Sector Snapshot
Sector Synopsis
Markets remained tariff-sensitive with autos rallying on potential policy flexibility while aerospace and chemicals remain pressured. Consumer names saw high volatility driven by shifting trade policy and analyst re-ratings. Big banks broadly impressed, while earnings and macro setups across software, biotech, and hardware saw increasingly selective sentiment.
Autos
Auto stocks found support after President Trump floated temporary tariff exemptions on imported vehicles and parts. GM still drew a downgrade at Barclays, which also turned more cautious on the broader sector and downgraded APTV, MBLY, and VC. Honda is reportedly exploring shifting production to the U.S. to avoid tariff exposure. EV names (TSLA, RIVM, LI, NIO, XPEV) traded mixed as China and Europe led sales growth, while the U.S. outlook remains clouded by regulatory uncertainty. Aurora (AUR) was initiated at Buy as analysts see a scalable path to AV expansion.
Retail, Consumer Staples & Restaurants
Tariff-related pressure and valuation resets drove major calls across consumer names. Coty (COTY) was double downgraded, while Church & Dwight (CHD) was upgraded for its defensive value positioning. PepsiCo (PEP) was downgraded on slower North American snacks performance. Grocer ACI issued weaker-than-expected guidance. Hormel (HRL) was upgraded as a low-risk earnings name. Arkansas’ move to restrict food stamp purchases of soda and candy sent shares of GIS, HSY, MDLZ, and PEP into choppy trade. Lowe’s (LOW) announced a $1.3B acquisition of Artisan Design Group.
Energy, Industrials and Materials
Aerospace stocks stumbled after reports China is pausing Boeing (BA) jet deliveries. Suppliers HXL and HWM were downgraded on macro softness. RKLB rose on news of new hypersonic testing contracts. In chemicals, Bank of America reset much of the space with a slew of downgrades (DOW, APD, HUN, PPG, GPRE) and a few upgrades (WLK, ESI). Albemarle (ALB) price target was cut amid weaker lithium and auto trends. Materials stocks remain pressured under the weight of tariff fallout.
Banks, Brokers, Asset Managers
Big bank earnings were in focus. Bank of America (BAC) beat on both EPS and revenue, helped by strong NII and trading revenue. Citi (C) also delivered a beat, driven by FICC and investment banking strength. PNC posted in-line EPS, though fee income and deposits were weaker. Loan loss provisions across banks reflect cautious macro positioning.
Insurance & Services
Staffing names saw lowered estimates and price targets from Truist, citing macro drag and negative private market sentiment. Korn Ferry (KFY) was highlighted as a favorite for its diversified model. France’s tax changes added pressure to ManpowerGroup (MAN).
Biotech & Pharma
Bristol Myers’ (BMY) Odyssey-HCM trial missed its endpoint. JNJ posted a solid Q1 beat but trimmed EPS guidance. VERV was upgraded on encouraging gene editing trial data. Novavax (NVAX) said its non-mRNA COVID vaccine had milder side effects than Pfizer’s. DTIL received fast track for its hepatitis B gene therapy program. Dental name XRAY was downgraded on performance and Byte strategy uncertainty.
Internet, Media & Telecom
Ericsson (ERIC) surged on a Q1 beat, with strength in North America. Netflix (NFLX) outlined a plan to double revenue and target a $1T valuation by 2030.
Hardware & Software Movers
HPE jumped after Elliott disclosed a $1.5B stake. HUBS was upgraded at UBS as valuation reset makes risk/reward attractive. In semis, Allegro (ALGM) dropped after ON withdrew its takeover offer. Nvidia (NVDA) announced pricing and release dates for its new RTX 5060 GPUs.
Featured Articles
China Strikes Back at U.S. Businesses
Xi Jinping is ramping up pressure on American firms operating in China, signaling a new phase of economic retaliation amid escalating tariffs. Restrictions are tightening across industries from aviation to finance, with U.S. companies facing tougher regulatory scrutiny and access barriers.
