The GBP/USD exchange rate has formed a giant cup-and-handle pattern that could trigger more gains ahead of the upcoming Bank of England (BoE) and US nonfarm payrolls (NFP) data. It was trading at 1.3300, a few points below the year-to-date high of 1.3430. This article highlights the bullish outlook for pound sterling.
US nonfarm payrolls data ahead
The GBP/USD pair will react to the upcoming US nonfarm payrolls (NFP) data, which will provide more color about the state of he economy.
Wall Street analysts are not optimistic about the labor market due to the actions of Donald Trump.
He announced large tariffs on imported goods from other countries, weakening business confidence. The administration has also fired thousands of workers through the Department of Government Efficiency (DOGE).
A report released by ADP earlier this week showed that the US private sector created just 61k jobs in April as employers slowed their hiring process.
Economists expect the data to show that the economy created 138k jobs in April after adding an additional 228K in March. There are odds that the official figures will be lower than expected. Also, as it has done in the past, the Bureau of Labor Statistics (BLS) may downgrade the numbers it released last month.
The other key data to watch will be on wages and the unemployment rate. Analysts expect the numbers to reveal that the jobless rate rose to 4.3%, while the average hourly earnings rose to 3.9%.
These numbers follow the US’s release of weak data. The US GDP contracted by 0.3% last quarter, while the consumer confidence has plunged to pandemic levels. Therefore, there is a likelihood that the Fed will start to pivot by hinting of more rate cuts.
There are odds that the BoE will cut interest rates by 0.25% next week since they remain higher than in other countries. The bank has left rates at 4.50%, higher than the European Union’s 2.4%.
Recent data indicate that the UK economy is softening and inflation is declining. The headline Consumer Price Index (CPI) fell from 2.8% to 2.6%. Analysts believe that the ongoing trade war could be deflationary, as China redirects goods intended for the US to European countries.
The daily chart reveals that the GBP/USD exchange rate has been in a strong bull run in the past few months. It jumped from a low of 1.2100 in January and reached a high of 1.3431.
Along the way, the pair formed a cup and handle pattern, a popular bullish continuation pattern with a depth of about 10%. It is now forming the handle section of the C&H pattern.
Therefore, measuring the same distance from the cup’s upper side shows that the pair will ultimately surge to 1.4700.
The JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) and the JPMorgan Equity Premium Income ETF (JEPI) have accumulated assets because of their high dividends. JEPI has over $38.9 billion in assets, while JEPQ’s assets have soared to over $24 billion. This article compares the two funds and assesses the better one to buy.
What is the JPMorgan Nasdaq Equity Premium Income ETF?
The JEPQ ETF is a popular fund that aims to give investors exposure to the tech-heavy Nasdaq 100, while still generating a strong dividend return to investors.
It does that by first investing in all companies in the Nasdaq 100 Index. This includes companies like NVIDIA, Tesla, Microsoft, Apple, and Google. Historically, the Nasdaq 100 Index has a good record of beating other benchmarks like the S&P 500 and Dow Jones.
After this, the fund then uses the covered call strategy by selling covered call options on the Nasdaq 100 Index. The benefit of this approach is that it lets the fund generate a regular income through the premium payments it generates.
What is the JPMorgan Equity Premium Income ETF?
The JEPI ETF is a popular ETF that works in the same way as JEPI, but it has a key difference in that it focuses on the S&P 500 Index. It invests in a diversified group of companies in the S&P 500, and then sells call options on the index.
JEPI does not invest in all the companies in this index. Instead, it invests in about 112 companies, including large names like Amazon, Travelers, Mastercard, ServiceNow, and Meta Platforms.
A common question is on the better investment between JEPI and JEPQ. The first low-hanging fruit in this analysis is to consider the expense ratio of the two funds.
The two of them have a similar cost of 0.35%, making it a tie. However, when comparing fees, one can also consider the fact that popular ETFs that track the S&P 500 and Nasdaq 100 indices have a lower expense ratio.
The other data to watch is their dividend yield, a notable thing since investors acquire these funds for their payouts. JEPQ has a dividend yield of 11.23%, while JEPI yields 7.80%. This means that a $100,000 investment in JEPQ will bring in a dividend return of $11,200, while JEPI will bring in $7,800. These returns excludes the price appreciation and the fees changed.
