Daily News Round Up
Tuesday, 27 May 2025
- Trade War Uncertainty Moderates, Boosting Risk Sentiment: The delay of President Trump’s proposed 50% tariffs on EU goods until July 9th triggered a broad-based rally in US futures and Asian markets, signaling a temporary easing of trade war anxieties. This shift in sentiment allowed investors to reassess risk, leading to gains in equities and a stabilization of the US dollar, though analysts caution against overoptimism given the potential for renewed trade tensions. (CNBC), (Market Watch), (FMP)
- Inflationary Pressures and Potential Stagflation Remain a Concern: Despite some cooling in consumer prices in Europe, warnings from Minneapolis Fed President Neel Kashkari regarding the stagflationary risk posed by tariffs continue to weigh on the economic outlook. Concerns linger that companies are currently absorbing tariff costs, but consumers may be affected if economic conditions deteriorate, creating a challenging scenario for sustained economic growth. (FMP), (WSJ)
- Earnings Season & Stock-Specific Developments Drive Volatility: Q1 earnings reports are generating significant stock-level movements, with notable upgrades and downgrades affecting individual companies. Intuit significantly exceeded earnings expectations, boosting its outlook, while Jack In The Box received a downgrade due to sustained underperformance. These results highlight a mixed earnings picture and underscore the importance of stock-specific analysis in the current market environment, with Nvidia’s upcoming results closely watched. (FMP), (FMP), (FMP)
- Commodity Price Fluctuations & OPEC+ Decisions Impact Energy and Metals: While gold prices saw a pullback after the tariff delay, driven by risk appetite increases, longer-term forecasts from Citi suggest significant upside potential due to geopolitical risks and potential trade escalations, projecting gold up to $3,500 per oz. Simultaneously, expectations for an OPEC+ production increase are dampening oil prices, with Brent crude declining to $64.50/barrel as the group considers a 411,000 bpd surge for July. (FMP), (FMP)
- Shifting Monetary Policies Globally Affect Bond Yields: Japan’s potential reduction in super-long JGB issuance caused yields to sharply decline, indicating a re-evaluation of fixed income strategies. This coincides with ongoing debate on interest rate policy, with the US Federal Reserve seemingly hesitant to adjust rates before greater clarity on tariffs and their inflationary impact. These shifts in monetary policy influence global capital flows and portfolio allocations. (FMP), (Reuters)
What happened yesterday?
Macro
Commodity Prices: Citi revised its near-term gold forecast to $3,500 per ounce, up from a $3,000-$3,300 range, with expectations for trading between $3,100 and $3,500 over the next few weeks. This upgrade is driven by potential 50% U.S. tariffs on EU goods, delayed to early July, and heightened geopolitical risks. Citi maintains a $1,050/oz target for platinum, noting current gains are headline-driven. The palladium target remains at $900/oz. U.S. households currently hold the most private gold in 50 years. (FMP)
Commodity Prices: On Tuesday, gold prices declined, with spot prices falling 0.5% to $3,326.53/oz and August futures decreasing 1.2% to $3,353.09/oz. This decrease occurred as President Trump postponed 50% EU tariffs until early July, prompting a shift towards equities. Major government bond yields eased in Asia, and the U.S. dollar stabilized, reducing gold’s appeal. Minneapolis Fed President Neel Kashkari warned of potential stagflation. Key tariff imposition is now scheduled for July. (FMP)
Economic Growth: Sentiment improved a little as wage expectations grew and views of the economic outlook calmed, a monthly survey said. (WSJ)
Energy: Oil prices decreased on Tuesday, with Brent crude falling 0.4% to $64.50 per barrel and WTI crude dropping 0.5% to $61.24 per barrel (no Monday settlement). Expectations of a production increase by OPEC+ are influencing prices; a potential rise of 411,000 barrels per day (bpd) is being considered for July. The OPEC+ ministerial session is scheduled for May 28, with voluntary-cut members meeting on May 31. A postponement of 50% tariffs on EU goods until July 9, initiated by U.S. President Trump, provided some support, mitigating further losses. (FMP)
