Morning News: June 18, 2025
Posted by Eddy Elfenbein on June 18th, 2025 at 7:05 am

Israel’s War With Iran Isn’t One Conflict. It’s Three.

Xi, Trump Take Opposite Sides on Iran-Israel

Mideast Oil Giants Bring Their Billions in Search of LNG Riches

Why Eliminating Coal Could Take a Long Time

China Solar Industry’s Self-Discipline Was Doomed From the Start

U.K. Inflation Eases Slightly Despite Concerns Over Rallying Oil Prices

The $10 Billion Proposal to Speed Up U.S.-Mexico Trade

Japan’s Exports Fell for First Time in Eight Months as Tariffs Weighed

Trump Flexes Security Powers to Keep Global Tariff Goal Alive

US-China Trade Truce Is a Cautionary Tale

Trump Is Driving Off Investors and Threatening the Dollar’s Reign

Aiming at the Dollar, China Makes a Pitch for Its Currency

The Dark Side of China’s Gold Frenzy

Bank Indonesia Stands Pat Amid Uncertainties

Sweden’s Central Bank Cuts Rate Amid Economic Uncertainty

US Plans to Ease Capital Rule Limiting Banks’ Treasury Trades

Trump and the Middle East Weigh on the Fed

The Problem With Wall Street’s Fixation on the Fed Dot Plot

The Genius Act Will Bring Economic Chaos

It’s Time to Excise the ‘Double Drawback’ Loophole

The Path to Record Deficits

Bitcoin Will Never Circulate As Money, But Amazon and Walmart Will

Private Equity Sits on $1 Trillion Amid Uncertainties, M&A Stalls, PwC Says

$100 Million for Your Data? Trump Missteps on Privacy and Palantir

Trump’s $499 ‘Built in the U.S.’ Smartphone Will Likely Be Made in China, Analysts Say, Making It Subject to His Own Tariff Policy

The Biggest Companies Across America Are Cutting Their Workforces

Submerging Servers in Liquid Helps Data Centers Cut Energy Use

Musk’s xAI Will Be Hard-Pressed to Extinguish Its Cash Fire

Altman Says Meta Offered OpenAI Staffers $100 Million Bonuses

Wall Street Wants In on Crumbl’s Oversized Sugary Cookies

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CWS Market Review – June 17, 2025
Posted by Eddy Elfenbein on June 17th, 2025 at 7:16 pm

(This is the free version of CWS Market Review. If you like what you see, then please sign up for the premium newsletter for $20 per month or $200 for the whole year. If you sign up today, you can see our two reports, “Your Handy Guide to Stock Orders” and “How Not to Get Screwed on Your Mortgage.”)

The stock market was shaken a bit on Friday after geo-political events dominated the news. On Monday, the market made back much of what it lost but today was another down day. The S&P 500 closed below 6,000 for the second time in three days.

During these kinds of events, Wall Street tends to be much calmer than the talking heads on TV. The Volatility Index is back over 20 which still isn’t very high. Compare that with April when it got as high as 60.

Over the past two months, overall volatility has decreased markedly. There simply aren’t a lot of intra-day movements. Earlier this year, we saw several big intra-day swings. I’m happy to say that Wall Street has really chilled out from the tariff panic this past spring.

The price for oil spiked, but even that has started to cool off.

This week, Wall Street seems less interested in Iran and more interested in the upcoming Federal Reserve meeting. The Fed will release its policy statement tomorrow at 2 pm ET and it’s very doubtful that we’ll see a rate cut. Traders currently place the odds of a 0.25% cut at 0.2% which, in my opinion, is about 0.199999% too high.

The Fed probably won’t resume cutting rates until after Labor Day, and that’s at the earliest. There’s even a good chance that rate cuts won’t happen until October. Goldman Sachs said the Fed won’t cut until December. Meanwhile, interest rates are having an important impact on retail sales, the housing market and which kinds of stocks are doing well. I’ll explain it all in a minute.