Therefore, the JEPQ ETF is a better investment than JEPI since it has a higher return than the JEPI one.
The other thing to consider when looking at the best ETF to buy is their total returns over the years. When doing this comparison, it is worth to note that past performance is not an indication of what will happen in the future.
However, I believe investing in an asset with a long track record makes more sense than the laggard. For example, investors have been rewarded well by investing in the Nasdaq 100 Index instead of buying the Dow Jones.
The chart above shows that the JEPQ ETF has had a total return of 37% in the last three years, much higher than what JEPI had. Similarly, JEPQ has risen by 9.7% this year compared to JEPI’s 6.35%.
Therefore, these numbers, together with the dividend yield, show that the JEPQ is a better fund to buy than JEPI.
Indian equity markets surged higher in Friday’s trade, with benchmark indices climbing significantly as a confluence of positive factors boosted investor sentiment.
Easing global trade tensions, a sharp drop in crude oil prices, supportive domestic auto sales figures, and record-high Goods and Services Tax (GST) collections all contributed to the bullish mood, propelling the Sensex past the 81,000 mark.
Returning to trade after a public holiday on Thursday for Maharashtra Day, the markets displayed strong momentum.
The BSE benchmark Sensex climbed 766.49 points, or 0.96 per cent, to hit 81,008 in early deals.
The NSE Nifty 50 barometer traded strongly near the 24,600 level, up 251.65 points or 1.03 per cent at 24,585.85.
Market breadth was firmly positive, with 2,307 shares advancing against 1,205 declining stocks on the BSE.
Easing trade tensions fuel global optimism
A key driver for the positive sentiment was the perception of easing global trade friction. Kranthi Bathini of WealthMills Securities noted that tensions between the US and China appeared to lessen as “both the nations expressed willingness to start trade negotiations”, as reported by Business Today.
He also highlighted comments from the US Trade Representative suggesting that trade deals with key partners, potentially including India, could be finalized within weeks, offering comfort to global markets.
This comes despite recent concerning US economic data, including a reported 0.3% contraction in Q1 GDP and signs of a cooling labor market, which have raised some global growth concerns.
Oil price slump offers relief
Adding a significant tailwind, particularly for oil-importing nations like India, was a sharp drop in global crude oil prices.
Devarsh Vakil, Head of Prime Research at HDFC Securities, informed Business Today that oil prices experienced their “most significant monthly drop in almost three and a half years,” partly attributed to signals from Saudi Arabia about potentially increasing production to gain market share.
Lower oil prices help alleviate inflationary pressures and reduce India’s import bill.
Domestic strength: auto sales and record GST
On the domestic front, monthly sales figures reported by Indian automakers for April generally met market expectations, providing reassurance about demand in the sector, with M&M highlighted as a strong performer.
Furthermore, India’s GST collection figures for April soared to an all-time high of approximately Rs 2.37 lakh crore, marking a 12.6 per cent year-on-year increase.
This record collection, the highest since the tax regime’s introduction in 2017, signals robust economic activity.
“GST revenue from domestic transactions rose 10.7 per cent to about Rs 1.9 lakh crore, while imported goods were up 20.8 per cent to Rs 46,913 crore,” noted Vakil.
India-US trade deal hopes persist
Optimism surrounding a potential bilateral trade agreement between India and the US also continues to support market sentiment.
A note from Nomura suggested India’s “relative tariff advantage will sustain” due to its potential first-mover status on a trade deal.
The two countries have already signed terms of reference outlining a roadmap for negotiations covering tariffs, non-tariff barriers, services, digital trade, and intellectual property rights, among other areas, according to news reports cited by Nomura.
Technical outlook and near-term caution
Technically, the market trend remains bullish. “Overall trend for the Nifty remains bullish, as it continues to trade above all key moving averages,” stated Vakil, placing immediate support at 24,150 and identifying the 24,450-24,500 band as a significant near-term resistance zone.
However, despite the positive momentum, some analysts advise caution.