Energy: Global oil prices are being kept firmly in check by rising crude inventories and OPEC’s decision to raise oil production. (Forbes)
Inflation: Minneapolis Fed President Neel Kashkari warned on Monday that President Trump’s trade tariffs risk creating a stagflationary environment characterized by slowing growth and rising prices. Kashkari stated that U.S. consumers have not yet fully felt the impact of higher import duties and believes the tariffs are “stagflationary.” He sees little chance of the Fed adjusting rates by September without clearer trade-deal outcomes. The ultimate impact depends on the duration and level of elevated tariffs. (FMP)
Inflation: Consumer prices were 0.6% higher on year in May, cooling more than expected and likely clearing the way for an expected ECB rate cut next month. (WSJ)
Inflation: Companies are absorbing tariff costs. If consumers pull back, there will be an issue. (Barrons)
Inflation: Market sentiment has swung from extreme fear to greed, with the S&P 500 surging by 25% since April, but optimism may now be overextended. Higher-than-expected inflation and delayed Fed rate cuts are keeping consumer and business borrowing costs at multi-decade highs, straining the economy. (Seeking Alpha)
Interest Rates: Japan’s Ministry of Finance (MOF) may trim issuance of 20-, 30-, and 40-year JGBs, causing yields to sharply decline. The 30-year JGB yield fell 12.5 basis points to 2.91%, the lowest since May 14. The 20-year JGB yield decreased 13.5 basis points to 2.37%, and the 10-year JGB yield dropped 4.5 basis points to 1.46%. The MOF intends to ramp up shorter-dated bond issuance to maintain funding needs if super-long issuance is cut. (FMP)
Interest Rates: Federal Reserve Bank of Minnesota President Neel Kashkari on Tuesday called for keeping interest rates steady until there is more clarity on how higher tariffs affect inflation, warning against looking through the impact of such supply price shocks. (Reuters)
International relations: Most Asian bourses traded narrowly on Tuesday due to caution regarding potential U.S. trade tariffs. Japan’s Nikkei 225 climbed 0.5% and the TOPIX added 0.4%, reversing early losses. The yen slid to ¥144 against the dollar. U.S. S&P 500 futures surged 0.9% in Asian hours. Nvidia’s quarterly report is due Wednesday, with analysts estimating Earnings Per Share (EPS) at $5.12 and revenue at $26.8 billion. Potential cuts to long-term JGB issuance are being considered by Tokyo. (FMP)
International relations: U.S. stock index futures rose sharply on Monday evening following President Trump’s agreement to delay 50% tariffs on EU imports until July 9. S&P 500 Futures increased 1.1% to 5,879.25, Nasdaq 100 Futures gained 1.3% to 21,236.50, and Dow Jones Futures climbed nearly 1% to 42,069.0. Nvidia’s Q1 earnings are scheduled for Wednesday, and analyst consensus price target for Nvidia is $675, representing roughly 15% upside from current levels. (FMP)
International relations: Most Asian currencies experienced narrow trading ranges on Tuesday. The U.S. Dollar Index fell 0.1% to a one-month low and Dollar Index Futures slipped 0.1%, reflecting muted demand. The USD/JPY pair declined 0.5% after Bank of Japan Governor Kazuo Ueda signaled a potential for further interest rate hikes amid rising inflation, with core consumer inflation hitting a two-year high in April. President Trump extended the 50% EU tariff deadline to July 9, and Japanese ministers will head to Washington in early June for the fourth round of trade negotiations. (FMP)
International relations: U.S. stock futures pointed to a solidly higher open when trading resumes on Tuesday after the holiday break. (WSJ)
International relations: China’s A1 rating holds, but Moody’s warns of trade shocks. Industrial profit gains clash with lingering domestic demand concerns. (FXEmpire)
International relations: The EU said it would “fast-track” trade talks with the US to avoid a transatlantic trade war. Trump criticized the EU for slow negotiations and threatened a 50% tariff on goods from the EU. (Business Insider)
