchanged on Wednesday after the US Federal Reserve kept interest rates unchanged. The central bank opted to maintain its benchmark interest rate at its current level, with Chair Jerome Powell indicating a cautious approach. (Invezz)
Interest Rates: Federal Reserve Chair Jerome Powell said the US central bank will remain patient on interest rates as it monitors inflation and trade developments, with recent tariff moves and shifting export patterns adding complexity to the economic outlook. “Near-term inflation expectations have moved up, tariffs [are] a driving factor,” Powell said at a news conference following the Fed’s decision to keep its benchmark rate unchanged. (Proactive Investors)
Interest Rates: Federal Reserve policymakers have maintained a steady approach to interest rates over the last year, keeping the target range unchanged. This policy stance has been despite growing external pressure to move earlier than most believe necessary. (Seeking Alpha)
Interest Rates: The Federal Reserve held its benchmark interest rate steady at 4.5% on Wednesday, as widely expected, while signaling a slower path to rate cuts and revealing a sharply divided policy committee. In updated projections, the Fed now anticipates two rate cuts totaling 50 basis points in 2025, followed by one 25-basis-point cut each in 2026 and 2027. (Proactive Investors)
Interest Rates: Though policymakers cautioned that uncertainty remains elevated, it has “diminished” since May, the Federal Open Market Committee wrote in a note. (New York Post)
Interest Rates: The Federal Reserve left its benchmark interest rate unchanged at a 4.25% to 4.5% range at its June meeting, making it the fourth consecutive meeting in which it held rates steady. (Fox Business)
Interest Rates: Hours before the decision, the president called the Fed’s chair, Jerome Powell, ‘stupid’ for anticipated rate hold (The Guardian)
Interest Rates: The Federal Reserve on Wednesday stuck to its forecast of two interest rate cuts this year despite seeing a burst of inflation coming in the next few months from higher tariffs. (Market Watch)
Interest Rates: The Federal Reserve on Wednesday released its decision on interest rates following its two-day meeting this week. (CNBC)
Interest Rates: Recent economic data seems to satisfy the normal rate cut preconditions of steady inflation and a weakening labor market, but the Fed has been hesitant to take action as it normally may, citing the uncertain impact of Trump’s tariffs. To that end, Goldman Sachs economists expect inflation to rise from its most recent 2.5% to 3.3% by December, according to the Fed’s preferred inflation measure of core personal consumption expenditures. (Forbes)
Interest Rates: Officials are waiting to see if businesses manage higher costs from tariffs by trimming profits or pushing up prices. (WSJ)
Interest Rates: The Federal Reserve held interest rates steady for the fourth time in 2025. Powell has signaled the Fed is waiting to see the impacts of Trump’s tariffs before cutting rates. (Business Insider)
Interest Rates: Financial markets will be closed Thursday for Juneteenth holiday (Market Watch)
Interest Rates: The Fed is expected to hold rates today, but soft jobs data and easing inflation point to a possible cut later this year—September or December in focus. (FXEmpire)
Interest Rates: US stocks edge higher as traders await Powell’s Fed update. Rate cut hopes and Mideast risks keep the S&P500 and Nasdaq 100 in focus today. (FXEmpire)
Interest Rates: The Federal Reserve is widely expected to keep interest rates unchanged on Wednesday, as policymakers weigh softening inflation and steady employment against a backdrop of escalating geopolitical tensions and uncertain US trade and immigration policies. Despite cooling inflation and mixed economic data—including weak May retail sales and declining industrial production—markets are betting that the Fed will maintain its federal funds target range at 4.25%-4.50%. (Proactive Investors)
International relations: In Europe, the Stoxx Europe 600 declined 0.5% in morning trading. Stora Enso R climbed 14.4% and Saab Series B rose 4.4%. (Market Watch)
