Zero Hedge

Alphabet Surges After Easily Beating Estimates, New $70 Billion Stock Buyback

Alphabet Surges After Easily Beating Estimates, New $70 Billion Stock Buyback

In our preview of Alphabet's Q1 earnings, we said the company was "Cheap, Room For Error, And Optimism Worst Is Over", and sure enough, the company is surging after hours after the company reported earnings that largely beat expectations across the board, including capex (with the exception of cloud which came in light on revenue but more than made up for it on profit).

Here is what the company just reported for Q1:

  • EPS $2.81 vs. $1.89 y/y, smashed estimate $2.01 (Bloomberg Consensus)
  • Revenue ex-TAC $76.49 billion, +13% y/y, beat estimate $75.4 billion
    • Total TAC $13.75 billion, +6.2% y/y, higher than estimated $13.66 billion
  • Revenue $90.23 billion, +12% y/y, beat estimate $89.1 billion
    • Google Services revenue $77.26 billion, +9.8% y/y, beat estimate $76.31 billion
    • Google advertising revenue $66.89 billion, +8.5% y/y, beat estimate $66.39 billion
    • Google Search & Other Revenue $50.70 billion, -6.2% q/q, beat estimate $50.3 billion
    • YouTube ads revenue $8.93 billion, +10% y/y, missed estimate $8.94 billion
    • Google Network Revenue $7.26 billion, -8.8% q/q, beat estimate $7.13 billion
    • Google Subscriptions, Platforms and Devices Revenue $10.38 billion, -11% q/q, beat estimate $9.91 billion
    • Google Cloud revenue $12.26 billion, +28% y/y, missed estimate $12.32 billion
    • Other Bets revenue $450 million, -9.1% y/y, missed estimate $473.9 million

  • Operating income $30.61 billion, +20% y/y, beat estimate $28.86 billion
    • Google Services operating income $32.68 billion, +17% y/y, estimate $30.42 billion
    • Google Cloud operating income $2.18 billion vs. $900 million y/y, estimate $1.94 billion
    • Other Bets operating loss $1.23 billion, +20% y/y, estimate loss $1.12 billion
  • Operating margin 34% vs. 32% y/y, beat estimate 32.3%

Number of employees 185,719, +2.7% y/y, estimate 183,718

Notably, in a time when many are expecting capex to be slashed, Alphabet's capital expenditures came in hotter than expected, at $17.2BN, up 43% YoY, and just above the median estimate of $17.1BN.

Commenting on the quarter, Sundar Pichai, CEO, said: “We’re pleased with our strong Q1 results, which reflect healthy growth and momentum across the business. Underpinning this growth is our unique full stack approach to AI. This quarter was super exciting as we rolled out Gemini 2.5, our most intelligent AI model, which is achieving breakthroughs in performance and is an extraordinary foundation for our future innovation. Search saw continued strong growth, boosted by the engagement we’re seeing with features like AI Overviews, which now has 1.5 billion users per month. Driven by YouTube and Google One, we surpassed 270 million paid subscriptions. And Cloud grew rapidly with significant demand for our solutions.”

That said, Alphabet needs to ensure momentum in its search advertising and cloud businesses in order to justify its heightened investment in the artificial intelligence race. Competition is prompting the company and its rivals to spend heavily on infrastructure, research and talent, and as noted above, While Google benefits from AI startups spending on its cloud and business tools, it’s also racing to present an answer to popular conversational AI chatbots, which consumers are beginning to think of as an alternative to using Google Search.

Google’s beginning of the answer to that threat: its “AI Overviews” and “AI Mode” in search, in which summarized responses are drafted by generative AI and highlighted ahead of Google’s web links, have seen mixed success. Meanwhile, Google’s AI changes to search have decimated traffic to independent websites across the open web. 

Tough for them, as for Alphabet, just to make sure the stock would not slump despite the solid beat, the company also announced a new $70 billion stock buyback authorization. Then again, with $75BN in LTM FCF and soaring capex, one wonders if GOOGL will soon need debt to meet all its funding needs.

GOOGL stock jumped as much as 5% after hours, precisely what the straddle implied move said it would do, rising just above $169 - the highest price since mid-March and well above its Liberation Day levels - before fading some of the gains.

Tyler Durden Thu, 04/24/2025 - 16:29

Gabbard Asks DOJ To Prosecute 2 Alleged Leakers

Gabbard Asks DOJ To Prosecute 2 Alleged Leakers

Authored by Zachary Stieber via The Epoch Times,

Two alleged intelligence community leakers have been referred to the Department of Justice (DOJ) for prosecution, according to Director of National Intelligence (DNI) Tulsi Gabbard.

Gabbard said in an April 23 post on the social media platform X that besides the two already referred for prosecution, a third referral is on its way.

Gabbard wrote that “politicization of our intelligence and leaking classified information puts our nation’s security at risk and must end” and that “those who leak classified information will be found and held accountable to the fullest extent of the law.”

“These deep-state criminals leaked classified information for partisan political purposes to undermine POTUS’ agenda. I look forward to working with [the Justice Department and FBI] to investigate, terminate and prosecute these criminals,” she said.

Gabbard’s office did not respond to a request for more information, and the DOJ did not return an inquiry.

Gabbard said that the unidentified officials leaked information to The Washington Post, which had reported recently on a classified assessment of the Tren de Aragua gang that allegedly found Venezuelan President Nicolás Maduro is not directing the invasion of the United States.

President Donald Trump in March invoked the Alien Enemies Act, finding that Tren de Aragua, at the direction of the Venezuelan government, was invading the United States.

“The weaponization of intelligence to undermine the President’s agenda is an assault on democracy. Those behind this illegal leak of classified intelligence, twisted and manipulated to convey the exact opposite finding, will be held accountable under the full force of the law,” Gabbard said on April 21.

She said that her office “fully supports the assessment that the foreign terrorist organization, Tren De Aragua, is acting with the support of the Maduro Regime, and thus subject to arrest, detention and removal as alien enemies of the United States.”

Gabbard also said that “rooting out this politicization of intelligence is exactly what President Trump campaigned on and what Americans overwhelmingly voted for.”

Federal law states that a person who communicates, furnishes, transmits, or otherwise makes available classified information to an unauthorized person can be sentenced to up to 10 years in prison if convicted.

The DOJ announced in March that it was probing the disclosure of other intelligence concerning Tren de Aragua.

“The Justice Department is opening a criminal investigation relating to the selective leak of inaccurate, but nevertheless classified, information from the Intelligence Community relating to Tren de Aragua,” Deputy Attorney General Todd Blanche said at the time.

“We will not tolerate politically motivated efforts by the Deep State to undercut President Trump’s agenda by leaking false information onto the pages of their allies at The New York Times.”

Tyler Durden Thu, 04/24/2025 - 15:45

12 Signs That U.S. Consumers Are Experiencing Far More Financial Stress Than Most People Realize

12 Signs That U.S. Consumers Are Experiencing Far More Financial Stress Than Most People Realize

Authored by Michael Snyder via The Economic Collapse blog,

Consumer sentiment is plummeting, delinquency rates are rising, and nearly three-quarters of all U.S. consumers admit that they are “financially stressed”.  If U.S. consumers are experiencing this much pain now, what will things look like six months from today if there are empty shelves and widespread shortages? 

 We witnessed a brief period of severe financial stress during the early days of the last pandemic, but we would have to go all the way back to the Great Recession to find a time that is truly comparable to what we are enduring now.  U.S consumers have been getting hammered for years, and now it appears that our problems are about to go to an entirely new level.  The following are 12 signs that U.S. consumers are experiencing far more financial stress than most people realize…

#1 According to the University of Michigan, consumer sentiment in the United States has fallen to the second-lowest reading ever recorded…

Americans are rarely this pessimistic about the economy.

Consumer sentiment plunged 11% this month to a preliminary reading of 50.8, the University of Michigan said in its latest survey released Friday, the second-lowest reading on records going back to 1952.

#2 According to a new CNBC/SurveyMonkey poll, a whopping 73 percent of U.S. consumers admit that they are “financially stressed”…

Americans are growing increasingly uneasy about the state of the U.S. economy and their own personal financial situation in the face of stubborn inflation and tariff wars.

To that point, 73% of respondents said they are “financially stressed,” with 66% of that group pointing to the tariff wars as a main source, according to a new CNBC/SurveyMonkey online poll.

The survey of 4,200 U.S. adults was conducted April 3 to 7.

#3 Approximately two-thirds of U.S. adults feel like they are “behind on their savings goals”, and half of U.S. adults believe that they will never reach their savings goals at all…

67% of Americans feel behind on their savings goals, with nearly half (47%) believing they’ll never reach their targets

#4 More than 60 percent of U.S. adults that currently have savings accounts have taken money out of them since the start of this year…

63% of people with savings accounts have withdrawn money since the beginning of 2025, primarily for unexpected expenses (48%) and everyday necessities (36%)

#5 The percentage of U.S. credit card accounts that are at least 90 days past due has reached the highest level in 12 years…

The percentage of credit card accounts that were at least 90 days past due hit a 12-year high in the fourth quarter of 2024.

According to data from the Federal Reserve Bank of Philadelphia, 0.90% of accounts were delinquent, the most since the Fed bank began its report.

