Latest news with #earningsreports
Argaam
26-05-2025
- Business
- Argaam
US markets will be closed today
US financial markets will be closed on Monday for Memorial Day, with trading resuming normally on Tuesday. The markets are set to open in positive on Tuesday after President Donald Trump announced a delay in imposing a 50% tariff on the European Union, extending the deadline to July 9. Futures linked to the Dow Jones Industrial, S&P 500, and Nasdaq 100 indices rose by more than 1% at 12:41 p.m. Mecca time. US stocks ended Friday's trading with weekly losses, with the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite falling by 2.45%, 2.6%, and 2.45%, respectively. The Dow Jones closed the week down 0.6% to 41,603 points, while the S&P 500 fell 0.65% to 5,802 points, and the Nasdaq Composite declined 1% to 18,737 points. This week, the markets are anticipating the publication of quarterly earnings reports from various companies, led by Nvidia, along with economic data such as the second reading of first-quarter GDP and the Federal Reserve's preferred inflation measure.
Forbes
20-05-2025
- Business
- Forbes
Has The Stock Market Hit A Bottom In 2025?
The market has shown promising signs of bottoming, with sentiment reaching extreme pessimism and ... More valuations moderating to more reasonable levels. After a turbulent start to 2025, investors worldwide ask the million-dollar question: Have we finally reached the bottom of this market correction? The dramatic swings of the past few months have tested even the most steadfast investors, prompting many to wonder if now represents an opportunity or a trap. This analysis will examine the current market conditions, historical comparisons and expert opinions to determine whether this represents a market bottom or a pause before further decline. We'll also explore strategies savvy investors implement in these uncertain times. The first quarter of 2025 delivered one of the most jarring market corrections in recent memory, with major indices dropping between 12% and 18% from their December 2024 highs. The tech-heavy Nasdaq was hit particularly hard, shedding nearly 22% before a recent April rebound that recovered roughly half those losses. This swift decline, triggered initially by disappointing earnings reports from major tech companies and exacerbated by new tariff announcements, caught many investors off guard. While the bounce in April has renewed optimism, trading volumes remain concerning. Much of the recovery occurred on relatively low volume, a potential red flag for sustainability. The resulting market whiplash has created a deeply divided investment community. Bulls point to the sharp recovery as evidence that the worst is behind us, while bears view it as a classic bear market rally before the next leg down. A stock market bottom represents the lowest point of a market decline before a sustained recovery begins. Identifying true bottoms is notoriously difficult in real-time, as they typically become apparent only in retrospect. Classic signs include capitulation selling (where even long-term investors give up and sell), extreme negative sentiment readings, and valuations that reach historically low levels. Market bottoms often feature a spike in volatility, unusually high trading volumes and what analysts call "washout days"—sessions with overwhelmingly negative breadth in which 90% or more of stocks decline simultaneously. They frequently coincide with peak pessimism in investor sentiment surveys and mainstream financial media coverage, turning decidedly negative. Notably, true market bottoms don't necessarily require new catastrophic news to form—they often occur when bad news fails to drive prices lower, suggesting the market has fully absorbed negative factors. This "climax of bad news" phenomenon historically precedes meaningful recoveries. Several critical macroeconomic and geopolitical forces are shaping the current market environment, each exerting significant influence on investor behavior and market dynamics. Understanding these factors is essential for contextualizing recent market movements and evaluating whether we've reached a bottom. The Federal Reserve's aggressive pivot in 2025 has dramatically reshaped market expectations. After holding rates steady through most of 2024, the unexpected inflation surge in late December prompted the Fed to signal a potential return to rate hikes. This move shocked markets and triggered the initial selloff. The subsequent March meeting brought a more moderate tone from Fed officials, suggesting they might hold rates at current levels rather than raising them further. Despite uncertainty about their longer-term trajectory, this shift helped fuel the April recovery. The market is now pricing in two potential rate cuts for late 2025, but these expectations remain highly dependent on incoming inflation data. Inflation has proven stubbornly persistent in 2025, with the latest readings consistently exceeding analyst expectations. The Consumer Price Index has remained above 4% for three consecutive months, complicating the Federal Reserve's policy decisions and limiting its flexibility to support markets through monetary easing. The combination of sticky inflation and already-high interest rates has created a challenging environment for equity valuations, particularly for growth companies whose future cash flows become less valuable in high-rate environments. Many economists point to the unusual disconnect between tightening financial conditions and continued