Historically, May has shown average seasonality for the Nifty, according to JM Financial.
Adani Ports was a standout gainer among Sensex constituents, rising 6% on strong Q4 results.
Maruti Suzuki, Eternal [as per source], Tata Motors, and IndusInd Bank also saw significant gains of 2-3%.
European stock markets surged at the opening bell on Friday, fueled by renewed optimism after China signaled a potential willingness to engage in trade negotiations with the United States.
This positive development, coupled with strong earnings from energy giant Shell, helped investors look past mixed corporate results and broader economic uncertainties as trading resumed widely following the May 1 holiday.
The pan-European Stoxx 600 index jumped 0.88% in early trading (rising to 1% by 8:26 a.m. London time), indicating broad-based buying interest.
The rally was particularly strong in cyclical sectors sensitive to global trade dynamics: mining stocks led the charge, soaring 2.5%, while banking shares climbed a healthy 1.7%.
France’s CAC 40 and Germany’s DAX both advanced around 1.4%, while the UK’s FTSE 100, which had traded solo on Thursday due to the holiday, rose 0.8%.
The FTSE 100 had managed to eke out a gain on Thursday, marking its 14th consecutive positive session and matching its best run since 2017.
The primary catalyst for Friday’s buoyant mood was news emerging from Asia.
China indicated it was “evaluating the possibility of trade talks” with the White House, a significant signal despite authorities reiterating Beijing’s core demand for the US to remove all unilateral tariffs, which have pushed duties on some Chinese goods into triple digits.
This hint of potential dialogue contrasted with recent comments from US Treasury Secretary Scott Bessent, who had suggested earlier in the week that it was “up to China to de-escalate” the situation.
Corporate earnings present mixed picture
While trade hopes lifted the overall market, corporate earnings reports painted a more varied picture:
Shell Shines: Energy major Shell provided a significant boost, with shares rising 2.4%. The company reported first-quarter adjusted earnings of $5.58 billion, comfortably beating analyst expectations (around 4.96bn−5.09bn consensus) despite the challenging environment of weaker crude prices. Underscoring its financial strength, Shell also announced a fresh $3.5 billion share buyback program, its 14th consecutive quarterly buyback of at least $3 billion. This performance comes as oil majors generally see profits moderate from the record highs of 2022.
NatWest Beats: British bank NatWest also delivered positive results, reporting a Q1 operating profit of £1.8 billion ($2.4 billion), ahead of the £1.54 billion expected by analysts (LSEG poll). The bank saw improvement in its net interest margin and return on tangible equity, leading it to state it expects to hit the upper end of its 2025 guidance. CEO Paul Thwaite noted customer resilience “in the face of increased global economic uncertainty.”
Moët Hennessy Cuts Loom?: In contrast, reports surfaced regarding potential significant job cuts at Moët Hennessy, the wines and spirits division of luxury giant LVMH. The Financial Times reported, citing an internal video, that new leadership plans to reduce the unit’s 9,400-strong workforce by around 1,200 (~10%) to align costs with current revenues, which have reportedly fallen back to 2019 levels while costs have risen 35%. This follows a weak Q1 for the division, particularly impacted by lower demand in the US and China and the looming threat of higher US tariffs on European luxury goods like champagne. Moët Hennessy did not immediately respond to CNBC’s request for comment.
Data and global context
Investors also awaited the preliminary reading for Eurozone inflation in April, due later Friday morning.
Overnight, sentiment on Wall Street had been supported by better-than-expected earnings from Meta and Microsoft, although disappointing results from Apple and Amazon released after the bell tempered some enthusiasm in extended trading.
Despite underlying concerns about global growth and the ultimate trajectory of trade negotiations, the signal from China regarding potential talks provided a tangible reason for optimism, allowing European markets to start the final day of the trading week on a strong footing.
The Trump administration on Friday formally closed a trade loophole that had allowed a flood of inexpensive goods from China to enter the United States without tariffs, a move that is likely to benefit domestic manufacturers but hit consumers with higher prices and upend business models of both Chinese exporters and US small firms.
