April 30th Market Overview

Happy Wednesday

Reality check: Take a moment, log into your accounts and see where you are YTD. As of writing this….

The S&P 500 is down -5.99% since Jan 1st.
The Nasdaq composite is down -10.41% since Jan 1st.

Are you keeping pace? If your portfolio is lagging behind those benchmarks by more than 3-4%, it's time to ask hard questions. This applies even if you are managing it yourself.

On Dec. 19th 2024, intuitions had a day of large de risking. I sent 2 emails out that day as a stark warning, you can still read that online. I almost never send two emails out in a day.

We essentially have had one bad leg from these Tariffs, if they continue and no deal with China is made - things WILL get a lot worse over the next year. There so much shit flying around in the media right now its hard to get a grasp on whats going on. Times like these I always like to look back at the numbers and benchmark where I’m at vs. where the market is at.


Let's dig in...

Executive Summary

• US economy contracted in Q1, a stark reversal from Q4’s expansion, triggering recession concerns
  

• Private sector payrolls reported the smallest job gain since July 2024, far below consensus estimates
  

• Trade deficit widened dramatically with imports surging at a record pace - companies front-loading ahead of tariffs
  

• First Solar $FSLR, Super Micro Computer $SMCI, and Snap $SNAP issued stark warnings about tariff impacts
  

• Investors await Microsoft $MSFT, Meta $META, and Qualcomm $QCOM reports after the close

Market Overview

Key Market Drivers

1. GDP Data Details: Q1 GDP declined versus expected growth. Consumer spending grew at its slowest pace since 2023, while government spending fell amid DOGE cuts. Commerce Department data showed the first GDP contraction since early 2022.
   

2. Historic Import Surge: Companies rushed to move goods ahead of tariffs, causing imports to jump at their fastest pace outside pandemic distortions since 1972. This created the largest trade-related drag on GDP in records dating back to 1947.
   

3. Labor Market Cooling: ADP private payroll report showed April job additions well below expectations and March’s already modest figures. The manufacturing sector was particularly weak.
   

4. Corporate Guidance Shifts: A growing list of multinational firms are adjusting financial targets due to tariff uncertainty. Auto manufacturers, semiconductor companies, and consumer goods firms lead the caution.
   

5. Pre-Tariff Inflation Data: The PCE price index showed inflation continued moderating in March before the latest tariffs. Core PCE inflation continues progress toward the Fed’s target.
   

Stock Spotlight

Snap $SNAP ( ▼ 14.14% ) withheld formal Q2 guidance, citing macroeconomic uncertainty affecting advertising demand. Management noted advertiser pullback related to the planned closure of a tariff loophole for lower-value goods.

First Solar $FSLR ( ▼ 8.86% ) cut its full-year outlook significantly, with CEO Mark Widmar explicitly calling tariffs a “significant economic headwind.” The company warned of potential write-downs on international facilities.

Super Micro Computer $SMCI ( ▼ 11.97% ) I revised preliminary Q3 results lower, citing delayed customer platform decisions shifting sales into Q4. The guidance miss pressured the entire semiconductor sector.

Oddity Tech $ODD ( ▲ 29.26% ) bucked the trend after beating estimates and raising its 2025 forecast, stating tariff headwinds are “expected to be manageable and largely offset by cost efficiencies.”

Starbucks $SBUX ( ▼ 6.48% ) fell after a major earnings miss with North American margins severely compressed. US comparable sales declined notably, while management’s comment that “EPS is not the best measure of our success at this stage” raised flags.

Big Name Updates

Microsoft $MSFT ( ▼ 0.88% ) will boost European datacenter capacity by 40% over the next two years, President Brad Smith announced, emphasizing compliance with European regulations.

Nvidia $NVDA ( ▼ 1.4% ) declined partly on Super Micro Computer news. Reports emerged that Huawei has started shipping AI chip clusters to Chinese clients following the Nvidia ban.

Alphabet $GOOGL ( ▼ 1.58% ) announced Waymo signed a preliminary agreement with Toyota to potentially integrate self-driving technology into future vehicles.

