New Recap May 26 — June 1 2025
Market Wrap
US
→ durable goods orders fell 6.3% mo/mo (below the forecast for a 7.6% decrease and the 7.5% increase seen previously)
- Core durable goods orders on the other hand rose by 0.2% (above the forecast for a 0.1% decrease and the 0.4% decrease seen previously)
→ CB consumer confidence hit 98 in May, above the 87.1 forecast and 85.7 seen previously
- This represents the biggest monthly gain in 4 years and comes amidst a pause in tariffs
- The improvement in confidence was broad across age and income groups as well as political affiliations, with the strongest gains among Republicans
- Outlook on the stock market improved, however views on the job market were mixed
- The median measure of consumer inflation expectations fell by the most since mid-2022
→ home prices rose 3.4% yr/yr in March, less than the 4% increase seen in february
- Mortgage rates continued to stay elevated, while inventory rose in many parts of the country which continues to weigh on buying
→ GDP fell 0.2% yr/yr in Q1 2025, less than the 0.3% decline initially reported
- The report showed that consumer spending rose 1.2%, below the 1.8% initially reported
- Net exports was the largest drag on GDP, bringing it down 5%, slightly more than initially projected
- The upward revision was due to higher business investment and inventory figures
- GDI also fell 0.2% in Q1, compared to the 5.2% yr/yr increase seen in Q4 2024
- Corporate profits decreased by 2.9% (the most since 2020), far lower than the 5.4% increase seen in Q4 2024
- Core PCE also rose slightly less than originally thought, up 3.4% yr/yr in Q1 vs the 3.5% originally reported
→ unemployment claims rose to 240k, above the forecast for 229k and up from the 226k seen previously but still in the range of the past year
- This marks a 4 week low
- Continuing claims also rose to 1.92 million, above the 1.89 million forecast
→ the US court of international trade blocked many of the tariffs put in place, claiming that they’re illegal
- This wasn’t going to affect certain tariffs like those on autos or pharmaceuticals
- This ruling was then paused by the US court of appeals
→ Core PCE rose 0.1% mo/mo, in line with forecasts and the previous reading
- Personal income rose 0.8% mo/mo, above the 0.3% expected and 0.7% seen previously
- Personal spending rose 0.2% mo/mo, in line with forecasts and below the 0.7% seen previously
- Data also showed goods imports fell by a record 20% due to higher tariffs
New Zealand
→ the RBNZ cut rates by 0.25 bps from 3.50% to 3.25%, as expected
- This marks the 6th straight meeting of cuts
- The central bank sent mixed signals during their meeting but forecasted another cut, despite now being close to neutral
NVIDIA earnings
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→ the company reported better than expected earnings and revenue
- Their data center division, which includes AI chips, grew 73% yr/yr
- Overall revenue grew 69% in Q1, coming in at $44.06 billion compared to the $43.31 billion expected and net income increased 26% to $18.8 billion
- EPS hit $0.96, above the $0.93 expectation
- Their gross margin was also 61% in Q1
- For the current quarter, they expect sales to hit $45 billion (slightly lower than estimates), saying that it would have been $8 billion higher if not for export restrictions to China
Canada
→ GDP rose 0.1% mo/mo, in line with forecasts and above the -0.2% change seen previously
- The increase was driven in large part by tariff related exports which helped offset some weakness in other parts of the economy
- The CAD rose after the report, and markets scaled back bets on the next BOC cut to 15% at their next meeting
- Prelim data for Q2 is also promising, showing output rising 0.1% in March and again in April, led by mining, oil, gas, and the financial industry
Japan
→ industrial production fell 0.9% mo/mo, less than the -1.4% forecasted, but worse than the 0.2% increase seen previously
- Data also showed that the unemployment rate held steady at 2.5%, as expected
- Retail sales also rose 3.3% yr/yr, above the 2.9% forecast and 3.1% seen previously
- Consumer prices in Tokyo rose 3.6% in May yr/yr, the highest jump in two years, driven by higher food costs
- Overall inflation rose 3.4% yr/yr
Next Week’s data:
Monday:
- Swiss retail sales, GDP, and inflation rate / EU HBOC manufacturing PMI / UK S&P manufacturing PMI / US ISM manufacturing PMI / RBA meeting minutes
Tuesday:
- EU inflation, and unemployment rate / US Jolts job openings / Australia S&P services PMI, and GDP
Wednesday:
- EU HBOC services PMI / UK S&P services PMI / US ADA employment change / Canadian S&P services PMI and BOC rate decision / US ISM services PMI / Swiss unemployment rate
Thursday:
- EU PPI and ECB rate decision / US jobless claims / French and German industrial production
Friday
- EU retail sales and employment change / Canadian unemployment / US unemployment rate
Sunday
- Chinese PPI and inflation rate
Sources:
