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Yahoo
22-05-2025
- Business
- Yahoo
Magnificent Seven Shareholder Meetings On Tap: Taking Stock of the Economy
Investors can pause to catch their breath after a wild last few months. Cooler heads appear to have prevailed in the trade war, the Q1 earnings season was better than expected, and (for now) economic data is hanging in there. According to Econoday, the last few US payrolls reports point to a slowing, but not halting, labor market. Warning! GuruFocus has detected 4 Warning Signs with TAP. The US unemployment rate has been steady around the 4.2% mark, while average hourly earnings have drifted down to 3.8% on a year-on-year basis. Moreover, CPI inflation data from February through April were largely below estimates. Now more than ever, though, both company-specific and economy-wide data are seen as less relevant. Last week's Retail Sales report, while light, didn't raise recession flags, and next week's April Personal Consumption Expenditure (PCE) Price Index print (which comes alongside the Personal Income and Outlays report) won't fully reflect the impact of tariffs. Mark your calendar for several macro updates, according to Wall Street Horizon's new Economic Calendar data. First, the minutes from the May 6-7 Fed meeting are set to be released on Wednesday, May 28th. Following that, the June FOMC gathering could be livelier as we'll get fresh forecasts from voting members via the Summary of Economic Projections (SEP) and the always-revealing Fed dot plot. Lastly, recession fears have ebbed in the last few months but be on guard for possible volatility around the second look at Q1 GDP, which hits the tape on Thursday, May 29. Yes, plenty of macro volatility catalysts are in the offing, but don't sleep on the long list of key shareholder meetings ahead. Specifically, several Magnificent Seven companies have Annual General Meetings (AGM) over the coming weeks. Beyond those glamour stocks, a handful of other large-cap bellwethers host events to update equity owners on company performance, strategic plans, and firm-specific and macro conditions they see. At the events, investors exercise their voting rights and engage with management, usually friendly but sometimes hostile. We detailed notable shareholder meeting events in April when volatility was near its zenith. Today, as panic has subsided and with the carrot of tax cuts dangling and hopes revived for deregulation, there could be a more upbeat tone. Here are the headline shareholder meetings scheduled: May 20: JPMorgan Chase & Company The Financials sector faces challenges and opportunities. On the positive side, last week's major IPO, eToro (ETOR), was quite encouraging for capital markets. Shares soared on their first day of trading, while the day before, fintech company Chime filed for a Nasdaq IPO.1 Moreover, KKR (KKR) received an upgrade from Morgan Stanley, and fellow capital markets company Carlyle (CG) got a boost from TD Cowen.2 And all of a sudden, M&A is kicking up in the shoe space (see: Skechers and Foot Locker). Good news for the JPM Investment Banking department. Unfortunately, last week's quarterly report on household debt from the Federal Reserve Bank of New York underscored a deterioration in consumer finances, including lower collective credit scores as household debt swells.3 JPM is arguably the most important global financial institution, headed by Jamie Dimon, dubbed America's banker. Investors should pay attention to what transpires today at JPM's AGM. May 21: Amazon Turning to the Mag 7, Amazon (NASDAQ:AMZN) had a load lifted off its back when the US and China chose to roll back most tariffs earlier this month. Shares soared by more than 8% on Monday last week, though they remain far below their $242 all-time high notched in February. The company also confirmed a small workforce reduction, adding to the list of recent layoff announcements. Still, its most recent earnings report was solida double beatwith Amazon Web Services (AWS) growing 17% YoY.4 Be on the lookout for any updates from CEO Andy Jassy this Wednesday. May 28: Meta Platforms Next week, before the PCE report and three-day weekend, Meta Platforms (NASDAQ:META) welcomes shareholders to its virtual event. It, too, beat Q1 sales and earnings estimates, helping to lift shares off their April 21 low under $500. META is the top-performing mega-cap tech stock year to date, with some arguing that it is executing the best on AI strategy. Despite fears of reduced ad spending amid all the macro uncertainty, it grew profits by 35% in the first quarter and issued solid guidance for the balance of the year. The kicker was a significant increase in its FY 2025 capex forecast.5 We'll see if executives, including CEO Mark Zuckerberg, discuss those plans in more detail next Wednesday. June 5: Netflix Netflix (NASDAQ:NFLX), while not officially a member of the Magnificent Seven, is among 2025's best stocks. Through last Wednesday, shares were