- Stocks, Futures Climb as China Mulls Trade Talks: Markets Wrap
Asian stocks climbed to the highest level in more than a month and US equity-index futures advanced Friday
after China said it’s evaluating trade talks with the US, boosting optimism that tariff tensions will tamp down.
A regional gauge rose 1.5% as China assessed talks after senior US officials repeatedly expressed a willingness
to discuss. Japanese shares rose 1.1% on positive comments from the country’s chief trade negotiator.
Contracts for the S&P 500 and European stocks jumped. The MSCI EM Currency Index advanced 0.5% to a
record high. Gold was set for its first back-to-back weekly loss this year while 10-year Treasuries fell. - Stocks rise to kick off May as Microsoft and Meta rekindle the AI trade
Stocks rose on Thursday after strong quarterly results from two Big Tech players eased concerns that artificial
intelligence progress would slow amid economic turmoil. The Dow Jones Industrial Average climbed 83.60
points, or 0.21%, to close at 40,752.96. The S&P 500 gained 0.63% to end at 5,604.14, still slightly below its
levels from before President Donald Trump’s “Liberation Day” tariffs announcement in early April. The Nasdaq
Composite increased 1.52%, to close at 17,710.74 and wipe out the decline it experienced since April 2. - Oil prices rise as China says it’s open for trade talks with U.S.
Oil prices pulled ahead in early Asian hours on Friday after China said its door is open for talks with the United
States, raising hopes of a de-escalation in a bitter trade war between the world’s two largest economies.
Brent crude futures rose 38 cents, or 0.6%, to $62.51 a barrel by 0136 GMT, while U.S. West Texas
Intermediate crude futures added 38 cents, or 0.6%, to $59.62 a barrel. China’s commerce ministry on Friday
said the United States has recently taken steps to open a dialogue with Beijing by conveying information
through relevant parties. Concerns that the broader trade war could push the global economy into a recession
and crimp oil demand, just as the OPEC+ group is preparing to raise output, have weighed heavily on oil prices
in recent weeks. However, the signals of a potential easing in trade tensions between the United State and
China, the world’s biggest importer of crude oil, supported sentiment towards crude. Oil prices were also
underpinned by a threat from U.S. President Donald Trump to impose secondary sanctions on buyers of
Iranian oil. The threat raised fears of tighter crude oil supplies, ANZ bank analysts said in a note. Trump’s
comments followed a postponement of U.S. talks with Iran over its nuclear program. He had previously
restored a “maximum pressure” campaign against Iran, which included efforts to drive the country’s oil exports
to zero, to help prevent Tehran from developing a nuclear weapon. Oil prices had gained late in Thursday’s
session to settle nearly 2% higher on Trump’s remarks, erasing some of the losses recorded earlier in the week
on expectations of more OPEC+ supply coming to the market. Reuters on Wednesday reported that Saudi
Arabia, de facto leader of OPEC+, has briefed allies and industry experts that it is unwilling to prop up oil prices
with further supply cuts. Several OPEC+ members are set to suggest the group accelerates output hikes in June
for a second consecutive month, Reuters earlier reported. Eight OPEC+ countries will meet on May 5 to decide
a June output plan. - Gold set for worst week in more than 2 months; US jobs data eyed
Gold prices were poised for their worst weekly performance in more than two months on Friday as receding
trade tensions tempered safe-haven demand, while the market’s focus shifted to the U.S. non-farm payrolls
report, due later in the day. Spot gold was steady at $3,239.15 an ounce as of 0206 GMT. Gold has lost more
than 2% so far this week, the steepest weekly fall since late February. U.S. gold futures rose 0.8% to $3,247.90.
“Prices are taking a breather, and I mean the bears now are taking charge. And well, because of that, we’ve
seen retail buying,” said Singapore-based dealer GoldSilver Central Managing Director Brian Lan. The United
States has approached China to seek talks over President Donald Trump’s 145% tariffs and Beijing’s door is
open for discussions, China’s Commerce Ministry said on Friday, signalling a potential de-escalation in the trade
war. Tariffs are easing, both U.S. and China are more willing to listen and take a step back, which is weighing
on gold prices, GoldSilver Central’s Lan said. Bullion, a safeguard against political and financial turmoil, last
soared to a record high of $3,500.05 per ounce on April 22 as investors sought refuge from global economic
turmoil. - China says it’s evaluating the possibility of trade talks with the U.S.
