The Week That Was, The Week Ahead: Macro & Markets, June 8, 2025
Everything to Know about Macro and Markets
Stocks clocked in large weekly gains, returning to positive territory year-to-date. The Dow Jones Industrial Average (DJIA) rose by 1.17%, the S&P 500 (SPX) increased by 1.50%, and the tech-heavy Nasdaq-100 (NDX) gained 1.97% for the week. The S&P 500 finished more than 20% above April's low, reclaiming the 6,000 mark first reached in February, although it remained about 2% shy of its record high.
Confident Investing Starts Here:
Macro Steers the Markets
The week began on a positive note, losing some steam in the second half. The weakness in PMI reports – with the manufacturing activity contracting for a third month in a row and services activity shrinking for the first time in 11 months – infused some gloom. However, Friday saw stocks find their footing again on solid job gains, which allayed fears about an imminent economic downturn.
U.S. jobs growth stayed strong in May, climbing 139,000 with unemployment unchanged at 4.2%. Although the March and April reports were revised downward, May's report reassured investors, as it reflected a very gradual cooling of the labor market. Still, diving into the job report's details, a stronger-than-expected wage growth continues to put a floor under inflation. This supports the Federal Reserve's 'wait and see' stance, despite President Trump's demands for a cut. According to the CME FedWatch Tool, the chances of a June cut are nil, and July's rate decrease looks increasingly improbable. Prices in interest rate futures markets imply that investors expect two quarter-point rate cuts by year-end, with the first cut not expected until September.
Wrapping Up the Season
Despite tariff headwinds and macro volatility, S&P 500 companies delivered solid results last quarter. Index members reported 12.9% year-over-year earnings growth – the second straight double-digit increase. 78% of firms – above the five-year average – exceeded EPS estimates. However, the number of companies issuing negative EPS guidance (68) was also above the average. In Q1, the Healthcare sector reported the highest earnings growth, 43%, leaving the Magnificent Seven cohort's 27.7% increase in the dust. In fact, Mag 7's earnings growth rate was below the average (32.1%) of the previous three quarters. Still, three members of the Magnificent bunch – Alphabet (GOOGL), Amazon (AMZN), and Nvidia (NVDA) – are among the top five contributors to earnings growth for the S&P 500 for the first quarter. Interestingly, Bristol Myers Squibb (BMY) and Gilead Sciences (GILD) were the other top contributors.
Stocks That Made the News
▣ Tesla (TSLA) lost nearly 15% over the week following the ugly social media spat between Elon Musk and President Donald Trump. The feud flared up over the impending budget bill, with Musk calling it 'disgusting', and followed by Trump's threat to take away billions of dollars in government subsidies and contracts awarded to Musk's businesses. Although shares rebounded on Friday as Musk and Trump moved to cool tensions, the spat cost Tesla over $150 billion loss in market cap.
▣ Broadcom (AVGO) fell on Friday, wiping out its weekly gain, after the chip giant only narrowly surpassed analyst revenue and expectations. In addition, its current quarter revenue guidance was also just above consensus. Solid, but not a blowout quarter and outlook, weighed on shares that recently hit all-time highs. Still, the company delivered on the AI narrative, reporting surging demand and upping AI networking revenue guidance.
▣ Microsoft (MSFT) continued its climb, hitting a fresh record on Friday as analysts raised price targets on acceleration in Azure and AI-related revenue growth. According to Goldman Sachs, Microsoft's cloud revenue could more than double by 2029. The tech leader's market cap has reached $3.5 trillion, surpassing that of Nvidia (NVDA) and making MSFT the largest company in the world.
▣ Lululemon (LULU) shares dove by 20% on Friday, capping large weekly losses, despite earnings beat. The apparel retailer cut guidance on macroeconomic uncertainty and the impact of tariffs that might force LULU to increase prices.
▣ DocuSign (DOCU) was another notable decliner, sinking nearly 19% post earnings. The company reported a strong financial performance, but a miss on billings raised investor fears about future growth.
The Q1 2025 earnings season is practically over, but several notable earnings releases are still scheduled for the next few days. These include Casey's General (CASY), Oracle (ORCL), Chewy (CHWY), and Adobe (ADBE).
