With a slew of earnings reports hitting the street after the bell Wednesday and prior to the open Thursday, there may be some skepticism with many companies pulling guidance or at least warning about lowered profits ahead due to tariffs.
Prior to the open, a number of companies reported first quarter earnings results, among them Southwest Airline (LUV), being sent lower by 3-4 percent in pre-market trading due to the company pulling forward guidance and announcing a reduction in flights for the second half of 2025. Likewise, American Airlines (AAL) withdrew its guidance, citing economic uncertainty. shares are flat. AAL trades at less than $10 per share.
Elsewhere, Chipotle Mexican Grill (CMG), which reported after Wednesday's closing bell, saw same store sales decline slightly, though the company topped EPS estimates. After closing about 3.5% higher on Wednesday, shares of the stock are down by roughly the same percentage pre-open.
Pepsico's (PEP) net income fell 10% to $1.8 billion. Adjusted for one-time items, PepsiCo earned $1.48 per share, just below the $1.49 analysts forecast. The company lowered its full-year earnings expectations in its earnings announcement Thursday morning, citing increased costs from tariffs and a pullback in consumer spending. One would hardly be surprised that branded chips at $5 a bag or a six-pack of Pepsi at $4 might be behind consumer reluctance. The company reported exceptionally-high profits last year as it raised prices on most of its offerings. Now that consumers are tapped out, they're not buying much of anything beyond absolute essentials.
Tractor Supply (TSCO) announced quarterly EPS of 0.34, missing expectations. Shares are falling by four percent or more.
Drugmaker Merck (MRK) posted a small beat with EPS of $2.22 but was cautious in its forward outlook. Shares are slightly higher - less than 2% - in early trading.
With earnings serving as a backdrop, stock futures were mixed, with Dow futures off 150 points, but NASDAQ futures higher by 35, and S&P futures flat.
Gold has rebounded to $3,355 this morning, and silver finally caught a bid, approaching $34 per ounce. WTI crud oil is up nearly $1.00 early, though it appears to be in no hurry to move much off recent lows.
On the geo-political front, Russia has launched missile attacks at Ukraine's capital of Kiev, even while the U.S. continues to dawdle over ineffective offers of cease fires and peace deals. President Trump responded with a post on his Truth Social that implored the Russian president to tone it down. The President actually used the phrase, "Vladimir! Stop!" in what should likely be seen as nothing more than posturing.
President Trump is likely to be perfectly content with pulling back from negotiations and allowing Russia to do as it pleases with its war-torn neighbor. As cynical as that may sound, U.S. policy has failed miserably - possibly intentionally - and Ukraine's leader Zelensky has resisted any and all attempts to forge some kind of peace initiative. The option of pulling back on U.S. financial and military support is likely the best option even though it allows Russia to dictate terms, given they are winning the war in the first place.
European allies are out of answers, out of touch and out of time. All their bombastic boasting about defeating Russia is now falling on deaf ears, since the EU and NATO collective cannot muster enough materiel or moral courage to continue arming the Ukrainians. Effectively, Project Ukraine - which was a fool's errand from the very start - is over. Russia will win the war as support for Ukraine dwindles to nothing.
Trump, having little to lose politically since it was not his war, will simply withdraw all support and walk away, then try to patch things up with Russia once the dust settles over Kiev.
At the Close, Wednesday, April 23, 2025:
Dow: 39,606.57, +419.59 (+1.07%)
NASDAQ: 16,708.05, +407.63 (+2.50%)
S&P 500: 5,375.86, +88.10 (+1.67%)
NYSE Composite: 18,631.09, +175.95 (+0.95%)
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