Today's Update 05-02-2025
Key Points and Metrics
Key Points and Metrics:
U.S. Economic Data:
Nonfarm Payrolls:
Actual: +177,000 jobs in April 2025
Forecast: +138,000
Previous: +228,000 (revised to +185,000)
The job market grew more than expected, indicating continued strength in employment.
Unemployment Rate:
Actual: 4.2%
Forecast: 4.2%
Previous: 4.2%
The unemployment rate remained steady, aligning with expectations.
Average Earnings:
Month-over-Month (MoM):
Actual: +0.2%
Forecast: +0.3%
Previous: +0.3%
Year-over-Year (YoY):
Actual: +3.8%
Forecast: +3.9%
Previous: +3.8%
Wage growth continues but at a slightly slower pace than anticipated.
Manufacturing Payrolls:
Actual: -1,000 jobs
Forecast: -5,000
Previous: +1,000 (revised to +3,000)
Manufacturing employment saw a slight decline but was better than expected.
Private Payrolls:
Actual: +167,000
Forecast: +125,000
Previous: +209,000 (revised to +170,000)
Private sector hiring was strong, surpassing forecasts.
Average Workweek Hours:
Actual: 34.3 hours
Forecast: 34.2 hours
Previous: 34.2 hours (revised to 34.3 hours)
An increase in average hours worked suggests higher labor utilization.
Corporate Earnings:
Apple Inc. (AAPL) Q2 2025:
Earnings Per Share (EPS): $1.65 (Estimate: $1.62)
Revenue: $95.36 billion (Estimate: $94.59 billion)
iPhone Revenue: $46.84 billion (Estimate: $45.94 billion)
Services Revenue: $26.65 billion (Estimate: $26.72 billion)
Share Buyback: Authorized up to $100 billion in repurchases
Dividend: Declared cash dividend of $0.26 per share
Apple delivered solid results, beating earnings estimates and announcing a significant stock buyback program.
Amazon.com Inc. (AMZN) Q1 2025:
EPS: $1.59 (Estimate: $1.36)
Net Sales: $155.7 billion (Estimate: $155.16 billion)
Amazon Web Services (AWS) Sales: $29.27 billion (Estimate: $29.36 billion)
Q2 Operating Income Outlook: $13 billion to $17.5 billion (Estimate: $17.82 billion)
Strong earnings but a cautious outlook on operating income for next quarter.
Exxon Mobil Corp. (XOM) Q1 2025:
Adjusted EPS: $1.76 (In line with estimates)
Total Revenue & Other Income: $83.13 billion (Estimate: $81.35 billion)
Exxon met earnings expectations and slightly beat revenue estimates.
Chevron Corp. (CVX) Q1 2025:
Adjusted EPS: $2.18 (Estimate: $2.90)
Revenue & Other Income: $47.61 billion (Estimate: $47.05 billion)
Chevron missed on earnings but slightly exceeded revenue expectations.
Market Movements:
Stock Indices:
S&P 500: Increased for the eighth consecutive day, marking the longest winning streak since August.
Nasdaq 100: Closed up 1.1%, boosted by strong tech earnings.
The stock market continues its upward momentum driven by positive corporate earnings.
Crude Oil:
Brent Crude Futures:
Settled at: $62.13 per barrel
Change: Up $1.07 or +1.75%
Note: Closed at the lowest level since March 2021 despite the daily gain.
WTI Crude Futures:
Settled at: $59.24 per barrel
Change: Up $1.03 or +1.77%
Oil prices have faced downward pressure but saw a modest rebound.
Gold:
Outflows: First weekly outflow since January reported by Bank of America (BofA)
Investors may be shifting away from gold amid changing market sentiments.
Geopolitical and Trade Developments:
Iranian Oil Sanctions:
President Trump's Announcement:
Mandate: All purchases of Iranian oil must stop immediately.
Consequence: Secondary sanctions on any country or person continuing to buy oil or petrochemicals from Iran.
This move could impact global oil supply and international relations.
Trade Negotiations:
U.S. and Russia:
Potential Actions: U.S. officials are considering options to increase economic pressure on Russia to end the Ukraine conflict.
U.S. and Japan:
Tariffs: Japan expresses that U.S. auto tariffs are "absolutely unacceptable."
Negotiations: Ongoing discussions regarding trade deficits and tariff reductions.
European Union:
Trade Chief's Statement: The EU is ready to increase purchases of U.S. gas and agricultural goods but seeks fair resolution on tariffs.
Offer: Europe may propose a €50 billion trade offer to the U.S.
Trade relations remain a focal point with potential implications for global markets.
Other Noteworthy Points:
Treasury Flows:
Outflow: U.S. Treasuries saw a $4.5 billion outflow, the largest since December 2023 (BofA).
Indicates a shift in investor sentiment towards U.S. government bonds.
Eurozone Economic Data:
Core Consumer Price Index (CPI) YoY Flash Estimate:
Actual: +2.7%
Forecast: +2.5%
Previous: +2.4%
Unemployment Rate:
Actual: 6.2%
Forecast: 6.1%
Previous: 6.1% (revised to 6.2%)
Slight uptick in inflation and unemployment suggests cautious optimism in the Eurozone economy.
Automotive Trade Updates:
U.S. Customs and Border Protection:
Confirmation: North American auto parts compliant with USMCA trade rules are exempt from the 25% U.S. auto tariff.
This exemption supports the automotive industry within North America.
Summary:
The U.S. economy showed signs of contraction with a negative GDP growth rate in Q1 2025, while employment growth slowed significantly.
Inflation indicators suggest moderation, with both headline and core PCE measures showing no monthly increase.
Consumer spending remains strong, and personal income continues to grow, indicating resilient consumer confidence.
Manufacturing activity is contracting in certain regions, as evidenced by the Chicago PMI.
The housing market displays robust growth with significant increases in pending home sales.
Markets reacted to the data with declines in equity futures and a weaker U.S. dollar, reflecting concerns about economic growth and ongoing trade tensions.
International developments, particularly involving China and Ukraine, may have implications for global trade dynamics and resource markets.
Investors are closely watching upcoming corporate earnings from major tech companies for further insights into economic conditions.
Central Bank Activity:
Bank of Japan maintained rates at 0.5%, delayed timing for inflation target
BoJ Governor Ueda expressed concerns about US tariffs impacting Japan's economy
US Treasury Secretary Bessent suggested two-year yields below federal funds rate signal Fed should cut rates
Market Reaction:
S&P 500 and Nasdaq futures gained at least 1% following strong tech earnings
Microsoft and Meta posted better-than-expected results
Japanese yen weakened after BoJ decision
US bond yields edged lower across the curve
Final Thoughts
The stronger-than-expected jobs report shows resilience in the US labor market while wage growth moderation provides some inflation relief. Markets are responding positively to potential US-China trade talks, pushing the S&P 500 toward its longest winning streak in over two decades. However, corporate earnings reveal mixed results with companies like Chevron facing headwinds from trade tensions. The geopolitical landscape remains complex with ongoing tensions between the US and multiple countries including Iran, Japan, and Russia. Trump's comments on monetary policy suggest continued pressure on the Federal Reserve despite the solid employment data. Investors should monitor upcoming Factory Orders data (10:00 AM) and Baker Hughes rig count (1:00 PM) for additional economic signals.
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