Daily News Round Up
Wednesday, 25 Jun 2025
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- Geopolitical Tensions Ease, Boosting Market Sentiment: The tentative ceasefire between Israel and Iran, coupled with minimal escalation in the region despite initial breaches, significantly alleviated market anxieties. This resulted in a broad-based rally in U.S. and Asian equities, a decline in oil prices, and falling Treasury yields, suggesting a shift toward risk-on sentiment. (Seeking Alpha), (FMP)
- Federal Reserve Signals Caution Amidst Mixed Economic Signals: Jerome Powell’s testimony indicated a reluctance to commit to near-term rate cuts, citing uncertainty around the impact of recently implemented tariffs and ongoing assessment of economic data. While acknowledging waning inflationary pressures with PCE at 2.6%, the Fed remains data-dependent, with key attention on upcoming CPI and PCE reports, and potential risks from tariffs could delay easing. (FMP), (PYMNTS)
- Diverging Global Inflationary Pressures Influence Central Bank Policies: While the U.S. and Canada see inflation stabilizing, Japan is experiencing rising core CPI (2.1% YOY), prompting calls for interest rate hikes. Conversely, Australia is seeing easing inflationary pressures leading to expectations of a rate cut. These divergent trends highlight the nuanced global economic landscape and the varying responses of central banks. (FMP), (WSJ)
- Corporate Earnings & Guidance Provide Mixed Signals: A mix of positive and negative corporate news influenced individual stock movements. Carnival (CCL) surged after beating Q2 estimates, while FedEx experienced a stock drop due to a lowered Q1 adjusted earnings forecast. Upgrades to Broadcom and Five Below, along with positive outlooks from BlackBerry and TD SYNNEX, contrasted with downgrades for Ollie’s and WPP, painting a complex picture of corporate performance. (FMP), (FMP)
- Shifts in Sector Sentiment Reflect Emerging Trends: Increased investor focus on defense spending, spurred by geopolitical events, as well as bullishness around AI infrastructure (benefiting Broadcom) signals sector rotations. Conversely, concerns around weakening demand for cell and gene therapy are impacting bioprocessing stocks like Repligen. Tesla’s robotaxi limited test is a key development to watch and indicates future investments in the company. (Barrons), (FMP), (FMP)
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What happened yesterday?
Macro
Economic Growth: There are likely two distinct paths ahead for monetary policy in 2025, according to a pair of economists at BofA Global. (Market Watch)
Geopolitics: Cooler heads prevailed in the Middle East this week (Seeking Alpha)
Geopolitics: Stocks rallied and oil prices fell Tuesday after U.S. President Donald Trump announced what appears to be a shaky ceasefire in the Israel-Iran war.The tentative truce proposed by Trump remained uncertain after Israel said Iran had launched missiles into its airspace less than three hours after the ceasefire went into effect. It vowed to retaliate.Still, investors took heart after Trump said Israel and Iran had agreed to a “complete and total ceasefire” soon after Iran launched limited missile attacks Monday on a U.S. military base in Qatar, retaliating for the American bombing of its nuclear sites over the weekend. (Fast Company)
Geopolitics: The markets are currently waiting for the first signs of stagflation, which is expected given the current policies in-place, and the unfolding events. The Israel-Iran ceasefire is likely only temporary as all sides evaluate the damage from the recent bombings on Iran’s nuclear facilities. (Seeking Alpha)
Geopolitics: If Iran attempts to block oil shipments in the Strait of Hormuz, prices could easily surge past $100 a barrel. That would likely trigger inflation and undermine President Trump’s chance of getting rate cuts from the Fed. (Seeking Alpha)
Geopolitics: Despite major geopolitical events, US stock markets showed resilience, with minimal losses and low volatility. Investors should stay committed to their investment philosophy, even amid escalating conflicts and uncertainty. (Seeking Alpha)
Inflation: Japanese core CPI rose to 2.1% year-on-year in May, its highest level in over two years. Board member Naoki Tamura urged a “decisive” interest rate increase, citing accelerating inflation toward the 2% target. Firms are boosting base pay, supporting household spending. Potential U.S. tariffs of 10% universal and 25% on cars threaten to increase import prices. The yen strengthened to ¥145 per dollar, up from ¥148 last week, following Tamura’s comments. U.S.-Japan trade talks are currently stalled. Investors are advised to reassess Japanese bonds, consider currency hedging and monitor the impact of tariffs. (FMP)
