U.S. Stock Outlook | Three major indices all fell, U.S. GDP unexpectedly shrank in the first quarter, and April's "little non-farm" far missed expectations

Pre-Market Trends

1. As of April 30 (Wednesday), U.S. stock index futures are all down. As of the time of writing, Dow futures are down 0.76%, S&P 500 futures are down 1.27%, and Nasdaq futures are down 1.79%.

1. As of the time of writing, the German DAX index is down 0.14%, the UK FTSE 100 index is down 0.10%, the French CAC40 index is down 0.03%, and the Euro Stoxx 50 index is down 0.49%.

1. As of the time of writing, WTI crude oil is down 1.49%, priced at $59.52 per barrel. Brent crude oil is down 1.39%, priced at $62.40 per barrel.

Market News

U.S. Q1 real GDP unexpectedly fell 0.3% year-on-year, heightening recession fears. The annualized preliminary value of U.S. Q1 real GDP fell 0.3% quarter-on-quarter, while the market expected a growth of 0.3%, marking the lowest level since Q2 2022. The contraction in the U.S. economy in Q1 was primarily due to companies stockpiling imported goods to avoid rising costs, highlighting the destructive impact of Trump's chaotic tariff policies. This will intensify market concerns about an economic recession and bring aggressive rate cuts by the Federal Reserve back into consideration, benefiting gold prices to return to historical highs.

U.S. April "small non-farm" data far below expectations. U.S. ADP employment increased by 62,000 in April, the smallest increase since July 2024, significantly lower than the expected 115,000. Meanwhile, on Tuesday, the number of job openings in the U.S. fell from a revised 7.48 million in February to 7.19 million last month, the lowest level since September of last year. These data indicate that demand for labor is weakening as employers have postponed spending plans until they have a clearer understanding of Trump's policies.

The "Fed's preferred inflation indicator" PCE price index is expected to cool, but unlikely to affect rate cut prospects. "Fed mouthpiece" Nick Timiraos stated that the median forecast derived by investment bank analysts based on CPI, PPI, and import data shows that the month-on-month growth rate of the core PCE in March is expected to slow from 0.4% last month to 0.08%, while the overall PCE is expected to decrease slightly by 0.1%, remaining nearly flat The PCE report is unlikely to affect the monetary policy outlook, and Trump's large-scale tariff increases may break the recent trend of easing price increases. Policymakers are expected to maintain interest rates at next week's policy meeting. Federal Reserve Chairman Jerome Powell has repeatedly stated that the labor market is in a "solid" state; he recently indicated that controlling inflation is necessary to ensure maximum employment—this is a key condition for interest rate cuts.

Ministry of Foreign Affairs: There have been no consultations or negotiations between China and the U.S. on tariffs. On April 30, Foreign Ministry spokesperson Guo Jiaqin hosted a regular press conference. A reporter asked whether there had been any negotiations or contacts between China and the U.S. regarding tariffs in the past 24 hours. Guo Jiaqin stated, "To my knowledge, there have been no consultations or negotiations between China and the U.S. on tariffs."

Under the threat of tariffs, the U.S. goods trade deficit hits a record high! The U.S. goods trade deficit unexpectedly widened to a record high in March, as companies continued to import goods ahead of the tariff implementation, indicating that U.S. economic output data for the first quarter may be significantly impacted. The surge in monthly imports may be the last effort by U.S. companies to secure supplies of goods and materials before the tariffs take effect. Recent forecasts show that the trend of U.S. economic weakness is difficult to avoid. The U.S. goods trade deficit unexpectedly increased by 9.6% month-on-month in March, reaching $162 billion.

Media: Musk is no longer based at the White House; the DOGE team will continue to work. According to reports, Musk is no longer regularly working at the White House and is preparing to gradually step back from his formal role in the Department of Government Efficiency (DOGE). White House Chief of Staff Susie Wiles stated in an interview with the newspaper, "I no longer meet with him in person, but we talk on the phone, and the end result is the same." Wiles emphasized that Musk's team will continue to work in the executive office building next to the West Wing of the White House, "his team will not be leaving." It is currently unclear how often Musk plans to return to the White House before his term as an unpaid special government employee ends at the end of May. At that time, he will provide informal advice for this work. For months, Musk would personally report to Trump in the Oval Office, attend cabinet meetings, and frequently fly on Air Force One with Trump. Wiles stated, "He hasn't completely stepped back; he just isn't on-site as much as before."

World Gold Council: Q1 global gold demand reaches the highest level for a first quarter since 2016. The World Gold Council (WGC) stated on Wednesday that global gold demand (including over-the-counter trading) in the first quarter of 2025 increased by 1% year-on-year to 1,206 tons, the highest level for a first quarter since 2016. Inflows into gold ETFs surged, driving total investment demand up to 552 tons, a year-on-year increase of 170%, the highest level since the first quarter of 2022. Demand for gold bars and coins remained high at 325 tons, 15% above the five-year quarterly average. Global gold jewelry demand (the main category of physical demand) fell by 21% to 380.3 tons, the lowest level since the pandemic in 2020. Another major source of gold demand—central bank purchases—decreased by 21% in the first quarter to 243.7 tons

Individual Stock News

AI hype warning signal reappears! Super Micro Computer (SMCI.US) preliminary performance far below expectations. The company's sales for the third fiscal quarter are expected to be between $4.5 billion and $4.6 billion, which is not only far below analysts' average expectation of $5.35 billion but also significantly lower than the company's previous guidance of about $5.5 billion. For the quarter ending March 31, the adjusted earnings per share are only expected to be between $0.29 and $0.31, while the market expectation is $0.53.