strength in consumer spending as a precarious balance that could ultimately lead to more significant economic deterioration. The expansion of tariffs announced in February 2025 sent shockwaves through global markets, particularly severely impacting technology, manufacturing and consumer goods sectors. These new trade measures, initially targeting several Asian economies but later expanded to include European imports, have disrupted supply chains and compressed profit margins for numerous multinational corporations. The latest quarterly earnings reports reveal companies struggling to pass these increased costs to consumers, resulting in profit warnings that have contributed significantly to market volatility. The uncertainty surrounding potential retaliatory measures from trading partners and the possibility of further escalation continues to hang over market sentiment like a sword of Damocles. The global economic picture has darkened considerably in early 2025. China's property sector woes have deepened despite government intervention attempts, while Europe teeters on the edge of recession amid energy concerns and manufacturing contraction. Emerging markets are struggling under the weight of dollar-denominated debt as the greenback strengthens. These international headwinds pose significant challenges for U.S. multinational corporations, many of which derive substantial portions of their revenue from overseas operations. The synchronized global slowdown raises legitimate concerns about corporate earnings sustainability through the remainder of 2025, even if domestic consumption remains relatively resilient. Investor psychology has undergone a remarkable transformation since the start of 2025. The unbridled optimism that characterized markets in late 2024 has given way to significant caution, with investor sentiment surveys reaching levels of pessimism typically associated with market bottoms. The American Association of Individual Investors (AAII) survey recently recorded its highest bearish reading since March 2020, while institutional investors have increased cash positions to the highest levels in nearly three years. This extreme negativity paradoxically serves as a contrarian indicator—historically, such pessimism often occurs near market bottoms when selling pressure has been exhausted. Historical market bottoms provide valuable context for evaluating our current situation. The 2020 COVID crash featured a sharp V-shaped recovery fueled by unprecedented monetary and fiscal stimulus, conditions notably absent today. Conversely, the 2008-2009 financial crisis produced a more protracted bottom-building process with multiple false starts before the sustained recovery began. The current market action resembles the 2000-2002 tech bubble deflation and the 2018 near-bear market, both characterized by valuation corrections rather than full-blown economic crises. In both cases, markets experienced significant relief rallies before ultimately testing or breaking their initial lows as economic fundamentals continued deteriorating. Most concerning for bulls, almost every primary bear market in the past century has featured at least one powerful countertrend rally exceeding 10% before reaching the ultimate bottom. These "bear market rallies" typically trap optimistic investors before resuming the downtrend—a pattern that raises caution flags about the sustainability of our recent bounce. Several compelling indicators suggest we have seen the worst of this correction. The breadth of the market decline reached an extreme in March, with nearly 90% of S&P 500 components trading below their 200-day moving averages—a level of oversold conditions typically seen near essential bottoms. Corporate insider buying spiked dramatically during the March lows, reaching the highest since early 2020. Historically, when executives put their capital to work purchasing their company shares, it often signals undervaluation. Unlike in the months prior, in the last two weeks, defensive sectors have underperformed cyclical sectors (such as consumer discretionary, industrials, energy, and financials), typically a reliable early indicator of market healing. The VIX volatility index, often called the market's "fear gauge," reached readings above 35 before declining—a pattern that has historically marked significant bottoms. This volatility compression, combined with stabilizing credit markets and narrowing high-yield bond spreads, suggests the acute phase of market stress may have passed. Despite these positive signals, several warning signs suggest this recovery could prove transitory. Trading volumes during the April rally have been consistently below average—healthy market bottoms typically feature strong participation and expanding volumes during the recovery phase, which has been notably absent. The market's concentration remains troubling, with much of the recovery driven by a small handful of large technology companies rather than broad-based participation. This narrow leadership historically represents an unstable foundation for sustained market advances and often precedes renewed weakness. Most worryingly, economic data continues to deteriorate beneath the surface. Housing starts have declined for three consecutive months, manufacturing surveys remain in contraction territory and initial jobless claims have begun ticking higher. These leading indicators historically turn down before major market declines and suggest the full economic impact of higher interest rates has yet to be