Inflation: Inflation pressures across the Australian economy continued to abate in May, setting the stage for a third cut in interest rates by the Reserve Bank of Australia next month. (WSJ)
Inflation: Federal Reserve Chair Jerome Powell told Congress on Tuesday (June 24) that higher tariffs will likely lead to higher prices down the line – though when, and how much of, those costs might be passed along to consumers is uncertain. (PYMNTS)
Inflation: The most recent inflation data indicate that the impact of tariffs overall has been thus far not been as drastic as some might have feared. But consumers are still mulling what’s to come, and the spending picture is at best mixed. (PYMNTS)
Inflation: Inflation in Canada steadied in May as drivers paid less at the pump and hefty rent increases continued to cool, though the central bank may still lack a clear enough signal to cut interest rates again (WSJ)
Interest Rates: U.S. stocks closed higher on Tuesday, with the Dow Jones Industrial Average rising 507 points (+1.2%), the S&P 500 gaining 1.1%, and the NASDAQ Composite climbing 1.4%. This increase was driven by a declared Iran-Israel ceasefire, effective immediately after nearly two weeks of military strikes, and comments from Federal Reserve Chair Jerome Powell suggesting “many paths are possible” regarding interest rate cuts. Prior to Powell’s comments, Trump-appointed Fed Governors Michelle Bowman and Christopher Waller suggested a July rate cut could be warranted if inflation remains tame. Crude oil prices plunged following the ceasefire announcement. Treasury yields are falling, and investors are weighing geopolitical relief alongside the potential for policy flexibility from the Fed. (FMP)
Interest Rates: Federal Reserve Chair Jerome Powell indicated the central bank isn’t rushing to change policy, citing waning inflationary pressures and tariff-related uncertainty. The U.S. economy is described as “solid,” with the unemployment rate at 4.2% in May. Headline PCE inflation rose 2.3% year-over-year in May, while core PCE increased 2.6%, both exceeding the Fed’s 2% target. The federal funds rate remains at 4.25%-4.5%. Powell warned that recent tariffs could push up prices, increasing short-term inflation expectations and posing a risk to rate cut timelines, despite two governors suggesting a possible July rate cut if inflation doesn’t re-accelerate. Key data to watch next includes June inflation data (CPI & PCE) and the July FOMC meeting commentary. (FMP)
Interest Rates: Investors face risks from a possible Federal Reserve interest-rate hike, as well as sharp cuts, in the months ahead, says Columbia Threadneedle analyst. (Market Watch)
International relations: Asian stock markets rose on Wednesday, following a 1.4% increase in the U.S. Nasdaq Composite on Tuesday. The Hong Kong Hang Seng rose 0.7%, South Korea’s KOSPI increased 0.3% after a 2.5% surge on Tuesday, and the Shanghai Composite and CSI 300 saw marginal gains. A U.S.-brokered, phased ceasefire between Israel and Iran, announced late Monday after a 12-day conflict including U.S. strikes on Iranian nuclear facilities, boosted investor sentiment. Australian consumer price data was softer than expected, and the Bank of Japan’s June policy meeting summary showed no indication of an imminent rate hike. (FMP)
International relations: Most Asian currencies were range-bound on Wednesday, with the Japanese yen (USDJPY) down 0.1%, the South Korean won (USDKRW) weakening 0.3%, and the Singapore dollar (USDSGD) and Indian rupee (USDINR) trading sideways. The Australian dollar (AUDUSD) remained little changed despite May’s Consumer Price Index (CPI) dropping to a 7-month low and the Trimmed Mean CPI hitting a 3-year low. The U.S. dollar weakened slightly, with market bets anticipating a potential Federal Reserve rate cut as early as July and renewed criticism of Fed Chair Jerome Powell. (FMP)
International relations: The fragile ceasefire between Israel and Iran, announced by Trump on Monday, appears to be holding. U.S. stocks jumped Tuesday on expectations that the Israel-Iran ceasefire would be honored. (CNBC)
International relations: The dollar is nearing a critical support level; a break below 97.50 on the dollar index could trigger further weakness to 95. Major currencies like the euro, franc, yen, Taiwan dollar, and Korean won are positioned to benefit from a weaker dollar. (Seeking Alpha)