Taiwan Semiconductor Manufacturing Company (TSM.US) begins construction of third factory in the U.S. TSMC has started building its third chip factory in Arizona, USA. As the Trump administration threatens to impose further tariffs to stimulate domestic manufacturing, TSMC is accelerating its expansion in the U.S. As the world's most advanced chip manufacturer, TSMC announced the third phase of its U.S. expansion plan. On the same day, U.S. Secretary of Commerce Gina Raimondo inspected TSMC's factory site in Arizona. TSMC stated that this is the largest foreign investment in U.S. history.

Samsung Electronics (SSNLF.US) Q1 revenue grows 10% year-on-year, hitting a record high, with a strong rebound in the memory business. The financial report shows that Samsung's Q1 revenue reached 79.1 trillion won (approximately $55.4 billion), a 10% year-on-year increase, setting a new record for a single quarter; operating profit was 6.7 trillion won, a 1.5% year-on-year increase, exceeding analysts' average expectations by 4.7%. Among them, the operating profit of the chip business reached 1.1 trillion won, a 7% quarter-on-quarter increase, and the revenue of the memory business nearly doubled year-on-year, becoming the core growth engine.

Weight loss drug "amputation," core drugs under pressure, Pfizer (PFE.US) aims to "buy, buy, buy" to strengthen its cardiac metabolism shortfall. Pfizer disclosed in its Q1 2025 financial report that following setbacks in the development of the oral weight loss drug Danuglipron, the company will accelerate its layout in the cardiac metabolism field through acquisitions or collaborations to fill product line gaps. The financial report shows that although Pfizer's Q1 revenue of $13.7 billion (down 8% year-on-year) did not meet market expectations, the adjusted earnings per share exceeded expectations, and the company maintained its upper limit of annual profit guidance.

Caterpillar (CAT.US) Q1 performance below expectations, tariff impact may lead to slight annual sales decline. Affected by weak demand for construction equipment, the company's performance fell short of analysts' expectations. Caterpillar stated that if tariffs persist and the economy falls into recession in the second half of the year, this year's sales are expected to decline slightly, but overall remain in line with expectations. Financial report data shows that the company's Q1 sales and revenue were approximately $14.2 billion, a year-on-year decrease of about 10%, lower than the average analyst expectation of $14.66 billion compiled by LSEG, with adjusted earnings per share dropping to $4.25, below the average analyst expectation of $4.35. The company pointed out that the decline in sales was mainly affected by changes in dealer inventory. Meanwhile, Caterpillar provided a performance outlook consistent with previous expectations. As a barometer of global economic health, Caterpillar's equipment is widely used in construction, mining, energy, and transportation sectors across continents Volkswagen (VWAGY.US) Q1 profit plummets 40%, tariff shadow looms over European automakers. Q1 revenue fell by 40% due to rising manufacturing costs that reduced profit margins, and U.S. tariffs have cast a shadow over the outlook for this German automaker. The company stated on Wednesday that its pre-tax profit for the three months ending in March was €3.1 billion, down from €5.1 billion in the same period last year. The group's operating profit margin dropped from 6% to 3.7%. Prior to this, Volkswagen's luxury sports car brand Porsche lowered its profit expectations this week, citing the impact of tariffs and weaker-than-expected electric vehicle sales. However, the uncertainty surrounding tariffs has led other automakers, including Mercedes-Benz Group, Volvo Cars, and General Motors (GM.US), to completely withdraw their forecasts.

TotalEnergies (TTE.US) splashes $2 billion on buybacks, dividend growth target unchanged. The French energy giant emphasized its low debt levels and robust balance sheet, announcing an additional $2 billion stock buyback in the second quarter while maintaining its 7.6% dividend growth target for the year, with capital expenditure plans remaining unchanged. The financial report showed that adjusted net profit for the first quarter was $4.19 billion, down from $5.11 billion in the same period last year, slightly below analysts' expectations of $4.38 billion. The company predicts that due to slow economic growth, trade disruptions, and OPEC+ production increases, oil prices will fluctuate in the $60-70 per barrel range in the coming months, with refining and petrochemical profit margins continuing to be under pressure.

Important Economic Data and Event Forecast

Beijing time 22:00 U.S. March PCE price index year-on-year, U.S. March core PCE price index year-on-year, U.S. March personal spending month-on-month, U.S. March personal income month-on-month, U.S. March seasonally adjusted existing home sales index month-on-month

Earnings Forecast

Thursday morning: Microsoft (MSFT.US), Meta (META.US), Qualcomm (QCOM.US), eBay (EBAY.US)

Thursday pre-market: Lloyds (LYG.US), Eli Lilly (LLY.US), Mastercard (MA.US), McDonald's (MCD.US), Roblox (RBLX.US)