🍴No rate cut

and some big earnings surprises

Good morning investors! Earnings season is in full swing as we await more trade news.

Today we cover:

  • No rate cut

  • Disney shines

  • More earnings

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📊 Economy and News 

Fed Holds Rates Amid Tariff Turmoil and Rising Economic Risks

The Federal Reserve left interest rates unchanged at 4.25% to 4.5% during its May meeting, as Chair Jerome Powell emphasized growing risks of both higher inflation and rising unemployment.

Despite external pressure, including President Trump’s renewed push for rate cuts, Powell dismissed the idea of acting preemptively. “We need more data,” he said, pointing to persistent inflation above the Fed's 2% target.

Powell acknowledged how new duties were far more aggressive than the Fed anticipated and warned they could significantly slow growth, boost prices, and raise joblessness. If sustained, he said, they might delay progress toward the Fed’s dual mandate for at least a year.

Powell reaffirmed the Fed’s independence, stating he’s never requested a meeting with any president. “That’s not my role,” he said.

The Fed's messaging reveals internal contradictions. It describes the economy as “solid” yet warns of significant downside risks, including potential unemployment spikes and inflation.

While wage growth is dismissed as a major inflationary force, inflation risks are still elevated. Additionally, the Fed’s stance on tariffs—waiting for clarity while acknowledging unclear outcomes—raises questions about the coherence of its approach.

Global hits:

Check this: Microsoft won its appeal against the FTC’s challenge to its $69B Activision Blizzard acquisition. In another news, CrowdStrike is cutting about 5% of its workforce, to streamline operations.

Exciting: Netflix is rolling out a revamped homepage and an updated mobile experience that will include an AI search tool as well as a TikTok-style vertical video feed. Rumors say that Trump will end chip export restrictions, helping chip stocks. Lastly, US top trade officials will meet with their Chinese counterparts this week to discuss tariffs.

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📈 Stocks

S&P 500 5,631.28 (+0.43%)
DJIA 41,113.97 (+0.70%)
NASDAQ 17,738.16 (+0.27%)
BRENT CRUDE 61.13 (+0.02%)
* Prices as of May 8th, 12:20 AM UTC

Apple and Google in trouble?

Eddy Cue, Apple’s services chief, testified that AI search engines will likely replace traditional ones like Google, causing Alphabet’s shares to drop 8% and Apple’s 2%.

Speaking during a Justice Department lawsuit against Alphabet, Cue said Apple plans to add AI search options from OpenAI, Perplexity, and Anthropic to Safari.

The lawsuit targets Google’s payments to Apple—up to $20 billion in 2022—to be the default search engine, a deal now at risk.

Cue noted a decline in Safari searches in April due to rising AI use, expressing concern over potential revenue loss. This is a major news for investors as Google’s search revenue could take a hit due to the growing use of AI.

Uber failed to impress: Uber’s Q1 2025 results beat earnings expectations but missed revenue forecasts, causing a 3% share price drop.

Uber projects Q2 gross bookings of $45.75–$47.25 billion and adjusted EBITDA of $2.02–$2.12 billion. Mobility bookings rose 13% to $21.18 billion, and delivery bookings grew 15% to $20.38 billion. Monthly active users hit 170 million, up 14%, with 3.04 billion trips booked, up 18%.

Uber One, which drives 60% of Uber Eats bookings, continues to shine and the company is planning major changes, including tightened office policy. Furthermore, Uber seems to be taking interest in autonomous vehicles, with 1.5 million AV trips annually.

Arm reported an earnings beat: The company issued optimistic guidance for the current quarter and full year. However, the positive news was overshadowed by the Trump Administration's announcement to revise Biden’s chip trade restrictions.

Arm reported an EPS of $0.55, surpassing the FactSet estimate of $0.52, with revenue of $1.24 billion against expectations of $1.23 billion. The company achieved record-breaking Q4 results, marking its first-ever quarter with revenue exceeding $1 billion, driven by a record $600 million in royalty revenue. Arm projects $4 billion in revenue for the year.