fully realized. Wall Street strategists remain deeply divided about market prospects. Prominent bulls like an equity research team at JPMorgan argue that inflation has peaked and the Fed will pivot to supportive policies by year-end, creating a positive backdrop for equities. They view the recent correction as a healthy reset that has purged speculative excesses rather than the start of a deeper bear market. In contrast, Morgan Stanley's analysts caution that earnings estimates remain too optimistic given the challenging macroeconomic backdrop. Their models suggest S&P 500 companies could face 5-8% earnings declines in 2025, compared to the consensus expectation of 3% growth, creating significant downside risk if these negative revisions materialize. Independent economists like Nouriel Roubini warn that markets are underestimating the persistence of inflation and the Fed's resolve to bring it under control, even at the cost of higher unemployment and market pain. This camp believes the April rally represents a classic bear market trap that will ultimately give way to new lows as economic reality asserts. After weighing the evidence, we must conclude that while many typical bottom indicators have flashed positive signals, substantial risks remain that could easily trigger another leg lower. The current market environment resembles previous bear markets, where powerful rallies ultimately failed. The technical picture has undoubtedly improved, with major indices reclaiming key moving averages and momentum indicators turning positive. However, the fundamental backdrop—high inflation, restrictive monetary policy and deteriorating economic data—creates a precarious foundation for sustained market advances. Most concerning is the timing of this potential bottom relative to the economic cycle. Historically, markets typically bottom approximately 6-8 months before recessions end, not before they potentially begin. With leading economic indicators still deteriorating, the market may prematurely price in a distant recovery, setting the stage for disappointment if economic conditions worsen. Sophisticated investors approach the current environment with strategic caution rather than outright bearishness. Many are using the recent strength to rebalance portfolios, trimming positions that have recovered significantly while maintaining substantial cash reserves to deploy on any renewed weakness. Sector rotation has become a key focus, with many institutional investors reducing exposure to consumer discretionary and technology stocks while increasing allocations to healthcare, consumer staples and select energy companies—sectors that historically outperform during periods of economic uncertainty and persistent inflation. Alternative investments are also gaining traction, with increased allocations to strategies less correlated with traditional equity markets. Treasury Inflation-Protected Securities (TIPS), commodities and select real estate investments are utilized to create more resilient portfolios capable of weathering continued volatility. Investors should closely monitor several key indicators to determine whether this recovery sustains or falters. The most critical factor remains inflation data—if price pressures continue moderating, it would provide the Federal Reserve much-needed flexibility to ease monetary conditions later this year. Corporate earnings reports deserve heightened attention, particularly guidance about future quarters. Watch for companies' ability to maintain profit margins amid rising input costs and potential demand softening—widespread downward revisions to future earnings expectations would represent a significant red flag. Employment data will prove crucial in determining the economic trajectory. The labor market has remained remarkably resilient thus far. Still, any sustained increase in weekly jobless claims or deterioration in monthly payroll figures could signal the beginning of a more pronounced economic downturn that would likely pressure markets further. Bottom Line The market has shown promising signs of bottoming, with sentiment reaching extreme pessimism and valuations moderating to more reasonable levels. However, history suggests caution is warranted when powerful rallies emerge within challenging macroeconomic environments. The unprecedentedly high inflation, rising interest rates and growing economic uncertainty create a fragile foundation for sustained market advances. While we may have seen the worst initial panic selling, investors should remain prepared for continued volatility and possibly even lower lows before a durable recovery takes hold. Classic bottom indicators include extreme negative sentiment, capitulation selling with high volume, valuations reaching historical low, and institutional investors increasing equity allocations after building cash reserves. Rather than timing the market precisely, consider dollar-cost averaging into quality companies with strong balance sheets, gradually deploying capital while maintaining some reserves for potential further declines. Typically, financials, consumer discretionary and technology sectors lead the initial recovery phase, while defensive sectors like utilities and consumer staples often lag during the early stages of new bull markets. Effective hedging strategies include maintaining adequate cash reserves, diversifying across asset classes, implementing targeted options strategies and increasing exposure to historically resilient sectors like healthcare and consumer staples.