#6 5 million student loan borrowers in the United States have not made a single payment in the last year, and 4 million other student loan borrowers will soon reach that status…

Of the more than 42.7 million student loan borrowers in the U.S., who owe a collective $1.6 trillion, the department says that more than 5 million have not made a payment in the past year. That number is expected to grow as an additional 4 million borrowers are approaching default status.

#7 For the first time in about 5 years, the Department of Eduction “will resume collections of its defaulted federal student loan portfolio”.  This is going to put additional financial stress on millions of U.S. households…

The U.S. Department of Education today announced its Office of Federal Student Aid (FSA) will resume collections of its defaulted federal student loan portfolio on Monday, May 5th. The Department has not collected on defaulted loans since March 2020. Resuming collections protects taxpayers from shouldering the cost of federal student loans that borrowers willingly undertook to finance their postsecondary education. This initiative will be paired with a comprehensive communications and outreach campaign to ensure borrowers understand how to return to repayment or get out of default.

#8 The average credit score in the United States just dropped at the fastest pace since the Great Recession…

America’s credit score just took its biggest hit since the 2008 crash.

The average FICO score in the US has dropped to 715 from 717 — the largest one-year drop since the Great Recession, according to new data from the credit-rating giant FICO.

#9 U.S. consumers are eating out less, and as a result restaurant chains all over the country are in financial distress…

Once rapidly growing commercial marvels, casual dining chains — sit-down restaurants where middle-class families can walk in without a reservation, order from another human and share a meal — have been in decline for most of the 21st century. Last year, TGI Fridays and Red Lobster both filed for bankruptcy. Outback and Applebee’s have closed dozens of locations. Pizza Hut locations with actual dining rooms are vanishingly rare, with hundreds closing since 2019.

According to a February survey by the market research firm Datassential, 24 percent of Americans say they are having dinner at casual restaurants less often, and 29 percent are dining out less with groups of friends and family.

#10 U.S. consumers are visiting shopping malls a lot less than they once did, and as a result many mall retailers are going belly up…

Merry Go Round, Bon-Ton, Lord & Taylor, The Limited, Loehmann’s, Bonwit Teller, Chess King, and Anchor Blue are just a few once-successful clothing retailers that no longer exist.

Now, a once-trendy fashion/clothing retailer finds itself having to make massive cuts and shut down 100s of stores in a fight to avoid bankruptcy.

#11 U.S. consumers are not spending as much money at hair salons, and Bloomberg is telling us that this is an indicator that a recession is coming…

Stylists from Manhattan to rural New Hampshire are seeing regular clients start to skip cuts and blowouts. In from the Maine town of Brewer, hairstylist Alyssa Dow said customers are choosing cheaper, “more low-maintenance” looks—and tipping less. In affluent Longmeadow, Massachusetts, where “people don’t like to walk around with roots” showing, clients who previously got color every two or three weeks are stretching it to four or five, citing the “political situation” and implying they’ve lost money in the stock market, said Michelle LaValley. “They’re cutting back in other areas as well, so it’s not just us,” said the salon owner, who has 28 years in the business. The wider pullback in spending seems to go beyond the general grumpiness that accompanied the so-called vibecession that started years ago when inflation rose, interest rates spiked and yet the US kept growing.

#12 According to the Fed, U.S. consumers are becoming more concerned about inflation and unemployment…

The central bank’s monthly Survey of Consumer Expectations showed that respondents saw inflation a year from now at 3.6%, an increase of half a percentage point from February and the highest reading since October 2023.

Along with concerns over a higher cost of living came a surge in worries over the labor market: The probability that the unemployment rate would be higher a year from now surged to 44%, a move up of 4.6 percentage points and the highest level going back to the early Covid pandemic days of April 2020.

Right now, economists all over the country are arguing about whether a recession is ahead of us or not.

But to millions of hard working Americans, it feels like a recession has already begun.

If you are currently experiencing financial stress, I want you to know that you aren’t alone.

Countless others are in the exact same boat, and the outlook for the months ahead is not promising at all.

*  *  *

Michael’s new  book entitled “10 Prophetic Events That Are Coming Next” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.

Tyler Durden Thu, 04/24/2025 - 14:45

North Korean Missile Used In Deadly Russian Attack On Kiev, Ukraine Claims

North Korean Missile Used In Deadly Russian Attack On Kiev, Ukraine Claims

A Ukrainian official speaking to Reuters Thursday has claimed that the missile that killed at least nine people in a major Russian aerial attack on Kiev overnight was a North Korean KN-23 (KN-23A) ballistic missile.

A residential building, factory, and cars were set on fire in the wake of the attack, which included a number of missiles and drones. Emergency crews were digging through rubble looking for victims throughout Thursday. At least one building was simply obliterated, suffering a direct hit by a powerful warhead. 

Anton Gerashchenko, a former adviser to Ukraine's minister of internal affairs, offered as 'proof' footage which shows a fast-moving, large missile falling on the city. However, it remains anything but clear from the video precisely what kind of missile it was, much less who produced it.

"The weapon that killed at least eight people in a major Russian aerial attack on Kyiv overnight was a North Korean KN-23 (KN-23A) ballistic missile, a Ukrainian military source told Reuters on Thursday," Reuters cited.

"The missile struck a residential building in the Sviatoshynskyi district west of Kyiv's center," the unnamed source described. While it's anything but clear from mere video or photographic evidence what kind of missiles were use on Kiev overnight, Russia and North Korea's deepening defense relations have been on full display since last summer.

Not only has Pyongyang sent some 10,000 of its troops to help liberate Kursk region, but huge amounts of artillery ammo has reportedly been shipped, based on a 2024 treaty.

And last year the US Defense Intelligence Agency (DIA) produced a report which said, "Analysis confirms that Russia used ballistic missiles produced in North Korea in its war against Ukraine. North Korean missile debris was found throughout Ukraine, according to an unclassified report released today by the Defense Intelligence Agency."

"Through careful analysis of open-source imagery, DIA analysts confirms the debris found in Kharkiv on Jan. 2, 2024 is missile debris from a DPRK short-range missile," the DIA continued in May of 2024. "The report provides a comparative analysis of publicly available images of North Korean missile debris and known North Korean missiles. The report shows that the missile debris in Ukraine is almost certainly of a North Korean ballistic missile."

BBC has picked up on the allegations that a North Korean missile was used to attack a European capital:

So US intelligence has strongly suggested that it is indeed possible Russia is using North Korean-made ballistic missiles on the Ukrainian capital. Zelensky has meanwhile used this information to say that there is an 'axis' of hostile forces and enemies of the West warring against Ukraine.

Tyler Durden Thu, 04/24/2025 - 14:25

Institutions Break Up With Ethereum But Keep ETH On The Hook

Institutions Break Up With Ethereum But Keep ETH On The Hook

Authored by Yohan Yun via CoinTelegraph.com,

Ethereum is entering one of its most precarious periods since its inception. Usage on the base layer is plummeting, core metrics are nearing multi-year lows, and even co-founder Vitalik Buterin is proposing a radical architectural overhaul. 

Institutions aren’t waiting to see how it plays out. Blockchain data shows that long-time supporters such as Galaxy Digital and Paradigm have been slashing their Ether holdings in recent weeks. 

So far in April, Ethereum’s base-layer activity has continued to collapse. Ethereum’s network fees are dropping, and inflation has been rising. Though layer-2 networks continue to develop, they’re cannibalizing the base layer’s value capture.

But the story isn’t entirely about Ethereum’s collapse. Some whales are treating this downturn as a rare buying opportunity. Even those who are selling Ether can’t fully let it go.

Ethereum gets dumped by institutions, but for how long?

Institutions are dumping Ethereum, but it’s the ex they keep checking on. It’s not entirely out of the picture — just benched while they explore options like Solana.

In recent weeks, blockchain analysts on the lookout for large crypto movements spotted several institutions moving ETH out of their tagged wallets, likely to sell. Lookonchain reported that Galaxy Digital deposited 65,600 ETH ($105.5 million) to Binance. The investment firm’s Ether exposure rose to as high as around 98,000 coins in February, but that has dropped to almost 68,000 ETH at the time of writing, Arkham data shows.

Galaxy dumps Ether, but not all of it. Source: Arkham

Galaxy’s holdings may have declined in recent weeks, but they’re still higher compared to the start of the year. Its Ether holdings reflect a broader trend seen in Ethereum-based investment products. According to CoinShares, ETH funds saw $26.7 million in outflows over the past week, bringing total outflows to $772 million over eight weeks. However, year-to-date flows remain positive, with $215 million in net inflows. 

As Galaxy trimmed its Ether holdings, it also withdrew 752,240 SOL ($98.37 million), Lookonchain reported. Ethereum lost considerable momentum to Solana, which became the chain of choice during the memecoin casino frenzy that dominated much of 2024 and early 2025. While that eventually cooled amid rampant scams, bots and low-quality tokens, it also served as a technical showcase for Solana — proving its ability to process massive transaction volumes without major fee spikes or outages.

Paradigm is another investor that has cut back on Ether. On April 21, it moved 5,500 ETH ($8.66 million) to Anchorage Digital. Paradigm transferred around 97,000 ETH (around $301.57 million) to Anchorage from January 2024, which was then moved to centralized exchanges, as onchain analyst EmberCN pointed out.

