NEWS
Market Red Until Trump Posted This
Source: tenor
The market was red before the trading day even started on Wednesday, after GDP data came out for the first quarter that showed the first decline in growth for 2023. President Trump took to Truth Social and said it was Biden’s fault, and by the end of the day, the market closed in a gain—art of the deal.
Jensen Huang spoke at the White House after the market closed, cheerleading the support of the White House for AI Infrastructure. According to Bloomberg, European officials plan to propose trade deals to the U.S. next week.
Today's issue covers two magnificent reports from Meta and MSFT, Robinhood falls despite beat, and Macro data sucks.
Here’s the S&P 500 heatmap. 8 of 11 sectors closed green, with Health care (+1.19%) leading and energy(-2.23%) lagging.
And here are the closing prices:
S&P 500 | 5,569 | +0.15% |
Nasdaq | 17,446 | -0.09% |
Russell 2000 | 1,964 | -0.63% |
Dow Jones | 40,669 | +0.35% |
EARNINGS
Two Mag Seven Giants Beat Results
Microsoft reported Q3 EPS of $3.46 on revenue of $70.07B. According to Yahoo Finance, analysts expected earnings of $3.22/share on revenue of $68.44B.
The firm’s cloud segment is expected to pull in $42.2B, up from $34.1B a year ago. Azure Revenue climbed 33%, above what the firm projected earlier in the quarter. Results rose from $2.94 EPS and $61.86B a year ago. Chief Satya Nadella said the firm delivered cloud revenue that climbed 22% YoY.
“Cloud and AI are the essential inputs for every business to expand output, reduce costs, and accelerate growth," Nadella said. “From AI infra and platforms to apps, we are innovating across the stack to deliver for our customers.”
Meta mostly beat expectations, and shares climbed 6% after posting results. The social media giant reported Q1 EPS of $6.43 on revenue of $42.31B. Analysts expected earnings of $5.22/share on revenue of $42.36B according to Yahoo Finance.
For the current quarter, the firm expects Q2 rev 42.5-45.5 est $44.06B. They also said they expected to spend about $1B less this year in total expenses, but spend $4-$7B more in CapEx.
The firm did not mention allegations from the Federal government that Meta's monopolizes the personal social networking world.’ The Wall Street Journal reported that Chief Mark Zuckerberg offered to settle for $450 million, but the government won’t go lower than $18 billion.
However, the CFO, Susan Li, said on the firm’s earnings call that their upbeat guidance is based on the current conditions in April, and things are going pretty well.
Source: Stocktwits
If tech keeps delivering, this quarter’s earnings season might come in positive, one money manager said.
“Tomorrow we are getting Apple and Amazon, if we can get beats from them too, we can get some real momentum, Daniel Morgan, Synovus Trust Senior Portfolio Manager, told Bloomberg.
ECONOMY
Macro Is Bad, Should You Feel Bad?
Two macroeconomic data drops hurt investor feelings on Wednesday, before more pressing matters helped push things higher.
GDP Numbers: The first quarter Gross Domestic Product numbers came in negative, recording the first contraction in U.S. growth for three years.
PCE Index: The Fed’s preferred inflation gauge was flat in March, with annual PCE inflation at 2.3%, down from 2.5% in February. Well, the U.S. Department of Commerce revised the previous numbers upwards to 2.7%. Core PCE, which excludes food and energy, also held steady month-over-month, rising 2.6 percent year-over-year.
In response, the market turned to fall, while White House Trade Advisor Peter Navarro said it was actually good news. He told CNBC it was the “best negative print” he has ever seen.
Trump ended up helping him out with a post, but Navarro went on to say that if you cut out the pain caused by tariffs, the economy would have grown.
“That is off the charts when you strip out inventories and the negative effects of the surge in imports because of the tariffs, you had 3% growth,” he said.
STOCKS
Other Noteworthy Pops & Drops
Toyota ($TM -2%): Toyota and Alphabet’s Waymo said Tuesday they were in early talks to integrate Waymo’s autonomous driving systems into Toyota’s personally owned vehicles and expand Waymo’s robotaxi fleet using Toyota’s platforms.
Grab ($GRAB +2%): The Southeast Asian ride-hailing and delivery company Grab raised its 2025 EBITDA forecast to $460 million–$480 million, up from $440 million–$470 million, after reporting Q1 revenue of $773 million, beating estimates of $766.7 million.
Humana ($HUM +1%): Insurer Humana expects a 10% drop in Medicare Advantage membership for 2025 due to planned exits from unprofitable plans and select markets. Analysts project Q1 revenue of $32.22 billion, up from $29.21 billion a year earlier, with EPS forecast at $10.07 compared to a prior loss of $2.16.
Stellantis ($STLA -3%): The automaker suspended its full-year 2025 guidance after reporting Q1 revenue of 35.8 billion euros ($40.66B,) down 14 percent year-over-year. Stellantis cited tariff-related uncertainties and lower shipment volumes, noting ongoing discussions with governments and adjustments to production plans.
Caterpillar ($CAT +0.6%): The industrial giant posted Q1 revenue of $14.2 billion, missing estimates of $14.58 billion, as sales declined 10% due to lower dealer inventories and unfavorable price realization. Adjusted EPS came in at $4.25, below the 4.35-dollar forecast, with tariff-related costs expected to weigh further on Q2 results.
Etsy ($ETSY -6%): Custom shop site Etsy reported Q1 revenue of $651.2 million, beating estimates of $641.7 million, driven by strong advertising and payments growth. Despite the revenue beat, Etsy posted a net loss of $52.1 million.
Regulus Therapeutics ($RGLS +136%):Shares surged 138% after Novartis agreed to acquire the company for $7 per share, valuing the deal at $800 million upfront. Regulus shareholders may receive an additional $7 per share if its lead drug, farabursen, secures regulatory approval.
AppLovin ($APP -7%): Shares of the mobile ad firm fell after Edgewater Research lowered estimates, citing a decelerating mobile gaming sector and rising competition from Meta and Alphabet.
Nvidia ($NVDA -0.1%): Seaport Research posted a rare analyst sell rating on Nvidia, citing that AI-driven growth is already priced into the stock. The firm set a $100 price target, implying an 8 percent downside, and flagged rising competition as hyperscalers develop their own chips.
Tomorrow’s Top Things
Economic data: Initial Jobless Claims (8:30 am), S&P Global Manufacturing PMI (9:45 am), ISM Manufacturing PMI (10:00 am).
Pre-Market Earnings: SNDL ($SNDL), Moderna ($MRNA), Roblox ($RBLX), Mastercard ($MA), CVS Health ($CVS), Eli Lilly ($LLY), Sirius XM Holdings ($SIRI), Wayfair ($W), Shake Shack ($SHAK).
After-Hour Earnings: Apple ($AAPL), MicroStrategy ($MSTR), Amazon ($AMZN), Block ($XYZ), Roku ($ROKU), Riot Platforms ($RIOT), Airbnb ($ABNB), Twilio ($TWLO), United States Steel ($X).