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNBC
an hour ago
- CNBC
NATO allies will pledge to hike defense spend – but will they deliver?
Fireworks could kick off during NATO's annual summit this week, as the U.S. pushes its allies to sharply increase their defense spending to 5% of their gross domestic product (GDP). The 5% figure is made up of 3.5% of GDP that should be spent on "pure" defense, with an extra 1.5% of GDP going to security-related infrastructure, such as cyber warfare capabilities and intelligence. While some member states they're happy to hit that milestone, and some countries are not too far off that mark, others don't even meet the 2% threshold that was agreed over a decade ago. While they might pledge to increase defense spending, whether these promises materializes will be the key question. Talk is cheap and timelines can be vague — but concerted action is what the U.S. and President Donald Trump, who's attending a NATO summit for the first time since 2019, will want to see. "The U.S. is looking for everybody to say, 'Yeah, we mean it. We have a plan. 5% is real. We're going to get there'," Kurt Volker, former U.S. ambassador to NATO and distinguished fellow at the Center for European Policy Analysis (CEPA), said Wednesday. "But one thing to watch for is if the messaging is actually on point. Some of the messaging from some of our European allies, at least when they back brief their own media and their own parliaments is, 'Yeah, 5% but it's really 3.5% and 1.5%, and that can be pretty much anything' ... So there's going to be a whittling down [of defense spending pledges] almost immediately," Volker noted at a CEPA briefing ahead of the NATO summit. "And if that is over emphasized, you're going to have a clash with the U.S.," Volker added. The stakes are high as allies meet in The Hague in the Netherlands on June 24-25, given ongoing conflict in Ukraine and war in the Middle East threatening to destabilize the global economy. Defense analysts say this year's meeting could be the most consequential in the alliance's 77-year history, with the U.S.' spend-pushing heavily forewarned before the summit. U.S. Defense Secretary Pete Hegseth was emphatic as he said 5% "will happen" at a separate NATO gathering earlier this month, with NATO Secretary General Mark Rutte also widely plugging that message to allies too. Defense spending has been a thorny subject for NATO members for years, and a persistent source of annoyance and anger for Trump, who was demanding that allies double their spending goals from 2% to 4% of GDP all the way back in 2018. NATO defense expenditure has nevertheless sharply picked up among NATO members since Trump was last in power. Back then, and arguably at the height of the White House leader's irritation with the bloc, only six member states met the 2% target, including the U.S. Times have changed, however; by 2024, 23 members had reached the 2% threshold, according to NATO data. While some greatly surpassed that target — such as Poland, Estonia, the U.S., Latvia and Greece — major economies including Canada, Spain and Italy have lagged below the contribution threshold. No NATO member has so far reached the 5% spending objective, and some are highly likely to drag their feet when it comes to getting to that milestone now. The U.K., Poland and Germany have already said they intend to increase defense spending to the requisite target, but their timeline is unclear. The UK is also reportedly trying to delay the spending rise among by three years, according to the i newspaper. CNBC has reached out to Downing Street for comment. Spain and Italy are seen as major holdouts against the 5% target, after only committing to reach the 2% threshold in 2025. Canada meanwhile spent 1.3% of GDP on defense in 2024, NATO estimates suggest, even less than Italy, Portugal or Montenegro. Spending 5% on defense is a target, but not a given, Jason Israel, senior fellow for the Defense Technology Initiative at CEPA, said Wednesday. "Every single country ... is trying to figure out how they're going to thread that needle of being able to make the commitment, but also make the accounting work when every single nation has to make trade offs against what is generally unpopular, massive increases in defense spending," he noted, stressing it's a "long way from commitments ... to actual capability," European aerospace and defense companies are following NATO spending commentary and commitments closely, but say they're stuck in limbo between pledges and action by way of concrete government procurement. The leaders of Leonardo, Embraer and Saab told CNBC last week the continent needs to act decisively and collectively to make long-term commitments to defense spending and investment contracts to enable companies like theirs to scale-up their production capacity and manufacturing capabilities. "If we go for 3.5% [of pure defense spending] across the European part of NATO, that will mean a lot, and more will be needed in terms of capacity. But we need to understand the capability targets better," Micael Johansson, the chief executive of Swedish defense company Saab, told CNBC. "We can do more, and I think we need to come together in Europe to create more scale, also in what we do to align demand, align requirements, so we can actually be competitive player in internationally. So there's a lot to do still," he said. Roberto Cingolani, CEO of Italian defense firm Leonardo, agreed that "there's a lot of work to be done." "Leonardo has a capacity boost program at the moment because we are quite aware of the fact that we have to increase the production of specific platforms, defense systems, electronics and technology solutions. It is not only matter of money, it's matter of priority. It's matter of reducing the fragmentation among countries in Europe," he told CNBC's Charlotte Reed at the Paris Air Show. Defense companies needed to know what will be expected of them ahead of time, Cingolani said, given the complex nature of global supply chains that underpin the defense industry. "We have approximately 5000 companies in the supply chain, and we are in 160 countries in the world. So it's very complicated," he noted. "You have to invest in supply chain. You have to make investments. You have to protect the supply chain. But of course, we also have to face a shortage of raw materials ... There is no no simple solution. If there were a solution, we would have done it already," he said.