Paradigm Capital held about 236,000 ETH in 2019 but holds 2,873 ETH on April 23. Source: Arkham

“While institutional investors initially bought into the ‘ultra-sound money’ narrative, they’re now facing a reality where decreasing protocol revenue and weakening tokenomics create legitimate concerns,” Jayendra Jog, co-founder of Sei Labs, told Cointelegraph.

Ethereum returns to net inflationary state

Ether deflation has been an attractive selling point to Ethereum investors. It was integrated into the network through two major upgrades. First, the London hard fork of August 2021 introduced Ethereum Improvement Proposal 1559, which partially burns transaction fees. Then in the Merge upgrade of September 2022, Ethereum became a proof-of-stake network and drastically cut new token issuance.

Ether’s supply consistently decreased following the Merge until April 2024, when Ether’s inflation began to accelerate. By early February 2025, the total ETH supply had surpassed its Merge level.

Ether’s total supply is approximately 186,705 ETH higher than it was at the time of the Merge. Source: Ultra Sound Money

Part of Ether’s inflation has been due to dropping fees, which results in less Ether burned. According to data from IntoTheBlock, Ethereum collected 1,873.52 ETH in fees from April 14 to April 21. That’s slightly higher than the 1,697.61 ETH in fees from the week starting on March 17, which was the lowest amount of fees collected (measured in ETH) since July 31, 2017.

Ethereum base layer’s fees drop to 2017 levels. Source: IntoTheBlock

Buterin’s radical RISC-V proposal for Ethereum

On April 20, Buterin proposed the RISC-V instruction set to substitute the current Ethereum Virtual Machine contract language, aiming to improve the speed and efficiency of the network’s execution layer. Some view the proposal as a white flag on the existing architecture.

Source: Rooter

“Vitalik’s RISC-V proposal is essentially an acknowledgment that the EVM’s fundamental architecture has reached its limits. When Ethereum’s founder proposes replacing the core VM that underpins the entire ecosystem, it signals not evolution but recognition of a design limitation that can’t be incrementally improved,” Jog said.

Cointelegraph has reached out to the Ethereum Foundation and will update this article when it answers.

The proposal follows a leadership shuffling in the Ethereum Foundation following rising complaints on the project’s direction. 

Could Ethereum be the one that got away?

Part of Ethereum’s struggles has been attributed to its rollup-centric approach to scaling its network. The idea was to build layer-2 scaling networks that would offload the transactions from the base chain but still utilize its security. That has alleviated congestion issues during times of high network demand but has also created new problems of its own, such as dropping Ether burns and fragmentation of the Ethereum ecosystem.

But there is an increased focus on layer-1 scaling, according to Tomasz Stańczak, the new co-executive director of the Ethereum Foundation. Stańczak said on X that the Ethereum Foundation will shift its focus to near-term goals, such as layer-1 scaling and layer-2 scaling support.

Source: Tomasz Stańczak

Some whales have taken advantage of Ethereum’s cheaper price tag. On April 23, Lookonchain identified two wallets accumulating millions of dollars worth of ETH. The blockchain monitor identified another wallet on April 22 that has accumulated over $100 million in ETH since Feb. 15. Ether is currently down from the plus-$4,000 it reached in December but rose over 10% on April 23 to over $1,800. 

In a recent client letter, Standard Chartered Bank slashed its 2025 price estimate for Ether from $10,000. However, for whales accumulating at current levels, upside potential remains, as the bank still predicts a year-end target of $4,000.

Geoff Kendrick, the bank’s head of digital assets research, attributed the more cautious outlook to Ethereum’s structural decline, noting that the layer-2 networks designed to improve scalability are now extracting much of the fee revenue once captured by the base layer.

Tyler Durden Thu, 04/24/2025 - 14:05

Ugly, Tailing 7Y Auction Sees Lowest Foreign Demand In Over 3 Years

Ugly, Tailing 7Y Auction Sees Lowest Foreign Demand In Over 3 Years

The week's last coupon auction is in the books, and perhaps because people are just tired of dealing with the non stop headline ping pong, it was also the ugliest.

The sale of $44BN in 7Y paper priced at a high yield of 4.123%, down 11bps from March and tailing the When Issued 4.121% by 0.2bps; this was the second straight tail and follows 6 consecutive stop throughs.

The bid to cover was largely unchanged from last month, printing at 2.55, up from 2.53 in March but below the six-auction average of 2.67.

But it was the internals where once again all the action was: While Directs were a high 25.44%, but not abnormally high, and in fact the number was down from 26.1% last month, it was once again Indirects that was the weakest link: foreign buyers took down just 59.3% of the full allotment, down from 61.2% in March and the lowest since December 2021. Dealers were left holding 15.3%, which actually was the highest going back all the way to May 2024.

Overall, this was a rather weak auction, not just the tail but more ominously, the continued decline in foreign demand. The flip side, of course, is that if Indirects really collapse the Fed will have no choice but to step in and start monetizing coupons. All it will need is an excuse, and at a time when Powell is feuding with Trump why the Fed should not step in, the outcome will likely be quite hilarious.

Tyler Durden Thu, 04/24/2025 - 13:28

Judge Halts Order Demanding Details On Efforts To Return Abrego Garcia To US

Judge Halts Order Demanding Details On Efforts To Return Abrego Garcia To US

Authored by Zachary Stieber via The Epoch Times,

The federal judge overseeing the case of Kilmar Abrego Garcia, an immigrant deported to his home country despite a court order, has paused her order demanding details on the U.S. government’s efforts to facilitate his return to the United States.

U.S. District Judge Paula Xinis on April 23 paused her order for one week. She did not detail the rationale behind the pause but wrote that it was entered “with the agreement of the parties.”

Lawyers for Abrego Garcia, an immigrant from El Salvador, and the government did not immediately respond to requests for comment.

Xinis previously ordered the government to facilitate the return of Abrego Garcia to the United States. When the government declined to provide details, she ordered officials to file daily updates with the court on its efforts.

The judge had also granted the plaintiff’s request for expedited discovery on the matter, including the terms of the agreement the United States reached with the Salvadoran government to house immigrants deported from America.

Xinis on Tuesday said that the U.S. government needed to address outstanding discovery requests, finding that the Trump administration has shown a “willful and bad faith refusal to comply with discovery obligations.”

“For weeks, Defendants have sought refuge behind vague and unsubstantiated assertions of privilege, using them as a shield to obstruct discovery and evade compliance with this Court’s orders,” she wrote in an order.

The government then filed a motion to stay that ruling. It was filed under seal, meaning it is not available to the public.

Lawyers for Abrego Garcia filed a sealed response to the motion.

Xinis referenced both sealed filings while entering the pause.

Garcia, who illegally entered the United States in 2011, was arrested in 2019. An immigration judge concluded that evidence showed he was a member of the MS-13 gang. A different immigration judge ordered Garcia deported but also issued a withholding of removal, which prevented the U.S. government from deporting him to his home country.

Garcia continued living in the United States until he was taken into custody by immigration agents on March 12. He was soon deported to El Salvador.

U.S. officials have said that the deportation there was a mistake because the withholding order was not listed on the flight manifest. They have more recently said the deportation was allowed because MS-13 was designated a terrorist group by President Donald Trump. Lawyers for Abrego Garcia say he should not have been deported to El Salvador and that he should be brought back to the United States to be with his wife, a U.S. citizen, and children.

In their last publicly available status report, dated April 21, U.S. officials said that the Salvadoran government told them that day that Abrego Garcia is being held at the Centro Industrial penitentiary facility in Santa Ana and is “in good conditions and in an excellent state of health.”

Tyler Durden Thu, 04/24/2025 - 12:40

Stocks Extend Gains After Trump Says "They" Are Having Meetings With China

Stocks Extend Gains After Trump Says "They" Are Having Meetings With China

US equities extended their gains after President Trump told reporters that US was having daily ongoing talks with China.

"Well, they had a meeting this morning... we may reveal it later, but they had meetings this morning, and we've been meeting with China."

Trump added, when asked for more details:

"...it doesn't really matter who 'they' are."

This lifted Nasdaq to a 2.5% gain on the day...

The S&P is at a key technical resistance level once again...

...and has rallied above the first CTA buy trigger:

  • Short term: 5595

  • Med term: 5775

  • Long term: 5479

If it closes here, we could start seeing cascade of chasing higher.

How long until China denies... again?

Tyler Durden Thu, 04/24/2025 - 12:38

Trump To Go After Democrat Fundraising Juggernaut ActBlue In Presidential Memorandum: Report

Trump To Go After Democrat Fundraising Juggernaut ActBlue In Presidential Memorandum: Report

President Trump is expected to sign a presidential memorandum on Thursday targeting major Democrat online donation platform, ActBlue - specifically cracking down on foreign contributions in American elections, Politico reports, citing a person Trump admin leaker familiar with the policy.

Photo: Alexander Grey/Unsplash; ActBlue

The crackdown is expected to involve Attorney General Pam Bondi's office.

Related:

According to Elon Musk, "ActBlue is currently under investigation for allowing foreign and illegal donations in criminal violation of campaign finance regulations. This week, 7 ActBlue senior officials resigned, including the associate general counsel."

