Weekly Sharks Briefing (05/26/2025)

Last Week in Markets:

Markets pulled back across the board last week, as investors grew increasingly concerned about U.S. fiscal sustainability, fresh trade tensions, and uncertain inflation signals. Equities, bonds, and the U.S. dollar all declined in tandem — a rare alignment reflecting broader macro unease.

Equities: Risk Appetite Fades
All three major U.S. indices fell roughly 2.5% on the week, reversing prior momentum. The S&P 500 is now 5.6% below its record high set just three months ago, as investors reassessed valuations against a backdrop of higher-for-longer yields and fiscal deterioration.

Crypto and Commodities: Inflation Hedges Shine
Despite weakness in traditional assets, Bitcoin extended its rally, rising nearly 6% to trade around $109,000, after briefly crossing $112,000 — a new all-time high. The leading cryptocurrency has now advanced for six consecutive weeks, powered by institutional flows, ETF momentum, and growing interest in decentralized stores of value amid sovereign debt concerns.

Meanwhile, gold surged nearly 6% to $3,360 per ounce, recovering the prior week’s losses. Its year-to-date rally remains intact, recently breaching a fresh record above $3,400. With real yields under pressure and safe-haven demand rising, gold continues to benefit from macro crosswinds.

Fixed Income and Currency: Fiscal Concerns Hit Bonds and the Dollar
The 30-year U.S. Treasury yield breached the 5% mark, reflecting heightened concerns over the long-term fiscal outlook and future supply of government debt. Simultaneously, the U.S. dollar weakened against major currencies including the Canadian dollar, as investor sentiment pivoted toward risk hedging and real assets.

Policy Watch: Moody’s Downgrade, Tax Bill, and Deficit Debate
The Moody’s downgrade of U.S. government credit placed the spotlight squarely on America’s growing debt burden. While the rating change is symbolic and doesn’t impact Treasury mechanics directly, it reinforces longstanding concerns around fiscal sustainability — particularly as interest costs balloon.

On Capitol Hill, the House passed a sweeping tax bill by a razor-thin margin, extending provisions of the 2017 tax cuts and introducing new measures aligned with previous Trump-era proposals. The Congressional Budget Office estimates the bill could add nearly $3 trillion to the deficit over the next decade, after accounting for expanded tax breaks, new spending, and rising interest obligations.

The bill now moves to the Senate for debate. If passed, it could deliver a modestly stimulative fiscal impulse, but one that exacerbates the structural deficit — a tradeoff markets are beginning to price in.

Looking Ahead: PCE Inflation Data in Focus
Investors are now turning their attention to the upcoming release of the Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation gauge. The previous report showed annual inflation slowing to 2.3% in March, down from 2.7% the month before. A further cooling would bolster the Fed’s case to hold rates steady or pivot dovish later in the year.

Earnings This Week:

Above is a weekly earnings calendar of the most important upcoming quarterly reports scheduled to be released by publicly traded companies.

This week brings a critical set of earnings reports that could move markets, particularly in tech and retail.

📍Earnings Spotlight: Nvidia (NVDA)
Report Date: Wednesday, after market close
Street Expectations:

EPS: $0.73 (+19.7% YoY)

Revenue: $43.2 billion (+66.2% YoY)

Narrative to Watch:
Nvidia remains the single most important company in the AI trade — and likely the market overall. This quarter’s results are expected to confirm whether demand for AI infrastructure continues to scale at the extraordinary pace seen in recent quarters.

One of the most closely followed questions is whether Nvidia can continue to grow despite H20 chip restrictions on China. Analysts like Matt Bryson of Wedbush are focused on management’s forward guidance and the pace of global datacenter adoption as the offset to potential geopolitical and regulatory headwinds.

Investor takeaway: This is a "make-or-break" moment for Nvidia. Expectations are sky high, and even a solid beat may not be enough without clear visibility into sustained momentum beyond 2025.

📍Earnings Spotlight: Salesforce (CRM)
Report Date: Wednesday, after market close
Street Sentiment:

Strong Buy/Buy: 32 of 44 analysts

Hold: 10 analysts

Sell: 2 analysts

Consensus: Buy

Salesforce enters earnings with strong Street support and growing confidence in its operational efficiency efforts. Investors are looking for proof that margin expansion and AI integration (notably via Einstein GPT and Data Cloud) are not just buzzwords, but contributors to durable growth.

The company has shifted from a pure growth story to one that blends profit discipline with strategic reinvestment — a key driver of sentiment in the current rate environment.

Investor takeaway: Any weakness here could reset expectations for enterprise software broadly, but if results surprise to the upside, CRM may emerge as a leadership name in the cloud software space once again.

📍Earnings Spotlight: Costco (COST)
Report Date: Thursday, after market close
Street Expectations:

EPS: $4.24 (+12.2% YoY)

Revenue: $63.1 billion (+7.8% YoY)

Costco remains one of the most consistently defensive names in retail, buoyed by steady traffic, pricing power, and membership loyalty. The company has navigated inflationary pressures better than most peers, and its diversified SKU base offers resilience during economic slowdowns.

This quarter, analysts will be closely monitoring same-store sales growth, renewal rates, and signals about any upcoming membership fee increase — something investors have long anticipated.

Investor takeaway: A strong quarter reinforces Costco's place as a retail stalwart, while signs of margin compression or slowing consumer spend could ripple across the retail sector.

Top Upgrades/Downgrades from This Week & last week:

Morgan Stanley Maintains Equal-Weight on Ncino, Raises Price Target to $27

Needham Maintains Buy on Ncino, Raises Price Target to $33

RBC Capital Maintains Sector Perform on Nike, Lowers Price Target to $65

Evercore ISI Group Maintains Outperform on Microsoft, Raises Price Target to $515

Citigroup Maintains Neutral on Salesforce, Lowers Price Target to $320

Wedbush Maintains Outperform on Oklo, Raises Price Target to $55

Wedbush Maintains Outperform on Tesla, Raises Price Target to $500

Barclays Maintains Equal-Weight on Baidu, Lowers Price Target to $84

Baird Maintains Neutral on Reddit, Lowers Price Target to $120

Jefferies Maintains Buy on Snowflake, Raises Price Target to $220

Raymond James Initiates Coverage On Lionsgate Studios with Outperform Rating, Announces Price Target of $10

Morgan Stanley Maintains Overweight on Nutanix, Raises Price Target to $90

Mizuho Maintains Outperform on Advanced Micro Devices, Raises Price Target to $135

Deutsche Bank Reinstates Hold on Intel, Announces $23 Price Target

Truist Securities Reiterates Buy on UnitedHealth Group, Lowers Price Target to $360

UBS Maintains Buy on Marvell Tech, Lowers Price Target to $100

Canaccord Genuity Maintains Buy on Spotify Technology, Raises Price Target to $775

Citigroup Maintains Neutral on Occidental Petroleum, Raises Price Target to $44

Cantor Fitzgerald Reiterates Overweight on Palo Alto Networks, Maintains $223 Price Target