Sector Synopsis
Markets opened the week with strength in tech and electronics following clarity on tariff exemptions, particularly for semis and smartphones. Autos and lodging were pressured by analyst downgrades and tariff-related uncertainty. Financials were in focus with strong earnings from GS and key bank reports due Tuesday. Materials, rare earths, and biotech each saw selective moves as macro and regulatory narratives evolved.
Retail, Consumer Staples & Restaurants
Retail stocks were mixed as limited electronics tariff exemptions spurred gains in appliance/electronics maker BBY, while discretionary pressures weighed on names like ULTA (downgraded). PTON rallied on an upgrade, while Wayfair dropped sharply on renewed tariff exposure. Luxury retail fell after LVMH missed expectations. In food and beverage, STZ posted a beat but lowered beer segment growth targets. Brown-Forman (BF) was upgraded amid easing European tariffs.
Autos, Leisure, Gaming & Lodging
Auto names underperformed following downgrades of GM and STLA, with analysts citing risk from production costs and uncertainty around industrial policy. Lodging names also saw multiple downgrades as Goldman cut 2025 RevPAR estimates. Theme park data showed Disney fared better than Comcast, particularly in California where Universal lagged due to wildfire impacts.
Energy & Industrials
OPEC trimmed demand forecasts for 2025–26 due to U.S. tariff headwinds and Q1 data. Palantir (PLTR) jumped on NATO contract news. EH was upgraded following renewed optimism on China’s eVTOL development. PSN landed a major Air Force environmental cleanup contract. Energy names softened further as demand concerns lingered.
Financials
Goldman Sachs topped Q1 expectations, reporting EPS of $14.12 versus the $12.30 consensus and net revenue of $15.06B. Strength in equities trading and asset management offset weaker fixed-income performance and a continued slump in investment banking fees. The firm also authorized a new $40B buyback program, signaling confidence despite macro uncertainty. The call emphasized GS’s differentiated business mix and operational discipline amid volatile markets. KKR acquired OSTTRA for $3.1B, and SNEX is acquiring futures broker R.J. O’Brien for $900M. Toast (TOST) expanded with Applebee’s; however, Flywire and Lightspeed were downgraded on tariff-related uncertainty. Big banks including Citi, BAC, and PNC report Tuesday.
Biotech & Pharma
Pfizer dropped development of a weight-loss pill due to liver injury concerns, benefiting competitors like NVO and VKTX. CERT guided Q1 revenue above expectations and launched a $100M buyback. DVA was hit by a ransomware attack. VERV posted early positive results for its PCSK9 editing therapy.
Healthcare Services & MedTech
CMS released its FY26 proposals for hospital and inpatient payments, mostly in line with expectations. The proposed 3.4% update for inpatient hospitals is seen as modestly positive. However, psychiatric inpatient update lagged expectations.
Materials, Metals & Mining
Chemicals saw further estimate cuts as Keybanc trimmed global auto and electronics volumes in its Q1 preview. DD was upgraded on valuation, while CTVA and CE are seen as stronger names. Rare earth stocks like MP and TMC gained on reports of a new U.S. stockpiling initiative. In paper, IP entered exclusive talks to divest EU assets to comply with merger conditions.
Internet, Media & Telecom
Semiconductors and hardware rallied on news the U.S. will exclude smartphones, PCs, semiconductors, and key components from new tariffs. Apple led the move, upgraded at Keybanc. Citi expects hardware strength to continue, though macro softness could weigh on broader demand. INTC announced a partial sale of Altera to Silver Lake. Media names like CMCSA were downgraded as convergence spending raises cost pressures.
Netflix Aims for the $1 Trillion Club
Netflix says it’s aiming for a valuation of $1 trillion, pointing to its expanding advertising and gaming businesses as long-term growth engines.
Co-CEO Greg Peters highlighted the company’s pivot from streaming-only to a broader entertainment platform, including live sports and mobile games.
Advertising is gaining traction, with ad-tier subscriptions growing and Netflix projecting a multi-billion-dollar revenue stream.
Netflix is also building out its gaming division as a potential margin booster, though monetization is still early.
Full Story – WSJ
Nvidia’s “Made in USA” Move Echoes Familiar Trump Playbook
Nvidia is shifting more chip packaging and testing to U.S. soil in anticipation of stricter tariffs and to align with the Trump administration’s push for domestic tech manufacturing.
This echoes a pattern seen in past Trump-era tariff policy—tech companies localizing operations to preempt trade headwinds.
While costly in the short term, Nvidia’s move may shield it from steep penalties and position it well for government contracts.
Analysts say other chipmakers may follow suit to secure exemptions and maintain access to key customers.
Full Story – WSJ
MicroStrategy Ditches Debt Plan, Reverts to Stock Sale for Bitcoin Buys
MicroStrategy will no longer issue convertible notes to fund additional Bitcoin purchases, opting instead to sell common stock directly.
The shift signals CEO Michael Saylor’s desire to act quickly amid recent crypto market volatility and rising rates.
The company already holds over 200,000 BTC and sees recent market pullbacks as buying opportunities.
Some analysts warn of shareholder dilution risks, though bullish investors see it as a continued bet on long-term BTC appreciation.
Full Story – MarketWatch
Fresh Debt Issuance from JPM and MS Finds Strong Demand
JPMorgan and Morgan Stanley successfully issued new debt last week, with strong investor demand despite macro volatility and rate uncertainty.
The reception suggests investor appetite remains intact for high-quality financial names even as recession fears linger.
Bond traders saw the pricing as reasonable, with spreads tightening post-issuance—a sign of broader market resilience.
This could bode well for other issuers heading into Q2, especially if earnings season confirms credit strength.
Full Story – MarketWatch
Theme | Q1 FY2025 | Q4 FY2024 | Q3 FY2024 | Q2 FY2024 |
---|---|---|---|---|
Revenue Performance | $15.06B (+6% y/y) beat est. $14.76B | $11.32B, strong rebound in IB fees | $11.82B, up 1% y/y | $10.90B, soft IB, resilient trading |
EPS | $14.12 vs est. $12.30 | $5.48 | $5.47 | $3.08 |
Investment Banking | $1.91B (-8% y/y) | Strong Q/Q recovery | Weak IPO activity | Advisory strength offset IPO slump |
Trading (FICC & Equities) | FICC $4.40B (miss), Equities $4.19B (beat) | FICC $4.36B, Equities $2.61B | FICC $3.59B, Equities $2.96B | Stronger FICC, soft Equities |
Asset Management | Flat; net inflows continue | Boosted by alternative investments | Steady inflows | Lower revenues, stable inflows |
Capital Return | New $40B buyback authorization | $1.75B buybacks | Reduced buybacks | Dividends maintained |
Outlook & Tone | Optimistic on normalized activity in IB and trading; eyes on macro risks and capital markets thaw | Cautiously upbeat on M&A/IPOs | Watching Fed and rates | Defensive posture, macro cautious |
Takeaway for Investors
Goldman Sachs delivered a clear top-line and EPS beat, driven by equity trading and cost discipline, while FICC lagged. Investment banking fees declined y/y but showed relative stability. The firm struck a confident tone, citing green shoots in M&A and ECM activity. The massive $40B buyback plan signals confidence in capital strength and long-term value creation. Watch for commentary from peers (Citi, BAC, PNC) to validate broader capital markets trends.