China said it is evaluating U.S. overtures to initiate trade negotiations, potentially paving the way for the world’s
two largest economies to start talks to resolve a trade war that has rumbled financial markets and cast a pall
on global economic activity. Senior U.S. officials have reached out recently “through relevant parties multiple
times,” hoping to start negotiations with China on tariffs, a spokesperson for the commerce ministry said in
a statement Friday. While assessing the possibility of starting any negotiations, Chinese authorities reiterated
Beijing’s request for the U.S. to remove all unilateral tariffs. Failure to do so would indicate “an outright lack of
sincerity” from Washington and “further compromise mutual trust,” according to a CNBC translation. “If the
U.S. wants to talk, it should show its sincerity and be prepared to correct its wrong practices and cancel the
unilateral tariffs,” according to the statement. U.S. President Donald Trump has slapped tariffs of 145% on
imported Chinese goods this year, prompting China to impose retaliatory levies of 125%. So far, both sides
have sought to blunt the economic impact of tariffs by granting exemptions on certain critical products. Chinese
offshore yuan strengthened 0.14% to 7.2665 against the U.S. dollar following the statement. While China’s
onshore markets are closed for a holiday, Hong Kong’s Hang Seng index jumped 1.6%. The latest comments
from Beijing follow a flurry of conflicting statements from the Trump administration and Chinese leadership on
whether talks were underway, with both sides wanting to avoid being seen as the first to back down.
Separately, U.S. Secretary of State Marco Rubio told Fox News’ Hannity Program that the “Chinese want to
meet and talk,” according to Reuters, while indicating that such talks will come up soon. - Weekly jobless claims surge to 241,000, more than expected, in latest sign of economic trouble
Initial unemployment claims posted an unexpected increase last week in a potential trouble sign for the
wobbling U.S. economy. First-time filings for unemployment insurance totaled a seasonally adjusted 241,000
for the week ended April 26, up 18,000 from the prior period and higher than the Dow Jones estimate for
225,000, the Labor Department reported Thursday. This was the highest total since Feb. 22. Continuing claims,
which run a week behind and provide a broader view of layoff trends, rose to 1.92 million, up 83,000 to the
highest level since Nov. 13, 2021. Much of the gain seemed to come from one state — New York, where claims
more than doubled to 30,043, according to unadjusted data. The increase may have been due to spring recess
in New York public schools, according to Sam Tombs, chief U.S. economist at Pantheon Macroeconomics.
“Nonetheless, the deterioration in the timeliest hiring and firing indicators over the last couple weeks suggests
that jobless claims will trend up over coming weeks,” Tombs said in a note. The District of Columbia, which had
seen a sharp increase earlier this year amid President Donald Trump’s efforts to shrink the federal government
payroll, saw a modest rise last week. The report comes amid several trouble signs for the economy, though the
labor market has remained stable. In a release Wednesday, the Commerce Department said gross domestic
product fell at a 0.3% annualized rate in the first quarter, the first contraction in three years. Much of the
decline was driven by a surge in imports ahead of Trump’s tariffs announced in early April, though consumer
spending cooled and a pullback in government outlays also contributed to the decline. Despite the rise in the
claims, the longer-term trend remains intact. The four-week moving average climbed 5,500 to 226,000, largely
in line with recent trends. The Labor Department on Friday will release its nonfarm payrolls total for April, with
economists expecting an increase of 133,000. The Thursday release will not factor into that number as it is
beyond the survey week used for the report. - U.S. and Ukraine sign economic deal that includes terms for natural resources in the war-torn country
The White House announced Wednesday night that it signed an economic partnership with Ukraine that
includes an agreement on the ownership and extraction of natural resources from the war-torn nation.
Treasury Secretary Scott Bessent said the agreement, established as the United States-Ukraine Reconstruction
Investment Fund, will allow the U.S. to “invest alongside Ukraine” to unlock its growth assets and ultimately
accelerate its economic recovery. “As the President has said, the United States is committed to helping
facilitate the end of this cruel and senseless war. This agreement signals clearly to Russia that the Trump
Administration is committed to a peace process centered on a free, sovereign, and prosperous Ukraine over
the long term,” Bessent said. “President Trump envisioned this partnership between the American people and
the Ukrainian people to show both sides’ commitment to lasting peace and prosperity in Ukraine.” “To be clear,
no state or person who financed or supplied the Russian war machine will be allowed to benefit from the
reconstruction of Ukraine,” he added. Yulia Svyrydenko, Ukraine’s economy minister, provided more details on
the minerals deal outlined in the agreement, first noting in a post on X that “it is the Ukrainian state that
determines what and where to extract” and that “subsoil remains under Ukrainian ownership.” Ukraine and
the U.S. will jointly manage and maintain co-ownership of the investment fund, with neither side holding a
dominant vote, Svyrydenko said. It will be financed by new Ukrainian oil, gas and critical mineral licenses, with
50% of all revenue from the licenses going toward the fund. Svyrydenko indicated in her post that the U.S. will
also contribute to the fund, through it is unclear exactly how much. - Australia Q1 producer price inflation beats estimates; retail sales rises 0.3% in March
Australia’s producer prices, as measured by the final demand PPI, grew by 0.9% in the first quarter of 2025.
