Daily News Round Up
Friday, 13 Jun 2025
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- Geopolitical Risks are Elevated and Spooking Markets: Escalating tensions in the Middle East, highlighted by Israel’s strike on Iran and Iran’s retaliatory drone attack, are driving risk-off sentiment and causing declines in U.S. stock futures (down ~1.6% initially) ((Forbes)) and a slump in the U.S. dollar to a three-year low. ((Investopedia)) This instability introduces a new layer of uncertainty for equity valuations.
- Inflationary Pressures Remain Complex and Contradictory: While PPI inflation came in soft ( (InvestorPlace)), concerns linger regarding potential price increases due to renewed tariffs, with former Treasury Secretary Yellen predicting at least a 3% rise in U.S. inflation ((CNBC)). The actual impact of Trump’s tariffs has been muted so far ( (New York Post)), creating a conflicting picture challenging the Federal Reserve’s policy path.
- US Economic Outlook is Increasingly Cloudy and Valuations are Stretched: Analysts point to significant headwinds for the US economy in 2025 stemming from tariffs, fiscal drag, and tightening labor markets, increasing recession risks ((Seeking Alpha)). Coupled with extremely high equity valuations representing unrealistic earnings growth expectations, this creates vulnerability to a substantial correction.
- AI Optimism and Shifting Strategy Driving Sector Performance: Strong performance within the tech sector is being fueled by AI advancements, exemplified by Oracle’s raised revenue forecast due to robust AI-driven cloud demand (revenue of at least $67 billion for fiscal 2026, a 16.7% y/y increase) ((FMP)). Citi initiated a “Positive Catalyst Watch” on Microsoft (MSFT) due to accelerating Azure growth and the potential of a $299 billion AI revenue pool ((FMP)), driving renewed investor interest in related stocks.
- Policy Shifts and Earnings Discrepancies Create Mixed Signals: HSBC upgraded U.S. equities to Overweight ((FMP)), while several companies reported mixed earnings results, with some (like America’s Car-Mart) posting beats but experiencing significant stock declines (down over 10%) ((FMP)) and others (Oxford Industries) seeing drops due to lowered guidance. These mixed signals indicate a selective market reacting to company-specific factors amidst broader economic and geopolitical uncertainty.
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What happened yesterday?
Macro
Economic Growth: James Kostohryz on the US economy’s significant headwinds in 2025 from tariffs, fiscal drag, and tightening labor markets, with recession risks rising and markets underpricing these threats. Current equity valuations are extremely stretched, with the S&P 500 pricing in unrealistic EPS growth and minimal risk, setting up potential for a major drawdown if shocks occur. (Seeking Alpha)
Economic Growth: A study suggests that new products have a better chance of success during an economic downturn—with some caveats. (WSJ)
Geopolitics: Israel strikes Iran, dollar’s slump is worst since 1980s, immigration raids cripple factories, and more news to start your day. (Barrons)
Geopolitics: This is a developing story. (Forbes)
Geopolitics: U.S. stock futures experienced declines following Israel’s airstrike on Iran, with S&P 500 futures dropping approximately 1.6%. This immediate market response reflects the index’s sensitivity to geopolitical developments that threaten global stability. (Forbes)
Geopolitics: Iran launched more than 100 drones toward Israeli territory Friday morning following Israel’s overnight missile strike on the country. It was the largest attack on the Islamic Republic since the Iran-Iraq war of the 1980s. (CNBC)
Inflation: Are predictions for a jump in consumer prices too early, or just wrong? (NYTimes)
Inflation: PPI inflation comes in soft (InvestorPlace)
Inflation: Former Treasury Secretary Janet Yellen predicts President Donald Trump’s tariffs will cause U.S. inflation to rise at least 3% year-over-year. “I definitely expect that we’re going to see them impact pricing” and average household income, Yellen said. (CNBC)
Inflation: So far, Trump’s tariffs don’t seem to have had much of an impact on prices overall. (New York Post)
Inflation: A closely watched gauge of the U.S. dollar’s value has tumbled to its weakest level in three years on Thursday, having taken out the previous 2025 low reached in April. (Market Watch)
Interest Rates: Tariff inflation has been muted, and cracks are appearing in the labor market. (WSJ)
Interest Rates: Bonds extend their rally after second batch of soft inflation data. (WSJ)
