Investment Rating - The report indicates a mixed sentiment on equities, with a notable improvement compared to previous bearish views, but still reflects uncertainty in the market [2][6]. Core Insights - Following the US-China trade truce, investors have significantly adjusted their recession expectations, with nearly 60% now assigning a 30% or lower probability of a recession occurring within the next 12 months, a stark contrast to the previous month where nearly half expected a 50% or higher probability [4][6]. - Despite improved sentiment, volatility is anticipated to remain elevated throughout the year, with 60% of respondents expecting the VIX index to reach 30 or higher by year-end [3][13]. - A majority of investors (70%) expect the S&P 500 to end the year above 5,800, a significant increase from only 25% who held this view last month [6]. Summary by Sections Market Sentiment - Risk sentiment has improved on the margin, but investors still expect more bouts of elevated volatility this year [2][13]. - 48% of respondents now expect the Fed funds rate to end the year above 3.75%, up from 31% last month [17][20]. Equities Outlook - The current sentiment on equities is mixed, with 36% bullish and 30% bearish [6]. - The S&P 500 is currently at 5,896, with expectations for year-end values significantly higher than previous estimates [8]. Interest Rates - Investors expect the next Fed rate cut to occur in September, with a slight bull steepening anticipated in the yield curve [20][24]. - 59% of respondents expect 2-year yields to be below 3.4% by year-end [20]. Currency Expectations - There has been a notable shift in sentiment regarding the euro against the dollar, with 46% expecting EUR/USD to end the year above 1.15, compared to only 22% last month [25].

Group 1 - Udemy experienced a significant stock price decline of nearly 12% in April, attributed to investor sentiment and external economic factors [1] - The company underwent a sudden CEO transition from Greg Brown to Hugo Sarrazin, which contributed to shareholder unease [2][6] - An analyst downgrade from Truist Securities reduced the price target for Udemy from $10 to $7, reflecting concerns about the company's positioning in a potential recession [4][6] Group 2 - The economic climate is causing fears of a recession, which typically leads consumers to cut back on non-discretionary spending, impacting Udemy's business model [5] - Despite reporting a more than tripled non-GAAP net income of nearly $17.9 million year over year, Udemy's revenue growth was only 2%, reaching slightly over $200 million [8] - Current guidance for the second quarter and full year was in line with analyst expectations, but the overall sentiment remains cautious regarding Udemy's potential for significant growth [8][9]

Core Viewpoint - Southwest Airlines is facing significant challenges due to potential economic downturns, leading to a sharp decline in stock price and the withdrawal of crucial profitability guidance for 2025 and 2026 [1][6]. Company Performance - In the first quarter of 2024, Southwest Airlines reported a revenue increase of less than 2% year over year, totaling just over $6.4 billion, which was in line with analyst expectations [4]. - The company narrowed its bottom-line loss to $77 million, compared to a shortfall of $218 million in the first quarter of 2024. The non-GAAP net loss improved to $0.13 per share from $0.36, beating the consensus projection of $0.17 [5]. Industry Context - The airline industry is highly sensitive to economic conditions, particularly discretionary consumer spending, which tends to decline during recessions [2][4]. - A study by Bank of America Institute indicated a 2.5% year-over-year decrease in weekly consumer spending on lodging as of March 22, suggesting a waning post-pandemic travel demand [8]. - The potential for a recession could exacerbate the already challenging environment for the airline and tourism industries, making recovery difficult for companies like Southwest Airlines [9].

Group 1 - The stock market has rebounded sharply from year-to-date lows due to renewed optimism for trade deals, but the economy is still bracing for a recession as the Q1 earnings season progresses [1] - Consumer spending is highlighted as a significant factor in the current economic landscape [1] Group 2 - Gary Alexander has extensive experience covering technology companies on Wall Street and working in Silicon Valley, providing insights into industry themes [1] - He has been a contributor on Seeking Alpha since 2017 and has been quoted in various web publications, with his articles syndicated to popular trading apps like Robinhood [1]