The policy shift, ending the so-called de minimis exemption, caps a years-long controversy over whether China’s low-cost retail platforms—particularly fast-fashion giants like Shein and Temu—were exploiting a regulatory grey area to gain unfair access to American markets.
The rule had permitted shipments under $800 in value to bypass most customs duties and inspections, provided they were sent directly to consumers or small businesses.
Now, those same packages must clear the same tariff barriers and regulatory scrutiny as bulk commercial imports.
What was the ‘De minimis’ rule and why it mattered?
The de minimis exception, introduced in the 1930s, aimed to reduce the burden on customs officials by waiving duties on shipments where collection costs outweighed the revenue.
Congress later raised the threshold to $5 in 1978, $200 in 1993, and $800 in 2016.
For years, the de minimis threshold became a tool of choice for a wide range of exporters and logistics firms.
It enabled sellers in China and elsewhere to send small parcels directly to US consumers without paying duties or providing full documentation.
That created a boom in low-cost cross-border e-commerce, with platforms like Shein and Temu sending tens of millions of parcels annually into American households.
In 2023 alone, US Customs and Border Protection processed over one billion such packages, with the average value of just $54.
But the loophole soon drew bipartisan scrutiny.
Critics, including US manufacturers and labour groups, said the rule gave Chinese sellers an unfair edge and contributed to job losses in warehousing, logistics, and manufacturing sectors.
Others pointed to its alleged use by fentanyl traffickers, who exploited the lax reporting requirements to ship dangerous chemicals into the country.
The administration said drug traffickers were “exploiting” the loophole to ship fentanyl precursor chemicals and related materials into the United States without disclosing shipping details.
“It’s a big scam going on against our country, against really small businesses,” former President Donald Trump said at a White House cabinet meeting this week. “And we’ve ended, we put an end to it.”
E-commerce retailers hike prices; some exit the US market altogether
Since tariffs on Chinese goods are punishingly high, de minimis goods are already starting to cost a lot more.
Temu has begun promoting goods already located in US warehouses under a new “Local” tag.
Shein has reassured shoppers that while some prices may change, the bulk of its offerings remain affordable.
Shoppers, however, say they saw prices for some items on Shein’s website rise over the weekend, according to a NYT article.
Both platforms have also recently cut back digital advertising in anticipation of the rule change affecting sales.
British clothing brand Oh Polly has also increased its US prices by 20%.
The American Action Forum estimated the change could impose $8 billion to $30 billion in new annual costs—ultimately borne by consumers.
Other firms, such as Understance (a Canadian underwear company), say they will halt shipments to the US altogether.
Beauty retailer Space NK has also paused US online orders, citing concerns over compliance and costs.
“I’ve seen a lot of small to medium-sized businesses just choose to exit the market altogether,” said Cindy Allen, CEO of Trade Force Multiplier, a global trade consultancy.
Who wins?
Industry groups in the US have welcomed the change.
Kim Glas, president of the National Council of Textile Organizations, said the exemption had “devastated the US textile industry” by allowing duty-free entry of unsafe and illegal goods, with textile and apparel items making up more than half of all de minimis shipments by value.
“This tariff loophole has granted China almost unilateral, privileged access to the US market at the expense of American manufacturers and US jobs,” Glas said in comments to the New York Times.
The impact has been visible across niche sectors too.
The Flag Manufacturers Association of America, in written comments to the US Trade Representative, said its members have faced an influx of deeply discounted American flags imported from China—often falsely labelled—which has led to a 25% to 35% decline in domestic flag sales last year.
Larry Severini, CEO of Embroidery Solutions Manufacturing LLC, which supplies embroidered star fields to US flag makers, said he was forced to close one of his two plants in South Carolina earlier this year due to pressure from low-cost imports.
Sales have fallen by about 20% since 2021, which he partly attributes to the de minimis provision.
“We need duties to level the playing field to make it fair,” Severini said.
The end of the de minimis exemption for Chinese goods could also offer an advantage to retailers less reliant on online platforms or Chinese manufacturing.
British fast-fashion retailer Primark, which serves US customers solely through its brick-and-mortar stores, sees an opportunity in the policy shift.