International relations: US stocks rose while oil prices plunged sharply Tuesday as investors hoped that President Trump could restore a fragile cease-fire agreement between Israel and Iran. (New York Post)
Market Sentiment: Banking giant JPMorgan has shifted its market stance, signaling renewed optimism for equities as geopolitical tensions between Israel and Iran appear to have cooled. (Finbold)
Policy: The Federal Reserve meets on Wednesday to advance a proposal that would ease leverage rules for banks, which would grant the industry a long-sought win they say will help big firms facilitate Treasury market trading. (Reuters)
Policy: Thailand’s central bank held rates steady, pausing amid renewed political tensions at home and uncertainty abroad. (WSJ)
Policy: The Federal Reserve wants more time to study the impact of tariffs before cutting rates. [contact-form-7] That’s according to Jerome Powell, the central bank’s chair, testifying Tuesday (June 24) that the Fed needs to see if tariffs push inflation higher before deciding on the interest rate cuts that President Donald Trump has demanded. (PYMNTS)
Industry
Defense: Military spending dwarfs investment in AI. Investors are catching on. (Barrons)
Retail: According to the 2025 survey by the Groceries Code Adjudicator (GCA), Amazon ranked last among UK grocery retailers for compliance with the Groceries Supply Code of Practice (GSCOP). Supplier sentiment showed improvement, with 66.4% reporting Amazon “consistently” or “mostly” complied, up from 47% in 2024. This still trails significantly behind Lidl, at 91.1%. Amazon became subject to the GSCOP in 2022. The gap between Amazon and the next-lowest performer, Lidl, is nearly 25 percentage points. The GCA is currently conducting an ongoing investigation into Amazon’s supplier payment practices over the last three years. (FMP)
Corporate
BlackBerry (NYSE:BB): BlackBerry Ltd. raised its fiscal year 2026 revenue guidance to between $508 million and $538 million, up from a previous range of $504 million to $534 million. Shares jumped 6% in after-hours trading. Q1 revenue was $121.7 million, slightly lower than $123.4 million year-over-year. The Secure Communications Segment forecast was lifted to $234 million – $244 million, from $230 million – $240 million. The QNX Embedded Platform delivered 8.1% year-over-year growth, generating $57.5 million in Q1. (FMP)
Broadcom: Broadcom (NASDAQ:AVGO) shares increased by more than 3% intra-day following an upgrade from Hold to Buy by HSBC, which raised its price target to $400. HSBC projects custom ASIC revenue will grow, driven by AI infrastructure spending increasing from 2% of AI server capex in 2023 to an estimated 14% by 2027. Blended average selling prices for ASICs are expected to climb 92% year-over-year in 2026 and another 25% in 2027. HSBC now projects Broadcom’s ASIC revenue of $28.4 billion in 2026 and $42.8 billion in 2027, representing a 42% and 69% increase above current Street estimates, respectively. (FMP)
Carnival (CCL): Carnival (CCL) shares increased by over 7% intra-day following second-quarter results that exceeded expectations. The company reported earnings per share of $0.35, beating estimates by $0.24, and revenue of $6.33 billion, surpassing the $6.21 billion consensus and rising by approximately $550 million year-over-year. Carnival projects a 3.5% year-over-year increase in constant-currency net yields for Q3 2025, following a 9% gain in the same period of 2024. Full-year net yields are now expected to increase by about 5% compared to 2024’s 11% growth, a 30 basis point revision higher than the forecast from March. (FMP)
Chewy Inc: Morgan Stanley has named Chewy Inc. (NYSE:CHWY) as their top pick to capitalize on a $40 billion U.S. veterinary clinic market. Morgan Stanley estimates that 100 clinics could generate $50 million in EBITDA, creating $500 million to $800 million in enterprise value. Chewy has over $3 billion in existing pet health sales, including the largest U.S. pet pharmacy, and 80% of millennials and Gen Z pet owners would consider Chewy-run vet clinics. Per clinic, Morgan Stanley projects annual revenue of ~$2.4 million, EBITDA at maturity of ~$500,000, Enterprise Value impact of $5M – $8M, capital investment of ~$1.5M – $2.0M, and an expected ROI of ~2.5x – 5x. In a base case scenario of 100 clinics by 2030, Chewy is projected to generate $290 million in revenue and $47 million in EBITDA. A bull case scenario with 275 clinics projects $842 million in revenue and $126 million in EBITDA. Morgan Stanley raised its bull-case price target from $68 to $75 per share. (FMP)