Also with this week’s Fed meeting, the Fed will release its Summer of Economic Projections. Frankly, the Fed has a pretty lousy track record of predicting the economy (remember that “transitory” inflation?), but it’s still interesting to see what the Fed expects. While inflation has been better behaved, it looks like we’re not returning to the pre-Covid world of sub-2% inflation. This is the new reality.

May Retail Sales Fall 0.9%

We’ve had a few disappointing economic reports this week. I’m not worried just yet, but it’s something to be aware of.

For example, this morning, we got the retail sales report for May, and it wasn’t good. Last month, retail sales fell by 0.9%. That was 0.3% worse than expected. Apparently, shoppers weren’t in a spending mood last month. Bear in mind that consumer spending makes up about two-thirds of the economy.

During April, retail sales fell by 0.1%. Over the last year, retail sales are up by 3.3%. That’s pretty weak.

If we don’t include cars, then sales fell by 0.3%, which was also worse than expected. Economists had been looking for an increase of 0.1%.

Building materials and garden stores saw sales fall 2.7%, while sliding energy prices pushed gasoline station receipts down 2%. Motor vehicles and parts retailers were off 3.5%, while bars and restaurants saw sales decline 0.9%.

On the plus side, miscellaneous retailers gained 2.9%, while online sales rose 0.9% and furniture stores increased sales by 1.2%.

The data from the prior months was probably impacted by consumers rushing to get deals before the tariffs went into effect. We recently got the report from the University of Michigan on consumer confidence, and it showed an impressive rebound, but this comes after a few disappointing months.

Another troubling report said that homebuilders are in a terrible mood. This is important because the housing industry drives so much of the economy.

For June, the Homebuilder Sentiment Index fell two points to reach 32. Any number below 50 is bad, and this is very bad. This is the third lowest print in the last 13 years. Wall Street had been expecting an improvement.

The survey showed that 37% of homebuilders said that they had to cut prices. That’s a three-year high. The average price reduction has been 5%. If the housing market isn’t happy, then it’s very hard for the overall economy to be happy.

There’s even a famous academic paper titled “Housing IS the Business Cycle.” I think that’s exactly right. The Federal Reserve also said that industrial production fell 0.2% last month.

I’m looking ahead to the Q3 GDP which is due out late next month. The GDP report for Q1 was a dud. It showed a decline of 0.2%, but Wall Street is expecting a rebound for Q2. The Atlanta Fed’s GDPNow model now sees Q2 growth of 3.5%. (That’s annualized and adjusted for inflation.)

I know the Fed doesn’t want to be the one to rescue the economy. I’m not sure it can, but I think it will give it a shot. I do expect interest rates to be lower by the end of the year.

The Market’s Tilt Away from Defense

One concern I have is that over the last two-and-a-half months, the market’s gains have been heavily concentrated in growth stocks. That’s to be expected at the start of a rally, but I’m skeptical that growth will continue to leave value in the dust.

Here’s a chart that I think shows a lot. This is the relative strength of consumer staples and healthcare stocks. I ran the chart on healthcare recently, but this week I want to show how it stacks up against consumer staples.

As you can see, the two lines are like waltzing partners.

Let me take a step back and explain this for a moment because it’s a subtle point that investors should understand. I call it “The Elfenbein Theory to Explain the Entire Stock Market.”

Broadly speaking, stocks tend to fall into one of four groups. The groups are value, growth, defensive and cyclical. The relative strength of value and growth sectors tend to move in opposite directions (but not always!). Likewise, the relative strength of defensive and cyclical sectors also tend to move in opposite directions. The cyclicals move in cycles. The defensives don’t (but not always!).

The value-growth dimension tends to align with short-term interest rates. Rates go down, value leads. Rates go up, growth leads (but not always!).

The cyclical-defensive dimension tends to align with long-term interest rates. Long-term rates go down, defensive stocks lead. Long rates go up, and cyclicals lead. (But not always!).