For starters, ActBlue did not require a card verification value (CVV) for donations, according to Rep. Bryan Steil (R-Wis.), chairman of the House Administration Committee, who sent letters and information collected over the past year to Texas, Virginia, Arkansas, Florida, and Missouri for further investigation into ActBlue.

“The final analysis produced a set of anomalous donor profiles, ranked by the severity of the inconsistencies. In reviewing this analysis, it became clear there is suspicious activity occurring that warrants further review,” the letter stated. 

In December 2023, Texas Attorney General Ken Paxton opened an investigation into ActBlue alleging the platform "may enable fraud," and that "straw donations" were systematically being made using false identities through untraceable payment methods.

Paxton said in an Aug. 8 statement ActBlue has cooperated with the Texas investigation and will now require CVV codes for credit card contributions.

ActBlue targets small-dollar donations, the Hill first reported, and has been an integral part of the Democratic fundraising structure, collecting an estimated $1.5 billion from about 7 million donors.

While that influx of cash was split among nearly 19,000 campaigns, an excessive amount has gone to the highest profile races. In just the first few days of the Harris campaign, for example, donors gave her $200 million through the platform, per ActBlue’s account on the social platform X, the Hill reported. -Fox News

In his letter to attorneys general, Steil said whistleblowers reported “anomalies” in Federal Election Commission donor records.

That prompted a data analysis of records spanning 14 years, which looked for suspicious trends by comparing donation patterns to open-source consumer data, voter rolls, and political profiling databases.

The ensuing investigation included consultations with the election commission, the Financial Crimes Enforcement Network, and the Office of Foreign Assets Control, according to Steil’s letter.

Findings included donations that were significantly disproportionate to a person’s net worth or previous giving history; uncharacteristic donations from party-affiliated registered voters that suddenly contributed to candidates of the opposing party; and unusually frequent donations from the elderly and first-time donors.

Similar concerns were raised in March 2023 by O'Keefe Media Group, which reported that some senior citizens in Maryland and elsewhere denied making the donations attributed to them in Federal Election Commission records.

Donors contacted by O'Keefe Media Group said they made political contributions to ActBlue but had no knowledge of making what amounted to thousands of donations—with some totaling more than $200,000—in a few years.

In December, Steil announced that documents turned over by ActBlue showed that the company had implemented new policies to "automatically reject donations that use foreign prepaid/gift cards, domestic gift cards, are from high-risk/sanctioned countries, and have the highest level of risk as determined," but said there "is still more work to be done."

Tyler Durden Thu, 04/24/2025 - 12:20

Trump Says Could Meet Putin 'Shortly After' Upcoming Middle East Trip

Trump Says Could Meet Putin 'Shortly After' Upcoming Middle East Trip

President Donald Trump has said he could meet with Russia's Vladimir Putin shortly after his upcoming trip to the Middle East in May, where's he expected to visit Saudi Arabia, Qatar and the United Arab Emirates.

The Gulf tour, set for May 13 through the 16th, will be the first such Mideast trip of Trump's second term. TASS reported this week, "In March, Russian presidential press secretary Dmitry Peskov told TASS that Trump and Russian President Vladimir Putin could meet in Saudi Arabia at some point."

Via Reuters

While there are no clear, concrete plans for this, Trump was asked by reporters Wednesday about the possibility of talks with Putin while in Saudi Arabia. 

That's when Trump responded, "It’s possible, but most likely not. I think we’ll meet with him shortly thereafter." But he didn't offer any details of when or where this could happen.

US special envoy Steven Witkoff has also recently suggested Saudi Arabia as a venue for a potential future Trump-Putin meeting.

The Kremlin has welcomed Trump administration suggestions that Ukraine finally give up claims to Crimea. Trump addressed Zelensky in a Wednesday social media statement and said "Crimea was lost years ago" and that he should face reality and give it up for the sake of peace.

Putin's office responded by saying, "This fully corresponds with our understanding and with what we have been saying for a long time."

But Trump had some strong words for Moscow on Thursday, following a deadly overnight Russian ballistic missile and drone attack on Kiev, which killed at least ten people.

"I am not happy with the Russian strikes on KYIV," Trump posted on Truth Social. "Not necessary, and very bad timing. Vladimir, STOP! 5000 soldiers a week are dying. Lets get the Peace Deal DONE!"

The Kremlin has laid out that it is willing to stop the finding, and that peace can be achieved if Ukrainian forces exit the four annexed territories of the East. 

Zelensky has shown no signs that he's willing to do this, also as he's citing the national constitution to say that not even Crimea can legally be given up. At this point, any earlier progression toward peace appears stalled. Can a Putin-Trump face to face meeting lead to a breakthrough?

Tyler Durden Thu, 04/24/2025 - 11:40

Fake It Till Trump Makes It

Fake It Till Trump Makes It

By Michael Every of Rabobank

Fake it till Trump makes it

Markets were thrilled this week as Bloomberg reported US Treasury Secretary Bessent saying 145% US tariffs on China were “unsustainable” and a trade deal would be done soon; yet people *in the room* say that didn’t capture his real message - that China would see *it* needed to move first. Markets were just as excited by President Trump saying those tariffs would come down “substantially” but missed the context that this was *after a deal*, not as a unilateral US step.    

The Wall Street Journal caused another market surge in reporting ‘White House Considers Slashing China Tariffs to De-Escalate Trade War: Levies could be cut by more than half in some cases although Trump hasn’t yet made final decision’. Within hours, one of the authors tweeted: “UPDATE: Admin official said Trump wouldn’t act unilaterally and would need to see action from China. People close to admin said Trump has plenty of room to cut tariffs without changing overall picture. “It would be kind of a pressure valve release without actually doing anything.”” The original headline was still up at time of writing over 12 hours later.

The Financial Times claims Trump’s “latest retreat” is on auto tariffs. An hour later, the president denied it. Again, the story was still up unchanged at time of writing.

Bloomberg this morning has the top headline “New Rate – Trump: China May Get New Tariff Rate Soon.” If you listen to what he said, he’s negotiating with 90 countries, and those that strike deals in the next 2-3 weeks will get a lower rate, while those that don’t will get one imposed… and China could be in either camp, the implication being it depends on what *it* does.

Moreover, not being reported prominently at all in the financial press, Bessent gave a speech at the IIF yesterday in which he stated, “Everywhere we look across the international system today, we see imbalance… My goal… is to outline a blueprint to restore equilibrium to the global financial system and the institutions designed to uphold it.” While he stressed, “America First does not mean America alone”, he made clear the US seeks “expanded leadership in international institutions like the IMF and the World Bank… to restore fairness to the international economic system [which faces] the stark reality of large and persistent US deficits as a result of an unfair trading system,” a status quo which is, “not sustainable for the US, and ultimately,… not sustainable for other economies.” 

He said the US is eager to work with the IMF and World Bank, “so long as they can stay true to their missions. And under the status quo, they are falling short… We must make the IMF the IMF again… [It] must be a brutal truth-teller and not just to some members. Today, the IMF has been whistling past the graveyard. Its 2024 external sector report was entitled, “Imbalances Receding.” This Pollyannaish outlook is symptomatic of an institution more dedicated to preserving the status quo than answering the hard questions. Here in the US, we know we need to get our fiscal house in order… but we will not abide the IMF failing to critique the countries that most need it, principally surplus countries… the IMF needs to call out countries like China that have pursued globally distorted policies and opaque currency practices for many decades.” 

Bessent also said the World Bank “should no longer expect blank cheques for vapid, buzzword-centric marketing accompanied by half-hearted commitments to reform… Treating China, the second-largest economy in the world, as a developing country is absurd.”

In Q&A, he underlined the US wants to work with China to help it shift to consumption as it moves back to manufacturing: but if China won’t … join, or decouple, the dots. He welcomed European defence spending but laughed at the Euro being a global reserve currency, wishing them well with the consequences that would come with it on top of the appreciation just seen. He also stressed, “I think Wall Street can continue doing well. But I think it’s Main Street’s turn to share in the prosperity,” implying he wants more lending by smaller banks to make the latter happen.

Elsewhere, Secretary of State Rubio was singing the same tune, the Defence Secretary from his, as the US Trade Representative has just done too, hammering home the US point from all sides.

In short, as central bank “Think of the asset prices!” control of markets is replaced by economic statecraft “Think of the national security!” control of the economy, we are seeing normative financial journalism determined to fake-it-till-Trump-makes-it what they want it to be - “because markets again.” 

Yes, the White House worries about markets. If things get ugly enough, they offer a verbal carrot. No, Trump is not faking it, and he did not just fold. The US grand macro strategy is not changing. As wiser heads at the Wall Street Journal note, ‘Markets Think They Hold All the Cards Over Trump’, before adding, “The plunge in stocks, bonds, and the dollar matter to Trump. But there’s no assurance that he will be ruled by them.”

Yet with a de facto US-China trade embargo in place, the US economy could see shortages on shelves within weeks and/or of price rises; and even if there is a tariff U-turn, logistics would then be overwhelmed, true even if the Fed’s Beige Book overnight was typically beige in capturing those emergent risks. That’s as fake-it-till-Trump-makes-it MAGA thinking that a stronger US dollar would provide offset to any tariffs falls far short of reality. That might see some movement.