Interest Rates: Fed watchers may want to consider taking the summer off this year. Federal Reserve Board members are likely to maintain their “wait-and-see” approach of the past few months, thanks to economic data showing little need for decisive monetary policy action in the near term. (ETF Trends)
International relations: Morgan Stanley analysts cite a “new bull case” driven by a reversal of reciprocal tariffs and de-escalation of U.S.-China trade tensions. Risk assets are currently in positive territory for the year. Key factors include investors viewing tariff delays/rollbacks as a “non-event,” shifting consensus toward less negative 2026 earnings revisions, and expectations the Federal Reserve will cut rates this year. Corporate tax cuts are projected to spur capital expenditure. The S&P 500 is near 6,000, approximately 2.3% below all-time highs, while the NASDAQ is up 25% from recent lows. The VIX is below its five-year average. Elevated P/E ratios above 21.5x are flagged as a potential caution signal. Risks include steepening global yield curves, widening U.S. budget deficits, and tariff deadline jitters in July. (FMP)
International relations: The U.S. dollar slumped to its lowest level since 2022 on Thursday, putting the greenback on track to have its worst start to a year in decades. (Investopedia)
International relations: The currency is falling despite factors that ordinarily would support it. (Barrons)
Policy: US community banks’ net interest margins are poised to expand as funding costs move lower, while earning assets mature and are replaced with higher-yielding loans and securities. Earnings are expected to grow even more rapidly in 2025 due to declining funding costs and the maturation of lower-yielding pandemic-era assets, allowing for margin expansion. (Seeking Alpha)
Policy: Hedge fund returns so far this year show a stark divide between those that have been able to navigate U.S. President Donald Trump’s erratic decision making and switch tactics quickly and those hemmed in by algorithmic strategies. (Reuters)
Policy: A Republican senator’s plan to take away the Federal Reserve’s power to pay banks interest on cash they park on central bank books could cause chaos for monetary policy implementation if it were implemented, market participants said. (Reuters)
Policy: President Donald Trump has set off a fresh round of worrying about his approach toward the Federal Reserve with his statement that his pick for the next Fed chair is “coming out very soon.” (Market Watch)
Policy: Though the Juneteenth holiday next Thursday will shorten the trading week by a day, there’s plenty for investors to chew on. (Schaeffers Research)
Policy: The market has completely recovered from the deep selloff during the first half of April. Investors are intently focused on evolving tariff and trade policies, when the Fed will next cut rates, as well as inflation. (Seeking Alpha)
Policy: The Federal Reserve’s inspector general is reviewing the Trump administration’s attempts to lay off nearly all Consumer Financial Protection Bureau employees and cancel the agency’s contracts, CNBC has learned. The inspector general’s office told Sen. (CNBC)
Policy: President Donald Trump ripped Federal Reserve Chair Jerome Powell as a “numbskull” as he turned up the heat on the central bank chief to lower interest rates. Trump claimed at the White House that lowering rates by two percentage points would save the U.S. $600 billion per year, “but we can’t get this guy to do it. (CNBC)
Trade: S&P 500 Futures are down 0.4% in Asian trading, while the Shanghai Composite and CSI 300 experienced slight declines. The Hang Seng is off 0.5%. Energy and materials indices outperformed, and commodity-linked indexes showed gains due to Middle East risks and rising crude oil prices. Trump plans to dispatch letters outlining new tariffs to major partners within two weeks. The U.S.-China trade agreement offered no binding commitments and maintains May’s reduced tariff levels. Chinese EV makers BYD and NIO extended declines by over 2%. Investors are awaiting specific tariff actions, the final trade-deal text with binding language on rare-earth exports and semiconductor controls, and geopolitical developments while experiencing a “wait-and-see” mode. (FMP)
Trade: EU exports fell by close to 10% in April compared with the month earlier, a dramatic reversal from March’s increase as American importers stocked up ahead of U.S. tariff announcements. (WSJ)
Trade: The move is one of the first times this year that consumer products were specifically targeted with higher import taxes. (NYTimes)
