Daily News Round Up
Tuesday, 03 Jun 2025
- U.S. Equities Maintain Positive Momentum Despite Emerging Risks: U.S. equities continued their upward trend in May, with the S&P 500, Nasdaq, and Dow Jones Industrial Average posting significant gains, culminating in the best monthly performance for the S&P 500 since November 2023 ((FMP)). Deutsche Bank upgraded its year-end S&P 500 target to 6,550, suggesting a 10.35% upside, fueled by easing concerns about the impact of new tariffs ((FMP)).
- Rising Bond Yields and Trade Tensions Pose a Growing Threat to Equity Valuations: Goldman Sachs cautioned that rising bond yields represent the most significant threat to recent equity gains, potentially hindering further upside ((FMP)). Escalating U.S.-China trade tensions, including the threat of new and higher tariffs, add another layer of volatility, especially impacting sectors reliant on global supply chains and consumer demand, such as semiconductors and consumer discretionary ((Seeking Alpha)).
- Global Growth Outlook Weakens, Driven by U.S. and Trade Concerns: The Organisation for Economic Co-operation and Development (OECD) downgraded its global and U.S. growth forecasts, now projecting U.S. growth at just 1.6% this year and global growth at 2.9% ((CNBC)). This revised outlook, coupled with inflationary pressure in some markets (Turkey 35.4% YoY, Switzerland negative), suggests a more challenging macroeconomic environment for equity earnings going forward ((WSJ)).
- Sector-Specific Developments Highlight Mixed Signals: The steel sector experienced a significant boost following the announcement of increased tariffs, with key players like Cleveland-Cliffs, Nucor, and Steel Dynamics seeing substantial gains ((FMP)). However, the aviation industry continues to grapple with supply chain delays, impacting Airbus’s delivery targets ((FMP)). The semiconductor industry shows strength driven by robust AI demand, benefiting Nvidia and its peers ((FMP)).
- Corporate Restructuring & AI Investment Drive Efficiency and Future Growth: Several companies announced restructuring plans and layoffs (Disney, Microsoft) to optimize operations, cut costs, and invest in future growth areas like Artificial Intelligence ((FMP), (FMP)). These moves signal a shift towards greater efficiency and a focus on high-growth opportunities, but also point to potential headwinds in certain legacy business segments.
What happened yesterday?
Macro
Banking: Brokered deposits at US banks declined for the fifth quarter in a row as many banks reduce reliance on expensive sources of funding amid the growth of low-cost deposits. Brokered deposits at banking-as-a-service (BaaS) institutions with total assets below $10 billion also dropped sequentially in the first quarter. (Seeking Alpha)
Commodity Prices: Oil prices rose on Tuesday, with Brent crude futures increasing 12 cents (0.19%) to $64.75 a barrel and U.S. West Texas Intermediate (WTI) climbing 20 cents (0.32%) to $62.72 a barrel. Iran is expected to reject a U.S. nuclear deal, potentially keeping a major OPEC producer from increasing output. OPEC+ confirmed a 411,000 barrels per day (bpd) supply increase in July. The dollar index remains near a six-week low. U.S. crude inventories will be reported on Wednesday. (FMP)
Economic Growth: U.S. equities finished with slight changes on Friday, with the S&P 500 at 5,911.69, the Nasdaq Composite at 19,113.77, and the Dow Jones Industrial Average at 42,270.07 (up 54.34 points, or 0.13%). May saw significant gains: the S&P 500 rose 6.2% (best monthly gain since November 2023), the Nasdaq increased by 9.6%, and the Dow climbed 3.9%. For the week ending Friday, the S&P gained 1.9%, the Nasdaq 2%, and the Dow 1.6%. President Trump accused China of violating a preliminary tariff deal late Thursday. Economists predict approximately 130,000 jobs added in May’s Nonfarm Payrolls, down from April’s 177,000. Potential new tariffs include a 10% minimum, with sector-specific duties possible if negotiations falter. Technology and consumer discretionary sectors led May’s rally. (FMP)
Economic Growth: Deutsche Bank increased its year-end S&P 500 target from 6,150 to 6,550, implying a 10.35% upside from the current level of 5,935.94. This follows similar upgrades from Goldman Sachs and UBS in May, with RBC Capital Markets also joining. The bank now estimates tariff-related earnings drag at only one-third of prior assumptions. Deutsche Bank raised its 2025 earnings per share (EPS) estimate to $267 from $240. The S&P 500 surged 6.2% in May, with over 70% of S&P 500 companies exceeding revenue and EPS forecasts. Deutsche Bank cautions that the rally could be punctuated by pullbacks related to trade policy and warns of potential triggers including renewed tariff announcements, geopolitical flashpoints, and macroeconomic data surprises. (FMP)
