Two ‘more’ pertinent economic reports were out yesterday, Tue 29 Apr 2025 :
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US consumer confidence index by The Conference Board.
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Jobs opening and labour turnover surveys (JOLTs) by US Bureau of Labor Statistics (BLS).
Needless to say, both were disappointing, to put it mildly.
Consumer Confidence Index - April 2025.
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Consumer confidence for April 2025, sank -7.9 points to 86, its lowest level since May 2020. (see above)
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It’s a larger decline than economists’ projection of 87.7.
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Another report, US’s Expectations Index, that captures people’s outlook on the economy, plummeted -12.5 points this month to 54.4, also the lowest level since October 2011.
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It is well below the threshold of 80 that usually signals a recession ahead. (see below)
In the release, the Conference Board said consumers explicitly mentioned concerns about tariffs increasing prices and having negative impacts on the economy.
As Trump reaches its 100th day in power, various surveys and polls continue to show growing pessimism among US consumers.
US JOLTs - March 2025.
US Jobs openings & labour turnover surveys (JOLTs) for March 2025 reported:
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Employment postings fell to their lowest level since September 2024.
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Jobs report showed 7.19 million positions, down by -290,000 from February’s 7.48 million.
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It is also below Wall Street expectation of 7.49 million.
Government postings fell by -59,000 amid Trump’s efforts to pare down the federal workforce. Transportation, warehousing and utilities also saw a drop of 59,000.
The JOLTS survey showed hiring was little changed while layoffs fell by -222,000.
Rounding off, more people said it was hard to find a job, rising to 16.6%, the highest level since October. Fewer people said there were plenty of jobs compared to last month.
Q1 2025 GDP Prelim report.
Maybe the report that will affect US market on Wed, 30 Apr 2025 will be US’s Gross domestic product (GDP) preliminary report for Q1 2025. (see above)
Economists predict a significant slowdown on growth for Q1 2025, that included the potential for an outright decline. (see below)
Below are several views / forecasts:
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FactSet - Consensus estimates showed that economists expect +0.8% growth, down from Q4 2024’s 2.4%.
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Fed Reserve Bank of Atlanta’s modelling tool, points to -0.4% GDP growth, after adjusting to account for unusual gold import numbers.
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$Comerica(CMA)$, Chief economist, Bill Adams expects -1.4% growth.
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$Goldman Sachs(GS)$ forecasts -0.2% economic growth.
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$Bank of America(BAC)$ forecasts +0.4% growth.
Many economists attributed the “loss” is likely to be driven by a surge in imports as US firms stocked up on inventory to get ahead of Trumps levies.
Looks like their analysis is spot-on. (see below)
US’s “Advanced trade balance in goods” report for March 2025, was released on Tue, 29 Apr 2025. (see above)
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It showed a record deficit of -$162 billion, up from February’s -$147.8 billion.
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Since the presidential election in November 2024, trade balance has mostly gotten worse each month, except for a slight improvement in February 2025.
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Trade deficit widened to a record high as businesses ramped up efforts to bring in merchandise ahead of Trump's sweeping tariffs.
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This means trade will be a large drag on economic growth in Q1 2025.
Nvidia Cont’d To Fall ?
$NVIDIA(NVDA)$ has experienced sharp price swings recently (see above), due to several key factors:
(1) Export Restrictions:
US imposed stricter rules on exporting advanced chips to China, directly impacting NVIDIA’s business and leading to concerns about future sales and write-offs.
Mr Jensen Huang has already reported a loss to the tune of $5.5 billion.
(2) Huawei Competition.
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Huawei’s new AI chip, the Ascend 910D, is seen as a growing threat to Nvidia, especially in China.
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The new chip is designed to compete directly with Nvidia’s high-end H100 GPU, which is widely used for AI applications.
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There is claim that the 910D could even surpass the H100 in some tasks.
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It is already working with Chinese tech firms to test the chip, with initial samples expected by late May 2025.
(3) AI Market Concerns.
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There is growing skepticism about the continued rapid growth of the AI sector, with some investors questioning whether spending on AI will remain as strong as in the past.
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On 27 Mar 2025, $Microsoft(MSFT)$ has announced scaling back on its AI-data centre.
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This was followed by report on 22 Apr 2025 that Amazon was similarly scaling back on its data centre expansion plan.
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Broader weakness in AI-related stocks has added to the selling pressure.
(4) Broader Market Uncertainty
Last but not least, general market volatility, including concerns about inflation, interest rates, and global economic growth, has contributed to the wild movements in US stock prices, including Nvidia’s.
Will US’s PCE inflation and GDP report out today, continue to pull US market lower, including Nvidia?
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Do you think US market will continue to consolidate today ?
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Do you think Nvidia will pullback below $100 again this week for the third time ?
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Comments
What are some recession proof shares?
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