Mid-Morning Look

Friday, April 25, 2025

U.S. stocks bounced between gains and losses early morning until after the open as several headlines related to trade and tariffs out of the US and China were conflicting, leaving markets uncertain. US stocks then pushed higher following positive economic data that showed improved confidence and lowered inflation expectations. Stocks however have since pulled back in a bit of “tug of-war” action this morning as traders weigh profit taking after solid gains this week and ahead of the weekend as the S&P 500 looks to post its first 4-day win streak since the middle of January as investors cheer the start of a busy week of quarterly earnings. Tech got solid results from GOOGL overnight in the Mag7 sector, helping the Internet/AI plays, while INTC slumped on a weaker outlook. Some headlines out overnight indicated China exempted some U.S. imports from its steep tariffs in a sign on Friday that the trade war between the two countries could be easing, though China quickly knocked down U.S. President Donald Trump’s assertion that negotiations were underway. Business groups said China has allowed some U.S.-made pharmaceuticals to enter the country without paying the 125% duties that Beijing imposed earlier this month in response to Trump’s 145% tariffs on U.S. imports. Oil, gold, Treasury yields all lower early as the dollar rises.

• University of Michigan surveys of consumers 1-year inflation outlook final April 6.5% vs prelim 6.7% and final March 5.0% and University of Michigan surveys of consumers 5-year inflation outlook final April 4.4% vs prelim 4.4% and final March 4.1%.

• In Insurance: PFG reported mostly in-line Q1 EPS but helped by the benefit of a low tax rate (17-20% FY guide) and weaker flows; HIG Q1 core EPS $2.20 vs est. $2.15; Q1 adj net income $639M vs. est. $629.1M along with solid core commercial P&C loss ratio, and P&C NWP growth; RNR was upgraded to Overweight, raise tgt to $275 from $235 saying sees several positives that set up with a very favorable risk/reward skew; AON shares slumped early on EPS miss on weaker revs including organic revs (Q1 +5% vs. est. +6%).
• In Footwear & Apparel: SKK shares fell after results (Q1 EPS beat) but said it’s not providing financial guidance and withdrawing its previous annual outlook due to macroeconomic uncertainty; shares of other footwear makers dropped in reaction as well (NKE, CROX, ONON). Stifel notes for SKX that the China sourcing hub (~40% of global total) is the highest in the space, and current communication of 145% incremental China to U.S. tariffs is a meaningful headwind, influencing numbers by Q225 end.

• CHTR +7%; posted mixed Q1 results, beating on revs but missing EPS and said it lost 60,000 internet customers over the quarter, but added 514,000 mobile lines (ests were for them to add 448,000 mobile lines).
• DLR +5%; as EPS beat, reported bookings well above expectations, continued pricing trends that strongly favor renewals, especially in the sub 1MW category (shares of comp EQIX rises in reaction).
• GOOGL +3%; delivered strong Q1 results as revs came in 1% above consensus and operating income came in 7% above ests; upside was driven primarily by cyclical areas (Search, YouTube) and the Subscriptions business; Search rose +12% y/y flat sequentially & now up double digit for 7 straight quarters, as is YouTube; also announced a $70B stock buyback.
• TSLA 3%; extending weekly gains post earnings this week/news that Musk to spend more time at company.
• VRSN +8%; after quarterly results topped consensus.

• APPF -12%; Top-line growth further moderated to 16% from 19% in Q1 on the continuation of challenging industry conditions across the broader property management sector resulting in a $3.8M revenue shortfall
• AVTR -16%; lowered its revenue outlook for the year to come in either +1%, down -1% or somewhere in between vs. prior guide of 1%-to-3% gain after waning demand in the government- and education-related end markets; posted Q1 revs fell -6% y/y to $1.58B below ests $1.61B.
• CLS -5%; after posting quarterly beat, but a guide that failed to breach the higher end of the previous range as sees Q2 revenue $2.58B-$2.73B vs. est. $2.61B; says raising its 2025 revenue outlook.
• GILD -4%; as reported lighter than anticipated Q1 revenues while reiterated guidance.
• INTC -8%; posted strong 1Q results, which were above expectations as pull-in demand ahead of anticipated tariffs drove strong results in CCG and DCAI, but lowered guidance reflects cautiousness regarding the negative end-demand impacts of tariffs; also cut its Opex outlook for 2025 to $17B from $17.5B.
• MMSI -2%; Q1 revenue and EPS beat consensus, management maintained its 2025 revenue guidance but lowered its 2025 EPS guidance due to tariffs; reiterated its guidance for $7-9M of WRAPSODY sales in 2025.
• SAIA -22%; Q1 EPS of $1.86 was well below consensus of $2.76 and revs rose 4.3% y/y to $787.6M but below the $812.8M saying March shipments were flat to February, causing revenues to fall well below expectations (ODFL, XPO shares fell in reaction).
• SKX -4%; after saying it’s not providing financial guidance and withdrawing its previous annual outlook due to macroeconomic uncertainty.
• TMUS -9%; reported better Q1 Ebitda and free cash flow but Post-paid phone net adds of 495k were marginally below consensus of 500k and contrasted with recent large net add beats and also slightly increased its 2025 guidance ranges by $100mn for Core adjusted EBITDA.