Economic Growth: The Paris-based global policy forum now sees U.S. growth at just 1.6% this year, and global growth at 2.9%. (Market Watch)
Economic Growth: The Organisation for Economic Co-operation and Development on Tuesday downgraded its growth forecasts for both the U.S. and global economy. The U.S. growth outlook was revised to just 1.6% this year and 1.5% in 2026. (CNBC)
Inflation: For investors, the situation poses a complex challenge: U.S. consumer spending has remained resilient so far, but rising retail prices and cost-cutting responses hint at a deeper strain brewing beneath the surface. (FXEmpire)
Inflation: Economists polled by Reuters had been expecting the May reading to come in at 2%, which is the European Central Bank’s target. (CNBC)
Inflation: Consumer prices were 35.4% higher on year in May, easing from 37.9% in April, after the central bank lifted its key interest rate in response to recent political turmoil and market jitters. (WSJ)
Inflation: Swiss inflation turned negative in May, marking the first decline in consumer prices for more than four years and adding pressure on the Swiss National Bank to cut its interest rate steeply later this month. (Reuters)
Interest Rates: The S&P 500 recently rallied by 2%, attributed to favorable trade developments, but Goldman Sachs warns rising bond yields pose the primary threat. Goldman maintains a 12-month S&P 500 return forecast of 10%, targeting 6,500 on the index. The 10-year U.S. Treasury yield recently reached 4.4% and is projected to climb to 4.5% by end-2025 and 4.55% in 2026. Historically, yields jumping by 60 basis points or more in a single month often weaken stocks. Most S&P 500 companies have fixed-rate debt maturing after 2028, but small-cap stocks, sensitive to rising rates, may underperform. Current equity prices are considered close to fair value, and valuation multiples will likely be restrained. Investors should monitor Fed meetings and Treasury auctions and reassess small-cap exposure. (FMP)
Interest Rates: Why interest rates are likely to be lower than today within the next few weeks. (Market Watch)
International relations: Asian equities saw modest gains on Tuesday, with Japan’s Nikkei 225 rising 0.3% and Hong Kong’s Hang Seng Index rallying 1.2%. Taiwan’s TSMC rose 1%, BYD Co gained nearly 2%, and Li Auto surged nearly 5%. Australia’s ASX 200 increased 0.3%. China’s CSI 300 and Shanghai Composite indices traded flat. The Caixin manufacturing PMI for May contracted. Q1 company profits in Australia shrank by 0.5%, and the country posted a larger-than-expected current account deficit. U.S. Treasury yields dipped. President Trump accused China of breaching a trade deal in mid-May, and talks have stalled. (FMP)
International relations: On Monday, the Dow Jones Industrial Average increased by 35 points (0.1%), the S&P 500 climbed 0.5%, and the Nasdaq 100 gained 0.7%, closing at 4:00 p.m. ET (20:00 GMT). The S&P 500 had a 6% gain in May, its best month since November 2023. China’s Commerce Ministry responded to President Trump’s claim on Friday that China violated a Geneva agreement reached in mid-May, which paused triple-digit tariffs for 90 days. The 90-day tariff pause expires in mid-August. U.S. Treasury Secretary Scott Bessent stated last week that talks with Beijing had stalled. (FMP)
International relations: Markets and U.S. futures were down on continued trade tensions, and ahead of Eurozone flash CPI data Tuesday and an ECB rate decision later this week. (WSJ)
International relations: A little-noticed provision in President Donald Trump’s sweeping tax and spending bill could spark the next battle in an escalating global trade war — and potentially unnerve an already rattled market for U.S. Treasurys that is critical to the global economy. (Market Watch)
International relations: U.S.-China trade tensions are escalating, especially over rare earth minerals, increasing volatility and risk of a near-term market pullback. China is far more dependent on the U.S. consumer market than commonly believed, making it vulnerable in prolonged trade disputes. (Seeking Alpha)
International relations: JPMorgan Chase & Co.’s chief executive, Jamie Dimon, came out on Monday with another warning about the bond market that some observers said could prompt more investors to look around the world and at other asset classes for protection. (Market Watch)
Labour: Australia’s independent wage-setting body on Tuesday raised the national minimum wage by 3.5% effective July 1, a real wage increase for about 2.6 million workers on the minimum wage as inflationary pressures ease in the economy. (Reuters)
