💪 Meta and Microsoft win

Together with Percent

Good morning investors! Yesterday was exciting with big economy and earnings news and today may turn out to be a major win.

Today we cover:

• The GDP report

• Microsoft and Meta beat

• More earnings

📊 Economy and News 

US Economy Shrinks Amid Tariff Turmoil, Sparking Fears of Recession

The US economy contracted in the first quarter of 2025, posting its worst performance since 2022.

Gross domestic product (GDP) declined at an annualized rate of -0.3%, a sharp drop from the 2.4% growth seen in the previous quarter and far below economists’ expectations of 0.8%.

Markets responded swiftly, with stocks falling after the release but recovered greatly by the end of the day. This indicates all may not be well and we have seen this happen before – Clinton had a rough start but a winning result and with AI at play, we may see the economy shining soon.

The downturn was driven largely by a record widening of the trade deficit, with imports surging 41.3% as companies rushed to beat new tariffs, while exports barely moved. This trade gap subtracted from GDP more than any time since records began in 1947.

Despite the weak headline number, business investment jumped 9.8%, likely due to tariff fears prompting firms to stockpile. Consumer spending, however, slowed to 1.8% — the lowest since mid-2023 — and government spending dropped sharply. Inflation also rose, with the PCE price index climbing 3.6%.

Trump dismissed the economic decline, blaming the prior administration and insisting a “boom” is coming. His adviser, Peter Navarro, highlighted underlying strength claiming US growth hit 3% without tariffs.

Still, economists warn that the outlook is fragile. Hiring slowed significantly in April, with private employers adding just 62,000 jobs. Though this single quarter doesn’t meet the definition of a recession, continued issues could push the economy further toward one.

Global hits:

• German inflation dips less than expected to 2.2% in April.

• Euro zone economy expands by better-than-expected 0.4% in the first quarter.

• US appeals court will not allow DOGE to access Social Security data.

Controversial: Starter homes’ cost at least $1 million in over 200 U.S. cities.

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📈 Stocks

S&P 500 5,569.06 (+0.15%)
DJIA 40,669.36 (+0.35%)
NASDAQ 17,446.34 (-0.086%)
BRENT CRUDE 63.12 (-1.76%)
* Prices as of May 1st, 12:20 AM UTC

Microsoft and Meta jump after positive reports

Microsoft shares jumped 7% in after-hours trading following a strong earnings report that beat expectations and showcased robust growth in its Azure cloud and AI businesses.

EPS came in at $3.46 (vs. $3.22 expected) on revenue of $70.07 billion (vs. $68.42 billion expected). The company also gave upbeat guidance for next quarter, forecasting revenue up to $74.25 billion and 34–35% Azure growth, well above Wall Street estimates.

Net income rose 18% to $25.8 billion, with Azure revenue climbing 33%, 16 percentage points of which came from AI-related demand.

Capital spending surged 53% to $16.75 billion, driven by data center expansion for AI workloads. Productivity software and Windows also beat estimates, while LinkedIn showed softness due to a weak hiring market.

This is a strong signal that Microsoft remains a dominant force in cloud and AI, despite macro uncertainties like tariffs. In fact, the company has low exposure and the word “tariff” came up just once on Microsoft’s Wednesday earnings call CEO Satya Nadella said he thinks the company could be helpful in providing software that could help clients counter rising costs.

Meta Delivers Strong Earnings, But Faces Global Ad and Regulatory Headwinds

Meta shares rose 5% after reporting better-than-expected Q1 earnings, with EPS at $6.43 (vs. $5.28 expected) and revenue of $42.31 billion (vs. $41.40 billion).

Net income rose 35% to $16.64 billion, and Q2 guidance was in line with Wall Street expectations.

Ad revenue beat estimates, though weakness was noted in Asia-Pacific due to reduced e-commerce ad spend linked to tariff and trade uncertainty.

Meta trimmed its 2025 expense forecast slightly but raised capital expenditures to $64–72 billion, reflecting increased AI infrastructure investment.

Daily active users hit 3.43 billion, while Threads reached 350 million monthly users and Meta AI approached 1 billion monthly users.

However, the company warned of a potential significant revenue hit in Europe after a regulatory challenge to its no-ads subscription model. Reality Labs remains a drag, losing $4.2 billion in Q1.

Also, the company made no mention of federal allegations that it holds a monopoly over personal social networking. According to The Wall Street Journal, CEO Mark Zuckerberg reportedly offered a $450 million settlement, but regulators are holding firm at $18 billion.

More earnings

• Qualcomm reported fiscal second-quarter earnings that topped Wall Street expectations as the company’s chip sales showed strong year-over-year growth. Its overall handset chip sales increased 12% on an annual basis to $6.93 billion.