Circle Internet Group: US Tiger Securities initiated coverage of Circle Internet Group, the issuer of USDC, with a “Hold” rating and a price target of $200. US Tiger highlights Circle’s first-mover advantage in compliant stablecoins, specifically USDC, and its strong institutional trust, alignment with the GENIUS Act, and distribution support via Coinbase (COIN), banking partners, and developers. Circle’s valuation is currently at 59x estimated 2026 EBITDA, reflecting expectations of regulatory success, institutional adoption of USDC, and a broad role in the fintech ecosystem. Analysts caution that the expected upside is largely priced in and achieving Circle’s broader vision of reshaping payments infrastructure requires uncertain ecosystem traction and policy clarity in the short term. (FMP)
FedEx Corp: FedEx Corp. (NYSE:FDX) forecasted first-quarter adjusted earnings of $3.40 to $4 per share, below the consensus estimate of $4.06, causing its stock to drop more than 5% in after-hours trading. CEO Raj Subramaniam cited volatile global demand, tariff uncertainty, and slowing trade. U.S.-China trade tensions, including tariff hikes from 145% in April to 30% in May, have negatively affected air cargo volume and cross-border shipments. The loss of duty-free status for sellers like Shein and Temu has significantly reduced volume on China–U.S. routes. FedEx withheld full-year earnings guidance due to uncertainty in U.S. trade negotiations, signaling fragility in global commerce and potentially impacting logistics volumes through 2025. (FMP)
Five Below: Goldman Sachs raised its price target for Five Below (NASDAQ:FIVE) to $135 from $122, maintaining a Buy rating. The stock currently has a price-to-earnings multiple of 25.7x, compared to its three-year average and below its five-year historical multiple. Goldman raised its second-quarter EPS estimate to $0.59 from $0.54 and increased its full-year EPS forecast for 2025 to $4.73, citing improved brand perception year-to-date and robust quarter-to-date trends. (FMP)
Nextdoor Holdings Inc: Nextdoor Holdings Inc (NYSE:KIND) received a neutral rating and a $2.00 price target from B. Riley on Wednesday. The platform connects 100 million users globally and reaches approximately one-third of U.S. households. B. Riley highlighted the significance of Nextdoor’s NEXT 1.0 launch in July 2025, anticipating a boost in user engagement, monetization, and profitability, though not immediately. The firm noted limited visibility into the timing and scale of revenue impact and potential for shareholder dilution. B. Riley expects management to prioritize user experience before monetization, potentially leading to “lumpy near-term financials.” (FMP)
Ollie’s Bargain Outlet: Loop Capital downgraded Ollie’s Bargain Outlet (NASDAQ:OLLI) from Buy to Hold, maintaining a price target of $130. The downgrade isn’t due to deteriorating fundamentals but reflects a belief that the current share price already incorporates anticipated positive factors. The firm sees limited upside following a recent stock run-up and considers the valuation stretched relative to near-term catalysts. (FMP)
Omnicom Group: Barclays downgraded Omnicom Group (NYSE:OMC) from Overweight to Equalweight, reducing its price target from $105 to $80. The Omnicom-Interpublic merger, which has received U.S. regulatory approval, is considered “extremely likely” to close pending final approvals from the UK and EU. Barclays anticipates investors will need to see “one or two decent quarters post-deal” before re-rating the stock, potentially into Q1 or Q2 2026. The downgrade reflects concerns about muted investor sentiment, the impact of AI blurring service lines, and a need for deeper restructuring beyond agency consolidation and back-office functions. (FMP)
Paychex, Inc.: RBC Capital set a price target of $165 for Paychex (NASDAQ:PAYX) on June 24, 2025, a potential 9.55% increase from the then-price of $150.62. Anticipated fourth-quarter earnings are $1.19 per share on revenue of $1.42 billion. Paychex shares closed at $151.25 before slightly decreasing to $150.85, a decrease of -0.26%, with a trading range of $150.21 to $152.17. The company’s market capitalization is approximately $54.3 billion, and the trading volume was 1,244,609 shares. Founder Thomas Golisano will step down from the board in July 2025. (FMP)
Paychex, Inc.: RBC Capital updated its rating for Paychex, Inc. (NASDAQ:PAYX) to “Sector Perform” on June 24, 2025, maintaining a “hold” action, with the stock price at approximately $150.61. Paychex will release its Q4 earnings on June 25, 2025, with analysts expecting earnings of $1.19 per share and revenue of $1.42 billion. The stock price increased 1.4% to $151.25 on Monday but currently stands at $150.63, a decrease of $0.62 (0.41%). During the trading day, the stock ranged from $150.17 to $152.17. Paychex’s market capitalization is approximately $54.26 billion, with a 52-week high of $161.24 and a low of $115.40. Trading volume was 1,196,813 shares. Founder Thomas Golisano will step down from the board in July 2025. (FMP)