I’m sure the super-smart kids out there picked up on something: “Hey Eddy, can’t you make a quadrant of those groups?” Yes, you can! There are also periods when short-term and long-term interest rates move in opposite directions. In simple terms, this is when the yield curve gets wider or narrower, and it impacts financial stocks.

This brings me back to the graph. The key defensive sectors are consumer staples and healthcare. Investors tend to like these stocks because their business tends to be more stable. You may not think a consumer staple like Hershey (HSY) or Colgate-Palmolive (CL) is similar to a healthcare name like Abbott Labs (ABT) or Stryker (SYK), but the stock charts certainly think they’re similar.

Lately, however, these stocks have been in Wall Street’s doghouse. The defensive sectors have lagged the market for two-and-a-half years. I don’t think this can last much longer. If the economy gets weaker, investors will lean towards these areas of the market, and there will be a lot of bargains. The rotation probably is not far away.

That’s all for now. I’ll have more for you in the next issue of CWS Market Review.

– Eddy

Morning News: June 17, 2025
Posted by Eddy Elfenbein on June 17th, 2025 at 7:03 am

Oil Market Well Supplied But Geopolitical Risks Bring Uncertainty, IEA Says

If Iran’s Oil Is Cut Off, China Will Pay the Price

Bank of Japan Stands Pat on Rates, Plans to Slow Bond-Buying Tapering After April 2026

German Financial Confidence Rises Again

Fed’s ‘Wait and See’ Approach Is Intact as New Risks Cloud Economic Outlook

Why the Fed Isn’t Cutting Rates Despite Cool Inflation

China Is Unleashing a New Export Shock on the World

Modi Misses Chance to Push for US Trade Deal as Trump Leaves G-7

The G-7 Was a Great Idea — Until it Became One Against Six

Cubans Shut Out by Trump Are Ditching Miami for Brazil’s Deep South

White House Eyes Rarely Used Power to Override Congress on Spending

Senate Bill Expands Business Tax Breaks, Delays Deal on SALT

Spending Cuts Won’t Shrink Government, and May Well Expand It

Fannie and Freddie Can Never Be Truly Privatized – The US Government Should Leave Well Enough Alone

Inflation Remains the Big Threat to Your Wealth

The Tax Code Is Punishing Savers, But Congress Has a Fix

Contra Klaus Schwab, Government Cannot Create Prosperity

South Africa Built a Medical Research Powerhouse. Trump Cuts Have Demolished It.

Trump Mobile Joins the Oval Office Sales Parade

Private Equity Has Peaked, and It’s About Time

Ken Griffin on Trump, Harvard and Why Novice Investors Won’t Beat the Pros

This Five-Star Fund Manager Says Even Smart Investors Have Been Missing the Greatest Theme of Our Time

How Big Batteries Could Prevent Summer Power Blackouts

How Apple Turbocharged China’s Development

Apple Pushes Back As the EU Attacks Its Precious Property

Eli Lilly to Buy Gene-Editing Biotech Verve for $1.3 Billion

It’s Official: Streaming Is Now the King of TV

Rent the Runway Sees Rebound in Subscribers, and Aims to Add More Styles to Keep Them

Kraft Heinz Is Ditching Artificial Dyes

The Aisle-Prowling Albertsons CEO Taking On Kroger

New Owner Gives High Times a Fresh Spark

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Morning News: June 16, 2025
Posted by Eddy Elfenbein on June 16th, 2025 at 7:00 am