International relations: It’s been no secret that international stocks have dramatically outperformed their peers stateside so far in 2025. (Market Watch)
Market Sentiment: A record 33% of S&P 500 market cap trades above 10x price-to-sales, far surpassing dot-com bubble levels and signaling extreme overvaluation. Sales growth is slowing sharply, with leading indicators like the ISM index pointing to negative real sales growth in the coming year. (Seeking Alpha)
Policy: Elevated tariffs and tighter immigration are a key focus for today’s insurance modelers. The re/insurance and insurance-linked securities industry saw a turbulent start to the year with the devastating and record-breaking Los Angeles wildfires in January that were followed by severe thunderstorm, hail and tornado activity across the country throughout the spring. (Seeking Alpha)
Policy: China is widely expected to keep its benchmark lending rates unchanged at a monthly fixing on Friday, a Reuters survey showed, after Beijing rolled out sweeping monetary easing measures a month earlier to aid the economy. (Reuters)
Policy: Fed Chair Jerome Powell is engaged in a balancing act: projecting confidence while admitting ‘we don’t know’ what comes next. (WSJ)
Policy: President Trump joked that he should appoint himself Fed chair — but Jerome Powell showed him who is really in charge of interest-rate policy. (Market Watch)
Policy: The US central bank has made no change to interest rates and warned the world’s biggest economy will see less growth and higher inflation due to tariffs. (Skynews)
Policy: For release at 2:00 p.m. EDT June 18, 2025 Although swings in net exports have affected the data, recent indicators suggest that economic activity has continued to expand at a solid pace. (Market Watch)
Trade: Will there be a comeback for the “reciprocal” tariffs that President Trump unveiled at his “liberation day” event on April 2? Probably not, according to Goldman Sachs Chief Economist Jan Hatzius. (Market Watch)
Trade: Officials are tracking labor-market conditions to determine whether job cuts in trade-exposed sectors like manufacturing start spreading in other parts of the economy. (WSJ)
Industry
Consumer Goods: Smith & Wesson faced lower sales and lower production volumes in recent months, and said inflation and tariff uncertainty also did not help. (Market Watch)
Metals: Industrial metal prices have recovered over half of their late-March sell-off and are positive year-to-date when adjusted for dollar weakness. Copper is the outperformer, while aluminum and zinc have seen modest gains. Lead and nickel are unchanged. U.S. steel and aluminum levies increased from 25% to 50% under Section 232. A U.S. investigation into copper imports under Section 232 is ongoing. Concerns exist regarding Q3 global growth and rising recession risks. UBS recommends a selective investment approach: buying copper on pullbacks, tactical aluminum and zinc exposure, and avoiding nickel and lead until supply-demand rebalancing signals are clear. Copper is identified as a “buy-on-dips” metal due to tight mine output and rising electrification demand. (FMP)
Corporate
Aurora Cannabis Inc: On June 18, 2025, Aurora Cannabis Inc. (NASDAQ: ACB, TSX: ACB) reported an earnings per share (EPS) of -$0.24, missing the estimated EPS of $0.11. Revenue was approximately $63.3 million, below the estimated $88.9 million. The company has a price-to-earnings (P/E) ratio of 41.17, an enterprise value to operating cash flow ratio of -40.01, and a current ratio of 3.30. (FMP)
CAI International, Inc: CAI International, Inc. (NYSE:CAI) is transitioning to NASDAQ, offering approximately 23.5 million shares and possessing a market capitalization of $1.32 billion. The IPO market is anticipated to be vibrant in June 2025, influenced by CoreWeave (NASDAQ:CRWV)’s 275% increase since its March debut. CAI’s current NYSE stock price is $56, with a 1.79% increase today. Over the past year, CAI’s stock price ranged from a high of $56.215 to a low of $30.04, with a current trading volume of 207,723 shares. (FMP)