“With prices going up from this part of the trade, I wonder if some Americans might start going back to shopping centres to find value there,” said George Weston, CEO of Primark’s parent company, Associated British Foods, in an interview with Reuters on Tuesday.
Impact on logistics
The change is expected to impact airlines and private carriers such as FedEx and UPS, which have long relied on steady business transporting low-value goods to the United States.
UPS, FedEx, DHL, and the US Postal Service say they are ready to implement the changes.
Yet the economic model that underpinned fast e-commerce deliveries from overseas warehouses may soon be upended.
Logistics experts believe sellers with strong profit margins will continue shipping from China, while others may invest in US-based warehousing to manage costs.
“There’s going to be price hikes, but China’s manufacturing base is still too strong to abandon,” said Izzy Rosenzweig, CEO of logistics firm Portless.
“That said, a lot of razor-thin-margin sellers will likely go local.”
Experts debate likely impact on drug trade and strain on customs personnel
One of the administration’s justifications for ending de minimis was its alleged role in enabling the smuggling of fentanyl and its precursor chemicals.
However, experts caution the policy’s effectiveness in stemming drug flows may be limited.
Many synthetic opioids still enter through the southern border with Mexico, not through international air freight.
Besides, pro-trade groups like the National Foreign Trade Council argue that removing de minimis could stretch already thin customs resources.
“CBP would need to hire and train new personnel, costing the agency millions or causing them to move agents from the already overburdened southern border,” the group warned.
US Customs and Border Protection, however, says it is prepared.
“We are equipped to carry out enhanced package screenings and enforce orders effectively,” a spokesperson said.
The economic stakes for China
The decision comes at a delicate time for China’s export-driven economy.
The end of de minimis treatment for its e-commerce shipments is expected to hurt companies like Shein, Temu (owned by PDD Holdings), and others that have built thriving US operations under the now-defunct rule.
Bob Chen, a director at Shenzhen-based venture firm Mangrove Capital, said the policy shift would “have a large impact on China’s low-cost goods-selling platforms.”
Sellers may be forced to either absorb the tariff costs or pass them on to consumers, jeopardising their price competitiveness.
Yet Chen also noted that even after price adjustments, Chinese platforms may remain attractive due to their efficient supply chains and economies of scale.
“They are still competitive on price,” he said. “And I don’t think other platforms such as Amazon [could replace them].”
In 2023, China’s cross-border e-commerce exports surged to $93.6 billion, a 42% year-on-year jump, making it the country’s second-largest export category.
A significant portion of that was destined for US consumers.
Shell PLC disclosed on Friday that its net profit for the first quarter experienced a substantial 28% year-over-year decrease, settling at $5.58 billion.
Despite this considerable decline, the reported profit figure surpassed the anticipations of financial analysts, indicating a stronger-than-expected underlying performance, according to a Reuters report.
Share repurchase program to continue
The energy giant also announced its decision to maintain the current rate of its share repurchase program, signaling confidence in its financial standing and future prospects.
The optimism comes even in the face of a challenging market environment characterised by declining crude oil prices and diminished profitability in refining operations compared to the previous year.
This strategic move to continue rewarding shareholders through buybacks underscores Shell’s commitment to delivering value amidst volatile market conditions.
Shell announced a continuation of its shareholder return program, stating its intention to repurchase $3.5 billion of its own shares over the subsequent three-month period.
This buyback represents the fourteenth consecutive quarter in which the energy giant has committed to returning at least $3 billion to its shareholders through share repurchases.
The ongoing buyback program reduces the total number of outstanding shares, which can lead to an increase in earnings per share and potentially boost the company’s stock price.
Investors often view such programs favorably as a sign of financial strength and disciplined capital management.
Shell’s continued share buyback program presents a notable divergence from its competitor BP, which has significantly reduced its own buyback initiatives in the current year.
BP’s decision to curtail buybacks stems from a strategic imperative to strengthen its balance sheet.
In contrast, Shell maintains a more robust financial position, evidenced by its lower gearing ratio of 18.7% compared to BP’s higher ratio of 25.7%.
Gearing, a key financial metric, represents the proportion of a company’s financing that comes from debt relative to equity.