International relations: The European Union may have won a reprieve from President Trump’s threatened 50% tariffs, but it remains unclear how the bloc will square its push for a mutually beneficial trade deal with Washington’s demands for steep concessions. (New York Post)
International relations: US stocks have been unusually volatile since the start of this year, mostly because of the Trump administration’s new trade policies that many believe could lead to a recession in the second half. In comparison, European equities have attracted significant capital in recent months due to more favourable monetary policies and, more importantly, stock valuations. (Invezz)
Market Sentiment: Stocks have shown resilience despite a challenging start to 2025, with the S&P 500 down 1.3% year-to-date, the Nasdaq Composite down 3%, and the Russell 2000 down 8.5%. A delay of a 50% tariff on EU imports, pushed from an unspecified date to July 9th following talks with Ursula von der Leyen, and positive economic data exceeding forecasts have contributed to market calm. Wolfe Research advises caution due to potential fiscal drag and economic sensitivity, suggesting an underweight position for cyclical sectors. The Russell 2000’s underperformance indicates uneven market leadership. (FMP)
Policy: Economists at Goldman Sachs say the Trump administration’s tariff policy will lift prices but not trigger an inflation surge. (Market Watch)
Trade: U.S. futures jumped Monday night stateside on Trump’s delay of 50% tariffs on the European Union. Analysts are warning investors not to let optimism over Trump’s postponement of EU tariffs run unchecked. (CNBC)
Trade: U.S. tariffs on goods imported from China fell to 51.1% while China kept levies of 32.6% on U.S. imports. (CNBC)
Trade: U.S. futures jumped Monday night stateside on Trump’s delay of 50% tariffs on the European Union. Analysts are warning investors not to let optimism over Trump’s postponement of EU tariffs run unchecked. (CNBC)
Trade: Wall Street appears poised to surge when markets open Tuesday, after two days of rallies by U.S. stock futures, spurred by President Donald Trump delaying his latest threat of 50% tariffs against European Union imports until July 9, to allow more time to reach a trade deal. (Market Watch)
Trade: We should have known it was too good to last. After markets enjoyed a month of relative peace in Donald Trump’s trade war with the world—a stretch of time during which Trump paused his so-called “reciprocal” tariffs on most countries and then rolled back his massive 145% tariffs on China—the president reignited the conflict Friday morning with a couple of posts on TruthSocial. (Fast Company)
Trade: A potentially devastating new round of tariffs looming over the European Union’s trade relationship with the U.S. will be pushed back for at least a month as negotiations continue. (Fast Company)
Industry
Luxury Goods: Diamonds face a baseline 10% import duty to the U.S. — a market accounting for over half of the global demand for polished diamonds. The tariff uncertainty comes at a time when the luxury industry at large is already contending with a slowdown in demand after a post-pandemic boom and an economic slump in China. (CNBC)
Pharmaceuticals: Sanofi and Vietnam Vaccine JSC (VNVC) inaugurated a new vaccine production facility in Vietnam on Tuesday, attended by French President Emmanuel Macron. The facility can produce multiple vaccine platforms, including inactivated and mRNA formulations, to accelerate COVID-19 booster rollouts and prepare for future outbreaks. It is WHO-prequalified and has export potential to ASEAN nations. Sanofi will transfer biomanufacturing know-how to VNVC. Initial output is 50 million doses per year, with a target of 100 million doses by 2027. Sanofi holds an AA- corporate rating and had over €15 billion in cash and equivalents at the end of Q1 2025. The facility classifies under the Pharmaceutical Preparations industry. (FMP)
Corporate