Yahoo
08-05-2025
- Business
- Yahoo
Coinbase & Lyft earnings, Mercado Libre CFO: Market Domination Overtime
In today's Market Domination Overtime, Julie Hyman and Josh Lipton recap the trading session's market and sector action (^DJI, ^IXIC, ^GSPC) while breaking the latest earnings reports after the closing bell. Mercado Libre (MELI) CFO Martín de los Santos sits down with the Market Domination Overtime team to talk about the Latin American e-commerce platform's record-high stock close after reporting first quarter results. The program is also joined by Benchmark Company managing director and senior research analyst Mark Palmer to talk about crypto exchange Coinbase Global's (COIN) earnings release. To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime here. There's the closing bell on Wall Street, and now it is market domination overtime sponsored by Tasty Trade. Jared Blier going to be along to give us the details from today's session. I'll start with the major averages here, which we are definitely seeing stronger on the day, but uh looks like a leg down in the last, um, I don't know, half hour or so of trading here. The Dow Jones Industrial, the last time we checked was up over 1% right now. It's up about 255 points, about 6.1%.So it has cut its gains from the highs of the day roughly in half. The S&P 500 same goes there, still up 6.1%, but down off of the highs, and the Nasdaq Composite is still hanging on to its gains, but you see that similar movement there still up by 1.1% as we see the rally continue on not just the trade deal or framework of a trade deal, at least being struck with the UK today as announced by President Trump and British Ka Starmer, but in addition to that, the president making some commentary about potentially some wiggle room on China ahead of talks in Switzerland with that country. So that's what's going on broadly. Let's get a closer look at today's action with Jared thank you, Julie. I'm just going to pull up the S&P 500. Well, actually the S&P 600. This is a small caps of 1.81%. Companies in here, small caps have to be profitable, but in the Russell 2000, which is up almost 0.5% point more, they don't have to be profitable. So interesting to see that dynamic in play. We saw the VIXs take a little bit of a dip, and I just go back, the indices like the S&P 500, the Nasdaq just kind of stalling out under their 200 day moving averages. So we might have a couple of days up in a row, but not by a large margin. But what is moving today in a big way is a yield that is up 10 basis points to 4.37%. I just want to keep that in the back of our minds here. And today the US dollar was also up. So is this kind of return to the pre-Trump inauguration days when we had yields and the dollar moving in tandem too hard, too close to say yet just because we're close to the action, but that's something that we want to continue to follow in the coming days. It'd be really interesting to see if of reverts back to the way things were with these trade announcements. Now here's the sector action and we can see health care in the red that was leading to the downside, down not even quite 1%. Utilities another defensive sector also down, real estate staples, all the defensive sectors in the red, but what was leading today were the cyclicals, industrials, materials, energy, not really a cyclical there always, but consumer discretionary and tech are and so the top a lot of those reflected in the Dow and the Nasdaq 100 here. Here's the Nasdaq 100. We can see Tesla up 3%. That was the leader in the Mag 7 today. Looks like AstraZeneca moving to the downside by about 4%, but a lot more green on the screen than red, and I'll show you how the Dow ended the day. More of a mixed board here. Walmart and some consumer staples, as I was talking about those defensive ones in the red. Walmart and J&J down more than 1%.McDonald's down about 1.5, Merck a little bit more than that. And uh let's get a look at the semiconductor trade here we go. Uh we can see arm in the red for about 6%, but overall looking like tech had a pretty solid day. Josh, thank you, Jared. Well joining us now is Arnem Holzer, Easterly EAB, global macro strategist. Easterly has $60 billion in assets under management. Arnem, always good to see you, let's let's start with Trump and tariffs and trade because that was front and center today. President Trump says, OK, we have this limited trade deal with the UK. He also said maybe he would consider lowering tariffs on China if those talks aren't even Switzerland go well. I mean, we were in in rally mode today as a market pro, market strategist. What did you make of thoseheadlines and reports? First of all, thanks for having me, um, Josh and think that there's there's the the on the surface tariff, there's the, the worst of all possible situations being taken off the table, but there's still the substrate of of where we're gonna end up, and I think the idea that there is, there are some arrivals, you know, arrivals here with trade deals is a good ultimately we're still trying to figure out how this whole mix comes together. We had some some musings today about some tax issues around carried interest around increasing the uh the highest rates. We obviously are concerned around how we're gonna see um the difference between bottom up earnings estimates and top down estimates get some of those things aren't really tariff related. They're just whether the underlying