CAVA Group: Stifel lowered its price target for CAVA Group (NYSE:CAVA) from $175 to $125, while maintaining a Buy rating. The firm revised its second-quarter same-restaurant sales (SRS) estimate to 5.5%, down from the Street’s 6.9% forecast, but the full-year SRS projection remains around 7%, consistent with the company’s guidance for a high-30% three-year stack. Stifel anticipates accelerating average unit volume (AUV) growth and expects sentiment-driven dips to present attractive investment opportunities for long-term investors. (FMP)
Chase / American Express: Chase will up the annual fee for its Sapphire card and Amex could do the same for Platinum holders. (Barrons)
Darden Restaurants: Truist Securities raised its price target on Darden Restaurants (NYSE:DRI) to $252 from $230, maintaining a Buy rating. Shares are up over 20% year-to-date. Truist’s card data indicates Olive Garden same-store sales increased by 6.5% in the fourth quarter, exceeding the consensus estimate of 4.5% and investor expectations of 5–6%. For fiscal 2026, Truist anticipates Darden’s guidance will surpass its long-term framework, with a target of a 10–15% total shareholder return, primarily driven by new store development. (FMP)
Equifax: UBS reaffirmed a Buy rating and $315 price target for Equifax (NYSE:EFX), citing a strong growth framework and long-term earnings potential. Equifax reaffirmed its long-term revenue growth target of 8–12%, countering expectations of 7–10%. The company’s USIS and EWS segments account for nearly 80% of revenue. Equifax has a total addressable market exceeding $50 billion internationally. The U.S. mortgage market is expected to grow modestly at 2–3% annually through 2030, with a potential 27% boost to 2030 EPS to around $19 (currently projected at $15) if mortgage activity rebounds significantly. Equifax targets $1.35 billion in capital allocation by 2025 and over $3 billion by 2030. (FMP)
GMS Inc.: On June 18, 2025, GMS Inc. (NYSE:GMS) reported an EPS of $1.29, a 12.17% surprise above the estimated $1.15, but lower than the $1.93 reported in the same quarter last year. The previous quarter’s EPS was $0.92 against an estimated $1.39, representing a negative surprise of 33.81%. Revenue reached approximately $1.33 billion, exceeding the estimated $1.30 billion by 2.81%, but was down from $1.41 billion in the same period last year. Over the past four quarters, GMS exceeded consensus revenue estimates twice. Key valuation metrics include a P/E ratio of 21.96, a price-to-sales ratio of 0.57, an enterprise value to sales ratio of 0.87, an enterprise value to operating cash flow ratio of 12.41, an earnings yield of 4.55%, a debt-to-equity ratio of 1.25, and a current ratio of 2.30. (FMP)
GMS Inc.: Robert W. Baird’s David Manthey set a price target of $93 for GMS Inc. (NYSE:GMS) on June 17, 2025, representing a potential 22.14% increase from the then-price of $76.14. The stock currently trades at $73.24, down 3.81% ($2.90) with a daily trading range of $73.07 to $75.98. Over the past year, the stock has ranged from $65.77 to $105.54. GMS reported quarterly earnings of $1.29 per share, exceeding the Zacks Consensus Estimate of $1.15 but down from $1.93 per share the previous year. Projected revenues are $1.3 billion, with a decline in quarterly earnings expected. GMS’s market capitalization is approximately $2.81 billion, with a trading volume of 927,606 shares. (FMP)
Korn Ferry (NYSE:KFY): Korn Ferry reported Q4 2025 earnings per share (EPS) of $1.32 (adjusted), exceeding the estimated $1.26, with a diluted EPS of $1.21. Revenue was approximately $712 million, exceeding the estimated $690 million. For the full fiscal year, diluted EPS was $4.60, with an adjusted EPS of $4.88. The company’s price-to-earnings (P/E) ratio is approximately 13.95, its price-to-sales ratio is about 1.26, and its enterprise value to sales ratio is around 1.18. Korn Ferry maintains a debt-to-equity ratio of 0.32 and a current ratio of approximately 1.90. (FMP)