Nations Head to G-7 Hoping to Reach Trade Deals With Trump

As Trump Returns to G7, Rift With Allies Is Even Deeper

America’s Immigration Mess Shows It Failing as a Nation of Laws

Iran Conflict Poses Rewards and Risks for OPEC+

Stocks Trade Cautiously as Investors Watch Oil Prices

Oil Erases Gain With Iran-Israel Attacks Sparing Flows So Far

The Private Equity Bet Transforming South Africa’s Energy Market

Chinese Spenders Open Wallets as Factories Slow

Japan’s Bond Chaos Heralds More Volatility in Global Markets

ECB Shouldn’t Rush Into Further Rate Cuts, Bundesbank’s Nagel Says

BOE Set to Hold Rates Again Despite Cooling Jobs Market

An Eighth-Generation Oyster Farmer Sees Hope in Britain’s Trade Deal

The US Is Exceptional — When It Comes to Rates

Fed on Hold Leaves Wall Street Asking What It Will Take to Cut Interest Rates

Young Graduates Are Facing an Employment Crisis

The Fog of Trade War Is Causing Confusion About Price Increases

Toymakers Team Up With Artists for Tariff-Proof Toys

A Town’s Single Largest Taxpayer Is Also Its Biggest Headache

Let’s Abolish Corporate Tax Refunds For Taxes Never Paid

The Bureaucrat and the Billionaire: Inside DOGE’s Chaotic Takeover of Social Security

Social Security Must Close the Benefit Gap for Bereaved Children

Trump’s Bill Would End EV Subsidies: Could This Kill Tesla?

‘Golden Share’ in U.S. Steel Gives Trump Extraordinary Control

Victoria’s Secret Is Under Mounting Pressure From Latest Activist Investor

Amex Plans ‘Largest Investment Ever’ in Platinum Credit Card

Everyone Is Using A.I. for Everything. Is That Bad?

Meta Gets Out Its Checkbook to Catch Up in the AI Race

How AI and Charter Schools Could Close the Tutoring Gap

Roku Shares Jump on Amazon-Connected TV Advertising Partnership

Are CVS, Mondelez and McDonald’s Silencing Shareholders?

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Morning News: June 13, 2025
Posted by Eddy Elfenbein on June 13th, 2025 at 7:04 am

Oil Prices Surge and Stock Markets Stumble After Israel Attacks Iran

Iran Retaliates After Israeli Strike as Trump Urges Nuclear Deal

An Israel-Iran War May Not Rattle the Oil Market

Republicans Are (Almost) Ready for Maximum Pressure on Russia

China’s ‘Cash-for-Clunkers’ Underlines Need for Structural Reform

China Forced to Keep Unprofitable Firms Alive to Save Jobs and Avoid Unrest

Bank of Japan Likely to Stand Pat Again, Discuss Further Bond Tapering

Europe’s Exporters Feel the Chill From Trump Tariffs

Chinese Firms in Talks to Join Group for Li Ka-Shing’s Ports

New Fees on Floating Garages Are Trump’s Latest Effort to Revive U.S. Shipbuilding

Where’s the Inflation From Tariffs? Just Wait, Economists Say.

The Case for Rate Cuts Is Growing

Trend Hedge Funds Struggle as More Nimble Macro Funds Embrace Whipsawing Markets

US Corporate Profit Fat Offers Cushion for Absorbing Tariffs

Elizabeth Warren: Trump Is Right About This One Thing

JPMorgan Can Retain Junior Bankers With Cash, Not Threats

Wall Street Is Investing Billions in Marinas for Bigger Yachts

The South Is Beating Inflation — But Not Housing

Your Electric Bill Is Rising Faster Than Inflation. Here’s Why.

Why There’s an Unexpected Surge in People Claiming Social Security

F.T.C. May Put Unusual Condition on Ad Mega-Merger: No Boycotting

Meta Finalizes $14.3 Billion Scale Investment, Hires Its CEO

AI Will Transform Medicine, Particularly If Trump Lets It

New Army Reserve Unit Enlists Silicon Valley Executives to Upgrade Tech

GameStop Shares Tank More than 20% as Retailer Reveals Convertible Debt Offering, Trading Cards Plan

Shein’s Planned Hong Kong Listing to Benefit from Wider Capital Pool

Air India Was Struggling Long Before 787 Crash

How the Clippers Engineered the NBA’s Best Home Court Advantage

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Morning News: June 12, 2025
Posted by Eddy Elfenbein on June 12th, 2025 at 7:04 am