Trade: A range of imported household appliances including dishwashers, washing machines, refrigerators and more will be subject to President Donald Trump’s expanded steel tariffs starting later this month, according to a notice posted on Thursday. (Reuters)
Trade: The cost of some baby gear has risen in recent weeks due to President Donald Trump’s tariff policies, according to a new congressional report. New parents across the U.S. could collectively pay an additional $875.2 million for key baby products this year, the report found. (CNBC)
Trade: U.S. President Donald Trump on Thursday warned he may soon hike auto tariffs, arguing that could prod automakers to speed U.S. investments. (Reuters)
Trade: Most retail executives expect President Donald Trump to walk back “reciprocal” tariffs on the EU, Vietnam, India and the rest of the world, new survey results from AlixPartners shows. Executives could be feeling more optimistic after recent court challenges and efforts between the U.S. and China to negotiate. (CNBC)
Trade: Separate readings this week on consumer and producer prices were downright benign, as indexes from the Bureau of Labor Statistics reported both rose just 0.1% in May. The months ahead are still expected to show price increases driven by President Donald Trump’s desire to ensure the U.S. gets a fair shake with its global trading partners. (CNBC)
Industry
Semiconductors: Google Cloud is partnering with CoreWeave to supply NVIDIA GPU-based computing capacity and provision infrastructure for OpenAI services like ChatGPT. CoreWeave will provide elastic GPU clusters, allowing Google Cloud to rapidly expand capacity without immediate hardware outlays. Google will also deploy its own cloud GPUs to meet growing AI workloads. Investors can monitor Google (GOOGL)’s earnings, with its next quarterly report focusing on cloud segment growth. NVIDIA (NASDAQ: NVDA) GPUs are central to this partnership, and market sentiment regarding NVIDIA’s growth prospects can be assessed via company rating APIs, including analyst buy/hold/sell breakdowns, price-target consensus, and upside/downside potential. The partnership signals a trend of cloud providers collaborating with niche data-center operators to meet increasing AI infrastructure demands, driving continued orders for GPUs, ASICs, and specialized accelerators. (FMP)
Corporate
AAON: DA Davidson reiterated a Buy rating on AAON (NASDAQ:AAON) and maintained a $125 price target. The reiteration follows AAON’s recent Investor Day presentation and second-quarter business update, which caused a stock pullback. AAON introduced financial targets through 2027 and aims for double-digit growth rates in the coming years, requiring relatively modest capital investment beyond 2025. The valuation premium relative to traditional peers has compressed. (FMP)
America’s Car-Mart (CRMT): America’s Car-Mart (CRMT) reported Q4 earnings per share of $1.26, exceeding the consensus estimate of $0.99, while revenue increased 1.5% year-over-year to $370.2 million, above the projected $360.02 million. Q4 retail unit sales rose 2.6% to 15,649 vehicles, although the average retail sales price decreased by $316 to $17,240. Gross profit margin improved by 90 basis points to 36.4%. Net charge-offs decreased to 6.9% of average finance receivables, down from 7.3% the previous year. Full-year 2025 revenue totaled $1.4 billion, flat year-over-year, with diluted EPS reaching $2.33, compared to a loss of $4.92 in 2024. The company’s stock dropped over 10% intra-day. (FMP)
America’s Car-Mart, Inc.: America’s Car-Mart, Inc. (NASDAQ:CRMT) is projected to release quarterly earnings on June 17, 2025. Analysts project Earnings Per Share (EPS) of $0.87 and revenue of approximately $369.77 million. The Price-to-Earnings (P/E) ratio is 70.74, while the Price-to-Sales ratio is 0.34 and Enterprise Value to Sales ratio is 0.96. The Earnings Yield is 1.41%. The Debt-to-Equity ratio is 1.55 and the Current Ratio is 6.30, with a negative Enterprise Value to Operating Cash Flow ratio of -16.93. (FMP)
Andrew Peller Limited: Andrew Peller Limited (ADWPF) reported earnings on June 11, 2025, with an Earnings Per Share (EPS) of -0.01, exceeding the estimated EPS of -0.06. Revenue was $52.47 million, falling short of the estimated $57.36 million. The price-to-sales ratio is 0.50, the enterprise value to sales ratio is 0.99, and the enterprise value to operating cash flow ratio is 9.54. The debt-to-equity ratio is 0.82, and the current ratio is 3.17. (FMP)