This was a slight uptick from the previous quarter’s 0.8% (the slowest since Q2, 2023) and marginally exceeded
the anticipated 0.8%. - Amazon.com Inc. gave a weaker-than-expected forecast for operating profit in the current quarter,
pointing toward a long list of factors including tariffs and trade that may cause consumers to pull back on
spending
The world’s largest online retailer projected operating profit of $13 billion to $17.5 billion, compared with an
average estimate of $17.8 billion. Sales will be $159 billion to $164 billion in the period ending in June, the
company said Thursday in a statement. Analysts, on average, expected $161.4 billion. Amazon shares have
fallen about 13% this year as Wall Street weighs the impact of President Donald Trump’s tariffs on a retail
operation that sources much of its goods from China. First-quarter results were generally in line with analysts’
estimates, but the company is clearly bracing for a slowdown in the coming months. In issuing its forecast,
Amazon added language on tariffs that wasn’t included the previous quarter. Results may be “materially
affected by many factors,” such as “tariff and trade policies,” currency fluctuations and “recessionary fears,”
the company said in the statement. Amazon didn’t mention tariffs when the company issued its first-quarter
forecast in early February. The company’s reputation for competitive prices and a broad base of suppliers could
insulate it if shoppers become more deal-focused. But a pullback by the independent Chinese sellers who help
stock Amazon’s warehouses could hit the logistics and high-margin advertising businesses. The Seattle-based
company has been growing more profitable in recent years as it cut costs and worked to streamline the logistics
operation. Gross margin rose again during the quarter, but by the slowest pace in three years, to 50.5%. - Apple Inc.’s sales from China declined more than anticipated in the latest quarter, overshadowing
otherwise solid results for the iPhone maker
China revenue fell 2.3% to $16 billion in the fiscal second quarter, which ran through March, the company said
in a statement Thursday. Analysts had estimated $16.83 billion. Overall sales gained 5% to $95.4 billion, ahead
of the $94.6 billion average estimate. Apple had projected percentage growth in the low- to mid-single digits.
The results were seen as an ominous sign for a company that faces even bigger challenges in the months ahead.
Apple’s China-centric production makes it especially vulnerable to tariffs announced by the Trump
administration. It’s also been struggling to hold on to customers in the Asian country, one of its biggest markets
outside the US. Apple shares declined about 2% in late trading after the results were released. They had been
down 15% this year through Thursday’s close. The iPhone maker also announced plans to increase its share
buyback program by $100 billion and boost its quarterly dividend 4% to 26 cents a share. The company has
been contending with a range of challenges — beyond the looming tariffs. Apple is playing catch-up in artificial
intelligence, forcing it to shuffle management in recent weeks. It’s also under mounting regulatory pressure in
the EU and its home country. On Wednesday, a federal judge demanded that the company open up its App
Store to third-party payment options and stop charging commissions on outside purchases. Tariffs remain one
of the biggest question marks. Though Apple is likely to sidestep the 145% China levy that the administration
originally proposed, new tariffs on electronics are still coming. The turmoil threatens to upend the company’s
supply chain and potentially force it to raise prices. Already, Apple is looking to make more of its US-bound
iPhones in India rather than China. - Shares of Eli Lilly & Co drop as much as 6.7% in premarket trading after the drugmaker cut its adjusted
profit forecast for the full year and CVS Health announced plans to move Lilly’s blockbuster weight-loss
drug, Zepbound, off its list of preferred drugs
FIRST QUARTER RESULTS: Adjusted EPS $3.34 vs. $2.58 y/y; Revenue $12.73 billion, +45% y/y, estimate $12.67
billion; Mounjaro revenue $3.84 billion; Zepbound revenue $2.31 billion, +21% q/q, estimate $2.3 billion;
Verzenio rev. $1.16 billion, +10% y/y, estimate $1.31 billion; Humalog rev. $537.2 million, estimate $523.5
million; Jardiance rev. $1.01 billion, estimate $734.7 million; Trulicity rev. $1.1 billion, estimate $1.13 billion;
Emgality rev. $124.6 million, estimate $227.2 million; Kisunla rev. $21.5 million, estimate $13.4 million;
Cyramza rev. $224.9 million, estimate $229.1 million; Taltz rev. $761.9 million, estimate $682.1 million; R&D
expenses $2.73 billion, +8.4% y/y, estimate $2.97 billion. YEAR FORECAST: Sees adjusted EPS $20.78 to $22.28,
saw $22.50 to $24; Still sees revenue $58.0 billion to $61.0 billion, estimate $59.66 billion (Bloomberg
Consensus). COMMENTARY: Lilly Guidance Doesn’t Reflect Any Policy Shifts; Guidance is based on the existing
tariff and trade environment as of May 1, 2025, and does not reflect any policy shifts, including pharmaceutical
sector tariffs, that could impact business; Guidance for EPS for 2025 decreased to the range of $20.17 to $21.67
on a reported basis, driven by the acquired IPR&D charges and net losses on investments in equity securities
and $20.78 to $22.28 on a non-GAAP basis, driven by the acquired IPR&D charges.; The company reaffirms its
previous 2025 revenue guidance and expects it to be between $58.0 billion and $61.0 billion.; “Lilly had a solid
start to the year, with 45% year-over-year revenue growth driven by strong sales of Mounjaro and Zepbound,”
said David A. Ricks, Lilly chair and CEO. - Estée Lauder Companies (NYSE:EL) Reports Earnings Drop And Guidance Amid R&D Leadership Change
Estée Lauder Companies announced a quarterly dividend and released new corporate guidance recently.