Iran Steps Up Enrichment With New Site After Nuclear Censure

Saudi Arabia Is Grabbing Oil-Market Share, but It Can Open the Tap Only So Far

The Art of the Stall: China’s Strategy for Dealing With Trump

New China Trade ‘Deal’ Takes U.S. Back to Where It Started

Supply Chains Become New Battleground in the Global Trade War

U.K. Economy Shrinks on Tariff Hit

The ‘Canada Drip’ Helps Absorb Shock of US Tariffs

Here’s How Much Money the U.S. Is Earning From Tariffs, in Charts

Muted May Inflation Defies Tariff Fears

Trump Says Again He’ll Set Unilateral Tariffs in Two Weeks

Tariffs On Medicines Will Cripple Manufacturing

If You Understand Car Loans, You Understand the National Debt

The Fed Can Now Declare Victory Over Inflation

Fed Seeks to Preserve Labor Market Lessons in Rewriting Rates Strategy

The Bond King Has a Warning for Private Credit: Feels Like 2006

Deutsche Bank’s Deal-Making Business Weaker than Expected

Chime Set for Long-Awaited Market Debut After $864 Million US IPO

BlackRock Aims to Grow Revenue to $35 Billion and More by 2030

Tech Giants’ New AI Ad Tools Threaten Big Agencies

How Washington Has Tried to Control China’s Tech

Trump’s Birthday Parade Isn’t a Harmless Military Spectacle

ICE Raids Have Sent Latino Shoppers Into Hiding and Big Brands Are Hurting

Companies Quietly Recast DEI to Duck Backlash

Treasury Weighs Rules That May End Colleges’ Tax Status Over Race Policies

As Companies Abandon Climate Pledges, Is There a Silver Lining?

Charging Electric Cars, a Bane of Their Owners, May Be Improving

Divorcing SpaceX Just Isn’t Possible Right Now

Trump Plan to Kill Dozens of NASA Missions Threatens US Space Supremacy

Why Warner Boss Zaslav Is Having to Split Up the Media Empire He Built

No Home, No Retirement, No Kids: How Gen Z-ers See Their Future

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Morning News: June 11, 2025
Posted by Eddy Elfenbein on June 11th, 2025 at 7:02 am

To Shake Russian Gas, Germany Pushes to Ship It in From Anywhere Else

The Audacious Reboot of America’s Nuclear Energy Program

US Energy Secretary Is Trying to Change Blue-State Minds About Fossil Fuels

Market Realities Continue to Mug Faddish ‘Energy Transitions’

Global Banks Scramble to Hire Top Talent in Booming Japan

ECB’s Rate Cut Helps Ensure Inflation Won’t Settle Below Target, Lane Says

U.S. and China Agree to Get Geneva Pact Back on Track

China Walks a Line in U.S. Trade Talks, Trying Not to Overplay Its Hand

The US Is Dooming the UN — Whether It Leaves or Not

Pope Leo Inherits Cleaned Up Vatican Bank That’s Making Money

World Bank Sees U.S. Growth Rate Halving as Tariffs Slow Global Economy

US Inflation Seen Picking Up With Some Tariff Pass-Through

The Republican Budget Bill Is a Fiscal Mirage

Why the Self-Proclaimed Deficit ‘Hawks’ Have Always Been Wrong

Paul Atkins Has His Work Cut Out For Him at the SEC

Top CFPB Enforcement Official to Resign, Citing ‘Devastating’ Shifts Under Trump

Appeals Court Keeps Trump’s Sweeping Tariffs in Place for Now

Noisy Trade Wars Shift Into Duller Framework Implementation Stage

How Home Depot Became Ground Zero in Trump’s Deportation Push

Is the Immigration Crackdown Already Showing Up in the Labor Market?