Boeing (NYSE: BA): Air India flight AI171, a Boeing 787-8 Dreamliner with 242 passengers, crashed shortly after takeoff from Ahmedabad en route to London-Gatwick. The aircraft reached 625 ft before descending at -475 ft/min, with the ADS-B signal lost just under a minute into the flight. Boeing (NYSE: BA) shares plunged over 8% in pre-market trading. The incident is expected to trigger regulatory scrutiny, compensation costs, and a safety review. Potential impacts include revenue risk due to delivery delays and fleet groundings, increased operating expenses for investigation and maintenance, and reputational damage following prior 737 MAX incidents. Key indicators to monitor include Boeing’s 787 order backlog, quarterly delivery numbers, and free cash flow. India’s Directorate General of Civil Aviation (DGCA) will conduct a crash investigation, and decisions regarding temporary groundings or additional inspections of Dreamliner 787-8s worldwide are anticipated. (FMP)
Fabrinet: Rosenblatt raised its price target on Fabrinet (NYSE:FN) to $290 from $250, maintaining a Buy rating. Fabrinet is expanding into Advanced Packaging and Optical Systems markets. The company is transitioning from 100G-per-lane VCSEL-based technologies to 200G-per-lane EML-based 800G and 1.6T transceiver solutions, with momentum expected in the second half of calendar year 2025 driven by NVIDIA’s Blackwell BG200 and BG300 architectures. Further growth is anticipated in fiscal year 2026 from a telecom deal with Ciena and a high-performance computing (HPC) win with Amazon. (FMP)
Global Partners LP: Global Partners LP (NYSE: GLP), an energy sector company distributing gasoline, distillates, and petroleum products, upsized a private offering of senior notes, demonstrating strong investor interest. Global GP LLC, the General Partner, purchased 5,000 shares at $54.35 each, increasing its ownership to 89,548 shares. Key financial metrics include a current ratio of 1.17, a quick ratio of 0.68, a debt ratio of 0.56, a debt-to-equity ratio of approximately 3.10, an interest coverage ratio of nearly 2.00, and a net debt to EBITDA ratio of approximately 5.04. The company holds total assets of $3.82 billion, liabilities of $3.12 billion, and cash and cash equivalents of $7.48 million. (FMP)
Hooker Furniture Corporation: Hooker Furniture Corporation (HOFT) reported an earnings per share (EPS) of -$0.29 on June 12, 2025, falling short of the estimated -$0.16, but improving from a loss of $0.39 per share the previous year. Revenue for the period was $85.3 million, below the estimated $88.9 million. Key financial ratios include a price-to-sales ratio of 0.30, a price-to-earnings (P/E) ratio of -9.30, an earnings yield of -10.75%, an enterprise value to sales ratio of 0.46, an enterprise value to operating cash flow ratio of -7.91, a debt-to-equity ratio of 0.34, and a current ratio of 3.53. (FMP)
HSBC: HSBC strategists, led by Max Kettner, have upgraded their U.S. equity stance to Overweight from Neutral, citing AI optimism, a weaker U.S. dollar, subdued positioning, and potential stronger-than-expected business activity. They anticipate a possible U.S. tax-cut deal before summer, contingent on orderly long-end yields. Current overweight allocations include Emerging Markets, Eurozone, and U.S. equities, as well as Emerging-market debt and high-yield credit in fixed income. Gold is the preferred hedge. Developed-market government bonds, particularly U.S. Treasuries and Japanese JGBs, are Underweight. HSBC recommends scaling into dips ahead of Q2 earnings and potential tax-cut legislation, monitoring Sector PE Ratios (U.S. Tech vs. Eurozone Financials, and Emerging-market consumer discretionary). Key dates include Fed policy meetings, U.S. Senate votes on tax proposals, and the Q2 corporate earnings season kickoff. The Economics Calendar API will provide alerts on FOMC announcements, key fiscal policy rollouts, and major economic data releases. Historical spikes in economic policy uncertainty have often preceded risk-asset rebounds. (FMP)
Jabil Inc: Jabil Inc. (NYSE:JBL), an electronics manufacturing services company, is expected to report Q3 FY’25 financial results on June 17, 2025. Analysts estimate earnings per share (EPS) of $2.28, while Jabil anticipates $2.30, a 20% increase from the previous year. Revenue is projected at approximately $7 billion, a 4% year-over-year growth, closely aligning with Wall Street’s estimate of $7.03 billion. Jabil’s price-to-earnings (P/E) ratio is 40.7, its price-to-sales ratio is 0.70, and its enterprise value to sales ratio is 0.76. The debt-to-equity ratio is 2.42, and the current ratio is 1.02. (FMP)
