Latest news with #ExpectationsIndex
Yahoo
6 days ago
- Business
- Yahoo
Pick 5 Buyer-Focused Stocks as Consumer Confidence Rebounds in May
On May 27, the Conference Board reported that the U.S. Consumer Confidence Index has rebounded this month after five consecutive months of decline. The final reading for May came in at 98, significantly above the Zacks Consensus Estimate of 86. The metric for April was revised marginally downward to 85.7 from 86 reported earlier. May's consumer optimism was primarily driven by expectations of a U.S.-China trade deal, the delay by the Trump administration to impose 50% tariffs on the European Union and the ongoing negotiations related to tariff and trade policies with several other major trading partners of the United States. At this stage, investment in consumer discretionary stocks should be fruitful. Five such stocks with a favorable Zacks Rank are: Netflix Inc. NFLX, The Walt Disney Co. DIS, Charter Communications Inc. CHTR, Roku Inc. ROKU and Roblox Corp. RBLX. Each of our picks carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. The Present Situation Index—based on consumers' assessment of current business and labor market conditions — rose to 135.9 in May from 131.1 in April. The Expectations Index — based on consumers' short-term outlook for income, business, and labor market conditions — climbed to 72.8 in May from 55.4 in April. However, this sub-index remained below the threshold of 80, which typically signals a recession ahead. In May, 44% of respondents expect stocks to be higher over the next 12 months, compared with 37.6% in April. With respect to the labor market, 19.2% of respondents expect more jobs to be available in the next six months compared with 13.9% in April. The chart below shows the price performance of our five picks in the past month. Image Source: Zacks Investment Research Netflix handsomely beat the Zacks Consensus Estimate for bottom line while the top line was mostly in line with the consensus mark in first-quarter 2025. Despite trade and tariff-related doldrums, NFLX seems to have maintained healthy engagement levels. NFLX reaffirmed its 2025 guidance irrespective of the possibility of a near-term recession. On April 1, Netflix launched its Ad Suite in the United States. NFLX will ramp up this Ad Suite in international markets in the ensuing second quarter. The ad-supported offerings will enable management to witness impressive subscribers and ARPU (average revenue per user) growth. Netflix's policies of offering an ad-supported lower-priced tier, abolishing password sharing and effective price increase, should help it to become a defensive play ahead of a possible economic downturn. Furthermore, Netflix uses artificial intelligence (AI), data science and machine language extensively to provide consumers with more appropriate and intuitive suggestions. Netflix's AI platform takes into account an individual's viewing habits and hobbies and accordingly provides recommendations. NFLX's AI model compiles subscriber information and recommends content based on their preferences, which can be customized by end users. AI applications enable NFLX to offer a high-quality streaming service at reduced bandwidths. Netflix has an expected revenue and earnings growth rate of 14% and 27.7%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3% over the last 60 days. The Walt Disney reported steady second-quarter fiscal 2025 results wherein revenues and earnings increased year-over-year. Domestic Parks & Experiences saw growth at domestic parks, Disney Vacation Club and Disney Cruise Line, partially offset by the decline at international locations including Shanghai Disney Resort and Hong Kong Disneyland Resort. In Entertainment, DIS expects double-digit percentage operating income growth in fiscal 2025. ESPN continues to reinforce its position as a sports-dominant platform, with the second quarter delivering its most-watched primetime ever and 32% viewership growth in the key 18-49 demographic. DIS has successfully transformed its streaming business from a loss-leader to a profitable growth engine. After reporting its first-ever Direct-to-Consumer (DTC) operating profit in fiscal year 2024, the momentum has accelerated in fiscal year 2025 with second-quarter DTC operating income reaching $336 million. The Walt Disney has an expected revenue and earnings growth rate of 3.8% and 15.1%, respectively, for the current year (ending September 2025). The Zacks Consensus Estimate for current-year earnings has improved 4.6% in the last 30 days. Charter Communications' first-quarter performance benefited from continued growth in mobile service revenues, which surged 33.5% year over year, adding 514K new mobile lines. CHTR's Internet revenues grew 1.8%, driven by promotional rate