AMC loses: The company reported an adjusted loss of ($0.58) per share, slightly better than the expected ($0.59) loss.

CEO Adam Aron highlighted a revenue beat of $862.5 million against estimates of $837.48 million, a strong result given the weak box office season. He noted it was the worst quarter for theater attendance since 1996, excluding the Covid period.

The company’s net loss widened to $(202.1) million from $(163.5) million in the same quarter last year. Aron expressed optimism, stating that ticket sales have already improved in the current quarter.

Charles River Laboratories gives good news: The firm raised its full-year guidance and reported Q1 adjusted EPS that exceeded estimates. The lab tech firm's stock surged +19% after announcing a board shakeup following an agreement with its largest investor, Elliott Investment Management. The company will appoint four new directors, while four current board members will not seek reelection.

Novo Nordisk jumps: The firm rose 2% after surpassing Q1 expectations, despite trimming its full-year forecast. The company reported net sales of $11.89 billion, a 19% year-over-year increase, with net profit up 14%. Sales of Wegovy jumped 85%, while Ozempic rose 18%. However, the company cautioned that pharmacy demand could slow in the coming months.

Carvana flexes: Carvana’s first-quarter results easily topped Wall Street’s expectations as the company reported record sales. The 46% year-over-year sales increase helped Carvana report other quarterly records in net income and adjusted earnings. Carvana, which doesn’t typically provide detailed annual guidance targets, on Wednesday also updated its long-term objectives and quarterly guidance.

Disney shines: Disney beat expectations in its fiscal Q2 report, with shares jumping. 10%.

Streaming was a standout, as Disney+ added 1.4 million subscribers, defying expectations of a decline and pushing its global base to 126 million. The company now sees modest subscriber growth ahead.

All three business segments posted revenue gains:

  • The direct-to-consumer unit saw 8% growth to $6.12 billion, driven by price hikes and more subscribers.

  • The entertainment division grew 9% to $10.68 billion, buoyed by strong carryover from winter films and upcoming titles like Mufasa and Moana 2.

  • Linear TV revenue dropped 13%.

ESPN-led sports revenue rose 5% to $4.53 billion, with ad gains from extra playoff games. Disney now expects sports operating income to grow 18% in fiscal 2025, up from 13%.

The experiences segment, which includes parks and cruises, grew 6% to $8.89 billion. U.S. park revenue rose 9%, while international parks dipped 5%. Consumer products grew 4%, thanks to licensing from the Marvel Rivals game.

Disney also announced a new theme park and resort in Abu Dhabi in partnership with Miral. Disney will provide design and oversight but won’t invest capital, instead earning royalties from the project.

The company raised its full-year adjusted EPS outlook to $5.75, a 16% increase over 2024.

💵 Personal Finance

How to be a day trader - Part IX

Let’s resume this week’s topic and talk more about day trading, including technical indicators. They are essential tools for day traders to analyze price movements and make informed decisions.

Key indicators include the Relative Strength Index (RSI), which measures overbought or oversold conditions, and the Moving Average Convergence Divergence (MACD), which identifies momentum shifts.

Bollinger Bands help traders spot volatility and potential breakouts, while volume indicators confirm trend strength.

For example, combining RSI with MACD can signal entry points during pullbacks in a trending market. Traders should avoid overloading charts with indicators, as this can lead to analysis paralysis.

Instead, select two or three complementary tools and master their application. Practice using demo accounts to test setups and refine strategies.

Platforms like TradingView offer customizable charting tools to visualize indicators in real time.

Always consider market context—indicators are not foolproof and work best when paired with price action analysis.

By understanding how indicators reflect market behavior, traders can time entries and exits more effectively, improving their edge in fast-paced markets.

💰 Be a Better Investor

“Buy when everyone else is selling and hold until everyone else is buying. That's not just a catchy slogan. It's the very essence of successful investing.”

J. Paul Getty

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Nothing in this newsletter is financial advice. Always do your own research and think for yourself.