Musk Expresses ‘Regret’ Over His Criticisms of Trump

Marc Andreessen Bet Big on Trump to Ward Off Tech’s Detractors

Rubio Is Pressing to Open Sanctions Investigation Into Harvard

Yale Is Rushing to Sell Billions in Private Equity Investments

African Students Are Flocking to US MBA Programs

Oil-Rich University of Texas Wants to Cash In on AI, Crypto and Power

Nvidia’s Huang Sees Quantum Computing Reaching Inflection Point

Amazon, Walmart Drone Deliveries Take Rivalry to the Skies

Cyberattack on Food Distributor Leaves Supermarket Shelves Running Low

The Media and Entertainment Deal Machine Is Revving Up

X’s Sales Pitch: Give Us Your Ad Business or We’ll Sue

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CWS Market Review – June 10, 2025
Posted by Eddy Elfenbein on June 10th, 2025 at 6:11 pm

(This is the free version of CWS Market Review. If you like what you see, then please sign up for the premium newsletter for $20 per month or $200 for the whole year. If you sign up today, you can see our two reports, “Your Handy Guide to Stock Orders” and “How Not to Get Screwed on Your Mortgage.”)

On Friday, the S&P 500 closed above 6,000. To be exact, the index closed at 6,000.36. Not many people expected the market to recover so quickly. The last time the S&P 500 closed above 6,000 was on February 21.

On Monday and Tuesday, it closed even higher. We’re now less than 2% from a fresh all-time high. Looking back at the panic this year, it all seems rather silly. We didn’t know what the tariff policy was going to be, and we were less sure of the potential impact.

In any event, investors got very scared. In just 48 calendar days, the S&P 500 lost 18.9%. Then in 63 calendar days, it gained back 21.2%. (Thanks to the lower base, we’re still not quite at a new high despite the gain being greater than the loss. Don’t blame me. Blame math.)

I wonder if a Rip Van Winkle-type of investor who had slept through the entire period would have noticed any difference. By the way, notice how much smaller the high-low bars have gotten since April. We aren’t seeing any dramatic intra-day reversals like we did this past spring.

The U.S. Economy Added 139,000 Jobs Last Month

On Friday, we got the jobs report for May, and it was pretty good. There had been some trepidation going into this report because the ADP report had been quite weak.

Nevertheless, the Bureau of Labor Statistics reported that the U.S. economy created 139,000 net new jobs last month. That was 14,000 more than expected although that was a very conservative expected number. The jobs number for April was revised lower to a gain of 147,000.

Bear in mind that recessions usually align with job losses, not slower gains. There are no signs that we’re in a recession. Of course, that could change.

The unemployment rate stayed at 4.2%. I dug into the data and found that if we look at a few more decimal places, then the jobless rate is the highest in 43 months (see below). Although that sounds like a lot, the unemployment rate has really been quite steady. I also like to look at the broader U-6 unemployment rate, and that stayed at 7.8%.

Probably the best news is that average hourly earnings rose 0.4% last month. That was 0.1% better than expected. Over the last year, average hourly earnings are up 3.9%. That’s not bad, but I’d like to see it improve.

Here are some details:

Nearly half the job growth came from health care, which added 62,000, even higher than its average gain of 44,000 over the past year. Leisure and hospitality contributed 48,000 while social assistance added 16,000.

On the downside, government lost 22,000 jobs as efforts to cull the federal workforce by President Donald Trump and the Elon Musk-led Department of Government Efficiency began to show an impact.

The number for April was revised downward by 30,000. The number for March was revised lower by 65,0000. The household survey showed a decline of 696,000 workers. There was a decline of 623,000 full-time folks and an increase of 33,000 parttime workers.

Overall, this was a good report although there are a few signs of weakness. The Federal Reserve meets again next week, and I strongly doubt they’ll make any changes to interest rates. In fact, I don’t see any rate cuts coming in July either.

However, the meeting after that, in mid-September, could be a different story. There’s a decent chance that the Fed will lower rates by 0.25%, but a lot can happen over the next three months. We’ll learn more tomorrow when the government releases the CPI report for May.

