Your Evening Recap for Wednesday, May 1stEquity markets advanced following the FOMC policy statement, rebounding from the week's lows, but couldn't hold the gains until the close. The FOMC held rates steady as expected but altered its statement, citing a lack of further progress in the fight against inflation. The news is negative for equities because higher interest rates impact consumer spending.
Results from McDonald's, Kraft Heinz, and Starbucks suggest consumers are pulling back on spending, which could lead to a nationwide recession. Consumer spending is nearly 70% of the economy, so it won't take a large decline to cause a recession. The question is how long the recession will last; if the FOMC cannot cut rates because of persistently high inflation, it could last long.
The S&P 500 is in correction and could continue to move lower over the next few days to weeks. The market has been supported by the idea that FOMC's next move is to cut rates, but the risk that they won't cut rates is growing, leading the market to reset its outlook for earnings growth. The market was pricing in the policy pivot for June; the way inflation is running, it may not happen until next year. Featured: Banking Apocalypse Ahead: Secure Your Savings Today! (Weiss Ratings) |
 Data storage device manufacturer Seagate Technology Holdings plc (NASDAQ: STX) hasn't significantly benefitted from the artificial intelligence (AI) boom. Its computer and technology sector rival Western Digital Co. (NASDAQ: WDC) had a dramatic 2024 reversal of fortune as losses of 46 cents transformed into profits of 40 cents, and sagging revenues turned into a 23% YOY revenue spike. Seagate also saw a spike in its bottom line, not so much from AI but from the recovery of cloud computing demand. This impacts Seagate the most since 90% of cloud computing data centers still rely on hard disk drives (HDD) for data storage due to the larger capacity and cheaper costs compared to flash solid-state drives (SSD). The Evolution of HDD Technology HDD is considered a legacy technology. Read The Full Story > |  Today, I'm making my boldest prediction ever.
Next-generation AI technology will create the first $100 TRILLION industry. I put together this personal video [HERE]… |
 DoorDash reported higher-than-expected revenue in the first quarter as strong growth in U.S. grocery orders helped make up for slowing restaurant demand.But the company's shares fell more than 15% in after-hours trading Wednesday as investors appeared concerned about rising costs. DoorDash said its net loss narrowed to $23 million in the first quarter, compared to a loss of $161 million in the same period a year ago. The loss, of 6 cents per share, was higher than the 3-cent loss Wall Street had forecast, according to analysts polled by FactSet. DoorDash said it increased both marketing expenses and research costs during the quarter. Read The Full Story > |
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