However, even a 60% tariff for China would mean the maximalist US position previously seen as unthinkable would be celebrated with relief. Moreover, those sneering at US assets as ‘uninvestable’ don’t see that these scarring experiences also mean real economy firms are scrambling to set up new supply chains in the US or outside China and will continue to do so even if tariffs go to 60% - when markets will be rallying while missing the longer-term big picture. Nobody in manufacturing assumes this goes away via a debunked Bloomberg, WSJ, or Financial Times headline. Where supply chains sit 3 to 5 years from now is open to question. Wheeling and dealing is thus underway:

  • 12 US states have sued Trump, saying tariffs have "brought chaos to the American economy.” They may bring chaos to a US constitution that only exists due to unity over the need for tariffs.
  • As allegations of China’s support for Russia emerge, the European Parliament is in the ‘final stages’ of talks with China to remove sanctions on it: apparently “free trade” trumps all for some. Good luck with that, as Bessent would likely say with a smile.
  • The US has made a final peace offer to Ukraine --which gets security guarantees from Europe only, and the potential ability to join the EU, not NATO-- and to Russia --which gets to keep most of what it’s taken for sanctions relief and US energy cooperation-- or it will walk away. Ukraine, supposedly to sign a minerals deal today again, has perhaps has already rejected it.
  • The US is reportedly telling Iran it will process nuclear fuel for it under a new deal, again bringing it in from the cold on sanctions. If it doesn’t agree, does the US opt for JCPOA 2.0, and then expanded Abraham Accords and the India-Middle East-Europe Economic Corridor, or war?
  • In response to a terror attack in Kashmir, India has cancelled visas for all Pakistanis; closed the border crossing; suspended the Indus Waters Treaty, which Pakistan has in the past stated could amount to an act of war; and rumours fly of possible Indian military action.
  • The ex-head of the WEF allegedly fiddled with the organisation’s Global Competitiveness Index ratings -- the data were faked by Schwab while the WEF were making it -- as well as engaging in financial and moral impropriety; and
  • The UK has decided to approve attempts to dim the sun to control climate change within weeks: it’s called British summer. Really – on both fronts. 

What a year 2025 is proving to be.

Tyler Durden Thu, 04/24/2025 - 11:20

Peace Will Be Achieved When Ukraine Withdraws From 4 Annexed Territories: Peskov

Peace Will Be Achieved When Ukraine Withdraws From 4 Annexed Territories: Peskov

Kremlin spokesman Dmitry Peskov has filled in a little bit more of the details in the wake of a Financial Times report issued Tuesday which said President Putin is offering to freeze the current battle lines for the sake of a peace deal.

The significant concession came as a surprise to many, who asked what's the catch. Peskov in Wednesday comments filled in the missing information, stressing that peace can be achieved if Ukrainian forces fully withdraw from territory in the four oblasts Moscow annexed in 2022.

Via AFP

Financial Times wrote that "The proposal is the first formal indication Putin has given since the war’s early months three years ago that Russia could step back from its maximalist demands to end the invasion."

Peskov in the fresh statement emphasized that Russia's claim to the territories of Donetsk, Luhansk, Kherson, and Zaporizhzhia remain enshrined in its constitution.

He was asked directly whether a Ukrainian withdrawal would end the war, to which he responded, "If Ukraine withdraws its troops from these four regions, then yes."

"According to the results of the referendums, these territories have entered the administrative borders of Russia. From our point of view, this is a de jure and de facto situation," Peskov said.

But so far Zelensky hasn't even been willing to cede Crimea, despite the Russian-speaking population of the strategic peninsula long being firmly in Russian hands, also with its naval Black Sea fleet being stationed there since Soviet Times and throughout recent history.

President Trump said Wednesday that Ukraine "lost" Crimea years ago, and so it is "not even a point of discussion". But Washington's demands that Ukraine finally compromise on the issue has been rejected by Zelensky.

Peskov commented on this too, expressing total agreement with Trump. "This completely corresponds with our understanding, which we have been saying for a long time," he said.

Via DW

If the Ukrainian government did finally accede to Russia's demands, it would lose 20% of its total territory, given this is about how much Russian forces currently occupy.

The US is also said to currently be offering Ukrainian neutrality vis-a-vis NATO, alongside international recognition of Crimea as Russian territory. But talks have still not gotten off the ground, and the Trump admin is ramping up the pressure on Zelensky especially.

Tyler Durden Thu, 04/24/2025 - 11:00

New Poll Data Confirms The Democrats' Worst Fears

New Poll Data Confirms The Democrats' Worst Fears

Authored by Matt Margolis via PJMedia.com,

Can you believe it? The Democrats, once the supposed champions of the working class, have exposed themselves as nothing more than elitist snobs who couldn't care less about real Americans. Recent polling has confirmed what conservatives have known all along: the Democratic Party is now the domain of overeducated, snobby, wealthy liberals who look down on anyone who doesn't share their "enlightened" worldview.

Remember when Democrats at least pretended to care about the working class? Those days are long gone, replaced by a woke agenda that caters to the most unhinged elements of society. Now, they're more interested in slobbering over MS-13 gangbangers than addressing the real concerns of everyday Americans.

Democratic strategist Doug Sosnik didn’t sugarcoat the situation during a conversation with Mark Halperin on 2WAY. The latest poll numbers, he explained, confirm what many on the Left have feared for months: the Democratic Party is in serious trouble. In a blunt, unflinching analysis, Sosnik laid out a series of hard truths that paint a grim picture of the party’s standing with American voters and underscore just how deep the erosion has become.

First, Sosnik pointed to the seismic shift in party affiliation. 

“The electorate in 2024 was 6% less Democratic than compared to four years ago,” Halperin noted, asking if that level of movement was historically significant. Sosnik didn’t mince words: “The shift is significant, but more importantly… I can’t remember the last time that people who voted on Election Day — the majority, uh, plurality of them — were Democrats.” He continued, “It shows a real erosion for the Democratic Party,” noting that many of the Democrats who backed Biden in 2020 simply didn’t show up this time around.

That drop-off was made even more glaring when coupled with the latest favorability ratings.

“Lowest net favorable rating since the ’90s,” Halperin remarked, prompting Sosnik to outline a trifecta of disasters driving the collapse in support: inflation, immigration, and cultural arrogance.

On the economic front, Sosnik admitted, “We had the worst inflation in America since the early 1980s.” 

He added that by the time Election Day arrived, “everything… was on average 20% higher than when Biden took office.” That kind of economic pain, Sosnik argued, doesn’t just dent a party; it shatters its credibility.

But the damage didn’t stop there. 

Immigration, Sosnik said, became both a practical problem and a symbol.

“There’s a concern that people, uh, for their own personal… safety and security… the immigration issue was sort of both a real problem for Democrats, but also… a proxy for just a general sense that there was a lawlessness with a Democratic administration.” That perception of disorder extended into the cities, where “these big cities around America that were largely… governed by Democrats” seemed unable — or unwilling — to maintain control."

Then came the cultural disconnect, the sense that Democrats had abandoned everyday Americans in favor of elite ideologies.

“A lot of people in America in the middle of the country thought Democrats were looking down on them,” Sosnik said bluntly. He attributed part of that disconnect to “how they talked, issues they cared about, all the DEI programs.” The result? A broadening sense among voters that Democrats “weren’t competent to govern.”

Taken together, the conversation was less a diagnosis than an autopsy. The Democrats aren’t just facing a messaging problem; they’re grappling with a wholesale rejection from swaths of the electorate they once considered safe. The warnings have been mounting for years. Now, with favorability cratering and voters fleeing, the party is watching those warnings come to life.

Tyler Durden Thu, 04/24/2025 - 10:40

PepsiCo Prints "Rare" Earnings Miss As Volatility & Uncertainty Mount

PepsiCo Prints "Rare" Earnings Miss As Volatility & Uncertainty Mount

It's rare for PepsiCo to miss Bloomberg Consensus earnings estimates. Still, the soda and snack giant has stumbled amid growing uncertainty surrounding the trade war and waning consumer sentiment—factors that ultimately prompted the company to lower its full-year earnings outlook.

The maker of Pepsi beverages and Frito-Lay snacks missed the consensus estimate, with Barclays analyst Lauren Lieberman calling the miss "exceedingly rare to see PEP results fall short of consensus expectations and while the miss was just 1c, we think it exemplifies just how challenging things are at the company today given in the past decade​-​plus, there's always been a way to deliver the bottom line." 

Here's a snapshot of Pepsi's 1Q25 earnings:

  • Core EPS: $1.48 (vs. $1.61 YoY), slightly below Bloomberg Consensus expectations of $1.49

  • Reported EPS: $1.33 (vs. $1.48 YoY), missed the estimate of $1.48

  • Operating Profit: $2.58B, down 4.9% YoY, missed $2.78B estimate

  • Revenue: $17.92B, down 1.8% YoY, beat $17.77B estimate

  • Organic Revenue Growth: +1.2% (vs. +2.7% YoY), above +0.53% estimate

  • Capex: $603M, below $657M estimate

  • Convenient Foods Volume: -3%

Regional Breakdown:

  • Foods North America: $6.21B

  • Latin America Foods: $1.66B

  • EMEA: $2.39B

  • International Beverages: $759M

  • PepsiCo Beverages North America: $5.88B (vs. $5.87B YoY, beat $5.83B estimate)

"As we look ahead, we expect more volatility and uncertainty, particularly related to global trade developments," CEO Ramon Laguarta stated. 