Market Sentiment: US stocks broadly jumped in May, with the S&P 500 registering its best month in over a year. Stocks gained during the month following a tumultuous April, when President Donald Trump’s announcement of tariffs against all US trading partners rocked markets. (Seeking Alpha)
Policy: It was another chaotic month in politics, economics, and markets. Budget negotiations and fiscal concerns dominated US-centric news outlets. (Seeking Alpha)
Policy: CNBC’s Jim Cramer reviewed Monday’s market action, chalking up the day’s performance to expectations about the White House’s next move. He advised that investors prepare for turbulence, even as some on Wall Street continue to have optimism about President Donald Trump’s impact on big business. (CNBC)
Policy: JPMorgan CEO Jamie Dimon highlighted the risks of rising U.S. debt and deficits, and he called for reforms to ensure economic growth and program sustainability. (Fox Business)
Policy: Summary: IPO filings and activity remain low in early 2025 despite recent high-profile debuts and filings. May 2025 saw the lowest number of IPO filings in six months, continuing a slow trend. (See It Market)
Trade: Tariffs and trade have dominated the media headlines since the beginning of the year, creating a volatile rollercoaster ride in the financial markets and the broader economy. Just this week, a federal court ruled that the president’s tariff policies were illegal, citing misuse of emergency powers under the International Emergency Economic Powers Act of 1977. (Seeking Alpha)
Industry
Aviation: Airbus delivered approximately 51 aircraft in May, a 4% decline compared to May of the previous year. Year-to-date deliveries total 243 aircraft, down 5% from the first five months of 2024. The company cites engine supply issues as a key factor in persistent delivery delays. Airbus maintains its annual target of delivering 820 aircraft by year-end, representing a 7% growth over the previous year, and the June 5 delivery report will be closely watched. During the airline industry summit in New Delhi, concerns were raised regarding Airbus’ supply chain reliability. (FMP)
Construction: Lumber is in the spotlight as the National Association of Home Builders and the U.S. Lumber Coalition disagree about what’s behind the U.S. housing market experiencing a slump. (Fox Business)
Mergers and Acquisitions: CapVest pledged to invest $500 million to grow mergers-and-acquisitions technology provider Datasite. (WSJ)
Retail: This week’s reports come as dollar stores are enjoying a revival of sorts. (Investors Business Daily)
Semiconductors: AI infrastructure build-out is moving faster than expected, with hyperscalers and enterprises investing more in AI factories and high-performance compute. Energy demand from AI will impact natural gas, renewables, and nuclear’s potential because of changing and growing digital infrastructure needs. (Seeking Alpha)
Corporate
Alphabet Inc: Alphabet Inc. (NASDAQ: GOOGL) shares fell by 2% following comments from U.S. District Judge Amit Mehta, with a final ruling expected by August. The DOJ initially proposed a 10-year structural separation plan which Mehta expressed skepticism about. The DOJ and a coalition of states are seeking to end Google’s multibillion-dollar default-search payments to OEMs like Apple and Samsung, share search data with competitors, and restrict ad syndication. Barclays maintains an Overweight rating with a $220 price target, citing default-search payments and ad syndication as key risks, while TD Cowen anticipates potential implementation of all three remedies. OpenAI’s Nick Turley testified that access to Google’s search data could accelerate AI model improvement. (FMP)
Apple Inc: Apple Inc. (AAPL) shares are down 20% year-to-date (YTD) compared to the S&P 500’s 1% gain. Bank of America (BofA) maintains a Buy rating and a $235 price target, despite the underperformance. BofA analysts cite robust free cash flow, strong shareholder returns, and expansion opportunities as supporting factors. Concerns include lagging in generative AI, potential product innovation delays (like AR glasses), and regulatory threats, particularly from a DOJ case that could impact Apple’s $20 billion+ annual search revenue. Gross margin pressure and risks related to China (production dependency, local competition, and regulatory scrutiny) are also noted. Apple currently trades at 25-27x forward earnings and remains underweight among many hedge funds. (FMP)
