Economic Data and Market Highlights
The MSCI All Country World Index rose 3.01% as most countries rose in lockstep after China indicated they may be open to talks with the US. The S&P has risen for nine consecutive days, the longest streak without a loss since 2004.
The U.S. economy contracted by 0.3% in Q1 2025, marking its first quarterly decline in three years and signaling mounting pressure on consumers and businesses alike.
While consumer-facing businesses showed signs of stress, some corporate earnings painted a more optimistic picture. Microsoft posted results that beat expectations, driven by continued momentum in its cloud services segment. Meta Platforms also surpassed forecasts for earnings and revenue, issuing upbeat guidance for the quarters ahead.
Consumer spending is weakening, particularly in discretionary areas like dining out. Restaurant visits have declined, with foot traffic to quick-serve chains down 1.6% year-over-year, according to Placer.ai. Brands such as Chipotle and Starbucks have reported fewer visits and transactions, attributing the drop to increased price sensitivity among customers. Dominos also noted a shift in consumer habits, with more customers opting for walk-in orders over delivery—another sign of cost-conscious behavior.
Impacts of Liberation Day will soon be felt as ship count departing with goods has trailed off significantly. Port of Los Angeles Executive Director Gene Serok noted in a recent Bloomberg interview ( https://www.bloomberg.com/news/videos/2025-05-02/port-of-la-says-imports-are-dropping-video )
that the last goods from before Liberation Day will arrive in port this weekend. The drop off will likely result in employment for dock workers and truckers. Should a deal come though he also noted that it will likely take six weeks to get back up to speed to re-establish supplies.
The reciprocal nature of the tariffs is also having an impact with China cancelling pork orders, the largest since the pandemic.
The Past Week’s Notable US data points (with revisions)
The Upcoming Week’s notable US data points
Source: Morningstar
Data Source: Financial News London, Financial Times, Morningstar, MarketWatch, Standard & Poor’s, and the Wall Street Journal.
Authors:
Jon Chesshire, Managing Director
Michael McNamara, Analyst