Read more – The Economist
Boeing Faces a Storm from All Sides
Boeing’s position in the trade war has become increasingly fraught as China halts deliveries and orders of new jets and parts. This comes on top of regulatory issues and slowing demand, further eroding confidence in the aerospace giant's recovery path.
Read more – WSJ
Activist Pressure Builds at Harley-Davidson
A major hedge fund is reportedly preparing a challenge to Harley-Davidson’s board, frustrated by the motorcycle maker’s strategy and shareholder returns. The move adds to pressure on management already navigating shifting consumer tastes and tariff risks.
Read more – WSJ
United Airlines Sends Mixed Signals
UAL offered two different outlooks for the year ahead—one optimistic and one cautious—citing uncertainty around tariffs, fuel prices, and consumer demand. The company remains confident in its long-term strategy but is bracing for a potentially turbulent 2025.
Read more – MarketWatch
J.B. Hunt Sees Customers in Wait-and-See Mode
Trucking giant J.B. Hunt says businesses are pausing orders and routing changes until the trade landscape stabilizes. The company pointed to a "dust settling" period around tariffs and logistics as a drag on near-term volumes.
Read more – MarketWatch
Nvidia to Take $5.5B Charge on H20 Chips to China
Nvidia said it will record a $5.5 billion charge this quarter tied to its high-end H20 chips exported to China—devices now at the center of trade restrictions. The move reflects deepening compliance risks and a likely pullback in AI hardware shipments to the region.
Read more – CNBC
Inside the Earnings Call - Johnson & Johnson (JNJ)
Q1 FY2025 Earnings Call Summary
Theme | Q1 FY2025 | Q4 FY2024 | Q3 FY2024 | Q2 FY2024 |
|---|---|---|---|---|
Revenue Growth | Beat expectations, driven by strength in MedTech and solid Pharma | In-line overall; MedTech acceleration offset slower Pharma | Revenue modestly above consensus, supported by international growth | Delivered a beat led by solid surgical and orthopedics volumes |
Margins | Slight pressure from FX and emerging market costs, but held steady overall | Stable margins with modest SG&A leverage | Expanding margins via efficiency gains | Margin lift driven by operating leverage and cost containment |
MedTech Division | Strong contributor to growth, particularly in electrophysiology and surgical vision | Robust performance, building on Q3 strength | Continued acceleration, especially in international markets | Performance rebound from pandemic-related procedure delays |
Pharma Division | Mixed—strength in immunology (Stelara, Tremfya), but impacted by generic competition | Mostly steady with resilience in oncology, some softness in immunology | Consistent with prior quarters—immunology and oncology led growth | Resilient core assets; loss of exclusivity weighing slightly |
Consumer Health (Kenvue-related) | Now fully divested - impact minimal to topline | Transitioned out; no material effect on Q4 numbers | Final quarter with Kenvue contributing | Wind-down of segment as part of spin-off completed |
Guidance | Lowered FY EPS outlook slightly to $10.50–$10.70 (from $10.75–$10.95); raised revenue outlook | Held prior EPS/revenue outlook | Reiterated full-year guidance | Initial FY guide issued: conservative, yet constructive |
Tone & Strategy | Steady, focused on pipeline execution, FX impacts, and cost discipline | Cautiously optimistic, with emphasis on pipeline and disciplined capital allocation | Confident tone, but watching macro pressures | Positive tone, citing operational resilience and global growth |
Takeaway for Investors
Johnson & Johnson delivered another earnings beat, showcasing continued strength in its MedTech business and stable performance in Pharma. However, management took a cautious step on full-year EPS guidance, citing FX pressure and selective cost inflation. With Kenvue fully spun off, JNJ is now a pure-play healthcare operator—leaning into innovation, global surgical expansion, and immunology leadership. The underlying business remains robust, and if macro headwinds ease, 2H25 could show accelerating earnings momentum.