Lavoro Limited: The consensus price target for Lavoro Limited (NASDAQ:LVRO) has declined from $4.50 a year ago to $3.25 last quarter, and further to $1.50 in the last month. Lavoro operates in the agricultural inputs retail sector across Brazil, Colombia, and Uruguay, selling seeds, fertilizers, and crop protection solutions. Kristen Owen from Oppenheimer maintains a price target of $11, differing from the general downward trend. (FMP)
Microsoft Corp: Citi analysts initiated a “Positive Catalyst Watch” on Microsoft (MSFT) due to what they believe are conservative Street estimates for Azure in fiscal 2026. Azure’s growth accelerated to a 39% year-over-year exit rate in March, exceeding the consensus. Microsoft’s capital expenditure implies 37% Azure revenue growth and a potential $299 billion AI revenue pool over six years. In Q4 2025, analysts anticipate robust FY 2026 guidance reflecting AI momentum, particularly from the OpenAI partnership. Key Azure growth metrics include 35% year-over-year constant-currency growth in 3Q F25 and a March exit rate of 39% versus Citi’s June-quarter guide of 34-35%. Street forecasts currently estimate ~32% Azure growth for FY 2026. (FMP)
Oklo: Wedbush raised its price target on Oklo (NYSE:OKLO) from $55 to $75 while maintaining an Outperform rating, citing favorable U.S. nuclear energy policy. Oklo received a Notice of Intent to Award (NOITA) from the Defense Logistics Agency Energy, representing the U.S. Air Force and Department of Defense, to provide nuclear power to Eielson Air Force Base in Alaska. The Department of Defense aims to increase nuclear capacity by a fourfold increase to 400 GW by 2050. The move follows an executive order by former President Trump aimed at accelerating U.S. nuclear energy development. (FMP)
Oracle: Wall Street caught a whiff of optimism Thursday from Oracle’s booming AI guidance and a calm Treasury auction. Trade remains the main migraine. (Seeking Alpha)
Oracle Corporation: Oracle Corporation raised its fiscal 2026 revenue forecast to at least $67 billion, representing 16.7% year-over-year growth, up from a previous estimate of 15%. Oracle Cloud Infrastructure (OCI) revenue increased by 62% year-over-year. Total cloud growth (apps + infra) is projected to exceed 40% in fiscal 2026, a significant increase from 24% this year. Remaining performance obligations rose 41% to $138 billion. In the fiscal fourth quarter, Oracle reported EPS of $1.70 versus an expected $1.64, and revenue of $15.9 billion versus $15.58 billion. (FMP)
Oracle Inc: Oracle’s shares increased by over 13% intra-day after the company revised its full-year revenue growth outlook. Oracle now anticipates total revenue of at least $67 billion for fiscal 2026, a 16.7% year-over-year increase, up from a previous forecast of 15%. In the fiscal fourth quarter, Oracle reported adjusted earnings per share of $1.70 on revenue of $15.9 billion, exceeding analyst expectations of $1.64 EPS and $15.58 billion in revenue. Oracle Cloud Infrastructure revenue grew by 62% year-over-year, and remaining performance obligations increased by 41% to $138 billion. (FMP)
Oxford Industries: Oxford Industries (OXM) shares decreased by over 10% intra-day following mixed Q1 results and reduced guidance. Q1 adjusted earnings per share were $1.82, below the estimated $1.98, while revenue reached $393 million, exceeding the projected $383.54 million, but down 1.3% year-over-year. Q2 EPS guidance is $1.05 to $1.25, compared to the anticipated $2.20. Projected Q2 revenue is $395 million to $415 million, below the $409.4 million consensus. Full fiscal year 2025 EPS guidance is $2.80 to $3.20, significantly below the $4.35 Street forecast. (FMP)
Quantum Corporation: Quantum Corporation (NASDAQ:QMCO) is projecting an EPS of -$1.16 and revenue of $65.85 million. The company has a P/E ratio of -0.43, a price-to-sales ratio of 0.25, and an enterprise value to sales ratio of 0.69. Its enterprise value to operating cash flow ratio is -20.22, with an earnings yield of -2.32%. The debt-to-equity ratio is -0.75, signifying a negative equity position. The current ratio is 0.37, indicating potential short-term liquidity issues. Quantum Corporation is scheduled to release quarterly earnings on June 16, 2025. (FMP)
The Lovesac Company: Lovesac (NASDAQ:LOVE) reported its first-quarter fiscal 2026 earnings on June 12, 2025, for the period ending May 4, 2025. The company’s earnings per share (EPS) was -$0.73, exceeding the estimated EPS of -$0.84. Revenue reached approximately $138.4 million, surpassing the estimated revenue of $137.5 million. Key financial metrics include a debt-to-equity ratio of 0.85, a current ratio of 1.59, a price-to-sales ratio of 0.45, and an enterprise value to sales ratio of 0.59. (FMP)