QXO, Inc.: QXO, Inc. (NYSE:QXO) stock fell 2.4% after announcing plans to raise $2 billion through a common stock offering, with a $300 million greenshoe option. The offering will be conducted under Form S-3ASR and is being underwritten by Goldman Sachs & Co. LLC, Morgan Stanley, and Wells Fargo Securities. Proceeds will be used for general corporate purposes, potentially including future acquisitions, strengthening balance sheet liquidity, and supporting working capital. Investors are evaluating the move due to dilution risk, representing a substantial injection of capital relative to the company’s market cap, and are advised to monitor current leverage levels, cash flows, acquisition history, and return on invested capital (ROIC) trends. (FMP)
Repligen Corporation: Barclays initiated coverage on Repligen Corporation (NASDAQ:RGEN) with an Overweight rating and a $150 price target. Barclays notes Repligen’s strong positioning in the bioprocessing space and exposure to early-stage clinical workflows. Concerns exist regarding weakening demand for cell and gene therapies, though pipeline data indicates growth, albeit slower than the 2020-2022 period. Repligen shares have dropped 20% since March, while the broader market has increased by 6% during the same period. (FMP)
TD SYNNEX (SNX): TD SYNNEX (SNX) reported fiscal second-quarter results exceeding expectations, with shares rising over 5% intra-day. Adjusted earnings per share were $2.99, surpassing the $2.71 analyst consensus. Revenue grew 7.2% year-over-year to $14.95 billion, exceeding the $14.3 billion forecast. Non-GAAP gross billings increased 12.1% to $21.6 billion, with a stable operating margin of 2.8%. Revenue in the Americas was $9.0 billion, up 5.3%, while Europe revenue increased 10.5% to $4.9 billion. Asia-Pacific and Japan revenue rose 8.7% to $1.0 billion. Q3 guidance projects adjusted EPS between $2.75 and $3.25, and revenue between $14.7 billion and $15.5 billion. (FMP)
Tesla Inc: Tesla has begun limited testing of its robotaxi service in Austin, Texas, utilizing a fleet of approximately a dozen driverless Model Y vehicles. The pilot program operates within a geofenced zone with front-seat safety monitors and remote teleoperator backup, avoiding operation in inclement weather. Initial passengers include handpicked Tesla influencers. The rollout is described as hyper-curated and a pilot test intended to refine software and optics. Tesla aims for “Mars-level” autonomous driving by next year. The system currently uses FSD V12 software, which is camera-only. Tesla intends to retrofit existing vehicles, facing potential hardware limitations including battery degradation, compute limitations, and sensor calibration. Success could result in Teslas becoming income-generating assets, a scalable ride-hailing network, and a high-margin revenue stream. The company faces regulatory hurdles, differing state AV regulations, and the need to establish public trust and accident liability frameworks. A global robotaxi network within 12 months is considered unlikely by experts. (FMP)
Tesla Inc: Tesla’s new registrations in Europe fell nearly 28% year-on-year in May 2024, dropping to 13,863 vehicles from 19,236 in May 2023 across the EU, UK, and EFTA. This contrasts with the broader European EV market, which saw battery EV registrations jump 27.2% to 193,493 units, and overall car sales rise 1.9% to 1.1 million units. Petrol and diesel car sales slumped -19.5% and -27.6% respectively. Tesla’s year-to-date European sales are down 37.1% year-on-year. Competition from European EV makers like Volkswagen and BMW, and Chinese firms like SAIC are contributing factors, alongside limited product launches and consumer backlash, particularly in Germany and France. (FMP)
WPP: Barclays downgraded WPP Plc from Equalweight to Underweight and reduced its price target to GBP 5.50 from GBP 7.00. WPP’s shares have fallen 44% year-to-date and currently trade at 7x 2025 estimated P/E. Key concerns include a CEO transition, which historically leads to media stocks underperforming by approximately 10%, and $1.4 billion in client billings being at risk. WPP anticipates first-half operating margins below last year’s levels, with Barclays’ FY25 estimates projecting margins 2-3% below consensus. (FMP)
