Market Overview - Market futures are rallying due to the absence of negative news, with tech stocks reaching record highs and the S&P 500 only about -1% below all-time highs [1] - The Dow gained +507 points (+0.62%), the S&P 500 rose +67 points (+1.11%), and the Nasdaq led with a gain of +281 points (+1.43%) [2] - Oil prices are declining, with WTI at $64.91 per barrel and Brent crude at $65.08 per barrel, down from $65 and $67 respectively [3] Federal Reserve Insights - Fed Chair Jerome Powell remains firm on keeping interest rates steady despite pressure from Republican members, citing cooling inflation but potential price increases from upcoming tariffs [4] - Employment numbers are softening but not indicating a sudden rise in job losses, with Continuing Jobless Claims not yet reaching 2 million per week [5] Company Performance: FedEx - FedEx reported fiscal Q3 earnings of $6.07 per share, exceeding the Zacks consensus of $5.93, with revenues of $22.22 billion surpassing expectations of $21.73 billion [6] - Both Express and Freight businesses outperformed, with increased export volume indicating a pull-forward of activity ahead of upcoming tariffs [7] - Next-quarter earnings guidance has been lowered to $3.40-4.00 per share, below the Zacks consensus of $4.05, leading to a stock decline of -4.4% [7]

Core Viewpoint - Alphabet's CEO Sundar Pichai emphasized that the company's investments in artificial intelligence (AI) will not hinder its plans to increase its engineering workforce over the next year, aiming to enhance productivity by automating mundane tasks [1][2]. Group 1: Company Strategy and Workforce - Pichai stated that the company expects to grow its engineering base, which will allow for greater productivity and efficiency in handling opportunities [2]. - In January 2023, Alphabet announced a reduction of 12,000 jobs, approximately 6% of its workforce, as part of a strategy to adapt to a "different economic reality" while focusing on AI [3]. - In January 2024, Pichai indicated that further job cuts could occur as the company seeks to streamline operations and improve execution speed [4]. Group 2: Industry Trends and Job Market Impact - A report indicated that 54% of U.S. workers believe generative AI poses a significant risk of widespread job displacement, with 74% of frequent users of generative AI believing it could replace aspects of their jobs [4]. - OpenAI's CEO Sam Altman noted that while technological revolutions can lead to job losses, they also create new jobs and enhance efficiency, allowing workers to earn more [5]. - Klarna's CEO mentioned that fewer job cuts occurred in engineering roles compared to other positions, but this trend may shift as more business professionals learn to code, aided by tools like ChatGPT [5].

Group 1 - A-Mark (NASDAQ: AMRK) reported a strong revenue increase of 14.9%, but its stock fell over 50% from its peak [1] - The decline in stock price is attributed to a significant drop in gold sales by approximately 20% [1] - Silver sales also contributed to the overall negative performance, although specific figures were not provided [1] Group 2 - The analyst has over 10 years of experience researching various companies across multiple sectors, including commodities and technology [1] - The focus of the analyst's research has been on metals and mining stocks, with a comfort level in other industries such as consumer discretionary, REITs, and utilities [1]

Investment Rating - The report upgrades the Energy sector to overweight amid record neglect and highlights potential benefits from provisions for domestic manufacturers in the tax bill [10][11][12]. Core Insights - Institutional clients have been the biggest net sellers of US equities, while private clients have returned to buying, marking a significant shift in client behavior [10][11][12]. - Energy stocks have seen the longest recent buying streak, with net buying for the last six weeks, contrasting with significant outflows in the Technology sector [10][11][12]. - The report notes that clients sold US equities for the first time in five weeks, primarily driven by institutional and hedge fund selling, while retail clients continued to buy [10][11][12]. Client Flow Trends - Institutional clients sold a net of $2.59 billion in equities last week, while private clients bought $0.84 billion [10][11][12]. - Hedge funds were net sellers for the first time in three weeks, with a total outflow of $1.48 billion [10][11][12]. - Retail clients have been net buyers in 24 of the past 25 weeks, indicating strong retail interest in equities [10][11][12]. Sector Performance - The Technology sector experienced the largest outflows, with net selling of $1.79 billion, while the Energy sector saw inflows of $0.32 billion [10][11][12]. - Health Care and Real Estate also faced significant selling pressure, while Communication Services ETFs recorded the biggest inflows [10][11][12]. ETF Trends - Clients sold equity ETFs for the first time in five weeks, with a notable shift from Blend/Growth ETFs to Value ETFs [10][11][12]. - Large-cap ETFs saw inflows, while Small/Mid-cap and Broad Market ETFs experienced outflows [10][11][12]. Market Capitalization Insights - Large-cap stocks saw significant outflows of $1.92 billion, while Small and Mid-cap stocks recorded inflows [10][11][12]. - The report indicates a trend where institutional clients are favoring Mid-caps over Large-caps [10][11][12].

