Macro Events & News
Markets surged last week, with the S&P 500 extending its winning streak to nine consecutive sessions as trade tensions remained subdued. No new tariff escalations were announced, and optimism grew on reports that the Trump administration is close to finalizing deals that could ease or eliminate tariffs. While no agreements have been formally announced, speculation was bolstered by rumors that China has softened its stance and is open to renewed discussions.
Earnings season continued with strong representation from the “Mag 7,” as Microsoft (NASDAQ:MSFT), Meta Platforms (NASDAQ:META), Amazon (NASDAQ:AMZN), and Apple (NASDAQ:AAPL) all reported quarterly results. Most beat or met expectations, but management teams cautioned that the effects of tariffs may not yet be reflected in their performance, urging a conservative view on full-year guidance while avoiding major revisions.
Economic data sent mixed signals. April’s jobs report showed strength, with 177,000 new jobs added—beating the 130,000 consensus—while unemployment held steady at 4.2%. However, downward revisions to prior months tempered the enthusiasm. Meanwhile, Q1 GDP contracted by 0.3%, marking the first decline since 2022. The drop was largely attributed to a sharp increase in imports as businesses rushed to stock up ahead of potential tariff hikes.
The 10-year Treasury yield closed relatively flat at 4.27%, while the VIX retreated to 22.68.
All the major indexes ended higher for the week: the Dow up 3%, the S&P 500 up 2.9%, and the Nasdaq leading with a 3.5% gain.
Watchlist News
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Apple (NASDAQ:AAPL) traded lower following its FY25 Q1 earnings release, as results were weighed down by weaker-than-expected Services growth, particularly in China. Management also flagged $900 million in additional costs expected this quarter due to escalating tariffs on China-sourced goods, further dampening sentiment.
august bear notes
The magnitude of the tariff-driven cost hit was unexpected, but it’s likely to be temporary and may ultimately lead to a more resilient supply chain. The slowdown in Services growth wasn’t a shock, but it does force shareholders to confront some deeper issues within Apple that need to be addressed. Still, this is Apple—backed by a massive cash reserve, a fiercely loyal customer base, and a tightly integrated ecosystem that keeps users locked in through seamless convenience. How long that edge holds is uncertain, but for now, Apple remains a core holding and market stalwart.
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Costco Wholesale (NASDAQ:COST) edged higher in line with broader market gains this week. There were no major company-specific news or announcements, but bullish options activity and institutional flows were noted by the trading community, signaling continued investor confidence.
august bear notes
As anticipated, Costco’s technical setup attracted attention from traders, and broader market strength gave them reason to act. The stock may consolidate in the near term, as it remains near all-time highs and carries significant exposure to the ongoing trade war. However, any shift in the tariff landscape could serve as a catalyst for a breakout. Monthly sales data, expected in the coming days, should offer further insight into how tariffs are impacting consumer demand and Costco’s operations.
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Meta Platforms (NASDAQ:META) reported strong Q1 FY2025 earnings, driven by continued momentum across its Family of Apps, which reached 3.43 billion daily active users. Revenue grew 16% year-over-year, and EPS came in at $6.43—beating estimates by more than 21%. Advertising performance was a key highlight, with ad impressions up 5% year-over-year and the average price per ad increasing 10%.
august bear notes
Meta’s strong results come as no surprise—its advertising platform remains unmatched in the industry. Growth across newer initiatives like Threads, Meta AI, and messaging, as well as promising traction in Reality Labs with products like the Ray-Ban smart glasses, adds to the long-term potential, especially since these segments are not yet fully monetized. However, the recent loss of China-related ad revenue is a valid concern and hasn’t been fully reflected in these lagging Q1 numbers. If tensions ease and a resolution in the U.S.-China tariff dispute emerges, the stock could push toward all-time highs—potentially another 20% from current levels.
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Tesla Inc (NASDAQ:TSLA) underperformed relative to the broader market this week, showing minimal movement despite strong market-wide momentum. European sales data revealed ongoing weakness, with Sweden seeing a 60% year-over-year drop. Meanwhile, competitors in China reported strong growth—Xpeng notably posted a 273% YoY increase in deliveries—highlighting Tesla’s declining momentum in key international markets.
august bear notes
Tesla’s muted performance contrasts sharply with broader market optimism. Despite flat trading, cracks in the core business are widening. Sales continue to decline across major European markets, and the brand is losing ground in China to domestic EV makers. CEO Elon Musk’s political activity and public persona negatively influencing consumer sentiment, particularly outside the U.S. That said, Tesla remains buoyed by its cult-like investor base and meme-stock status. Traditional valuation metrics matter less here. Any positive headline—especially around the anticipated robotaxi launch—could ignite a sharp rally, even though fundamentals don’t currently justify it. The stock remains highly reactive and speculative.
