From Wall Street to Main Street
Highlights from the past week
Market / Macro Economic Summary Markets on the whole were negative once again for the week as President Trump’s tough on tariffs talks and economic uncertainty bring investors to reassess prospects for the year. The Dow Jones was down .99%, S&P 500 lower by 1.78% and the Nasdaq fell by 2.6% on the week. For the year, the S&P and Nasdaq are negative as well and the Dow Jones holds on to a marginal .61% gain. There has been a shift from growth towards value but earnings reports continue to come in better than expected. This past week, the administration again imposed 25% tariffs on Mexico and Canada, only to postpone them for one month until April 2. Nonetheless, markets continued to fall, and sentiment did not seem bolstered by this postponement, as the threat of tariffs now looms large for April, across not only Canada and Mexico, but other economies like the European Union, which may be subject to reciprocal tariffs. In addition to tariff uncertainty, government cost-cutting initiatives have pressured sentiment. While the U.S. jobs report for February was in line with expectations, with 151,000 jobs added and the unemployment rate ticking up only slightly to 4.1%, these figures do not yet reflect the federal government layoffs, which will likely dampen new job growth and increase unemployment. This comes at a time where new jobs added were already slowing, and corporations may be reconsidering hiring efforts in the face of tariffs and a potentially cooling economy. I will maintain, while the near term will be a bit shaky as we navigate renegotiations to trade deals via tariffs, our economy remains fairly strong. Company Specific / Micro Economic Summary Target (TGT) Shares initially traded lower but then closed higher as the retail giant reported a strong quarter. Revenue of $30.9 billion came in slightly ahead of the $30.8 billion. Earnings per share of $2.41 were much better than the $2.25 analysts expected. CEO Brian Cornell said they look to continue to build a distinct competitive advantage but also said tariff impacts could lead to higher prices as soon as the next couple of weeks. Crowdstrike (CRWD) Shares of the cybersecurity firm were down 8% despite CEO George Kurtz delivering a strong quarter. Earnings per share of $1.03 were nearly 20% higher than estimates. Revenue of $1.06 billion was also higher than the $1.04 billion Wall Street was looking for. Management exits the quarter with $4.24 billion in ARR (annual recurring revenue) and well on its way towards its $10 billion goal. Problem on the quarter was a very small miss on guidance for the upcoming quarter. Okta Inc (OKTA) Shares were up 22% as the multi-factor security firm reported a top and bottom-line beat. Earnings per share of $0.78 cents were four cents better than expected. Revenue of $682 million was also ahead of the $669 million that Wall Street was looking for. CEO Todd McKinnon said the company has seen accelerating RPO (remaining performance obligations), profitability and cash flow. Broadcom (AVGO) Shares closed up 5% as CEO Hock Tan delivered another great quarter. Revenue of $14.9 billion came in ahead of the $14.6 billion. Earnings per share of $1.60 was also nine cents ahead of estimates. AI data centers, infrastructure software revenue, and connectivity solutions were all helpful towards the strong quarter. Parting Thoughts We welcome an opportunity to discuss the above detail and wish you much success in the rest of your week! Regards, Erick J. Palacios, MBA Wealth/Fiduciary Advisor