step-ups and rate adjustments. Spectrum Mobile's competitive pricing & expanded 5G coverage remain the key growth drivers. In March 2025, Spectrum Mobile launched satellite-based services through a collaboration with Skylo, a non-terrestrial network service provider. CHTR's Spectrum One continues to win market share with its differentiated offerings like Mobile Speed Boost and Spectrum Mobile Network, each of which runs on its advanced Spectrum WiFi. Spectrum WiFi provides unlimited Internet access to residential customers even when they are outdoors. It will also help CHTR fend off competition. Charter Communications has an expected revenue and earnings growth rate of 0.3% and 13.2%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 5.1% in the last 30 days. Roku benefits from increased user engagement on The Roku Channel and the popularity of the Roku TV program. The Roku OS is the #1 selling TV OS in the United States, with TV unit sales greater than the next two TV operating systems combined. The Roku Channel reached U.S. households with approximately 145 million people and remained the #3 app on its platform by both reach and engagement, with streaming hours up 82% year over year. More than 80% of streaming hours on The Roku Channel originates from the Roku Experience. Roku continued to expand penetration in the United States, surpassing half of the broadband households. Roku has an expected revenue and earnings growth rate of 10.5% and 80.9%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 39.3% in the last 30 days. Roblox develops and operates an online entertainment platform. RBLX offers Roblox Client, an application that allows users to explore 3D digital worlds; and Roblox Studio, a toolset that allows developers and creators to build, publish and operate 3D experiences and other content. RBLX also provides Roblox Cloud, a solution that provides services and infrastructure to power the human co-experience platform. Roblox has an expected revenue and earnings growth rate of 22.5% and 2.1%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4.1% in the last 30 days. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Netflix, Inc. (NFLX) : Free Stock Analysis Report The Walt Disney Company (DIS) : Free Stock Analysis Report Charter Communications, Inc. (CHTR) : Free Stock Analysis Report Roku, Inc. (ROKU) : Free Stock Analysis Report Roblox Corporation (RBLX) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
UPI
6 days ago
- Business
- UPI
May American consumer confidence rebounds after five months of decline
Traders work on the floor of the New York Stock Exchange on Wall Street in February. File Photo by John Angelillo/UPI | License Photo May 27 (UPI) -- The nonprofit research organization The Conference Board announced Tuesday that the confidence of American consumers in regard to current business and labor market conditions is on the rise, but notes a recession could be on the horizon. According to a press release, the Board's Consumer Confidence Index increased in May by 12.3 points to 98, up from 85.7 in April. Its Present Situation Index, which is based on the assessment of American consumers on current business and labor market conditions, also went up 4.8 points to 135.9. The Board's Expectations Index, which measures the short-term outlook of American consumers in relation to business, income and labor market conditions also rose 17.4 points to 72.8. Global Indicators at The Conference Board Senior Economist Stephanie Guichard said that consumer confidence "improved in May after five consecutive months of decline." However, as per The Conference Board, when the Expectations Index stays below 80, it often signals an imminent recession. Even so, the data indicates that consumers were more confident about potential job availability and business conditions over the next six months and had increased optimism about future income prospects. Guichard also said that consumers' outlook on stock prices improved as the market showed a positive direction in May "with 44% expecting stock prices to increase over the next 12 months," an increase from 37.6% in April, "and 37.7% expecting stock prices to decline," which is down from 47.2% in April. "This was one of the survey questions with the strongest improvement after the May 12 trade deal," she added. The reported cutoff date for the data taken in for these scales was May 19, but around half were received after the May 12 announcement by the Trump administration that it had paused tariffs on Chinese imports. "The rebound was already visible before the May 12 US-China trade deal but gained momentum afterwards," Guichard also explained, but while Expectations Index had risen from April, "their appraisal of current job availability weakened for the fifth consecutive month."