economy and capital expenditure plans come through because remember the reason we're doing these trade deals is because we want to bring manufacturing back to this country and so that's part of the optimism, but part of the reality is companies have to make plans and it does look like in the first quarter and so far you're seeing some indications of companies being a little more pragmatic. We haven't seen job shedding I think some of the recovery that we've seen to date in the last couple of weeks has been about the good news that the worst is off the table. Will these deals that we're hearing here really connote a big upward movement and will they bring China along? So some of this move, I think is interesting, but it doesn't necessarily resolve some of the deeper problems that we still see in the market. Well, and ifcompanies are trying to make decisions based on certainty.I guess the question is can they look at the deal today as a template for other deals? And if that's the case, if there's still a 10% baseline tariff, that's not fantastic news for them. Well, and, and there are two sides to this. One, as you said, is the corporate planning side. So treasurers have to decide, you know, boards have to decide how much are we gonna onshore, how much can we onshore, and and different industries it's gonna.A different mix, but there's also the issue of how is the Fed going to interpret trade deals and whether or not they end up being inflationary. There's a construct right now we heard it yesterday with Chair Powell that there's an equality of potential for a growth recession for a slowdown and inequality of inflation pressure. The numbers that we've seen give you a little bit of question is though, depending on how the the trade deals get implemented in the time frames, the inflationary impact may be much less, and the growth scare may actually be a little bit quicker and that's where we think the Fed may be a little bit too complacent and I understand that they'd like to see more hard data, but we know for a fact that they can squash difficulty if you get into a real slowdown and a real capex, you know, kind of longer time frame to recovery and the productivity numbers today were not you may have a little bit more, you know, wet kindling when you try to light it and so our, our concern here, and we think investors should be aware of this, is that there's likelihood of more volatility because of some of that uncertainty than you've seen in the rally now the end of the uh the end of today you did see some of the market come off some of that may have been some of these musings about tax of these, some of that may have been because the market saw how much we've come back and wondered if it was if it was discounting the market correctly, but in either case, I think the volatility drop has been pretty dramatic and there's still an opportunity here I think for investors to make sure that they have some kind of interest in products that play volatility because I don't think the all clear signal's been given yet. To put it another way, do you agree with President Trump that the Fed istoo late? Well, I, I, you know, we never believe it. We, he, he made it a personal, there was a personal issue there, but I think from a fundamental point of view, the Fed has to be has to be a little bit more conservative in their actions. But what we've seen over the last few crises is that their interpretations have not been whether it was about inflation being transitory or whether rates not really being, um, you know, being impactful or whether it was the not really viewing the fiscal did get awfully close to achieving the soft landing before these tariffsarrived. That's, that's a fair comment, but we did see some slowing, and, and we were wondering whether the productivity numbers were as durable or whether they were a reflection of big fiscal spending, and I think that issue was still going to be was still some slowing and you're absolutely right, the tariffs definitely introduced a shock, but the question is now if, if it's really 10% tariffs, is that really enough to engender uncertainty or was there some fundamental issue that that potentially the market was seeing that that treasurers and boards are gonna have to reconcile? I'm not convinced either that, what we are very convinced about is that from a secular point of view there is still volatility in the market and you know whether you look even at geopolitical, which is somehow really not been discussed very much, we think there's still reasons to believe that shocks be in play even if the bottom may be in. There's still a pretty wide range of base base outcomes. I don't think the base case is a 6 to 8% equity year. We, we're not convinced that a 6 to 8%, you know, 2025 makes sense unless you get a lot of good news and the market seems to be discounting a fair amount of good news. Don't get complacent. In other words, either us or the Fed. Thanks. Thank you, Arnie. Always good to see right, Lyft's results are just crossing the wires. Let's get to those right now. They're popping about 5%. It does look just quickly looking through the headlines. Julie Lyft, it looks like they report gross bookings that come in stronger than expected in Q1. I'm seeing a 4.16 billion Lyft saying in a statement that does beat what analysts were looking for. It looks like rides 16% they go to 218.4 million. That was also better than the street had penciled