The common theme among US companies has been a reduction in or complete withdrawal of guidance (see AA) due to tariff uncertainty. Pepsi slashed its EPS outlook for the year due to mounting macroeconomic headwinds but maintained its organic revenue growth forecast and shareholder return targets.

Here's more color on the changing outlook:

  • Core EPS: Now expected to decline 3% YoY (previously expected a low-single-digit increase)

  • Core EPS (constant currency): Now flat YoY (previously expected mid-single-digit growth)

  • Organic Revenue: Still expects a low-single-digit increase

  • Tax Rate: Core annual effective tax rate expected at ~20%

  • Shareholder Returns: Still targeting ~$8.6 billion in total cash returns for the year

Goldman analysts Bonnie Herzog and Ethan Huntley, along with others, provided clients with their initial summary of the mixed earnings report, indicating a "Q1 topline beat but a slight EPS miss - FY25 EPS guide lowered given tariffs & macro pressures." 

Here's more color on their take:

Investor expectations heading into PEP's Q1 print were quite low, dragged largely by ongoing concerns over the health of the consumer which have pressured consumption trends - as seen in recent scanner data trends, particularly for FLNA. And as expected, PEP's Q1 results were soft with +1.2% organic revenue growth (vs our/cons ests of +0.9%/+0.6%), though the planned timing and phasing of certain productivity initiatives weighed on core operating margins - leading to a slight EPS miss at $1.48 (vs our/FactSet cons ests of $1.50/$1.49). Further, given expected higher supply chain costs related to tariffs, elevated macroeconomic volatility, and a subdued consumer backdrop, PEP lowered its FY25 f/x neutral EPS growth to ~flat y/y (vs +MSD growth prior) but maintained its organic sales guidance of +LSD% (vs our/Visible Alpha cons ests of +2.5%/+2.3% ahead of the print). Surprisingly given the weaker dollar, PEP continues to expect a ~3pt headwind from f/x to impact reported net revenue and EPS growth and therefore expects core EPS growth of -~3% implying FY25 EPS of ~$7.92 (vs $8.16 last year, and vs our/FactSet cons est of $8.29/$8.26 into the print). Furthermore, PEP restated its financial segments this morning making it difficult to analyze their new segmented results vs expectations. However, PEP's PBNA segment delivered 1% organic sales (vs our/cons ests of +0.5%/-0.1%) and 14% operating profit growth and PEP's new PepsiCo Foods North America (PFNA, comprised of the former FLNA and QFNA) delivered -2% organic sales and -7% f/x neutral operating profit growth. While optically concerning, we think today's results could serve as a clearing event - helping to reset investor expectations at a much more realistic level. However, we expect the stock to underperform today.

Taking a step back, Q1 organic sales growth was up +1.2% (vs our/cons ests of +0.9%/+0.6%) - despite the benefits of an easier y/y compare (1Q24 organic sales growth of +2.7%, with vols -2%) - driven by healthy price/mix and relative strength internationally. As expected, the top-line growth continued to be driven by net price realization (+3% vs our +1.8% est), reflecting mgmt's continued efforts to offset inflationary cost pressures with strong revenue management actions. That said, organic volumes were under pressure, as expected, down -2% (vs our/cons ests of -0.9%/-1.5%) - and were sequentially weaker than Q4 (-1%).

By segment, PEP's PBNA segment delivered 1% organic sales (vs our/cons ests of +0.5%/-0.1%), with price mix of +2% and volumes down -1%. PFNA organic topline growth was down -2%, with price mix of +1% and volumes down -3%. Internationally, PEP's new International Beverages Franchise (IB Franchise) organic topline growth was up +7%, with healthy +5% volume growth and price mix of +2%. EMEA organic topline growth was up a solid +8%, driven by price mix of +16% with volumes -8%. Elsewhere, Latin America Foods (LatAm Foods) organic topline growth was up +3%, driven by price mix of +3% with volumes down -0.5%. Lastly, Asia Pacific Foods organic topline growth was down -1%, driven by healthy volumes of +3.5%, albeit offset by price mix (-4%). Moving down the line, gross margins were broadly flat y/y at 55.7% (vs our/cons ests of 55.8%/55.5%), while Op margins were down ~50bps y/y to 15.6% (vs our/cons ests of 15.7%/15.8%), as SG&A expenses as a % of sales were up ~60bps y/y to 40.1%. As a result, PEP delivered Q1 core f/x neutral EPS growth that was down -4% to $1.48 (vs our/cons ests of $1.50/$1.49).

Bottom Line - We maintain our Buy rating on PEP as we believe it remains well positioned given its strong brand portfolio (esp. Frito Lay) and long-term growth opportunities in Beverages, particularly given its impressive revenue growth management capabilities, its owned distribution network and superior supply chain, which ensures the right (& affordable) products are available when & where needed. Overall, we continue to believe PEP should be able to deliver sustainable average annual +MSD% organic sales growth in the next decade - despite some potential near-term headwinds.

Here's more commentary from other Wall Street desks (courtesy of Bloomberg):

Barclays (equal-weight), Lauren Lieberman

  • "It is exceedingly rare to see PEP results fall short of consensus expectations and while the miss was just 1c, we think it exemplifies just how challenging things are at the company today given in the past decade​-​plus, there's always been a way to deliver the bottom line," Lieberman writes

  • PEP's reduced annual EPS guidance reflects higher supply chain costs (tariffs); in prepared remarks, PEP also discussed upping commercial investments

  • PEP mentioned two new areas of focus for cost savings within the new Pepsi Foods North America division: "optimizing and right​-​sizing" the supply chain and the "go​-​to​-​market footprint"; increasing efficiencies in transportation & logistics

  • Both of these are "critical points" given its outsized investment in Frito over the past five years, which has generated a "disappointing ROI," according to Lieberman

JPMorgan (neutral), Andrea Teixeira

  • Expects negative stock reaction to the "sizeable net tariff impact" and macro/consumption volatility

  • It's the first time PEP misses EPS estimates in "many years"

  • Core EPS guidance lowered by a "very high magnitude" despite the company's plan to take mitigating actions

  • North America savory snacks volumes were down 4% in 1Q, worse than Teixeira's -3.5% estimate, and will likely "remain the key concern for investors as far as calling for a potential inflection given the several headwinds (low-income consumer under pressure, GLP-1, etc)"

Bloomberg Intelligence, Kenneth Shea

  • Higher-than-expected supply-chain costs related to global trade volatility were the "key factor" to 8% drop in 1Q adjusted EPS

  • Shea blames the "lingering weakness" in the PepsiCo Foods North America segment as the main reason for the EPS guidance cut

Piper Sandler (overweight), Michael Lavery

  • NA Food segment remains challenged, while organic revenue growth in international business continues to be healthy, growing 5% in the quarter, driven by beverages

  • Lavery said she expects to hear more about productivity savings progress and promotional outlook for the salty snack category on the company's earnings call

  • Also hopes to better understand what tariff assumptions are included in PEP's updated guidance

Additional headlines from the Pepsi CEO:

  • PEPSI CEO: WORKING ON 'RIGHT-SIZING' COST OF FRITO LAY PRODUCTS

  • PEPSI CEO: CONSUMERS IN CHINA, MEXICO 'HURTING A BIT'

  • PEPSI CEO ON DYE BANS: SHIFTING ENTIRE PORTFOLIO NATURAL COLORS

  • PEPSI CEO: TRANSITION TO NATURAL COLORS IN NEXT FEW YEARS

  • PEPSI CEO: EXPECTING LIMITED IMPACT IN US SNAP PROGRAM CHANGES

  • PEPSI CEO: DEVELOPING PROTEIN PRODUCTS, KEY FOR GLP-1 USERS

Proteins for GLP-1 users??

Tyler Durden Thu, 04/24/2025 - 10:20

US Existing Home Sales Weakest March Since Great Financial Crisis

US Existing Home Sales Weakest March Since Great Financial Crisis

Following an unexpectedly large jump in February (biggest in a year), existing home sales were expected to drop significantly in March, and they did. Existing home sales fell 5.9% MoM (considerably worse than the 3.1% MoM drop expected) reversing the upwardly revised 4.4% MoM rise in February, dragging sales down 2.4% YoY...

Source: Bloomberg

This is the weakest March sales pace since 2009... and biggest MoM drop since Nov 2022.

Source: Bloomberg

The drop in sales aligns perfectly with the lagged rebound in mortgage rates, which suggests the next two months will see an improvement before weakness resumes...

Source: Bloomberg

The median sales price increased 2.7% from a year ago to $403,700, a record for the month of March and extending a run of year-over-year price gains dating back to mid-2023.

Source: Bloomberg

Interestingly, new and existing (median) home prices are once again identical...

Source: Bloomberg

The gain in prices largely reflected more sales activity for homes priced above $1 million, NAR Chief Economist Lawrence Yun said on a call with reporters. However, he also noted that the size of the increase was relatively mild compared to wage growth.

Prices are rising even as more inventory comes onto the market from depressed levels. The supply of previously owned homes jumped 19.8% from a year ago to 1.33 million, the most for any March since 2020.

