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- 📈 Deere Plows Through Headwinds
📈 Deere Plows Through Headwinds
OpenAI's $4B Cloud Investment, Dick's Acquires Foot Locker, Trump Critiques Apple's India Shift, Tesla Stock's Surprising Rally, Cava's Mediterranean Growth Momentum
Evelio Silvera
May 16, 2025
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Good morning.
⚡ The Fast Five → OpenAI's $4B Cloud Investment, Dick's Acquires Foot Locker, Trump Critiques Apple's India Shift, Tesla Stock's Surprising Rally, Cava's Mediterranean Growth Momentum
🔎 Market Trends → Wall Street ends mixed; US Futures Edge Lower After Mixed Session
And now…
⏱️ Your 5-minute briefing for Friday, May 16, 2025:
MARKET BRIEF
Before the Open
As of market close 05/15/2025.
Pre-Market
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Fear & Greed
Markets in Review
Powell Warns of Stormier Inflation Skies, but Markets Hold Firm
The S&P 500 rose 0.4%, extending its win streak to four days, while the Nasdaq slipped 0.2%, snapping a six-day rally. The Dow climbed 0.7%, lifted by industrials and utilities.
The Big Picture:
Investors took Fed Chair Jerome Powell’s remarks on inflation volatility in stride, betting the worst is behind us for now. Despite a soft retail sales print and Powell's warning that the economy may face “more frequent supply shocks,” traders focused on falling wholesale prices and easing Treasury yields as a sign the Fed can stay on the sidelines.
Producer prices fell 0.5% in April, the largest drop in five years. That’s a strong signal businesses are absorbing cost increases tied to tariffs, not passing them on—at least for now.
Market Movers:
Cisco (CSCO) gained 4.9% after beating Q3 estimates on strong enterprise demand.
Foot Locker (FL) surged 86% after agreeing to be acquired by Dick’s Sporting Goods (DKS). Dick’s dropped 14.6% on the deal news.
UnitedHealth Group (UNH) tumbled 11% amid a DOJ probe into its Medicare Advantage unit. UNH pushed back, calling the report “deeply irresponsible.”
What They’re Saying:
“We may be entering a period of more frequent and persistent supply shocks — a difficult challenge for central banks.” — Jerome Powell, Federal Reserve Chair
WHAT WE’RE WATCHING
Events
Today: University of Michigan - Prelim UoM Consumer Sentiment - 10:00am
Why You Should Care: Financial confidence is a leading indicator of consumer spending, which accounts for a majority of overall economic activity.
Today: University of Michigan - Prelim UoM Inflation Expectations - 10:00am
Why You Should Care: Expectations of future inflation can manifest into real inflation, primarily because workers tend to push for higher wages when they believe prices will rise.
Earnings Reports
Today: Brookfield Renewable Corporation, Flowers Foods
Monday: Trip.com Group, Ryanair Holdings, ZIM Integrated Shipping Services
MARKET BRIEF
Leading News
Farm Equipment Giant Plows Through Headwinds With Surprising Strength
Photo Credit: Julia Koblitz
Why it matters:
Deere's (DE) stronger-than-expected earnings signal resilience in the farm equipment sector despite tariff pressures, suggesting the agricultural downcycle may be bottoming out earlier than anticipated.
Zoom Out:
The world's largest farm machinery maker jumped to record highs Thursday after posting earnings that exceeded even the most optimistic forecasts. This comes despite Deere trimming its full-year outlook due to Trump's tariffs, which are expected to create a $500 million headwind in fiscal 2025.
After a multi-year slump following the 2023 peak in farm equipment sales, markets appear to be stabilizing. North American agricultural markets show signs of improvement with farmers benefiting from steadier crop prices and lower input costs, potentially setting the stage for a meaningful recovery in 2026.
Key Insights:
Tariff impact less severe than feared: Despite trimming the bottom of its annual profit guidance by $250 million to $4.75 billion, Deere executives expressed confidence in offsetting these costs through pricing adjustments and operational efficiencies – a classic example of how well-managed companies can navigate policy headwinds.
Inventory normalization underway: The prolonged equipment sales slump since 2023 has forced painful but necessary inventory adjustments. With dealer stocks approaching healthier levels and farm income stabilizing, the market is clearing the way for a potential upturn that historically rewards patient investors.
Strategic U.S. investment commitment: CEO John May's pledge to invest $20 billion domestically over the next decade demonstrates both political savvy and long-term confidence in American manufacturing capabilities.
Market Pulse:
"When excluding tariffs, we've seen some stabilization in the North American ag market," noted Josh Beal, Deere's investor relations director, offering a glimpse into the underlying strength masked by trade tensions.
Bull’s Take:
Smart investors should view this agricultural equipment downcycle like previous ones – temporary pain creating buying opportunities in quality names like Deere that typically emerge stronger. The 21% year-to-date gain suggests the smart money is already positioning for the inevitable upturn.
Headlines
OpenAI Grows CoreWeave Tie-Up With New $4 Billion Cloud Deal (link)
Dick's Sporting Goods is buying Foot Locker for $2.4 billion (link)
Trump Not Happy With Apple Moving iPhone Production To India (link)
Why Tesla Stock Has Soared This Week (link)
CNH partners with SpaceX’s Starlink for farm connectivity (link)
Cava revenue beats estimates as Mediterranean chain reports double-digit same-store sales growth (link)
CRYPTO
Fear & Greed
Headlines
DAILY SHARE
On the Socials
*Hat-tip to pikacap
Gold hitting record highs
The price of gold keeps heating up. If the record-breaking year of 2024 wasn't enough, gold hit a major historic 2025 milestone by crossing the $3,000/ounce threshold!
Here are 3 Key Reasons:
Looming economic & political uncertainty
Increasing central bank demand
Rising National Debt - over $36 Trillion
So, could gold surge even higher?
According to a recent statement from Jeffrey Gundlach, famed American business man and investor… “Gold continues its bull market that we’ve been talking about for a couple of years, ever since it was down to $1,800.” He expects gold to reach $4,000/oz.
Is it time you learn more about precious metals?
Get all the answers in your free 2025 Gold & Silver Kit. Plus, if you request your free kit today, you could qualify for up to 10% Instant Match in Bonus Silver*.
*Offer valid on qualified orders of Goldco premium products only. Receive up to 10% in free silver based on purchase amount; cannot be combined with other offers. Additional terms apply—see your customer agreement or contact your representative for details.
All content provided by Investor Lookout and Bull Street is for informational and educational purposes only and should not be taken as trading or investment recommendations.
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