Wall Street Goes Nuts for Circle

Wall Street has gone absolutely bonkers recently over the debut of Circle Internet Group (CRCL). The company is a stablecoin issuer which means its coins are tied to the value of the dollar. Hence, the prices are “stable.” This is a major difference from bitcoin which is highly volatile.

What I find interesting about the Circle-mania is that this appears to be another sign of crypto entering the mainstream. Years ago, I think crypto was wrongly seen as a plaything of computer nerds. Now, however, it may be taking on an important role in the financial services sector. If all goes well, then consumers can use stablecoins for fast and secure transactions.

Basically, Circle provides a platform that lets businesses integrate stablecoins seamlessly into their operations.

The stock took off from an offering price of $31 per share to a high of $138 per share. Well, that’s not bad for three days of work (CRCL closed lower for the first time today). The environment has also been helped by a crypto-friendly administration in Washington. The company raised $1.1 billion.

Since the Circle IPO, a few stablecoin ETFs have already rushed in to join the frenzy. I won’t be surprised to see some larger and more established firms issue stablecoins in the coming months.

Circle is the issuer of USDC. In the stablecoin arena, Circle is #2 to Tether. Circle currently has $60 billion in circulation while Tether is up to $150 billion.

Circle makes its money by investing its reserves in U.S. Treasuries. At some point, stablecoins may be thought of as cash, just expressed slightly differently.

Bloomberg says there are now 80 ETFs that track digital assets. One year ago, Bitcoin was trading around $25,000. It recently got as high as $110,000.

Tomorrow, the Senate is scheduled to vote on an important piece of legislation that addresses the stablecoin industry. The bill is backed by the Trump administration and the stablecoin industry.

According to Bloomberg, “The stablecoin bill would set up rules for dollar-pegged tokens used to make payments. The stablecoins would have to be backed one to one with reserves held in short-term investments like federal debt, overseen by federal or state regulators.”

My chief concern about any stablecoin is reserve management. This is why transparency is so important.

The bill has support from both sides of the aisle although some Democrats say the legislation could damage the financial sector. My view is to let 1,000 flowers bloom. If it has a role, the market will quickly adapt.

Casey’s Soars on Earnings Beat

Sixteen months ago, I highlighted Casey’s General Stores (CASY) in the newsletter. I didn’t know the company very well but some friends in the Midwest raved about Casey’s, and it’s very popular there.

It’s basically a gas station masquerading as a pizza shop. Or vice versa. It really doesn’t matter.

The idea is simple. If you drive a car, you’ll need gas. If you’re going to go to a gas station, you might as well choose the place that has pizza as well.

Casey’s is based in Iowa and the stores are mostly in Iowa, Missouri and downstate Illinois. The company also has an impressive presence in the other Midwestern and Plains states. There are now over 2,700 locations in 17 states.

Casey’s prefers to locate in small towns where there’s less competition. There isn’t a Casey’s within several hundred miles of Wall Street.

The stock has been a huge winner over the years. Since 1991, Casey has returned more than 500-fold.

I bring up Casey’s because the stock soared 11.6% higher today after it reported very good earnings. After yesterday’s closing bell, Casey’s said it made $2.63 per share for its fiscal Q4. Wall Street had been expecting $1.95 per share.

Revenues were up 11% to nearly $4 billion which was also better than expected. Casey also increased its quarterly dividend by 14% to 57 cents per share. This is a neat little stock that’s not well-known on Wall Street. The stock is up nearly 60% since I profiled it last year.

That’s all for now. I’ll have more for you in the next issue of CWS Market Review.