Shell’s lower gearing suggests a lesser reliance on debt financing and a stronger equity base, potentially affording it greater flexibility in pursuing shareholder returns through buybacks while maintaining financial stability.
Shell’s adjusted earnings, which the company defines as net profit, were $5.58 billion in the first quarter.
This figure exceeded the average analyst forecast of $4.96 billion from a company-provided poll but fell short of the $7.73 billion reported in the same period last year.
In a March strategy update, Shell announced plans to increase shareholder returns through higher liquefied natural gas sales, primarily via share repurchases.
The company also stated it would reduce investments through 2028 and consider selling or shutting down certain chemicals operations.
Shell confirmed on Friday its previously announced decreased annual investment budget for the current year, which is set at $20-$22 billion.
Refining margin falls
The indicative refining margin was $6.2 per barrel.
This represents a decrease from $12 per barrel in the previous year but an increase from $5.5 per barrel at the close of the prior year.
During the first quarter of the year (January-March), the average global benchmark price for Brent crude oil was approximately $75 per barrel.
This is a decrease from the corresponding period last year, when the average price was about $87 a barrel.
The JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) and the JPMorgan Equity Premium Income ETF (JEPI) have accumulated assets because of their high dividends. JEPI has over $38.9 billion in assets, while JEPQ’s assets have soared to over $24 billion. This article compares the two funds and assesses the better one to buy.
What is the JPMorgan Nasdaq Equity Premium Income ETF?
The JEPQ ETF is a popular fund that aims to give investors exposure to the tech-heavy Nasdaq 100, while still generating a strong dividend return to investors.
It does that by first investing in all companies in the Nasdaq 100 Index. This includes companies like NVIDIA, Tesla, Microsoft, Apple, and Google. Historically, the Nasdaq 100 Index has a good record of beating other benchmarks like the S&P 500 and Dow Jones.
After this, the fund then uses the covered call strategy by selling covered call options on the Nasdaq 100 Index. The benefit of this approach is that it lets the fund generate a regular income through the premium payments it generates.
What is the JPMorgan Equity Premium Income ETF?
The JEPI ETF is a popular ETF that works in the same way as JEPI, but it has a key difference in that it focuses on the S&P 500 Index. It invests in a diversified group of companies in the S&P 500, and then sells call options on the index.
JEPI does not invest in all the companies in this index. Instead, it invests in about 112 companies, including large names like Amazon, Travelers, Mastercard, ServiceNow, and Meta Platforms.
A common question is on the better investment between JEPI and JEPQ. The first low-hanging fruit in this analysis is to consider the expense ratio of the two funds.
The two of them have a similar cost of 0.35%, making it a tie. However, when comparing fees, one can also consider the fact that popular ETFs that track the S&P 500 and Nasdaq 100 indices have a lower expense ratio.
The other data to watch is their dividend yield, a notable thing since investors acquire these funds for their payouts. JEPQ has a dividend yield of 11.23%, while JEPI yields 7.80%. This means that a $100,000 investment in JEPQ will bring in a dividend return of $11,200, while JEPI will bring in $7,800. These returns excludes the price appreciation and the fees changed.
Therefore, the JEPQ ETF is a better investment than JEPI since it has a higher return than the JEPI one.
The other thing to consider when looking at the best ETF to buy is their total returns over the years. When doing this comparison, it is worth to note that past performance is not an indication of what will happen in the future.
However, I believe investing in an asset with a long track record makes more sense than the laggard. For example, investors have been rewarded well by investing in the Nasdaq 100 Index instead of buying the Dow Jones.
The chart above shows that the JEPQ ETF has had a total return of 37% in the last three years, much higher than what JEPI had. Similarly, JEPQ has risen by 9.7% this year compared to JEPI’s 6.35%.
Therefore, these numbers, together with the dividend yield, show that the JEPQ is a better fund to buy than JEPI.
Questions surrounding Elon Musk’s long-term role at the helm of Tesla intensified Wednesday following a report that the company’s board of directors recently initiated steps to identify potential successors to the high-profile CEO.
The exploration, according to the Wall Street Journal, was reportedly prompted by board members’ concerns over Musk’s significant involvement with the Trump administration.