BRT Apartments Corp.: BRT Apartments Corp. (BRT) reported a Q1 EPS of -$0.12, surpassing analyst expectations of -$0.19 by $0.07. Revenue reached $24.52 million, exceeding the $23.63 million consensus estimate. The stock closed at $15.76, with a 3-month performance of -12.88% and a 12-month performance of -9.94%. Over the past 90 days, there were 0 positive EPS revisions and 1 negative EPS revision. (FMP)
Chime: The Chime IPO is expected to be one of the biggest new issues of the year, with the mobile banking platform expected to start trading in early June. (Kiplinger)
Cleveland-Cliffs Inc / Nucor Corp / Steel Dynamics Inc: Former U.S. President Donald Trump announced a tariff increase on steel imports, raising the rate from 25% to 50%. This move supports a $14 billion investment by Nippon Steel Corporation in U.S. Steel, which will modernize and expand steel infrastructure across Pennsylvania, Indiana, Minnesota, Alabama, and Arkansas. The investment includes $2.2 billion for the Mon Valley facility, $7 billion for upgrading and building other facilities, and a $5,000 bonus for each U.S. Steel worker. Following the announcement, Cleveland-Cliffs Inc (CLF) surged over 25%, Nucor Corp (NUE) jumped 11%, and Steel Dynamics Inc (STLD) gained 5.9% in premarket trading. The deal is being touted as the largest industrial investment in Pennsylvania’s history. (FMP)
Credo Technology Holding: Credo Technology Holding (CRDO) reported Q2 2025 results surpassing analyst expectations, with EPS of $0.35, beating the $0.27 consensus by $0.08, and revenue of $170 million versus a $159.59 million consensus. The stock closed at $62.65, up 48.9% in the past three months and 148.7% in the last year. There were 9 positive EPS revisions and zero negative revisions in the prior 90 days. Q1 2026 revenue guidance is $185-$195 million, compared to a $162 million consensus, implying a 15%-20% year-over-year increase at the midpoint. Credo currently trades at 180x trailing-12-month earnings, with an EV/Revenue multiple of 6x, compared to a peer average of 4x. Analyst price targets are clustered in the $70-$75 range, suggesting approximately 15% upside. The company’s Q1 2026 earnings are scheduled for early August. (FMP)
CrowdStrike Holdings, Inc.: Over the past year, the consensus price target for CrowdStrike Holdings, Inc. (NASDAQ:CRWD) has increased significantly. One year ago, the average price target was $376.22, compared to $425.13 last quarter, and $490 last month. Despite a recent downgrade by RBC Capital setting a price target of $275, the company is experiencing higher-than-expected demand. CrowdStrike recently implemented a 5% reduction in headcount, projected to yield a 380 basis points margin improvement. (FMP)
Dollar General Corporation: Dollar General (NYSE:DG) has seen its stock outperform competitors by 35% over the past three months. Analyst price targets have fluctuated, with a current average target of $120, compared to $95 last quarter and $108.82 one year ago. BMO Capital set a price target of $265. Last month, the average price target was $120. The company is implementing strategic initiatives like SKU rationalization and store remodels, and analysts expect Dollar General to surpass earnings estimates in its upcoming Q1 report, despite shrinking profit margins. Expansion plans, including potential growth into Mexico, are also contributing to positive sentiment. (FMP)
Guidewire Software, Inc: Guidewire Software, Inc. (NYSE:GWRE) is a leading provider of software for the property and casualty (P&C) insurance industry, with a focus on cloud-based solutions and artificial intelligence. Over the past year, analysts’ consensus price target has increased; it was $237.33 a few months ago, $226 last month, and $172.13 last year. Anticipated third-quarter revenues are projected to be between $283 million and $289 million. RBC Capital has a price target of $125. The company’s stock has appreciated by 80% over the past year. The company faces challenges including competition, regulatory changes, and data security threats. (FMP)
JPMorgan Chase & Co.: On June 2, 2025, RBC Capital maintained a “Hold” rating for JPMorgan Chase & Co. (JPM) with a stock price of $264.19. The current stock price is approximately $264.82, a 0.31% increase or $0.82. Today’s trading range is $261.91 to $265.01, while the 52-week range is $190.88 to $280.25. JPM’s market capitalization is roughly $735.94 billion, and trading volume today is 3,926,616 shares. (FMP)