RXO: Truist Securities maintains a Buy rating and $18 price target for RXO (NYSE:RXO), citing a potential upside of over 60% based on a mid-cycle valuation of 10–11x EBITDA. The firm highlights progress in synergy realization from the Coyote acquisition and anticipates margin expansion and improved free cash flow. Despite subdued freight volumes due to macro pressures, RXO is focused on cost control, operational productivity, and integration targets, positioning it as a compelling recovery play in the logistics sector. (FMP)
Shopify: Benchmark maintains a Buy rating on Shopify (NASDAQ:SHOP) with a $125 price target. The analysis highlights two long-term benefits stemming from a change in online checkout flow: improved visibility into conversion data and increased adoption of Shop Pay. The shift directs transactions to merchant sites, potentially boosting Shopify’s take rate and gross profit per transaction, previously routed through third-party gateways like Meta Pay or PayPal Express. The firm anticipates stronger monetization through payment control and ad optimization, despite potential short-term conversion disruptions. (FMP)
Silicon Motion Technology: BofA Securities upgraded Silicon Motion Technology (NASDAQ:SIMO) from Neutral to Buy, increasing the price target from $55 to $90. Shares rose over 4% intra-day. Key drivers include growth in the enterprise solutions business through partnerships with NAND manufacturers and NVIDIA, resilient topline growth, and high gross margins with minimal exposure to U.S. tariffs. Silicon Motion is involved in a legal dispute with MaxLinear, expected to conclude in late Q4 2025, potentially resulting in a breakup fee of over $160 million, with a portion possibly returned to shareholders as dividends. The company is also positioned to benefit from increasing sovereign investments in AI infrastructure, specifically with its MonTitan line. (FMP)
Take-Two Interactive Software, Inc.: Take-Two Interactive Software (NASDAQ:TTWO) is facing a securities fraud investigation by Pomerantz LLP related to business practices, triggered by the postponement of Grand Theft Auto VI to May 26, 2026. The stock dropped $15.67 per share, a 6.66% decrease, closing at $219.50 on May 2, 2025. Director Ellen F. Siminoff sold 268 shares at $230.95 each on June 16, 2025, leaving her with 4,696 shares. The stock price recovered to $239, a 0.62% increase, trading between $235.67 and $241.82 that day. Over the past year, the stock has ranged from $135.24 to $241.98, with a current market capitalization of approximately $42.4 billion. Trading volume was 1,377,729 shares on June 16, 2025. (FMP)
Tesla Inc: Tesla Inc. plans to launch a limited robotaxi service with 10 vehicles in Austin by June 22, facing pressure from seven Texas Democratic lawmakers to delay the rollout until September 1, 2025, when new autonomous vehicle regulations take effect. The lawmakers cited stronger safety provisions in the new law and a need for greater public trust. They requested Tesla publicly outline its compliance plans if it proceeds with the June launch. While Texas’s current legislation allows autonomous vehicle operation with basic insurance and registration, Republicans control the Texas legislature, potentially limiting the request’s impact. Investors can track Tesla’s financial performance via the Full Financial as Reported and Earnings Historical APIs. (FMP)
Uber Technologies Inc: Raymond James upgraded Uber Technologies Inc. (NYSE: UBER) to “Outperform” on June 18, 2025, with a stock price target of $83.39. Uber’s stock currently trades at $83.37, down $1.39, within a daily range of $82.31 to $86.47. Over the past month, Uber’s stock declined by 7.7%, while the Zacks S&P 500 composite rose by 0.6% and the Zacks Internet – Services industry gained 4.7%. Uber has an average brokerage recommendation (ABR) of 1.48, with 36 out of 50 brokerage firms rating it a Strong Buy and four rating it a Buy. Uber’s market capitalization is approximately $174.34 billion, with a trading volume of 19,979,992 shares today, and its 52-week high is $93.60 and its low is $54.84. (FMP)