in. Um, looking ahead, lift expects gross bookings for the current period. It looks like between 4.41 billion and 4.57 billion. The midpoint, uh, landing above looks like what the street had been looking for and also forecasting of $115 million to $130 million. So adjusted IBEDA margin as they point out, uh, as a percentage of gross bookings at 2.6% to 2.8%. So um it looks like overall investors are happy about the numbers here 5.4% is the game we're seeing in the stock, by the way, also a new repurchase program authorization, new stock buyback uh new total is $750 million. So, you know, kind of a little bit of sugar there for investors as well, even as we get these good numbers. Yeah, stock, higher in today's trade, which is when we got Uber's results as well this week, and remember they actually posted gross gross some results that at least disappointed some investors but lift higher now. All right, we're gonna take a break, come back perhaps with Coinbase numbers, stick around, much more market, uh, domination over time still to of Mercado Libre closing at a record today as the company's first quarter earnings and revenue beat estimates. The Latin American e-commerce and fintech giant reporting revenue growth of 37% year over year. Martin De Los Santos, CFO of Mercado Libre, is back with us now. It's good to see you again, Martin. Thank you so much for joining us. Hi, thank you very much for having me again. So part of your numbers were driven by an increase in Argentina, um, and obviously you guys huge in Brazil, huge in Mexico, but talk to me about um perhaps how the changing macro conditions in Argentina are are helping your business. Yes, we have seen a significant change in macro in Argentina for the past few quarters. I mean, last, you know, one year ago was probably the lowest point in terms of macro, where we saw numbers of items decrease in the platform, which was very rare for, for and over time over the past few quarters, we have seen improvements, uh, and I think in Q1, we have tremendous results, but it's not only macro that helps us. The fact that we have millions of users, uh, already interacting with our platform, our brand in Argentina is very strong, both for Mercairra and Mercadopago, which is our commerce and FinTech uh ecosystem. Uh, we have one of the money market funds in Argentina, the largest money market fund in Argentina were by far the largest e-commerce platform. So I think it's a combination of macro plus the user experience and all the investment and the innovation they were doing on, on our platform that enabled us to deliver very strong numbers in Argentina. Um, items sold in Argentina grew by 52% year on credit book grew 4X from last year, you know, 4 times, um, and all of the metrics both on the commerce side and the fintech side are performing extremely well, not only in volume, but also improving profitability. So we had a, a very good quarter in, in Q1 in Argentina and we are very optimistic about the changes that are happening in Argentina and the macro situation going forward. What, what are those changes specifically, Martina, you're optimistic about? Well, we're seeing, you know, inflation coming down, uh lower interest rate that is helping our, our users finance transactions on our platform take make credit more affordable to them. The, the FXs that was um there was a lot of frictions in terms of the FX market, now it's been um normalized in Argentina. So a lot of, a lot of, most of the macro trends are pointing in the right direction and obviously, that really helps not only us and our results, but also consumption in general, which is picking up again in Argentina. Um, Martin, every time we talk, um, I am amazed at the just the, the leaps and bounds that, uh, are happening with your growth, and you've talked about just online adoption, that that's one of the things that are dri is driving it. We've also talked about how you're not very exposed to tariffs directly in the US because you're not dealing in the US you do have a warehouse in Texas, what I'm curious about is whether you're concerned in particular about the Mexican economy as a result of the trade back and forth with the United States and whether you're seeing any signs in your business about the tariff effect there and on the economy. I think if you look at the history of MercadoLibrea for the past 25 years, you know, we started the company back in '99, we become from being a startup in a garage, we became the, the most valuable company today in Latin America. And a lot of, you know, throughout the years, we've seen all type of macro situation, not only in Mexico but in Argentina, Brazil. So we are very used to dealing with macro complex conditions, uh, even more difficult than the conditions that we see today.I think the most important thing is people moving online. If you look at Latin America, the penetration of commerce continues to be very low at 15%. So there's plenty of room to continue growing by bringing people online, by improving the user experience, continue to work on our product, our platform, bringing more merchants to our platform, delivering faster to our users, you know, increasing our logistic infrastructure. So I think it's the results that you're seeing are more dependent on we do and our execution and actual macro factors that we're very used to dealing with. So specifically in Mexico, our GMB grew up by 20 23% year on year. Uh