Citing people familiar with the discussions, the Wall Street Journal reported that Tesla board members contacted several executive search firms approximately a month ago to begin exploring options for a potential CEO successor.
The board’s reported move came as Musk faced heightened scrutiny for his high-profile position in the Trump administration.
His role leading the Department of Government Efficiency (DOGE) and spearheading federal job cuts proved particularly controversial.
This intense focus on his government work coincided with a challenging period for Tesla, marked by declining sales attributed partly to its aging electric vehicle offerings.
Investor unease has been palpable, compounded by Musk’s embrace of far-right political movements in Europe, which has reportedly led to protests targeting the CEO and Tesla.
The report also reveals that there have been incidents of vandalism at company showrooms and charging stations in both the US and Europe.
The WSJ report indicated that board members directly addressed these concerns with Musk, meeting with him and requesting a public acknowledgment that he would dedicate more time to leading Tesla.
Musk did subsequently state last week that he intended to significantly reduce the time allocated to his administration duties and refocus on managing his portfolio of companies, including the electric vehicle maker.
However, crucial questions remain unanswered.
The current status of the board’s succession planning efforts could not be determined, according to the report.
Furthermore, it was unclear whether Musk, who also sits on Tesla’s board, was made aware of the specific outreach to executive search firms, or how his recent pledge to spend more time at Tesla might have influenced the board’s ongoing considerations.
Market reacts swiftly to succession report
News of the board’s reported exploration into succession planning had an immediate negative impact on Tesla’s stock price.
Shares in the electric vehicle company declined more than 3% during Wednesday’s trading session following the Wall Street Journal report, ultimately closing down 3.38% at $282.16.
The stock saw a marginal gain of 0.13% in extended hours trading.
Neither Tesla nor Elon Musk immediately responded to requests for comment on the report, sought by Reuters.
The development underscores the complex interplay between Musk’s multifaceted roles, political engagements, and the governance challenges facing one of the world’s most valuable and closely watched companies.
G Squared’s chief investment officer Victoria Greene says investing in Super Micro Computer Inc (NASDAQ: SMCI) on the post-earnings decline is like “catching a falling knife.”
Earlier this week, the AI server company reported 30 cents a share of earnings for its fiscal third quarter, sharply below expectations of 54 cents.
SMCI’s preliminary revenue for the third quarter also missed consensus by about a billion-dollar. Versus its year-to-date high, Supermicro stock is down nearly 50% at writing.
SMCI stock could crash to $18 in 2025
According to Victoria Greene, just because SMCI shares are already down significantly doesn’t mean “you can’t go down further.”
In fact, new chip restrictions under the Trump administration and a potential slowdown in corporate spending on artificial intelligence could push Supermicro stock down further to $18 in the coming months, she added.
Note that the AI company saw its gross margin contract by 220 basis points in the third quarter as well, prompting Greene to argue “this stock is not worth the risk here.”
SMCI stock does not currently pay a dividend to incentivize sticking with it through turbulent times either.
Mizuho trims estimates for Supermicro shares
Super Micro Computer’s earnings release suggests it generated about $4.55 billion in revenue in its fiscal Q3, which translates to a year-over-year growth rate of about 18% only.
That’s down alarmingly from as much as 200% annualised growth that the company has reported in the past.
SMCI’s devastating preliminary report for the third quarter made Mizuho analyst Vijay Rakesh cut his price objective on the AI stock to $34 as well.
Rakesh attributed much of the weakness in Supermicro’s Q3 financials to it losing share to the likes of Dell Technologies.
Plus, the DOJ overhang warrants caution in buying SMCI shares as well, he added.
Investors should note, however, that Mizuho’s new price target on Super Micro Computer Inc still represents about a 7% upside from current levels.
Is it worth buying SMCI at current levels?
SMCI stock is being punished this week also because its disappointing Q3 update follows pompous remarks from its chief executive, Charles Liang, who in February said, “the calendar year 2025 growth could be a repeat of calendar year 2023.”
In 2023, Super Micro Computer increased its revenue at an annualised rate of more than 37%.