Yahoo
6 days ago
- Business
- Yahoo
Big Market Gains on Tariff Delay, Improved Consumer Confidence
Tuesday, May 27, 2025The pause on EU tariffs announced over the weekend was the main story in today's pre-market activity, and it remained so throughout the day. Although slightly off session highs intra-day, the Dow gained +740 points, +1.78%, the S&P 500 grew +118 points, +2.05%, the Nasdaq +461, +2.47%, and the small-cap Russell 2000 — which has lagged the other major indexes — won the day: +50 points, +2.48%.Aside from the 50% tariff pause on EU imports for the next six weeks (with the idea that negotiations will be hashed out between now and then), we saw Salesforce CRM intending to acquire Informatica INFA for $8 billion — and which both buying and selling companies gained on the news — and an upgrade on Southwest Airlines LUV from Jefferies sent major airlines up +4% or higher. Earlier today, the May report on Consumer Confidence from The Conference Board was released, with a headline of +98.0 — +12.3 points higher than the slightly downwardly revised April result. The Present Situation print gained +4.8 points to 135.9, while the Expectations Index +17.4 points to + more, 44% of investors now believe the stock market will be higher than at present over the next 12 months. While this remains below 50%, it still helps illustrate some of the positive sentiment the market has gained since tariff delays have been instilled by the White House. Cloud management platform Box BOX shares are up +11% following Q1 earnings results ahead of analyst expectations: 30 cents per share beat consensus by a solid nickel. Revenues of $276 million in the quarter outpaced the $274.4 million estimated. Also, revenue guidance was ratcheted higher for both Q2 and full fiscal year, and the stock is now up double-digits year to date. (You can see the full Zacks Earnings Calendar here.)Tech authentication firm Okta OKTA, on the other hand, is trading down -10% in the after-market on a Q1 beat of its own — earnings of 86 per share on $688 million in sales surpassed the 77 cents per share on $679.7 million estimates, respectively. But with full-year revenue guidance slightly below the Zacks consensus, and a mention of 'potential risk on an uncertain economic environment,' its +59% gains year to day are giving some of that back at this hour. The big news for tomorrow continues to be expectations for NVIDIA's NVDA Q1 earnings after the close. Shares gained another +3% today as the 'AI trade' picks up steam again. NVIDIA shares are +44% off April 4 lows following the initial bite of the tariff wars. The semiconductor giant currently carries a Zacks Rank #3 (Hold) and Value-Momentum-Growth grade of M and Salesforce earnings are also expected Wednesday, as are the minutes to the most recent Federal Open Market Committee (FOMC) meeting. We've heard from many Fed members since the May 7th decision not to move on interest rates with so much economic uncertainty ongoing, but parsing commentary between meetings — with an outlook toward future potential moves — is expected or comments about this article and/or author? Click here>> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Salesforce Inc. (CRM) : Free Stock Analysis Report Southwest Airlines Co. (LUV) : Free Stock Analysis Report Macy's, Inc. (M) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report Informatica Inc. (INFA) : Free Stock Analysis Report Box, Inc. (BOX) : Free Stock Analysis Report Okta, Inc. (OKTA) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
6 days ago
- Business
- Yahoo
Consumer pessimism eases amid cooling in U.S.-China tariff war
This story was originally published on CFO Dive. To receive daily news and insights, subscribe to our free daily CFO Dive newsletter. Consumer pessimism about the future eased in May after a five-month gain amid a cooling in the U.S.-China tariff war, the Conference Board said Monday. The Consumer Confidence Index rose by 12.3 points this month to 98, the Conference Board said. The Expectations Index — gauging consumers' short-term view about income and the outlook for business and the labor market — also surged but remained below the level that usually signals sustained economic growth rather than a coming recession. 'The rebound was already visible before the May 12 U.S.