decelerated a little bit but still very strong growth, much faster than the, than the actual average for the market, so we continue to gain market share. On the commerce side, on the fintech side, we have millions of people still are not included financially in Mexico. Take the example of only 15% of people in Mexico have a credit card, so there's plenty of room for us to continue growing. So I think I would say that we will adapt to the macro situations, but I, I think the most important thing is to continue executing, to continue to have the 18,000 developers that we have looking at the product and improving the user experience day to day. A lot more important than actual macro factors that, that we'll deal with in the different countries. Martin, great to see you. Great to have you on the show. Thank you. Thank you very much. Pleasure being with you and hope to see you soon. All right, Coinbase earnings crossing the wire just moments ago here, and revenue coming in shy of what analysts had been anticipating $2.03 billion 2.11 billion dollars is what analysts had been estimating. Uh, just an IEDA beating estimates though at about $929.9 million estimated, uh, IDA there $971 million. Transaction revenue pretty much in line with had been estimated, but services revenue a little shy of what had been estimated. Now for a company that you would think would trade pretty much in line with Bitcoin, that's not really what's happened this year. We have seen this stock pull back even as we have seen Bitcoin recover to some extent. I do want to mention that we did see the shares gain about 5% in today's session, and that's after it agreed to buy an options crypto options platform called that propelled the shares higher. So to put it in context, the pull back Josh coming after uh the the boost that it got from announcing that, that, uh, yeah, I know, I know investors make a beeline for that subscription and services revenue, and that for Q1 comes in at 698. That's a bit light street was more closer to 703. I'm just looking for their Q2 call on that, uh, they're looking for Q2 subscription services between $600 million to $680 million but that'll come up and as well as of course about the big M&A news they made today saying they have agreed to buy derivit for about $3 billion. Yeah, exactly. All right, let's get more on the latest results from Coinbase. Mark Palmer is joining us, benchmark company managing director and senior research analyst. Mark, I'm sure you're still sifting through the results, but I know you're a bull on this name here, um, but I am curious what you make of that revenue mess. Yeah, um, well, first of all, thanks for having me. Um, you know, the, the miss is in the big picture, you know, really inconsequential, especially relative to, uh, today's news, uh, where the company, um, announced the largest, uh, acquisition in the history of the digital asset industry, uh, and, um, positioned itself to be an even bigger player in, uh, amongUh, institutional investors. So what we're seeing right now in terms of, uh, the, the top line and particularly subscription and services you know, that is a point in time. What, um, we are thinking about is, uh, where are these numbers gonna go once Drebit is actually part of, uh, the Coinbase family, and, and that's what's really exciting. Uh, so, you know, right now, if you look at subscription services, you've got custody, you've got staking, um, you've got, uh, the, the, contribution of, uh, stablecoins, uh, but derivatives is really not a big part of that. And if we see the kind of institutional adoption of crypto that we are anticipating, a lot of those institutional players want to express their views in crypto via derivatives. And so now Coinbase, uh, via Dreit, which is the largest player globally, uh, is in a great position to do exactly that. And, and Mark, I, I know though you, you make a beeline as so many do for that subscription services revenue number. So the fact that in Q1, it did, it did come in a touch light, 698 consensus was 702.5, that's not a concern for you. No, it really isn't, um, you know, especially, you know, the, the, the trading volume side, you know, we have the ability to track any analyst can track that on a daily basis. Uh, the reason why subscription and services revenue is so important is because the company is trying to become less dependent on particularly retail transaction and so, uh, the more that it can grow that number, the better. But again, this is a work in progress. Um, you know, if we are able to see, uh, the US Congress pass and enact, uh, a market structure such that there's a regulatory framework and institutions feel much more comfortable, uh, participating in the crypto space then the numbers with regard to, uh, staking, for example, custody, um, and now derivatives, uh, are likely to be much, much higher. So this in our view is really not about where they were as of March.31st, what happened in the first quarter of 2025. It's about where do we go from here. And there are some pretty exciting things on that front, um, especially again if we see that legislation passed so that everybody knows what the rules of the road are going to look like going forward. At the same time, Mark, Coinbase still operates in the world that we all operate in, and it's a world where there are a lot of now and they refer to that in their in their letter they say macro uncertainty, including around global