Microsoft Corp: Microsoft Corp. has laid off over 300 employees, following a previous announcement of 6,000 job cuts, as part of a restructuring plan to manage operating costs, realign talent toward AI-focused initiatives, and stay competitive. The company cites “organizational changes” to position itself for long-term success in the AI-driven era. The layoffs are consistent with a broader tech industry trend of cutting costs to fund research and development and AI infrastructure, with a shift in talent demand towards AI, machine learning, and cloud innovation. Despite these cuts, Microsoft maintains a strong financial position with solid cash flows and a dominant position in the enterprise AI race. (FMP)
Nvidia / Marvell / Broadcom: Morgan Stanley reaffirmed its “Overweight rating” on Nvidia (NASDAQ:NVDA), maintaining its ranking as the firm’s top pick in the chip sector. Analysts cite Nvidia’s strong recent performance, exceeding expectations in gross margins, revenue ex-China, networking recovery, and supply chain ramp, particularly for racks. Nvidia is considered to be “materially undershipping demand.” The firm acknowledged geopolitical tensions involving China as the reason for the absence of forward guidance for the second half of 2024 or calendar 2026. Morgan Stanley believes current rack bottlenecks causing inventory build-up among original design manufacturers (ODMs) are a short-term issue. The firm has upgraded sentiment on Marvell (NASDAQ:MRVL) due to recent stock weakness and anticipates strong earnings for Broadcom (NASDAQ:AVGO) this week. (FMP)
Nvidia / Tesla: The Innovator IBD 50 exchange traded fund surged 1.7%. (Investors Business Daily)
The Walt Disney Company: The Walt Disney Company is laying off several hundred employees across film, television, and corporate finance divisions as part of a strategic overhaul. This follows a 2023 restructuring that eliminated 7,000 jobs to cut $5.5 billion in costs, and earlier layoffs in March 2025 of fewer than 200 employees (approximately 6%) across ABC News Group and Disney Entertainment Networks. Despite these layoffs, Disney+ showed unexpected growth, and theme parks delivered strong results. The company’s stock is up 21% since the earnings release, currently trading at $112.62 (down 0.3% on Monday). The restructuring aims to optimize operations for streaming competition and shift resources from legacy TV businesses. (FMP)
Toyota Motor / Toyota Industries: Toyota Industries (OTC: TYIDF) is considering a roughly $42 billion tender offer from Toyota Motor (NYSE: TM) and other group companies, with a decision expected on Tuesday. If approved, Toyota Industries would be taken private, representing one of the largest management buyouts in Japanese corporate history. Toyota Industries owns approximately 9% of Toyota Motor, while Toyota Motor holds about 24% of Toyota Industries. The deal aims to streamline decision-making, improve accountability, and optimize capital allocation, potentially enabling reinvestment in electric and autonomous vehicle projects. Toyota Industries was founded in 1926 and spun off its automotive division in 1937. The company maintains investment-grade credit ratings and operates in sectors including industrial materials handling (forklifts) and diesel engines. Regulatory approval from Japanese antitrust authorities is required, and shareholder acceptance is needed for the remaining approximately 76% stake after Toyota Motor’s existing 24% ownership. (FMP)
TSMC: Taiwan Semiconductor Manufacturing Co. (TSMC) CEO C.C. Wei acknowledged U.S. trade tariffs have a “marginal impact” and “indirect effects” on pricing and demand, but reaffirmed strong demand for AI chips outweighs these risks. TSMC, a leading contract chipmaker supplying companies like Nvidia and Apple, recently posted strong Q1 earnings and maintains a bullish multi-year forecast driven by its AI semiconductor supply chain dominance. The company has committed over $165 billion to U.S. chipmaking expansion to reduce geopolitical exposure, meet localized production needs, and benefit from U.S. subsidies. No major changes in customer behavior have been observed, with more clarity expected in the months ahead. (FMP)
Vodafone Idea: Vodafone (NASDAQ:VOD) and Vodafone Idea (NSE:IDEA) shares rose 1.3% following disappointing Q4 FY25 results. Vodafone Idea lost 1.6 million subscribers, bringing its total user base to 198 million. Average revenue per user (ARPU) increased to Rs 164, while Jio experienced 1% ARPU growth and Bharti Airtel had flat ARPU. The company faces significant financial challenges with total government dues of ~$22.5 billion, including spectrum and AGR liabilities. $4.3 billion in dues were converted to equity, resulting in the Government of India owning 49% of the company. Bank/financial liabilities stand at ~$0.3 billion, with cash reserves of ~$1.2 billion. A fundraising plan of Rs 200 billion (~$2.3 billion) has been approved. (FMP)