– Eddy

Morning News: June 10, 2025
Posted by Eddy Elfenbein on June 10th, 2025 at 7:07 am

British Government to Spend $19 Billion on New Nuclear Plant

Iran Seeks ‘Framework’ Deal in US Nuclear Talks, Official Says

China’s Chokehold on This Obscure Mineral Threatens the West’s Militaries

China and US Holding Second Day of Trade Talks in London

Traders Wary of Bold Bets Drag Credit Volatility Near Record Low

‘Collateral damage’: Fund Managers Lobby Congress over Section 899 to Avert Foreign Investors Leaving the U.S.

Never Take Candy from Strangers

Blackstone Plans $500 Billion Europe Investment, CEO Says

Trump Tariffs Threaten to Derail US Midwest’s Factory Revival

Wall Street CEOs are Cycling Through the Five Stages of Tariff Grief

Biotech Start-Ups Feel the Pain of Federal Funding Cuts

‘Most Favored Nation’ Price Controls Are the Path to Drug Shortages

FTC Seeks Information From Top Advertising Agencies as Part of Ad-Boycott Probe

Ad Forecaster Cuts Industry Outlook as Trade Upheaval Risks Five-Year ‘Chilling Effect’

America’s Small Businesses Hopeful of Boost From Trump’s Spending Bill

This Year’s Pride Festivals Are Brought to You by Small Businesses

Contra the Trump FTC, Boycotts Are Protected by the First Amendment

Congress Contemplates What Might Be the World’s Cruelest Tax

The White House Wants This Fight With Los Angeles

A College Degree Is No Longer a Risk-Free Investment

Musk Is the $350 Billion Rocket Man Who Fell to Earth

Zuckerberg Is Personally Recruiting New ‘Superintelligence’ AI Team at Meta

Switch 2 Resellers Drive Thriving Market in Japan Despite Crackdown

Warner Bros. Discovery Bet on All You Can Eat. Viewers Wanted More à la Carte

American Mid: Hampton Inn’s Good-Enough Formula for World Domination

Smucker’s Guidance Miss Shows Struggles of Packaged Food Firms

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Morning News: June 9, 2025
Posted by Eddy Elfenbein on June 9th, 2025 at 7:10 am

China’s Exports to U.S. Suffer Biggest Decline Since 2020

U.S. and China to Meet at Precarious Moment in Trade War

Taiwan Exports Growth Nears 15-Year High Amid Tariff Uncertainty

Japan’s Economy Remains at Risk of Technical Recession, Data Shows

Irish Manufacturing Contracts Sharply as U.S. Import Boost Fades

Oil & Gas Deals Are Tanking. The World’s Top M&A Law Firm Has Been Here Before

America Has Plenty of Rare Earths. But Not for Long

An Empire Built on Paper Looks to Benefit From Trump’s Trade War

Trump Aides Urge Court to Spare Tariffs as They Dismiss Worries in Public

Senate Republicans Plan to Release Major Revisions to Trump’s Tax Bill

Wall Street, Main Street Push for Foreign Tax Rethink in US Budget Bill

How To Solve the Unsolvable

‘Most-Unloved Bonds’ Turn Routine US Auction Into Crucial Test

Third Time Lucky? Citi Changes Its S&P Target Once More After Index Hits 6,000.

Retail Quants May Be the Next Stabilizing Force for Markets

Quant Firm’s $1 Billion Code Is Focus of Rare Criminal Case

Inside the Online Marketplaces That Enable ‘Pig Butchering’ Scams

What’s Harder? Planning Interest Rates, Or Harvard’s Class Of 2029?

The ‘Manosphere’ Just Wants Trump and Musk to Get Along

How Trump Has Leverage Over Musk

Cathie Wood Says Tesla Is the Stock She’d Pick If She Could Only Invest In One Company

Anti-Woke Crusades Only Make Hegseth and Rubio Look Petty

CEOs Don’t Realize Their Haters Make Them Better Leaders

Nvidia CEO Says the UK Is In a ‘Goldilocks’ Moment: ‘I’m Going to Invest Here’

Meta Set to Throw Billions at Startup That Leads AI Data Market

Warner Discovery Splits Cable From Marquee Streaming, Studio Businesses

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