Boot Barn (NYSE:BOOT) / JPMorgan: Boot Barn (NYSE:BOOT) shares increased over 1% pre-market after JPMorgan raised its price target to $207 from $196, maintaining an Overweight rating. JPMorgan projects fiscal 2026 EPS of $6.95, exceeding management’s guidance of $5.50 to $6.40 and the Street consensus of $6.24. Quarter-to-date same-store sales through May 14 are up +9%, compared to management’s full-quarter guidance of +4% to +6%. JPMorgan anticipates over 300 basis points of potential same-store sales outperformance in the second half, referencing baseline trends closer to 8.9%. The Work Boot category, representing 20% to 25% of total sales, is a key driver of potential upside. (FMP)
Coupang: Morgan Stanley raised its price target on Coupang (NYSE:CPNG) to $32 from $27, maintaining an Overweight rating and naming it their new Top Pick. The upgrade is based on Coupang’s strong competitive positioning and favorable macro conditions. Morgan Stanley forecasts 41% adjusted EBITDA growth in 2025, supported by a 150 basis point year-over-year improvement in segment margins, reaching 9%, and contributing an additional $700 million in EBITDA. The firm sees a valuation of 23x EV/EBITDA on 2025 estimates, compressing to 15x by 2026, following a 23% year-to-date rally. (FMP)
Instacart (CART): Jefferies raised its price target on Instacart (CART) to $50 from $48, maintaining a Hold rating. Analysts anticipate Instacart will meet consensus gross transaction value (GTV) estimates, potentially with upside from Uber Eats. Jefferies slightly raised its financial estimates above consensus levels. Concerns remain regarding profitability due to investments in affordability and marketing, and a slower ramp in high-margin advertising revenue. (FMP)
Intuit (NASDAQ:INTU): Intuit (NASDAQ:INTU) reported fiscal Q3 adjusted EPS of $11.65 on $7.75 billion in revenue, exceeding consensus estimates of $10.91 and $7.56 billion. This marks the company’s ninth consecutive quarter of topping EPS estimates by an average of 6%. Revenue grew 19% year-over-year (YoY), with an operating margin of 56%, surpassing the Street’s forecast of 54%. For Q4, Intuit projects EPS of $2.63-$2.68 on $3.723-$3.760 billion in sales, compared to the expected $2.60 and $3.53 billion. The full-year outlook now anticipates non-GAAP EPS of $20.07-$20.12 (18-19% growth) and revenue of $18.723-$18.760 billion (approximately 15% growth), revised upwards from prior ranges of 13-14% and 12-13%. The consensus price target is $650, with a high of $720. (FMP)
Jack In The Box Inc: Truist downgraded Jack In The Box Inc (JACK) from Buy to Hold on Monday and lowered its price target to $22 from $51, citing seven consecutive quarters of underperformance in same-store sales. The downgrade reflects muted growth expectations for the company’s U.S. outlets, with continued weakness observed in April-May data. Truist believes Jack’s “Jack-on-Track” plan, announced in April, is unlikely to significantly increase shareholder value and calls for a comprehensive strategic reset rather than financial restructuring or asset sales. Shares currently trade near mid-single-digit multiples, limiting upside until same-store sales trends reverse. (FMP)
JOYY Inc: JOYY Inc. (NASDAQ:JOYY) reported first-quarter EPS of $1.18, exceeding the $1.00 consensus estimate, and revenue of $494.35 million, surpassing the $490 million estimate. Shares closed at $43.64, down 7.4% over three months but up 33.7% year-over-year. The company has averaged a 5% positive EPS surprise over the past four quarters. Q1 revenue grew by 12% year-over-year, reaching $494.35 million. The Adjusted EBITDA margin was 38%. JOYY currently trades at 18x trailing-12-month earnings, compared to a 16x median for software-services companies. (FMP)
Lowe’s: Stifel lowered its price target for Lowe’s (NYSE:LOW) from $250 to $240, maintaining a Hold rating after the company’s fiscal Q1 2025 earnings. The firm kept its 2025 EPS forecast at the low end of Lowe’s reiterated guidance. Q1 showed improving comparable sales, but Stifel is cautious about the sustainability of top-line momentum and the company’s ability to meet full-year revenue targets. The firm anticipates sideways trading for Lowe’s stock in the near term, with its valuation reflecting a discount to retail peers. (FMP)