• Norwegian Cruise Line Holdings missed first-quarter earnings expectations. The company said Americans may be hesitant in booking longer cruises to Europe. Cruise stocks more broadly have been pressured, amid even an optimistic outlook.

• Europe’s Airbus posted stronger-than-expected revenues and core profit for the first quarter and reaffirmed targets for the year, while stressing it was too early to quantify the impact of a tariff war in which there would be “only losers.”. The world’s largest planemaker said widely watched adjusted operating income rose 8% to 624 million euros ($707 million) and revenues gained 6% to 13.54 billion euros in the quarter, led by defense which smoothed the impact of lower jetliner deliveries. Airbus says it’s in constructive talks over the production of the A400M military airlifter.

• Yum Brands, the parent of KFC, Pizza Hut and Taco Bell, posted mixed first-quarter results, as earnings beat Wall Street estimates but revenue missed. Pizza Hut’s same-store sales dropped more than expected. Yum Brands said sales rose 12% in the first quarter.

• Grab raised its 2025 EBITDA forecast to $460–$480 million, up from a prior range of $440–$470 million, after posting Q1 revenue of $773 million, ahead of the $766.7 million estimate.

• Stellantis suspended its full-year 2025 guidance after reporting Q1 revenue of €35.8 billion ($40.66B), a 14% year-over-year decline. The company pointed to tariff uncertainties and reduced shipments, while noting ongoing talks with governments and adjustments to its production strategy.

• Caterpillar reported Q1 revenue of $14.2 billion, missing the $14.58 billion estimate, as sales fell 10% due to lower dealer inventories and weaker pricing. Adjusted EPS was $4.25, below the expected $4.35, with tariff-related costs expected to further impact Q2 performance.

• Etsy reported Q1 revenue of $651.2 million, topping the $641.7 million estimate, boosted by solid growth in advertising and payments. However, the company still posted a net loss of $52.1 million.

💵 Personal Finance

How to be a day trader - Part IV

Let’s resume this week’s topic and look at top platforms for day traders:. All these are available on mobile and web and cater to global audiences but with some limitations.

1. eToro – Best for Social and Beginner Traders

eToro is renowned for its social trading features, allowing users to copy the trades of experienced investors.​

Key Features:

• Assets: Stocks, ETFs, Forex, Crypto, Commodities, Indices

• Cost: No commission on stock CFDs; spreads vary by asset

• Minimum Deposit: $100 (USD)

• Leverage: Up to 1:30 for retail clients; higher leverage may be available for professional clients.

Though great, remember that it offers no support for hedging or scalping strategies and has fees on withdrawals and inactivity​.

2. AvaTrade – Best for Advanced and Automated Traders

AvaTrade offers a range of platforms, including MetaTrader 4 and 5, catering to both manual and automated traders.​

Key Features:

• Assets: Forex, Stocks, Crypto, Commodities, Indices, Bonds

• Cost: Competitive spreads; no commission on most trades

• Minimum Deposit: $100 USD

• Leverage: Up to 1:30 for retail clients; up to 1:400 for professional clients ​

It supports automated trading via Expert Advisors and offers advanced risk management tools like AvaProtect but has no support for real stock trading (CFDs only). Plus, it charges an inactivity fee after three months.

3. Interactive Brokers – Best for Professional and International Traders

Interactive Brokers provides access to global markets with a tiered pricing structure suitable for high-volume traders.​

Key Features:

• Assets: Stocks, Options, Futures, Forex, Bonds, ETFs

• Cost: $0 commissions for IBKR Lite; up to $0.005 per share for IBKR Pro

• Minimum Deposit: $0 for IBKR Lite; $2,000 for IBKR Pro

• Leverage: Varies based on account type and asset class

It offers access to over 125 markets worldwide and low margin rates​ but may not be suitable for beginners due to a complex interface. Plus, there’s an inactivity fee.

4. Robinhood – Best for Casual and Mobile Traders

Overview: Robinhood is known for its commission-free trading and user-friendly mobile app, appealing to casual investors.​

Key Features:

• Assets: Stocks, Options, Crypto

• Cost: No commission on trades

• Minimum Deposit: $0

• Leverage: Available through margin trading accounts

This offers access to cryptocurrency trading​ but doesn’t have the best customer service out there.

5. Fidelity Active Trader Pro – Best for Research and Analysis

Fidelity's Active Trader Pro offers robust research tools and real-time analytics for active traders.​

Key Features:

• Assets: Stocks, Options, ETFs

• Cost: $0 commissions on trades

• Minimum Deposit: $0

• Leverage: Available through margin accounts​

This offers extensive research and analysis tools with customizable alerts and watchlists. However, there is limited access to international markets.

Check tomorrow’s issue for more on day trading, including top strategies.

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👩🏽‍⚖️ Legal Stuff
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