up 29% on the year, ranking it 13th best among all S&P 500 companies YTD. The Movies and Entertainment industry company within the Communication Services sector ruffled some feathers a month ago when it was reported that a $1 trillion market cap was targeted by co-CEO Ted Sarandos.6 That doesn't seem so out of line today, with NFLX knocking on the door of a $500 million equity valuation. Last week, the firm said its ad tier now has 94 million monthly active users, up 34% just since November and higher by a whopping 135% from 12 months ago.7 Seen as a recession-resistant and tariff-buffered asset-light company, investors will surely be upbeat heading into the June AGM. June 6: Alphabet The Mag 7 is not a monolith. Alphabet (NASDAQ:GOOGL) has struggled in 2025, with the stock down by more than 10%, a strong Q1 report notwithstanding. Earlier this month, news broke that Apple's (AAPL) Eddy Cue testified that Safari searches were down for the first time in 22 years.8 That was bad news for Alphabet since its search engine is the default for Apple products. It will be critical to hear from CEO Sundar Pichai and other top executives on not just search, but also ongoing Justice Department probes and how the $2 trillion market cap company plans to make inroads into AI as the competition grows fiercer. June 25: NVIDIA Last but not least, NVIDIA (NASDAQ:NVDA) has been on a heater in the past several weeks. Through May 21, the stock was up by more than 50% from the April nadir. CEO Jensen Huang appears to be in President Trump's good graces as he joined the POTUS and other tech leaders in a pivotal business trip to the Middle East. To wit, BofA noted that NVIDIA was among the top beneficiaries from deals inked in Saudi Arabia last week.9 The bulls hope such capital investments and new orders will be the next leg of the AI boom. Expect to hear more about the broader outlook on June 25, and NVIDIA reports quarterly results on Wednesday night next week. The bulk of Q1 earnings season is in the books, and we have some stability on the trade front. That makes upcoming shareholder meetings all the more important as investors look ahead to the year's second half. There are individual company stories and macro trends that shape capital project plans and dictate shareholder-friendly initiatives like stock buybacks and dividends. Be sure to take detailed notes during the Mag 7 AGM season. 1 Stock trading app eToro pops 29% in Nasdaq debut after pricing IPO above expected range, CNBC, Samantha Subin, May 14, 2025, Morgan Stanley Upgrades KKR (KKR), Nasdaq, George Maybach, May 14, 2025, As student loan default rate spikes, some borrowers face grave consequences,' New York Fed says, CNBC, May 13, 2025, Announces First Quarter Results, Amazon Inc, May 1, 2025, Meta Reports First Quarter 2025 Results, Meta Inc., April 30, 2025, Netflix aims to be a trillion-dollar company, says co-CEO, TechCrunch, Lauren Forristal, April 23, 2025, Netflix says its ad tier now has 94 million monthly active users, CNBC, Sara Salinas, May 14, 2025, Searches on Safari dipped for the first time in 22 years, Apple's Eddy Cue admits, and it's because more people are using AI instead of Google, Fortune, Sasha Rogelberg, May 8, 2025, Nvidia, AMD 'top beneficiaries' from Saudi deals, but Broadcom and Marvell will benefit: BofA, Seeking Alpha, Chris Ciaccia, May 14, 2025, Copyright 2025 Wall Street Horizon, Inc. All rights reserved. Do not copy, distribute, sell or modify this document without Wall Street Horizon's prior written consent. This information is provided for information purposes only. Neither TMX Group Limited nor any of its affiliated companies guarantees the completeness of the information contained in this publication, and we are not responsible for any errors or omissions in or your use of, or reliance on, the information. This publication is not intended to provide legal, accounting, tax, investment, financial or other advice and should not be relied upon for such advice. The information provided is not an invitation to purchase securities, including any listed on Toronto Stock Exchange and/or TSX Venture Exchange. TMX Group and its affiliated companies do not endorse or recommend any securities referenced in this publication. This publication shall not constitute an offer to sell or the solicitation of an offer to buy, nor may there be any sale of any securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. TMX, the TMX design, TMX Group, Toronto Stock Exchange, TSX, and TSX Venture Exchange are the trademarks of TSX Inc. and are used under license. Wall Street Horizon is the trademark of Wall Street Horizon, Inc. All other trademarks used in this publication are the property of their respective owners. This article first appeared on GuruFocus. 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
CNN
01-05-2025
- Business
- CNN
Consumer spending soared in March as Americans tried to get ahead of tariffs