Sales declined in all four regions from the prior month, with the biggest drops occurring in the West and South.

Sales of existing single-family homes retreated 6.4%, while sales of existing condominiums were unchanged.

Properties remained on the market for 36 days on average last month, compared with 42 days in February

Finally, while home prices are at record highs, on a 'real' inflation adjusted basis (relative to gold, we mean), they are at 12 year lows...

If you had 129 ounces of gold right now, would you swap them for a 'used' house?

Tyler Durden Thu, 04/24/2025 - 10:11

Anduril Co-Founder Warns: U.S. Munitions Stockpile Would Last One Week In Hot Conflict

Anduril Co-Founder Warns: U.S. Munitions Stockpile Would Last One Week In Hot Conflict

The United States would deplete its munitions stockpile if it entered into genetic warfare against a global superpower, Anduril co-founder Trae Stephens warns.

Stephens, who co-founded of the cutting-edge defense startup alongside Palmer Luckey, dropped the chilling warning on Auren Hoffman’s World of DaaS podcast.

“The reality is, if we got into a hot conflict with a great power, we would run out of munitions in a week,” Stephens told Hoffman. “We’ve built these capabilities that are incredibly exquisite, incredibly custom, with really complicated supply chains.”

Stephens, who is also a partner at Peter Thiel’s venture capital fund Founders Fund, pointed out that the U.S. is struggling to supply Saudi Arabia with enough Patriot missiles to counter daily Houthi attacks, leaving the the Middle East Kingdom to seek out additional inventories from other nations due to limited availability.

  • FLASHBACK: Raytheon CEO Explains Why China Has US Military By The Balls

“What that means is, our partner nations, like Saudi Arabia, for example, which is fighting this ongoing conflict with the Houthis—they’ve got stuff being shot into their sovereign territory, creating havoc on a daily basis,” Stephens explained. “We cannot sell them enough Patriot missiles. They literally have to go to other partner nations and try to buy their inventory of Patriot missiles”

Stephens also highlighted that in cases like Ukraine, the U.S. is rapidly depleting both its own and available inventories of military capabilities to support the war effort, with limited resupply options, as manufacturers resort to calling retirees back to rebuild assembly lines.

“Then you see situations like Ukraine, where we deplete not only the available inventory but also our own inventory of the capabilities we’re sending to support the war effort, with no ability to actually resupply,” the technology executive said. “The Primes are literally calling people out of retirement to rebuild assembly lines to make some of these capabilities.”

The AP reported back in November 2024:

The wars in Ukraine and the Middle East are eating away at critical U.S. weapons stockpiles and could hamper the military’s ability to respond to China should a conflict arise in the Indo-Pacific, the top U.S. commander for that region said Tuesday. Head of U.S. Indo-Pacific Command Adm. Samuel Paparo cautioned Tuesday that the U.S. providing or selling billions of dollars worth of air defenses to both Ukraine and Israel is now impeding his ability to respond in the Indo-Pacific, such as if China invades Taiwan.

“It’s now eating into stocks, and to say otherwise would be dishonest,” Paparo told the Brookings Institution last year.

Stephens’ stark warning echoes a recent interview with Luckey, who stressed that rebuilding the U.S. manufacturing base is not only feasible but critical to counter rising global volatility.

“If we can't make the things that we need to maintain our quality of life, then we are actually just subservient to our adversaries,” Luckey, who leads Anduril as CEO, told legendary music producer Rick Rubin on his Tetragrammaton podcast. 

“Is there a possibility that over time America could get back its manufacturing base? Absolutely,” Luckey told Rubin. “The problem that we did, I mean there's a million problems, but what we did is hollowed out our country by allowing China into the World Trade Organization and allowing American companies to outsource manufacturing to China without penalty, without import tariffs, without any reason to not do it.”

 “Why wouldn't you, if you're allowed to just send it to another country where everything's cheap, where it's dirt cheap and there's no environmental regulations and no labor laws, why wouldn't you do that? And we've been able to get a bunch of cheap shit over the last 50 years as a result,” the startup billionaire added. “That has helped the United States. Everyone's able to buy cheap TVs and cheap cars and cheap stuff because of China's rise. The flip side of that is that there's no more manufacturing in the United States.”

Check out this ReadyWise go-bag... 25-year shelf life...

Click pic, grab one for each car. Sale ends 04/30 Tyler Durden Thu, 04/24/2025 - 09:55

China Dismisses Reports Of US Trade Progress As "Fake News," Demands Removal Of Unilateral Tariffs Before Negotiating Table 

China Dismisses Reports Of US Trade Progress As "Fake News," Demands Removal Of Unilateral Tariffs Before Negotiating Table 

Wednesday's equity market rollercoaster—sharp pops and drops—was driven by conflicting reports on headlines surrounding potential U.S.-China trade talks. 

Markets surged after a Wall Street Journal report suggested President Trump considered cutting steep tariffs on Chinese imports. But sentiment quickly reversed when Reuters poured cold water on the claim. Further declines followed after Treasury Secretary Scott Bessent clarified there had been "no unilateral offer from Trump" to reduce Chinese tariffs and that a trade deal could take two to three years to finalize.

In the overnight hours, China demanded Washington remove unilateral tariffs before engaging in trade talks and rejected the claim that any negotiations had progressed.  

"The US should respond to rational voices in the international community and within its own borders and thoroughly remove all unilateral tariffs imposed on China, if it really wants to solve the problem," Ministry of Commerce's spokesman He Yadong told reporters at a regular briefing on Thursday in Beijing. 

Yadong rejected any signs of progress in bilateral communications, indicating that "reports on development in talks are groundless." He said Washington needs to "show sincerity" if both sides want to make a deal.

Ministry of Foreign Affairs spokesperson Guo Jiakun also called any rhetoric coming from the Trump administration about deal progress "fake news" in a press conference. 

The Trump administration's softening stance—reported by the WSJ, which sent US equity markets higher early Wednesday—may signal a willingness by the US to de-escalate the trade war with Beijing in order to shift to the negotiating phase.

Trump told reporters on Wednesday: "Maybe we'll make a special deal, and we'll see what it will be. Right now, [the tariffs are] 145%, that's very high." 

One day earlier, Treasury Secretary Bessent told investors at a closed-door meeting: "No one thinks the current status quo is sustainable, at 145% and 125%, so I would posit that over the very near future, there will be a de-escalation. We have an embargo now on both sides."

Alfredo Montufar-Helu, senior adviser at The Conference Board's China Center, told the Shanghai Morning Post that "news today confirms China has no intention to reach out first with a proposal of its own."

"The impasse in negotiations is driven by a very simple dynamic; no side wants to bear with the political costs of being seen as capitulating to the other side," Montufar-Helu explained. 

According to Zhang Zhiwei, chief economist at Pinpoint Asset Management, even if the negotiations between China and the US start immediately, reaching an agreement could take time, and mounting risks exist. The tariff war on both sides could soon unleash pain across global trade. 

"It takes time for trade negotiations to proceed between the US and other countries. This means the tariffs will hit global trade and economies for at least several months. It is not clear to what extent inventory build-up and pre-loading of trade in the past few months will help to soften the immediate damage. The question now is how bad trade and other macro data will be in China, the US and other countries," Zhiwei said. 

The economic trade storm brews: 

Bloomberg reported last week that Beijing wants to see several things from Trump's administration before trade talks begin, such as more respect and naming a point person for the dialogue. 

Neither side has announced any upcoming bilateral trade meetings despite Trump's announcement this week to ease tariffs potentially. 

*  *  *

Top products at ZeroHedge Store:

- ZeroHedge Waxed Canvas Hat

- ZeroHedge Shirt

- IQ Biologix Astaxanthin (extremely potent anti-inflammatory)

- ZeroHedge Multitool

- Anza SWAT Micarta Blued (made in the USA)

Tyler Durden Thu, 04/24/2025 - 09:45

Nintendo Switch 2 Frenzy: "Selling Out" Across US Retailers As Tariffs Won't Impact Pricing 

Nintendo Switch 2 Frenzy: "Selling Out" Across US Retailers As Tariffs Won't Impact Pricing 

U.S. families with young gamers can breathe a sigh of relief this week as Goldman analysts told clients that the upcoming Nintendo Switch 2 won't see price hikes due to the ongoing trade war.

Nintendo's hotly anticipated Switch 2 is now available for pre-orders at major U.S. retailers as of early Thursday morning. 

According to the tech blog Tom's Guide, demand for the new console is so intense that major retailers' websites are crashing, with "sold out" notifications appearing across some platforms operated by Walmart, Target, and Best Buy.

Nintendo Switch 2 will retail for $449, with the Mario Kart World bundle costing $499.

The good news for U.S. families who are avoiding tariff landmines as President Trump tries to negotiate an 'America First' trade deal with the Communist Chinese is that Goldman gaming analysts Minami Munakata and Haruki Kubota said console prices will remain at pre-trade war levels.

Here's more color on this from Munakata:

On April 18 (U.S. time), Nintendo announced that pre-orders for the Nintendo Switch 2 will begin in the U.S. on April 24. The company had originally planned to begin pre-orders on April 9 but announced on April 5 (U.S. time) that it was postponing the start of pre-orders following the Trump administration's announcement of new tariff policies.