Core Viewpoint - Google's $1 billion housing pledge from 2019, aimed at addressing the Bay Area's housing shortage, is now at risk as the company pulls back from its office expansion plans in the region [1][3][12]. Group 1: Housing Pledge Details - The majority of the $1 billion pledge consisted of land, specifically $750 million worth of suburban office parks, intended to be transformed into four mixed-use neighborhoods accommodating 15,000 homes [2]. - The Middlefield Park site, a 40-acre area near Google's Mountain View headquarters, was planned for 1,900 homes and public amenities but is now up for sale [3][4]. - Google had agreed to donate 2.4 acres of land worth $53 million for affordable housing, but this land has not yet been transferred to the city [4]. Group 2: Development Challenges - The current buyer of Middlefield Park would need to adhere to Google's existing development agreement, which includes community benefits and affordable housing commitments [5]. - Concerns have been raised that without Google's financial backing, the project may be scaled back, potentially leading to lower-density housing instead of the originally planned high-density development [6][10]. - The financial viability of high-density residential projects is questioned due to rising interest rates, leading developers to pivot towards lower-density options [7][10]. Group 3: Broader Industry Context - Google is not alone in facing challenges with housing commitments; other tech companies like Meta have also struggled to initiate promised housing projects [15]. - The pandemic has altered office space needs, leading to a reevaluation of previously ambitious development plans [11][12]. - Despite efforts to expedite the approval process for Google's projects, significant delays and bureaucratic challenges have been cited as factors hindering progress [17][18].

Core Viewpoint - The introduction of Clause 899 in the recent tax and spending bill poses a significant threat to foreign investors holding U.S. assets, potentially escalating the trade war into a capital war [1][2]. Group 1: Legislative Impact - Clause 899 aims to impose increased tax rates on investors from countries deemed to have "discriminatory" tax policies, starting with a 5% increase on passive income, escalating by 5% annually, up to a maximum of 20% [1]. - This legislation represents the most extensive unfavorable change to foreign capital tax treatment since the 1984 Deficit Reduction Act and the 1966 Foreign Investor Tax Act [2]. Group 2: Targeted Entities - The clause primarily targets countries that impose digital services taxes on large tech companies like Meta, including Canada, the UK, France, and Australia, as well as those utilizing global minimum corporate tax agreements [3]. - Affected parties include sovereign wealth funds, pension funds, government investment entities, retail investors, and companies holding U.S. assets [3]. Group 3: Market Reactions and Predictions - Analysts predict that the clause could disrupt bond markets even before it is utilized, as it is seen as a tool for the Trump administration to negotiate against digital services taxes [5]. - The clause is expected to receive broad Republican support, increasing its likelihood of being included in the final Senate reconciliation bill [5]. Group 4: Economic Consequences - If passed, Clause 899 could generate an estimated $116 billion in tax revenue over ten years, but it may also lead to a significant withdrawal of foreign investment from U.S. assets [6]. - The current market response appears calm, but U.S. assets have underperformed this year, with the S&P 500 rising only about 0.4%, compared to a 20% increase in the German benchmark index [6]. Group 5: Broader Implications - The clause's implementation could undermine the attractiveness of U.S. Treasury securities for foreign investors, further pressuring the dollar and potentially increasing long-term interest rates [7]. - The overall sentiment suggests that the U.S. may face challenges in maintaining its status as a favorable investment destination due to the adverse tax environment introduced by Clause 899 [7].

Welcome back! In case you missed it, our new newsletter, Tech Memo, written by the great Alistair Barr, launched on Friday. Check out the first edition here. And if you aren't already, subscribe here. In today's big story, we're looking at Big Tech's obsession with cutting out middle managers and flattening their orgs. Markets: When companies like Facebook and Zillow IPO, they turn to this man Tech: How one of the hottest coding startups almost died. Business: Gen Z is turning to blue-collar jobs. But first ...