Apple $AAPL ( ▼ 0.06% ) received price target reductions from multiple analysts, with Barclays maintaining an Underweight rating and Loop maintaining a Hold.

Other Notable Company News

Taiwan Semiconductor $TSM ( ▲ 1.02% ) started building its third US chip plant in Arizona, part of a significantly expanded $100 billion commitment to increase American production.

Caterpillar $CAT ( ▼ 1.02% ) estimated current tariffs could add hundreds of millions in costs this quarter alone. Incoming CEO Joe Creed indicated the company needs more clarity before adjusting prices.

GE Healthcare $GEHC ( ▲ 2.86% ) reduced its full-year adjusted earnings forecast, primarily attributing the cut to US-China bilateral tariffs.

Automaker Warnings: Stellantis $STLA ( ▼ 3.96% ) suspended 2025 guidance amid tariff uncertainty. Mercedes-Benz withdrew guidance, warning current tariffs could significantly impact margins. Volkswagen $VWAGY ( ▼ 2.9% ) maintained targets but added a tariff impact caveat.

Booking Holdings $BKNG ( ▲ 1.85% ) reported strong results across all metrics but still traded lower. Airbnb $ABNB ( ▼ 4.47% ) received an upgrade to Buy from DA Davidson ahead of its report.

Caesars Entertainment $CZR ( ▼ 3.5% ) reported seeing “no signs of consumer spending softness in 2025,” a rare positive outlook amid economic concerns.

Seagate Technology $STX ( ▲ 10.55% ) gained after beating estimates and providing upbeat guidance, defying the broader market weakness.

Sector Watch

Bond Market

Treasury yields held stable despite equity market volatility and weak GDP data. The 10-year yield showed minimal movement. The Treasury Department announced no plans to increase note-and-bond auction sizes for the next three months and maintained its forward guidance of no changes “for at least the next several quarters.”

Policy Watch

• President Trump attributed the GDP contraction to a “Biden ‘Overhang’” via Truth Social, telling Americans to “BE PATIENT!!!” as his tariff policies “will soon start kicking in.”
  

• Commerce Secretary Howard Lutnick hinted a trade deal announcement is coming soon, while Trump mentioned negotiations with India are “coming along great.”
  

• The administration is preparing a contingency bailout plan for farmers potentially hurt by trade tensions, according to Agriculture Secretary Brooke Rollins, though they “don’t believe it will be necessary.”
  

• White House trade adviser Peter Navarro indicated negotiations with multiple countries are actively ongoing. The administration has reportedly received written offers from nearly 20 countries.
  

• Trump advisor Scott Bessent mentioned analyzing a 15% “Made-in-America” tax bracket for companies with hopes for a signed tax bill by July 4th.
  
  

What to Watch

1. Tech Earnings Impact Tomorrow: $META, $MSFT, and $QCOM after hours.

   • Watch $META's user metrics and ad pricing for early signals of macroeconomic weakness

   • $MSFT Azure growth rate - anything below 25% could trigger tech sector selling

   • $QCOM commentary on smartphone chip inventory levels will indicate consumer electronics demand
     

2. Q1 GDP Revisions (Late May): Beyond the headline contraction.

   • Look for Personal Consumption revision - currently at weakest level since 2023

   • If import surge gets revised downward, recession narrative could quickly reverse
     

3. Copper's Signal Function: Metal dropped to 2-week lows amid economic concerns.

   • Watch for copper's response to Chinese PMI data releasing tonight

   • Key technical level at $4.50 - break below suggests deeper economic concerns
     

4. Canada-US Trade Negotiations: Carney's White House visit next week.

   • Auto parts supply chain implications for $F, $GM if exemptions granted

   • Agricultural commodity markets closely tied to outcome - watch $DBA ETF
     

5. Write-Down Contagion Risk: $FSLR's facility impairment warning as canary.

   • Q2 earnings pre-announcement season starts in 3 weeks - watch for surge in warnings

   • Focus on companies with significant Chinese manufacturing ($AAPL, $NKE)

P.S. 

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Thanks for reading 🙂

- John