The console price will be US$449.99, as originally announced. However, prices for peripherals, such as controllers and cameras, have been raised by around 5%-10% from the initially announced prices, and the company said that further price revisions are possible depending on changes in the market environment.

Munakata explained to clients Nintendo's move to keep console prices at pre-trade war prices "makes sense in view of potential medium- to long-term impact on software sales." 

She continued:

We believe the decision to keep the console price unchanged reduces the need for concern about the impact on unit sales forecasts. Growth in the installed base for game hardware is essential for sales of game software, which accounts for the majority of Nintendo's profits. While US-bound hardware, which we assume will be shipped from Vietnam, will likely face a cost increase due to the 10% universal tariff (reciprocal tariff is paused), we view Nintendo's decision to prioritize a smooth launch for the Nintendo Switch 2 by keeping the console price unchanged in the U.S. (one of its most important markets) as a reasonable one, given the focus on long-term growth of the Nintendo Switch 2 platform.

Separately, an overnight report from Bloomberg stated that the demand for Switch 2 in Japan has been "overwhelming."

Nintendo President Shuntaro Furukawa wrote on X:

"We have received 2.2 million applications for the lottery sale at our official online store for customers in Japan alone, which is far larger than what we had anticipated. As such, we apologize that a significant number of the applicants won't be selected."

Pelham Smithers of Japan-focused equity research house Pelham Smithers Associates said Japan accounts for about a third of the global Switch installation base, which implies 6.6 million pre-orders globally. 

Back to Goldman's Munakata, she provided more details about Nintendo's tariff impact:

A Bloomberg report on April 10 suggested that over 1 mn game consoles were exported from Vietnam to the U.S. in Jan-Feb 2025 (we believe that Nintendo accounts for the majority of game consoles produced in Vietnam, and that most US-bound Nintendo hardware is produced there). Based on the report, Nintendo may be able to build up inventory to meet most of its U.S. demand for FY3/26 before the end of the tariff pause (90 days from April 9). We believe this means the potential negative earnings impact from lower hardware profitability is likely to be limited in the near term (our FY3/26 Nintendo Switch 2 shipment assumption is 6 mn units for the Americas and 14.5 mn units overall).

Near-term earnings impact likely limited, but watching news flow for any medium- to long-term impact.

On the other hand, if the announced 46% tariff gets imposed on exports from Vietnam after the tariff pause, we believe extended imposition of reciprocal tariffs by the Trump administration could still put downward pressure on Nintendo's earnings over the medium to long term. If the impact of the tariffs were to be passed on through higher selling prices, this could lead to a lower unit sales outlook for hardware. If Nintendo were to absorb the costs while keeping the selling price unchanged, this could lower hardware profitability. In either case, the tariffs could put downward pressure on Nintendo's earnings, so we will continue to monitor news flow related to tariffs.

Despite the tariff impacts, Munakata remained "Buy" rated on Nintendo...

Our 12-month target price of ¥13,600 is unchanged, and we maintain our Buy rating.

Last month, Munakata wrote a note stating that Switch 2 will "unlock dormant hardware and dormant users" and send "the number of active consoles to continue to renew record highs."

Separately, Rockstar's Grand Theft Auto VI's release later this year is expected to provide additional tailwinds for the gaming industry, which had been stuck in a rut for years but appears to have entered a renewed growth trajectory in 2024.

The good news is that Switch 2 remains at pre-trade war prices. 

Tyler Durden Thu, 04/24/2025 - 09:20

NPR: Abrego Garcia Was "Living Quietly" In Maryland Before He Was Deported

NPR: Abrego Garcia Was "Living Quietly" In Maryland Before He Was Deported

Authored by Jonathan Turley,

Yesterday, I tweeted out after hearing a segment on National Public Radio on the case of Kilmar Abrego Garcia. NPR reported that there was no evidence presented that Abrego Garcia was an MS-13 member and that “he had been living quietly in Maryland” before he was suddenly arrested and deported. 

While many disagree on the handling of the case, few would agree that Abrego Garcia who was reported for spousal abuse and suspected of human trafficking was “living quietly in Maryland.”

Anyone listening to the radio program would have been left with an incomplete and distorted account of the case.

The print story used the same language as the radio segment. NPR claimed that Abrego Garcia

“was granted protection by an immigration judge in 2019 that should have prevented his deportation. He had been living quietly in Maryland with his wife and three children and working in construction until Immigration and Customs Enforcement officers arrested and deported him last month.”

I have previously said that I believe the Administration should have returned Abrego Garcia to the United States for a correct and prompt deportation. If he were to be brought back, I cannot see any barrier to Abrego Garcia not only being deported but deported back to El Salvador.

NPR leaves out a couple of facts in its passing reference to his being “granted protection by an immigration judge.” 

Abrego Garcia already had a hearing at which the judge found evidence that he was an MS-13 member. It was not only based on his being arrested with MS-13 gang members and wearing clothing associated with the gang. It was also based on a confidential source connected to the gang. After losing at his hearing, Abrego Garcia then lost on appeal.

The only reason that Abrego Garcia was not removed is that he said that he was being threatened by a gang that could harm him in El Salvador. That gang, however, reportedly no longer exists.

More importantly, President Trump has declared MS-13 a Foreign Terrorist Organization, which bars the use of the justification for his not being removed. In other words, he has little factual or legal foundation under his original claims to remain in the country.

However, putting the merits aside, NPR’s portrayal of Abrego Garcia was bizarre. He was repeatedly accused of beating his wife. The court record states:

“Per the Prince Georges County Police Gang Unit, ABREGO-Garcia was validated as a member of the Mara Salvatrucha (MS13) Gang. Subject was identified as a member of the Mara Salvatrucha MS-13, “Chequeo” from the Western Clique a transnational criminal street gang. This information was provided by tested source who has provided truthful accurate information in the past. See Prince Georges County Police Department (Gang Sheet).”

Abrego Garcia was also suspected of human trafficking. Indeed, the description of the stop leaves one astonished that he was allowed to simply drive away. According to DHS:

“On Dec. 1, 2022, Abrego Garcia was stopped by the Tennessee Highway Patrol for speeding. Upon approach to the vehicle, the encountering officer noted eight other individuals in the vehicle. There was no luggage in the vehicle, leading the encountering officer to suspect this was a human trafficking incident. Additionally, all the passengers gave the same home address as the subject’s home address. During the interview, Abrego Garcia pretended to speak less English than he was capable of and attempted to put the encountering officer off-track by responding to questions with questions. When asked what relationship he had with the registered owner of the vehicle, Abrego Garcia replied that the owner of the vehicle is his boss, and that he worked in construction…

The encountering officer decided not to cite the subject for driving infractions but gave him a warning citation for driving with an expired driver’s license. Abrego Garcia’s driver’s license was a MD “Limited Term Temporary” license. The encountering officer gathered names of other occupants in the vehicle but could not read their handwriting. The officer did not pursue further information due to no citation being issued.”

So Abrego Garcia, an undocumented immigrant, was stopped with an expired license in a car with  eight others and no luggage on a trip from Texas to Maryland. He gave a false statement and the officer suspected human trafficking but let him go.

It is now being reported that the person whom Abrego Garcia described as his “boss” at a construction job was Jose Ramon Hernandez Reyes, an illegal migrant previously convicted of human smuggling. The black 2001 Chevrolet Suburban belonged to Hernandez Reyez.

One can reasonably object that there was no final adjudication of these claims from spousal abuse to human trafficking to gang membership. However, it strains credulity to claim that Abrego Garcia was living a “quiet” life in Maryland. The complaint of his wife that he was a wife-beater alone would seem to contradict NPR’s claim.

The claim has that certain “fiery but mostly peaceful” quality to it . . . except NPR just decided to leave out the “fiery” and the “mostly” parts.

This month I wrote about NPR repeating a false claim that the Supreme Court rejected the claim the government was involved in censorship — despite the express statement of the Court to the contrary.

NPR has long been accused of showing bias in its coverage. It is now facing calls to end the public subsidy for the news outlet.

Tyler Durden Thu, 04/24/2025 - 09:05

Massive Buying Of Boeing Aircraft Sends US Durable Goods Orders Soaring In March

Massive Buying Of Boeing Aircraft Sends US Durable Goods Orders Soaring In March

US Durable Goods Orders printed a massive 9.2% MoM surge in preliminary March data, massively beating the +2.0% MoM expectation) and pulling orders up 10.9% YoY - the highest since Jan 2022. This is the third straight month of strong orders...

Source: Bloomberg

That is a four sigma beat of expectations...

Source: Bloomberg

But... and its a big but!

Ex-Transportation, durable goods orders were unchanged MoM (rising 2.2% YoY)...

Source: Bloomberg

And so - all of the gains in the headline orders print were due to a 139% surge in orders for commercial aircraft and parts...

Source: Bloomberg

Boeing Co. said it received 192 orders in March, the most since the end of 2023 and up from 13 in the previous month. At the same time, China recently ordered its airlines not to take further deliveries of Boeing jets as the trade war escalates.

However, non-defense capital goods shipments including aircraft, which feed directly into the equipment investment portion of the gross domestic product report, dropped 1.9%, the most since October.

What will The Atlanta Fed GDPNOW forecast do with this massively mixed big picture data?

Tyler Durden Thu, 04/24/2025 - 08:53

Pages