Do Q2 Reports Shape a More Uncertain Outlook?

If you think there are no signs of tariffs inside the current U.S. macro system, you may have to think again.

Let’s get more on that now from our Chief Equity Strategist and Economist, John Blank.

1. Each month, you highlight a section, found within the latest Zacks Market Strategy report. This month it’s the Institute of Supply Management’s (ISM) manufacturing purchasing manager indices (PMI). Is that where the most striking tariff dynamics caught your attention?

2. Where within that data are these tariff signs located?

3. According to the purchasing managers, where in the system is the impact of this data being felt, in the economy, markets?

4. Stronger than expected retail sales numbers out last week don’t seem to indicate tariffs are affecting consumer spending habits yet. That seems like a positive, correct?

5. Earnings are rolling in. At the start of April, Q2 earnings estimates have declined for 13 of the 16 Zacks sectors. That’s when estimates for Q2 had come under severe pressure with the announcement of reciprocal tariffs in early April prompting analysts to materially lower their earnings expectations. Since then, our Research Director Sheraz Mian, says the revisions trend stabilized later in the quarter with estimates increasing slightly for a few sectors. Does that negate the ISM data at all?

6. What impact do you see this data having on the Zacks Sector Rankings?

7. What about tariff lead impact to stocks? They’re on a winning streak, near all time highs. Have investors mostly ignored the tariff story?

8. Do you see that turning around near-term?

9. Speaking of stocks, three major multi-nationals are on your radar. Two are not based in the U.S. Among them, Seven and I Holdings Co. (SVNDY), The Estee Lauder Companies (EL) and Bayer AG (BAYRY).

Our Chief Equity Strategist and Economist, John Blank, on signs of tariffs inside the U.S. macro system. With John, I’m Terry Ruffolo.

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This article originally published on Zacks Investment Research (zacks.com).

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