Today's Update 04-29-2025
Key Points and Metrics
Key Points and Metrics:
Latest Financial Data:
General Motors (GM):
Earnings Update:
Q1 2025 Adjusted EPS: $2.78 (Estimate: $2.70)
Revenue: $44.02 billion (Estimate: $43 billion)
North America Adjusted EBIT: $3.29 billion (Estimate: $3.27 billion)
Actions:
Cut earnings expectations for 2025.
Halted $4 billion in share buybacks.
Market Reaction:
GM shares fell in premarket trading.
U.S. stock futures lost earlier gains following the announcement.
U.S. Economic Indicators:
Consumer Confidence (April 2025):
Actual: 86
Forecast: 88
Previous: 92.9 (Revised to 93.9)
12-Month Inflation Expectations: Reached 7% (Highest since November 2022).
JOLTS Job Openings (March 2025):
Actual: 7.192 million
Forecast: 7.5 million
Previous: 7.568 million (Revised to 7.48 million)
Dallas Fed Manufacturing Index (April 2025):
Actual: -35.80
Forecast: -17
Previous: -16.30
Comments: Executives described the tariff situation as "chaos" and "insanity."
World Bank Forecasts:
Commodity Prices:
Expected to fall 12% in 2025 and an additional 5% in 2026.
Adjusted for inflation, prices will return to 2015-2019 averages.
Energy Prices:
Forecasted to decline 17% in 2025 to the lowest level in five years.
Expected to drop another 6% in 2026.
Brent Crude Price Projections:
2025 Average Price: $64 per barrel
2026 Average Price: $60 per barrel (Down from $81 in 2024)
Food Prices:
Anticipated to fall 7% in 2025 and an additional 1% in 2026.
Corporate Earnings Highlights:
UPS:
Q1 2025 Earnings:
EPS: $1.49 (Estimate: $1.41)
Revenue: $21.5 billion (Estimate: $21.1 billion)
Actions:
Plans to cut 20,000 positions in 2025 due to Amazon downsizing.
Pfizer (PFE):
Q1 2025 Earnings:
Revenue: $13.72 billion (Estimate: $14.09 billion)
Outlook:
Reaffirmed FY 2025 guidance.
Adjusted EPS forecast remains at $2.80 to $3.00.
PayPal (PYPL):
Q1 2025 Earnings:
Adjusted EPS: $1.33 (Estimate: $1.16)
Revenue: $7.79 billion (Estimate: $7.85 billion)
Outlook:
Reaffirmed FY adjusted EPS guidance at $4.95 to $5.10.
Global Trade and Tariffs:
China:
Waived a 125% tariff on U.S. ethane imports.
Urged the U.S. to establish a stable business environment.
Emphasized that the tariff war was initiated by the U.S.
Amazon:
Will begin showing the cost of Trump tariffs on each product.
Political Developments:
Canada:
Liberal Party projected to win its fourth consecutive election.
Mark Carney, former central banker, expected to become Prime Minister.
Canadian dollar remained stable following election projections.
Ukraine:
President Zelenskiy warned that Russia is preparing activities in Belarus this summer.
Ukraine seeks to finalize a minerals deal with the U.S. promptly.
Central Bank Insights:
European Central Bank (ECB):
Comments by Officials:
Cipollone: Tariffs risk leading to persistently lower global growth.
Rehn: Expects the disinflationary process to continue.
Kazaks: Highlighted significant uncertainty in the global economy.
Actions:
ECB's bond holdings under the Pandemic Emergency Purchase Programme (PEPP) reached €1.54 trillion.
Energy Markets:
Oil Prices:
Brent Crude Futures: Settled at $65.86 per barrel, down 1.51%.
NYMEX WTI Crude June Futures: Settled at $62.05 per barrel, down 1.54%.
World Bank Outlook: Lower oil demand due to weaker economic growth and increased adoption of electric vehicles in China.
U.S. Treasury Updates:
Borrowing Estimates:
Expects to borrow $514 billion in Q2 2025 (Previously estimated $123 billion).
Assumes the debt ceiling issue will be addressed.
Cash Balance Targets:
End-June cash balance target maintained at $850 billion.
Projects $554 billion in net borrowing for July-September, with a cash balance of $850 billion at end-September.
Global Economic Data:
German GfK Consumer Sentiment (May 2025):
Actual: -20.6 (Forecast: -25.8, Previous: -24.3)
Spanish Economic Indicators:
Estimated GDP QoQ: 0.6% (Forecast: 0.7%, Previous: 0.7%)
Estimated GDP YoY: 2.8% (Forecast: 3.1%, Previous: 3.4%)
CPI YoY Flash: 2.2% (Forecast: 2%, Previous: 2.3%)
Crypto Regulations:
United Kingdom:
Finance Ministry plans to bring crypto exchanges and related firms within the regulatory framework.
Aims to boost investor confidence, support fintech growth, and protect consumers.
New draft legislation for crypto assets to be published.
Technology and Innovation:
China:
President Xi Jinping emphasized the need to enhance policy support and talent development in artificial intelligence (AI).
Urged for constant iteration in AI technology.
Other Notable Events:
UPS Exploring Robotics:
In talks with Figure AI to deploy humanoid robots.
U.S. Government:
White House indicated that Trump wants tax cuts included in the reconciliation package.
Trade talks with the UK are progressing positively.
World Bank Commentary:
Commodity price declines could moderate near-term inflation risks from rising trade barriers.
The combination of corporate earnings reports, economic data releases, and geopolitical developments is influencing market sentiments:
Corporate Actions: Major companies like GM and UPS are adjusting their forecasts and operations in response to economic uncertainties and changes in the trade environment.
Economic Indicators: U.S. consumer confidence and job openings have declined more than expected, signaling potential concerns about economic growth and employment.
Energy and Commodity Markets: The World Bank projects a significant decline in energy and commodity prices over the next two years, which could alleviate some inflationary pressures.
Global Trade Relations: China is making strategic decisions on tariffs and emphasizing the importance of stable relations with the U.S., while the U.K. moves toward regulating the crypto market to enhance investor confidence.
Political Landscape: Canada's projected election results could influence future economic and trade policies, especially with Mark Carney's expected leadership.
Technological Focus: China's commitment to advancing in AI technology highlights the global emphasis on innovation and its potential economic impact.
Final Thoughts:
The markets are navigating significant uncertainty around trade policy, with tariff impacts beginning to materialize in corporate earnings and guidance. Consumer confidence is weakening while inflation expectations are rising sharply, creating a challenging environment for the Federal Reserve. Companies are taking defensive positions, with GM pausing buybacks and Amazon planning to highlight tariff costs to consumers. Meanwhile, the Treasury is pursuing bilateral trade agreements with multiple countries while keeping China discussions on hold. Economic data suggests slowing growth ahead, with the Dallas Fed Manufacturing Index showing dramatic deterioration and executives using terms like "chaos" and "insanity" to describe the current tariff situation. Investors should watch upcoming earnings from tech giants for insights on how the trade tensions are affecting the most valuable companies in the market.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Always do your own research and consider your financial situation before making investment decisions.
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Harry