Core Insights - American Eagle Outfitters reported disappointing quarterly earnings, reflecting a $75 million write-down in spring and summer merchandise, leading to the withdrawal of its full-year guidance due to macroeconomic uncertainty [1][6]. Financial Performance - The company experienced an operating loss of $85.18 million for the three-month period ending May 3, compared to a net income of $77.84 million a year earlier [4]. - Revenue decreased to $1.09 billion, consistent with expectations but down from $1.14 billion a year prior, with comparable sales down 3% [5][10]. - Loss per share was reported at 29 cents adjusted, compared to an expected loss of 22 cents [10]. Management Commentary - CEO Jay Schottenstein acknowledged the challenging first quarter and expressed disappointment with the results, emphasizing actions to improve performance in upcoming quarters [2][6]. - The company is working to align inventory with sales trends and is actively evaluating forward plans to strengthen product performance [7]. Future Guidance - AEO issued a downbeat outlook for the second quarter, expecting revenue to decline by 5% and comparable sales to decrease by 3% [6]. - The company anticipates operating income for the second quarter to be between $40 million and $45 million [6]. Industry Context - AEO is not alone in withdrawing or modifying financial guidance, as other retailers like E.l.f. Beauty and Canada Goose have also adjusted their forecasts due to trade uncertainties [8]. - The company sources nearly 20% of its products from China and aims to reduce this to below 10% by the end of the fiscal year, with potential tariff impacts of $5 million to $10 million [9][11].

Group 1 - Stellantis has withdrawn its full-year financial guidance due to uncertainties related to U.S. trade policy [1] - The company reported first-quarter net revenues of 35.8 billion euros ($40.7 billion), which is a 14% decline compared to the previous year [2] - The decline in net revenues is attributed to lower shipment volumes, an adverse regional mix, and price normalization [2]

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The Trump Administration's tariff policies have led to significant uncertainty in the US economic outlook, raising fears of a potential recession [3][28] - Economists express differing views on the likelihood of a recession, with some predicting a 45% probability of recession within the next 12 months due to the impact of tariffs on growth [9][56] - The effective US tariff rate is expected to rise by approximately 16 percentage points this year, contributing to a forecasted real GDP growth of only 0.5% for 2025 [9][56] Summary by Sections Interviews with Economists - Paul Krugman emphasizes that the uncertainty surrounding tariff policies, rather than the tariffs themselves, poses a significant risk for recession [29][40] - Jan Hatzius notes that while the hard data remains solid, soft data indicates a concerning outlook, with a potential 2 percentage point hit to growth from tariffs [56][60] - Oren Cass argues that the trade policies could lead to better long-term economic outcomes despite short-term costs [93][94] Market Vulnerability - The report assesses that markets are quite vulnerable to recession risks, particularly due to the uncertainty surrounding tariff policies [4][33] - Concerns about a financial crisis arising from tariff-induced economic conditions are acknowledged, but the current banking system is viewed as healthier compared to previous crises [32][66] Economic Forecasts - The report revises the US growth forecast down to 0.5% for 2025, with a 45% chance of recession within the next year due to the impact of tariffs [9][56] - The report highlights that the uncertainty from tariff policies is affecting business investment decisions, leading to a potential slowdown in economic activity [30][61] Recommendations for Investors - Investors are advised to consider traditional safe havens such as the Yen, Swiss Franc, and gold, as well as regional and style diversification to hedge against recession risks [34][68] - The report suggests that monetary policy adjustments, including potential rate cuts, could help stabilize the economy if recessionary conditions emerge [68][69]