What Happened Last week…
In tariff news, President Donald Trump said he is looking to “help some of the car companies” since they “need a little bit of time” to switch production to the U.S. Trump’s statement came after the prior weekend’s news that smartphones, computers, and other electronics would be temporarily exempt from reciprocal tariffs. Indices finished the week as follows: DJIA (-2.66%), S&P 500 (-1.50%), NASDAQ (-2.62%).
Federal Reserve Chairman Jerome Powell spoke at the Economic Club of Chicago where he expressed his thoughts on tariffs and inflation. Powell said, “Tariffs are highly likely to generate at least a temporary rise in inflation. The inflationary effects could also be more persistent.” Powell also reiterated, “For the time being, we are well positioned to wait for greater clarity before considering any adjustments to our policy stance.” The next Federal Open Market Committee meeting takes place May 6-7.
Nvidia (NVDA) said it will record a $5.5 billion quarterly charge due to the restriction of exporting its H20 graphics processing units to China, which requires a special license. According to the company’s filing, the U.S. government “indicated that the license requirement addresses the risk that the covered products may be used in, or diverted to, a supercomputer in China” and said “the license requirement will be in effect for the indefinite future.” Additionally, Nvidia said it will build AI supercomputers for the first time in the United States, with a commitment of up to $500 billion over the next four years.
According to FactSet, as of April 17, for Q1 2025, 12% of S&P 500 companies reported earnings with 71% having a positive EPS surprise and 61% having a positive revenue surprise. The blended earnings growth for the S&P 500 is 7.2%, which would be the seventh straight quarter of growth. The blended revenue growth for the index is 4.3%, which would be the 18th consecutive quarter of growth for the index.
Happening This Week…
The following companies report earnings this week: GPC, KMB, MCO, RTX, TSLA, VZ, CMG, GD, LRCX, NEE, NOW, TMO, TXN, VRT, DOV, GOOG, MRK, PEP, PG, ABBV, PSX.
On Wednesday, new home sales for March are expected to increase to 680,000 from 676,000. On Thursday, existing home sales for March are expected to decrease to 4.14 million from 4.26 million, which was the second-highest reading since March 2024.
Thanks for Reading!
The Rockline Team