Seven & i Holdings / Alimentation Couche-Tard: Shareholders at 7-Eleven owner Seven & i Holdings have approved a new board for the Japanese convenience store giant at the company’s annual general meeting, potentially putting an acquisition by Canada’s Alimentation Couche-Tard on hold. (Forbes)
Skyline Corp (SKY) / Golar LNG Ltd (GLNG) / Dynagas LNG Partners (DLNG) / Okta Inc (OKTA) / SeaCube Container Leasing Ltd (BOX) / Semtech Corp (SMTC): Earnings reports released Tuesday include estimates for Skyline Corp (SKY) with EPS of $0.7767 and revenue of $600.94M, Golar LNG Ltd (GLNG) with EPS of $0.2186 and revenue of $66.34M, Dynagas LNG Partners (DLNG) with EPS of $0.29 and revenue of $37.37M, Okta Inc (OKTA) with EPS of $0.7702 and revenue of $680.33M, SeaCube Container Leasing Ltd (BOX) with EPS of $0.259 and revenue of $275.09M, and Semtech Corp (SMTC) with EPS of $0.3667 and revenue of $250.09M. The Earnings Calendar API tracks releases by date and ticker, while the Earnings Historical API tracks EPS beats, misses, and price reactions. (FMP)
Sony Group Corporation: Sony will spin off its financial arm, Sony Financial Group, via a direct listing on September 29. The spin-off, enabled by Japan’s 2023 tax reforms, will distribute just over 80% of Sony Financial’s shares to Sony shareholders. Sony Financial Group holds over ¥2 trillion in equity and maintains an A- credit rating. The spin-off aims to enhance capital efficiency for Sony’s entertainment and electronics divisions and unlock value for investors, marking Japan’s first such move in over two decades. (FMP)
Terex: Goldman Sachs upgraded Terex (NYSE:TEX) from Neutral to Buy, raising its price target from $45 to $60. The upgrade is based on signs of earnings stabilization and improved visibility. The Aerial Work Platforms segment is believed to have bottomed in Q1, supported by a 30% production cut and a decline in used inventory levels—the first since late 2022. The Environmental Services Group acquisition now contributes 25%–30% of total profits. Potential tariff impact from Mexico-based manufacturing under USMCA is estimated at $0.50 per share. (FMP)
Tesla Inc: Tesla Inc. experienced a 49% decline in European new-car registrations in April, dropping to 7,261 units from 14,228 in April of the previous year. This decrease reduced Tesla’s regional market share to 0.7% from 1.3%. Overall European battery-EV sales increased by 34.1% to 145,341 units during the same period. BYD overtook Tesla in April. (FMP)
Trump Media & Technology Group: Trump Media & Technology Group plans a $3 billion capital raise: $2 billion in equity and $1 billion via a convertible bond. The company intends to deploy this capital into cryptocurrencies, including Bitcoin, as part of a broader financial platform. As of early Monday, Bitcoin was trading around $112,500, a 0.8% increase on the day. The $1 billion convertible bond issuance will require a prospectus filing with the SEC, and life-of-bond yields will influence the timing of crypto deployment. Senior figures, including VP JD Vance and Donald Trump Jr., are scheduled to appear at a crypto investor conference this week. (FMP)
Wingstop (NASDAQ:WING): Truist Securities upgraded Wingstop (NASDAQ:WING) from Hold to Buy, increasing its price target to $400 from $274, causing pre-market shares to rise over 2%. Analysts anticipate same-store sales (SSS) will bottom in Q2 2025 and reaccelerate in 2026. New store development is forecasted to continue in the mid-teens and Truist believes Wingstop may surpass its long-term development targets. The upgrade is based on confidence in a same-store sales rebound and long-term growth prospects, supported by proprietary card data from May and the upcoming “Smart Kitchen” initiative. (FMP)
Workday: Workday reported Q1 EPS of $2.23, exceeding the $2.01 consensus estimate by $0.22, and revenue of $2.24 billion, surpassing the $2.22 billion estimate. Shares closed at $272.38, up 6.2% over three months and 4.4% year-to-date. Over the past eight quarters, Workday has exceeded EPS forecasts by an average of 8%. The company’s revenue increased 14% year-over-year. Workday currently trades at 25x trailing-12-month revenue, compared to a 20x peer median for software-services companies. There have been 23 upward EPS revisions in the last 90 days. (FMP)
