April 29th Market Overview

Happy Tuesday.

Tuesday finished higher after a late spark flipped the switch. Secretary Lutnick hinted a trade deal is essentially 'done' with an unnamed country, just awaiting their final approval. That news clearly shifted the afternoon sentiment, even as tariff uncertainty continues to dominate the broader picture I think it puts some light at the end of this tunnel.


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Let's dig in...

Executive Summary

• Commerce Secretary Lutnick announced a trade agreement with an unnamed country is “done” but awaiting foreign government approval
  

• General Motors withdrew 2025 guidance and suspended buybacks citing tariff uncertainty despite beating Q1 expectations
  

• Multiple economists now project Q1 GDP will contract, with estimates ranging from -0.2% to -1.5%
  

• Port of Los Angeles expects 35% drop in Chinese shipments next week as retailers halt imports

Market Overview

Key Market Drivers

1. Trade Deal Progress: Lutnick's announcement of a completed deal pending foreign approval shifted market sentiment in the afternoon. Treasury Secretary Bessent added the U.S. is "very close" with India and making progress with South Korea and Japan, while characterizing the overall approach as "strategic uncertainty."
   

2. Tariff Impact Materializing: The record March goods trade deficit ($162B) suggests significant pre-tariff stockpiling. Gene Seroka, Port of Los Angeles executive director, warned incoming shipments will drop dramatically as major retailers halt Chinese imports.
   

3. Consumer Warning Signs: Conference Board's consumer sentiment plunged to levels not seen since 2011, particularly in expectations. Barclays reported consumers front-loading purchases of electronics and big-ticket items ahead of tariff implementation.
   

4. GDP Outlook Deterioration: Following trade data, Wall Street economists revised Q1 GDP projections downward. Goldman Sachs now forecasts -0.8%, JPMorgan -1.5%, suggesting the economy may have contracted even before tariffs took full effect.
   

Stock Spotlight

Honeywell $HON ( ▼ 0.47% ) beat Q1 estimates with adjusted EPS of $2.51 on $9.82B revenue. Aerospace segment stood out with 14% sales growth driven by commercial aftermarket and defense.

Royal Caribbean $RCL ( ▼ 0.77% ) reported strong Q1 results and raised full-year guidance. The company cited record bookings and “excellent close-in demand” with onboard spending exceeding prior years.

Hims & Hers Health $HIMS ( ▼ 5.54% ) announced a collaboration with Novo Nordisk to offer Wegovy through its telehealth platform/

SoFi Technologies $SOFI ( ▼ 5.73% ) delivered Q1 adjusted EPS of $0.06 on revenue of $771.8M. Financial Services segment revenue grew 101% year-over-year with contribution margin expanding to 49%.

General Motors $GM ( ▼ 3.62% ) beat Q1 estimates but pulled 2025 guidance, noting tariff impacts could be “significant” and prior forecasts “shouldn’t be relied on.” The company suspended share buybacks and will update guidance once tariff clarity emerges.

Big Name Updates

Amazon $AMZN ( ▼ 1.59% ) abandoned plans to display tariff surcharges on its Amazon Haul discount store. The White House had called such a move “hostile and political.” President Trump reportedly called Jeff Bezos directly about the issue.

Tesla $TSLA ( ▼ 3.38% ) announced its first Semi trucks will roll off the Nevada line by late 2025, targeting 50,000-unit annual capacity despite 145% tariffs disrupting Chinese component supply.

UPS $UPS ( ▼ 1.48% ) announced 20,000 job cuts following earnings, citing reduced Amazon business and macroeconomic uncertainty.

Netflix $NFLX ( ▲ 0.54% ) is on pace for its eighth consecutive positive session since reporting earnings, heading for its best month since May 2023.

Other Notable Company News

Twilio $TWLO ( ▲ 0.24% ) received coverage initiation from Needham with a Buy rating and $125 price target, citing strong positioning to execute against FY27 financial targets.

Lyft $LYFT ( ▼ 1.12% ) faces pressure from Engine Capital, which is pushing for board changes with directors having stronger financial and governance experience.

Boeing $BA ( ▲ 0.68% ) was removed from S&P’s CreditWatch Negative list, with its BBB- rating affirmed.

Gilead Sciences $GILD ( ▲ 2.24% ) agreed to pay $202M to settle claims it used speaker programs to funnel kickbacks to doctors for HIV drug prescriptions.

Sector Watch

Bond Market

• Treasury yields edged lower with the benchmark 10-year yield dropping to 4.167%

• Investor John Paulson predicted gold could reach nearly $5,000 by 2028 amid trade tensions and central bank buying

Policy Watch

• Administration plans to soften automotive tariff impacts, preventing duties on foreign-made cars from stacking on top of other levies

• President Trump called this "a little bit of help" for the transition period

• Chinese researchers reportedly developed an EUV light source comparable to global standards—potentially breaking a key bottleneck in advanced chipmaking currently dominated by ASML

• India reportedly offering a "forward most-favoured-nation" clause to accelerate trade talks with the U.S.

• China's Foreign Ministry maintained its position that the "tariff war was launched by the U.S."
  
  

What to Watch

1. PCE Inflation Data (Wednesday): The Fed’s preferred inflation measure will provide insight into price pressures ahead of the central bank’s next policy meeting.

   • Will influence rate cut expectations

   • May reveal early tariff impact on prices
     

2. Q1 GDP Report (Thursday): First-quarter GDP figures expected to show contraction, potentially signaling recession risk.

   • Multiple banks have revised forecasts sharply downward

   • Will determine if economy was already weakening before tariffs
     

3. Big Tech Earnings (Tomorrow/Thursday): Meta and Microsoft report Wednesday, followed by Apple and Amazon Thursday.

   • AI investment and monetization progress

   • Forward guidance amid tariff uncertainty
     

4. April Jobs Report (Friday): First labor data collected after tariff announcements.

   • Apollo’s chief economist warned of “significant risks” the number will miss expectations

   • Could reinforce fears of trade policy’s economic impact

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Thanks for reading 🙂

- John