According to the Nasdaq listed firm, much of the weakness in its third quarter was related to “delayed customer platform decisions” and higher inventory for older generation products.
Still, Supermicro is evidently grappling with a lot of headwinds at writing to inspire confidence in building a position in its stock.
What’s also worth mentioning here is that the consensus rating on this AI stock also currently sits at “hold” only.
In a sharply critical ruling with potentially far-reaching consequences, a federal judge has found Apple Inc. in violation of a previous court order aimed at opening up its App Store to alternative payment methods.
The judge mandated that Apple cease charging commissions on purchases made outside its proprietary system and took the extraordinary step of referring the tech giant to federal prosecutors for a potential criminal contempt of court investigation.
US District Judge Yvonne Gonzalez Rogers, presiding over the long-running dispute between Apple and Fortnite creator Epic Games Inc., delivered the stinging rebuke on Wednesday.
She sided unequivocally with Epic’s argument that Apple had failed to genuinely comply with her 2021 injunction, which stemmed from findings that Apple engaged in anticompetitive practices under California law.
That original order required Apple to allow developers to steer users toward payment options outside the App Store, thereby bypassing Apple’s standard commission, which can reach up to 30%.
While Apple did implement changes allowing external links, it subsequently imposed a new 27% fee on revenues generated through those outside transactions – a move Epic argued undermined the court’s directive.
Judge Gonzalez Rogers agreed, finding Apple’s actions were not a good-faith attempt at compliance but a deliberate effort to maintain its lucrative App Store revenue stream.
“It did so with the express intent to create new anticompetitive barriers which would, by design and in effect, maintain a valued revenue stream; a revenue stream previously found to be anticompetitive,” she wrote in her detailed 80-page ruling.
That it thought this court would tolerate such insubordination was a gross miscalculation.
Criminal referral and allegations of deception
Perhaps the most striking element of the ruling is the referral to the US attorney’s office in San Francisco to investigate potential criminal contempt charges against Apple for flouting the 2021 order.
The US attorney’s office declined immediate comment.
The judge’s decision was underpinned by findings that Apple attempted to obscure its noncompliance.
“After two sets of evidentiary hearings, the truth emerged,” Gonzalez Rogers wrote.
Apple, despite knowing its obligations thereunder, thwarted the injunction’s goals, and continued its anticompetitive conduct solely to maintain its revenue stream.
Furthermore, the judge singled out testimony from Alex Roman, Apple’s vice president of finance, labeling it untruthful.
She stated Roman “even went so far as to testify that Apple did not look at comparables to estimate the costs of alternative payment solutions,” when evidence suggested the company did precisely that.
Because neither Roman nor Apple’s legal team corrected this testimony, “Apple will be held to have adopted the lies and misrepresentations to this court,” the judge concluded.
Judge Gonzalez Rogers also found Apple had abused attorney-client confidentiality to shield information from Epic, ordering Apple to cover Epic’s legal fees associated with fighting for those documents.
Apple disagrees, Epic claims victory
Apple expressed strong disagreement with the judge’s findings. “We will comply with the court’s order and we will appeal,” a company representative stated.
Conversely, Epic Games CEO Tim Sweeney hailed the decision as a landmark win for software developers.
He told journalists the ruling “forces apple to compete with other payment services rather than blocking them,” calling it a “huge victory.”
Significant financial implications
The order forcing Apple to eliminate commissions on external App Store purchases could significantly impact the company’s bottom line.
The App Store generates billions of dollars in high-margin revenue annually.
This ruling comes as Apple potentially faces another major financial hit related to payments Google makes to be the default search engine on Apple devices, a central issue in the ongoing Department of Justice antitrust case against Google’s parent company, Alphabet Inc.
Legal context
It’s important to recall the initial 2021 trial outcome. While Judge Gonzalez Rogers found Apple’s conduct violated California’s Unfair Competition Law, she largely sided with Apple on federal antitrust claims.
Her order mandating the allowance of external payment links was upheld last year when the US Supreme Court declined to hear appeals from either side, making Wednesday’s contempt finding particularly significant.
The case reference is Epic Games Inc. v. Apple Inc., 20-cv-05640, US District Court, Northern District of California (Oakland).