Meanwhile, global indices, including the S&P 500 and Dow, witnessed positive momentum due to robust
earnings from tech giants like Microsoft and Meta. While the broader market experienced a 2.7% rise, Estée
Lauder’s 4.72% price increase amidst less favorable earnings could reflect investor interest buoyed by dividend
affirmation, despite the challenging sales outlook. The continuation of positive market sentiment likely
outweighed Estée Lauder’s softer earnings news, contributing to its stock performance aligning with the
broader market’s upward trend. The recently announced quarterly dividend and corporate guidance from
Estée Lauder Companies arrived as broader market indices, like the S&P 500 and Dow, experienced upward
momentum due to robust performances from technology giants. While Estée Lauder’s 4.72% share price
increase demonstrates some positive investor sentiment, it’s worth noting the company’s longer-term
performance, with a total return, including dividends, dropping significantly by 51.86% over the past year.
Compared to the broader US market, which saw a 9.6% rise, Estée Lauder has notably underperformed. Within
the US Personal Products industry, Estée Lauder also lagged, as the industry itself declined by 24.1% over the
same period. - Enovix (NasdaqGS:ENVX) Faces 17% Weekly Price Decline Amid Global Trade Tensions
Enovix experienced a 17% decline in share price over the last week, a stark reflection of the broader stock
market turmoil driven by escalating global trade tensions. Amidst a 5.6% drop in the market, spurred by the
Trump administration’s tariff announcements, investor sentiment was notably impacted. In particular,
heightened concerns over economic recession risks and diminishing confidence in corporate profitability
contributed to the downturn. As major indexes, including the Nasdaq, entered bear market territory, Enovix
shares were not insulated from these overarching market pressures, illustrating broader investor caution amid
economic uncertainty. Over the past year, Enovix’s total return was a 14.23% decline, underperforming both
the US market’s 3.3% positive return and the US Electrical industry’s 6.2% decline. Several factors may have
contributed to this performance. Throughout 2024, the company reported consistently increasing sales, yet
remained unprofitable with significant net losses. Notably, full-year sales rose to US$23.07 million, but the net
loss widened to US$222.24 million. The company’s expensive Price-To-Book Ratio, at 5.1x compared to the
industry average of 1.8x, indicates a potentially overvalued position, possibly dampening investor enthusiasm
amidst profitability concerns. - Kohl’s fires new CEO for personal relationship with a vendor
Kohl’s (NYSE:KSS) said on Thursday it had fired CEO Ashley Buchanan after an investigation found he had
pushed for deals with a vendor with whom he had a personal relationship, after little more than 100 days in
the CEO job. Buchanan engaged in transactions with this person’s company on “highly unusual terms”, Kohl’s
said in a filing, and also caused the company to agree to a multi-million-dollar consulting agreement with a
team that included this person he was involved with. He also did not disclose the relationship, the company
said. Buchanan’s firing makes the third change at the helm in as many years for the beleaguered department
store retailer, which has been struggling with several quarters of sagging sales due to stiff competition from e
commerce firms and big-box retailers such as Walmart (NYSE:WMT), as well as its own strategic missteps.
Kohl’s shares rose 8.4% on Thursday, as it reported better-than-expected preliminary first-quarter earnings,
but the stock is still down roughly 70% over the last year. Buchanan was not immediately available for comment
when contacted on LinkedIn, while Kohl’s declined to provide further comment. Buchanan was named CEO in
November, replacing Tom Kingsbury. After he took over as CEO in January, Kohl’s cut about 10% of its corporate
workforce to improve profitability. “(Kohl’s) desperately needs stability and changes in its business model.
However, it’s better to make the move to fire Buchanan rather than let the situation get worse,” Morningstar
Research analyst David Swartz said.
Menu