Core Insights - UnitedHealth Group's stock has experienced a significant decline, dropping 22.4% on April 17 following disappointing first-quarter earnings and a cut in full-year guidance, with an additional 17.8% drop after the CEO's resignation and removal of full-year guidance [1][2][7] - The stock is down 38.5% year-to-date, nearing the performance of Moderna, which is down 42%, making UnitedHealth one of the worst performers in the S&P 500 for 2025 [2] Company Performance - UnitedHealth operates through two main segments: UnitedHealthcare, which collects premiums from health insurance plans, and Optum, its health services segment [4] - Despite solid year-over-year growth in both segments, the company is facing increased costs and investigations into its Medicare Advantage billing practices [7][8] - The company has suspended its full-year outlook due to rising medical costs for new Medicare Advantage beneficiaries and plans to return to growth in 2026 [7] Market Impact - UnitedHealth's market capitalization is approximately $282 billion, making it a significant player in the healthcare sector, but its stock price decline has a more pronounced effect on the Dow Jones Industrial Average due to its price-weighted nature [9][10] - The stock's decline has impacted the Dow by roughly 4 percentage points, affecting its year-to-date performance [12]

Core Viewpoint - U.S. corporate share buybacks have surged significantly, indicating a strong preference for repurchasing shares over dividend payments, with a total of $262 billion in buyback announcements since April 1 [2][9]. Group 1: Buyback Trends - April marked the strongest monthly pace for corporate share buybacks in years, acting as a stabilizing force in volatile markets [1][3]. - The trend of increasing buybacks following market corrections was observed during the Silicon Valley Bank crisis and the early stages of the Ukraine war [3]. - Companies are utilizing buybacks to boost earnings per share (EPS), signal confidence, and fend off activist investors, leading to a notable increase in share prices [9]. Group 2: Major Corporate Buybacks - Apple Inc. announced a staggering $100 billion buyback, reinforcing its long-standing practice of repurchasing shares [4]. - Alphabet Inc. followed with a $70 billion share repurchase, while Wells Fargo & Co. committed $40 billion to its own stock [5]. - Other notable buybacks include KLA Corp at $5 billion, Dick's Sporting Goods at $3 billion, and Shell PLC at $3.5 billion, showcasing a broad interest across various sectors [6]. Group 3: Sector-Specific Buybacks - The technology sector is particularly active, with Broadcom Inc. and Applied Materials Inc. each announcing $10 billion buyback plans [7]. - Consumer and industrial companies are also participating, with Graphic Packaging Holding Co., Ingersoll Rand Inc., and Cirrus Logic Inc. committing between $500 million and $1.5 billion, and MGM Resorts International announcing a $2 billion buyback [8].

Economic Data Insights - The S&P 500 has declined 10% from its high due to tariffs imposed by the Trump administration, creating uncertainty in financial markets [1] - The Labor Department will release jobs, payroll, and unemployment numbers, while the Commerce Department will announce first-quarter GDP and consumer spending data [2][3][4] - Job openings are forecast to decrease by 68,000 to 7.5 million, indicating potential labor demand reduction [6] - Non-farm payrolls increased by 228,000 in March, with a forecast of 130,000 jobs added in April, which could influence investor sentiment [6] - The unemployment rate rose to 4.2% in March, with expectations to remain the same in April, which could impact market reactions [6] - GDP growth is expected to slow to 0.4% in Q1 2025, the lowest in three years, reflecting the economic impact of tariffs [6] - Consumer spending is projected to increase by 0.4% in March, with lower numbers potentially causing stock declines [6] Technology Sector Financial Results - Four major tech companies—Meta Platforms, Microsoft, Amazon, and Apple—are set to report financial results, which will provide insights into their performance amid tariff impacts [8] - Meta Platforms is expected to see a 14% increase in sales to $41.4 billion and a 12% increase in earnings to $5.28 per diluted share, with a focus on AI's impact on engagement and ad spending [10] - Microsoft anticipates an 11% revenue increase to $68.4 billion and a 10% earnings increase to $3.22 per diluted share, with investor interest in AI monetization [10] - Amazon's revenue is expected to rise by 8% to $154.9 billion, with earnings increasing by 39% to $1.36 per diluted share, highlighting the need to address tariff impacts on sales [10] - Apple forecasts a 4% sales increase to $94.1 billion and a 5% earnings increase to $1.61 per diluted share, with significant focus on the trade war's effects on its business [10] Market Reactions and Expectations - The financial results and management guidance from these tech companies will be closely monitored, as any lack of visibility could lead to market anxiety and potential sell-offs [9] - Strong financial results and positive commentary regarding the trade war could trigger a stock market rally [11]