-China trade deal but gained momentum afterwards,' Stephanie Guichard, senior economist for global Indicators at the Conference Board, said in a statement, referring to a 90-day reduction in U.S. levies on China imports to 30% from 145%. Roughly half of survey results were gathered before that date. The share of consumers expecting a recession over the next 12 months fell in May, the Conference Board said, aligning with a markdown on the odds of a downturn among economists. For example, Goldman Sachs recently trimmed the probability of a recession to 35% from 45% while citing reduced tensions between the U.S. and its trade partners. Consumer confidence rose among all age and income groups, and across political affiliations, the Conference Board said, noting the biggest gains among Republicans. Expectations for average inflation during the next 12 months fell to 6.5% from 7% in April, the Conference Board said. President Donald Trump on Sunday withdrew a threat to impose 50% tariffs on goods from the EU on June 1, giving the 27-country bloc until July 9 to negotiate a trade agreement. Consumers may be too optimistic about the outlook for price pressures, according to economists concerned that import levies on goods from virtually all U.S. trade partners will spur inflation. "Consumer confidence may have soared and Americans have reason to be happy given the rollback in tariffs, especially with China,' Robert Frick, corporate economist with Navy Federal Credit Union, said in an email. 'But when prices start rising from existing tariffs in a month or two, it will be a sobering reminder that a new inflation fight has just begun," he said. Indeed, many consumers voiced concerns that tariffs will stoke inflation and slow economic growth, the Conference Board said. At the same time, 'there were also some mentions of easing inflation and lower gas prices.' Forty-four percent of respondents expect stock prices to increase during the next 12 months compared with 37.6% in April, Guichard added. 'This was one of the survey questions with the strongest improvement after the May 12 trade deal.' While consumer confidence jumped this month, a tariff-induced rise in the purchase of goods plunged after March. Factory orders sank 6.3% in April after rising nearly 8% the prior month as companies snapped up goods before import levies pushed up prices, the Commerce Department said Monday. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
6 days ago
- Business
- Yahoo
US consumer confidence rebounds in May after 5-month slide
U.S. consumer confidence rose in May after five straight months of deterioration after a pause in higher tariff rates between the U.S. and China boosted optimism, though concerns about tariffs raising prices and hurting the economy remained. The Conference Board reported on Tuesday that its consumer confidence index rose by 12.3 points to 98 in May, well above the modest rise to 87 that was projected by economists polled by Reuters. Roughly half of the consumer confidence survey's responses were collected after May 12, when the Trump administration reached a deal to lower tariffs on Chinese imports from 145% to 30% for a 90-day period, in exchange for China reducing its tariffs from 125% to 20%. "The rebound was already visible before the May 12 U.S.-China trade deal but gained momentum afterwards," said Stephanie Guichard, senior economist, global indicators at the Conference Board. "The monthly improvement was largely driven by consumer expectations as all three components of the Expectations Index – business conditions, employment prospects, and future income – rose from their April lows." Gas Prices Hit 4-Year Low Ahead Of Memorial Day Weekend "Consumers were less pessimistic about business conditions and job availability over the next six months and regained optimism about future income prospects. Consumers' assessments of the present situation also improved," Guichard said. Read On The Fox Business App However, she added that "while consumers were more positive about current business conditions than last month, their appraisal of current job availability weakened for the fifth consecutive month." The Conference Board's report found that the rebound in consumer confidence occurred across all age groups and income groups, as well as across political affiliations – though it noted that prior months' declines meant the index's six-month moving average was still down. Us Consumer Sentiment Drops To Near Record Low In May On Inflation Worries, Tariff Uncertainty Tariffs continued to feature prominently in the Conference Board's write-in responses, which also included optimism about trade deals. "Notably, consumers continued to express concerns about tariffs increasing prices and having negative impacts on the economy, but some also expressed hopes that the announced and future trade deals could support economic activity," the report said. "While inflation and high prices remained an important concern for consumers in May, there were also some mentions of easing inflation and lower gas prices," it added. The report showed that consumers' average inflation expectations over 12-months dipped to 6.5% after spiking to 7% in April. It also asked consumers a special question about whether they've changed their spending and financial behavior recently, with more than a third (36.7%) saying they put money aside for future spending. About a quarter of consumers said they tapped into savings to pay for goods and services (26.6%) and postponed major purchases (26%). Reuters contributed to this article source: US consumer confidence rebounds in May after 5-month slide Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