A car-buying frenzy, stoked by tariff fears, drove US consumer spending in March to its biggest monthly gain in more than two years, new data showed Wednesday. Consumer spending leapt 0.7% from February, according to a Commerce Department report released Wednesday that showed Americans shelled out last month for durable goods, particularly automobiles. The Commerce Department's Personal Income and Outlays report — which provides the most comprehensive federal data on spending, income as well as the Federal Reserve's preferred inflation gauge — further reinforced what the recent retail sales data and anecdotal evidence have been indicating: Americans picked up their spending and likely pulled forward some purchases out of fear that President Donald Trump's tariffs will raise prices in the months to come. But as of March, price hikes were held in check and overall inflation slowed to its lowest rate since September — in part due to recession fears weighing down oil prices. Wednesday's report from the Commerce Department showed that the Personal Consumption Expenditures price index — the Fed's favored inflation gauge — rose 2.3% in March from the year before, slower than February's 2.7% increase. On a monthly basis, prices were unchanged, versus a rise of 0.4% in February. 'This was a good report, no question about it,' Robert Frick, chief economist with Navy Federal Credit Union, told CNN in an interview Wednesday. However, that takeaway comes with a major caveat: Trump's sweeping policies — particularly cutbacks in federal jobs and spending massive tariffs and mass deportations — not only have injected substantial uncertainty into the economy but also have significantly raised recession risks, Frick said. 'But let's not fool ourselves,' Frick cautioned. 'Things will get worse later this year, probably later in the summer. But for now, we really need to cross our fingers and hope that incomes and jobs hold up, because those are the things that will insulate us against the effective tariffs and higher inflation.' Economists expected the PCE price index to cool sharply to 2.2% annually in March, likely due to falling energy costs as oil prices slumped on lower demand expectations. Energy prices did indeed fall, plunging 2.7% in March. Food prices, however, saw their biggest jump in months, rising 0.5% from February. Excluding food and energy costs, the core PCE price index was flat for the month and slowed to an annual rate of 2.6% from 3%. In any other environment, inflation heading towards 2% would likely fuel optimism that the Fed would resume its rate-cutting ways and lower interest rates. However, Trump's economy-shaking policy decisions, especially those that have triggered a trade war with China, theaten to put the central bank between a rock and a hard place by stagnating economic growth while driving inflation higher. 'Inflation is set to pick up as tariff increases lead to higher goods prices,' Gus Faucher, chief economist for PNC Financial Services, wrote in a note on Wednesday. 'This will create a dilemma for [Fed policymakers]. Inflation is still above the [central bank's] 2% objective, but the labor market could start to soften, putting the committee's two goals in conflict.' The April jobs report is set to be released Friday and is expected to show a softening in employment gains but a still relatively stable labor market. However, other major economic data released Wednesday could portend some challenges for the months to come: In the first quarter, economic activity contracted for the first time in three years (amid a surge of imports) and a separate report on private-sector hiring showed a precipitous drop-off in job gains. Based on Wednesday's Commerce Department data, the economy is holding up for now. Consumer spending rose 0.7% from February, marking a sharp acceleration from 0.1%. It was the biggest monthly jump in spending activity in more than two years, Commerce Department data shows, as Americans rushed to buy products ahead of the bulk of President Donald Trump's tariffs. But the latest data lands at a time when uncertainty is swelling about the extent to which Trump's massive policy moves — including a broad array of tariffs — could upend global order and the US economy. Helping to fuel spending was a 0.5% jump in personal incomes, a strong rate that bodes well for continued consumer spending, Frick said. 'The No. 1 thing I always look for is income, because no matter how anxious people are feeling about the economy or inflation, if they have the money, they'll spend the money,' he said. Consumers didn't sock away as much into savings last month as they did in February, but the personal saving rate came in at a healthy 3.9%. Considering those household finance dynamics as well as inflation, Wednesday's release was a 'good report' but also another sign of a 'calm before the storm,' Frick said. 'In the context of what's to come, it will help bulwark us against the effect of tariffs and [product] scarcity and layoffs that will be coming,' he said.