Yahoo
an hour ago
- Yahoo
Those who invested in RCE Capital Berhad (KLSE:RCECAP) five years ago are up 251%
It hasn't been the best quarter for RCE Capital Berhad (KLSE:RCECAP) shareholders, since the share price has fallen 11% in that time. But that scarcely detracts from the really solid long term returns generated by the company over five years. In fact, the share price is 140% higher today. We think it's more important to dwell on the long term returns than the short term returns. The more important question is whether the stock is too cheap or too expensive today. While the long term returns are impressive, we do have some sympathy for those who bought more recently, given the 15% drop, in the last year. With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time. RCE Capital Berhad's earnings per share are down 3.0% per year, despite strong share price performance over five years. So it's hard to argue that the earnings per share are the best metric to judge the company, as it may not be optimized for profits at this point. Therefore, it's worth taking a look at other metrics to try to understand the share price movements. In fact, the dividend has increased over time, which is a positive. Maybe dividend investors have helped support the share price. The revenue growth of about 3.5% per year might also encourage buyers. You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image). Take a more thorough look at RCE Capital Berhad's financial health with this free report on its balance sheet. When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for RCE Capital Berhad the TSR over the last 5 years was 251%, which is better than the share price return mentioned above. This is largely a result of its dividend payments! We regret to report that RCE Capital Berhad shareholders are down 11% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 7.2%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. On the bright side, long term shareholders have made money, with a gain of 29% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For example, we've discovered 2 warning signs for RCE Capital Berhad that you should be aware of before investing here. Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Malaysian exchanges. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
an hour ago
- Yahoo
Those who invested in RCE Capital Berhad (KLSE:RCECAP) five years ago are up 251%
It hasn't been the best quarter for RCE Capital Berhad (KLSE:RCECAP) shareholders, since the share price has fallen 11% in that time. But that scarcely detracts from the really solid long term returns generated by the company over five years. In fact, the share price is 140% higher today. We think it's more important to dwell on the long term returns than the short term returns. The more important question is whether the stock is too cheap or too expensive today. While the long term returns are impressive, we do have some sympathy for those who bought more recently, given the 15% drop, in the last year. With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time. RCE Capital Berhad's earnings per share are down 3.0% per year, despite strong share price performance over five years. So it's hard to argue that the earnings per share are the best metric to judge the company, as it may not be optimized for profits at this point. Therefore, it's worth taking a look at other metrics to try to understand the share price movements. In fact, the dividend has increased over time, which is a positive. Maybe dividend investors have helped support the share price. The revenue growth of about 3.5% per year might also encourage buyers. You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image). Take a more thorough look at RCE Capital Berhad's financial health with this free report on its balance sheet. When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for RCE Capital Berhad the TSR over the last 5 years was 251%, which is better than the share price return mentioned above. This is largely a result of its dividend payments! We regret to report that RCE Capital Berhad shareholders are down 11% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 7.2%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. On the bright side, long term shareholders have made money, with a gain of 29% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For example, we've discovered 2 warning signs for RCE Capital Berhad that you should be aware of before investing here. Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Malaysian exchanges. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
