Autodesk and Intuit each projected better-than-expected earnings that sent their shares soaring. At the same time, trade tensions between the United States and the European Union soared when former President Donald Trump floated large tariffs. The market was quite reactive in both positive and negative ways as investors repositioned themselves for these new developments.
For the current quarter, Autodesk is projecting adjusted earnings to be in the range of $2.44 to $2.48 a share. This forecast is supported by expected revenues between $1.72 billion and $1.73 billion. Following the announcement, Autodesk stock soared more than 2%. This spike is an indication that investors are hopeful about the company’s second quarter guidance, which exceeded analyst expectations.
Tax-prep titan Intuit just delivered a powerful quarterly report and the company raised its full-year outlook. This announcement sent its stock soaring over 40% on the news. The company’s strong results were a big part of the bullish mood in the broader tech space.
Just look what happened when Donald Trump threatened to impose tariffs. This increased blow-up coincides with a breakdown in negotiations between the U.S. and the E.U. He even suggested a huge 25% tariff on Apple products sold in the U.S. This development underscores the importance for Apple to begin future production of its iPhones in this country.
“I have long ago informed Tim Cook of Apple that I expect their iPhone’s that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else. If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S.” – Donald Trump
Trump floated a gigantic 50% tariff on all European Union imports. He mentioned that this tariff would go in effect June 1, 2025. These proposals would have a huge impact on any company that depends on trading across borders, raising alarm bells for investors.
Analyst Gabe Hajde upgraded a major manufacturer’s stock to overweight from underweight. He increased his price target by $10, to $55. That’s an implied bullishness of 21.9% from Thursday’s close. Hajde noted that valuations are lower than historical averages. With such rock solid and obvious route to higher profits, these shares are quite compelling.
Ross Stores expected second quarter earnings in a range of $1.40 to $1.55 in profit per share. The firm cautioned that if tariffs stay elevated profitability could be put in jeopardy. In the wake of that announcement, Ross Stores stock crashed more than 11%. This decline reflects that investors are concerned about the impact of the proposed trade measures on company earnings.
On Friday, Wells Fargo provided Sonoco Products with a double rare double upgrade. This upgrade is a big step towards reflecting that positive sentiment, even in the face of broader market volatility.
The bond market dealt with these developments very quickly. The yield on the 30-year Treasury bond jumped to 5.161%, its highest level since October 2023, according to Bloomberg data. This increase in yields is often a harbinger of investor expectations of both economic recovery and re-emerging inflationary pressures.
And as these events play out, investors continue to be on the lookout. They predict how trade warfare and infamous earnings projection cryptically will flavor competition chords in the market. The relationship between international trade policies and corporate performance continues to have a significant impact on investment strategies going forward.