trade policy is impacting consumer sentiment and may contribute to softer crypto trading markets and lower asset prices as we enter the second quarter and I think that's been one of the interesting things during this first stretch of the year for underlying crypto prices, right, is thatIt wasn't a safe haven. Gold was the actual safe haven, you know, the old school safe haven was the safe haven. Um, and so how then does that affect Coinbase if there is more risk in the market and if it hits crypto prices? Well, I think it's pretty clear, you know, based on what we've seen recently that, you know, the macro is still very much a factor as it pertains to, you know, all things crypto. Um, you know, with that said, um, it is pretty impressive that with the kind of, uh, market and macro uncertainty we still see right now, uh, Bitcoin today, uh, surpassed 100,000 for the first time since January 20th, so, you know, clearly there is a bid there, um, you know, just between two of the big players, uh, BlackRock being one and strategy, the former micro strategy being another, you know, they're buying up quite a bit more than the amount of Bitcoin that's produced in a given you know, so the demand side is there and we have not even gotten to the point at which institutions have seen, uh, the green light to, to really, uh, participate. So yes, uh, the macro is gonna be a concern, uh, you know, we saw that hit Coinbase shares, um, over the last couple of months, uh, but at the same time, uh, the set up here going into the back half of in terms of, uh, the legislative initiatives, uh, in terms of, um, you know, the potential to have institutions get involved in earnest for the first time, uh, because, of course, you know, crypto is that odd asset class where retail investors have led the way in terms of adoption since crypto's been around for the last 1516 years. Uh, you bring the institutions into play and the first step was really, you know, the, fact that the SEC approved in the US, uh, Bitcoin spot ETFs, you know, with that in place, you know, we, we've seen 140 billion of those now. Um, the next step is, uh, allowing, uh, institutions to feel comfortable, uh, entering into the space and the way that these institutions typically want to express a view is via derivatives, and as of today, Coinbase is now in a position to be the leader in that space. That deal's supposed to close at the end of this year. So going into 2026, you could see a very exciting new revenue stream just at the time when institutions are getting the green light. Mark, so I know you have a buy on this name, you're a believer, but when you're talking to your clients, Mark, and they say, OK, it's a buy, but what are the, what are the downside risks I need to consider, you say what, Mark? I think there are a few things. I mean, um, you know, just today, you know, we saw that in the US Senate, um, the, um, you know, one of the two versions of the stablecoin bill was voted down by a single vote, it was 49, and ultimately there's, uh, probably gonna be some more horse trading that occurs before, uh, that, that story is over. Uh, but if we don't see that legislation passed that would enable the institutions to feel more comfortable, uh, then this is still very much a retail space. Retail investors, as we've seen, uh, are, um, you know, somewhat fickle as it pertains to, uh, crypto, uh, and that translates into an awful.A lot of volatility, volatility in the stock market, um, you know, translates into a lower multiple typically speaking. This is why, uh, you know, Coinbase is so focused on that subscription and services line, you know, the, the more recurring revenue that, uh, is part of the story, um, the, the fuller the multiple on the stock should be, the better the stock should perform. Mark, appreciate that instant analysis and reaction. Thank you, time for what to watch Friday, May 9th, sponsored by Tasty Trade, starting off on the Federal Reserve. The Fed releasing the cavalry tomorrow with 10 officials set to speak. This is coming after yesterday's FOMC interest rate decision. The Fed holding rates steady for now in a post-decision press conference, Fed Chair Jay Powell did say that the risks of higher unemployment and inflation have risen. Powell also pushing back about political pressure from the White House, telling reporters that quote, I've never asked for a meeting with any president, and I never over to earnings, we'll get some insight from the energy infrastructure sector tomorrow. Enbridge announcing results for the first quarter in the morning. Analysts expect the company's profits to grow in the low double digits driven by the acquisition of US gas utilities from Dominion Energy and higher pipeline tolls. And finally, Lockheed Martin hosting its annual shareholder meeting in the morning. Shareholders for the defense contractor will be voting on proposals and discussing the company's current performance and future amid a rapidly changing economic landscape. That'll do it for today's market domination over time. Be sure to come back tomorrow at 3 p.m. Eastern for all of your coverage leading up to and after the closing bell. But don't go anywhere on the other side of the break. It's ask you for a trend. I got you covered for the next half hour with the latest and greatest market stories so you can get ahead of the things affecting your money. 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
