2 weeks Ago By Lance Roberts
Recent consumer sentiment readings have been horrendous. For instance, the University of Michigan’s latest consumer expectation s and the Conference Board’s consumer confidence index are at or near their lowest levels in ten years. However, despite poor sentiment and concerning outlooks, recent consumer spending reports show increased spending.
We, and many economists, believe this is a function of consumers frontrunning tariffs. If you think that tariffs will increase the price of goods appreciably, frontrunning, or buying more than you need, or in advance of a need, makes sense. The latest Johnson Redbook weekly retail sales index argues consumers are frontrunning tariffs despite having historically poor sentiment.
This odd divergence can be seen on the graph on the right. The Johnson Redbook index measures year-over-year same-store sales growth for a sample of large U.S.
general merchandise retailers, covering about 9,000 stores. Because the index is released weekly, it provides one of the most real-time indicators of consumer spending. The change in spending over the last two weeks is near its peak for the last few years.
Further confirming the Johnson Redbook data was Wednesday’s Retail Sales data, showing the largest gain since January 2023. Motor vehicles, a likely candidate for tariff frontrunning, drove the strong spending. Remember, the surge in spending today, especially that related to front-running tariffs, will result in less spending tomorrow as consumer needs are sated.
China Trade Restrictions Make NVDA Attractive Nvidia shares (NASDAQ: NVDA ) were under pressure due to tariffs and trade-related restrictions. On Tuesday afternoon, they announced that the US government would indefinitely ban them from selling their H20 chips to China. Consequently, they are taking a substantial charge-off to first-quarter earnings.
Per the company: First quarter results are expected to include up to approximately $5.5 billion of charges associated with H20 products for inventory, purchase commitments, and related reserves. The graph below shows that 10-15% of Nvidia’s revenue is from China.
Losing Chinese revenue, even if temporary, will sting. But is the stock price already pricing in the bad news and not factoring in NVDA’s growth potential? While we do not know the ultimate resolution regarding tariffs and trade restrictions, we do know NVDA is cheap. Furthermore, NVDA is growing its earnings and revenues at many multiples of the market.
Accordingly, NVDA has a PEG ratio of 1.15, less than half of the S&P 500 . NVDA shares may stay under pressure for the foreseeable future, but they present investors with the rare opportunity to buy a value stock with high growth potential.
(function(){function c(){var b=a.contentDocument||a.contentWindow.
document;if(b){var d=b.createElement('script');d.innerHTML="window.
__CF$cv$params={r:'9323c524dc6cf82f',t:'MTc0NDk3NTE5Ny4wMDAwMDA='};var a=document.createElement('script');a.nonce='';a.
src='/cdn-cgi/challenge-platform/scripts/jsd/main.js';document.getElementsByTagName('head')[0].
appendChild(a);";b.getElementsByTagName('head')[0].appendChild(d)}}if(document.
body){var a=document.createElement('iframe');a.height=1;a.
width=1;a.style.position='absolute';a.
style.top=0;a.style.
left=0;a.style.border='none';a.
style.visibility='hidden';document.body.
appendChild(a);if('loading'!==document.readyState)c();else if(window.addEventListener)document.
addEventListener('DOMContentLoaded',c);else{var e=document.onreadystatechange||function(){};document.onreadystatechange=function(b){e(b);'loading'!==document.
readyState&&(document.onreadystatechange=e,c())}}}})(); Philadelphia Fed Manufacturing Index plunges, signaling worsening conditions By Investing.co .
.. 17 Apr 2025 Redburn Atlantic upgrades Nasdaq on upside from fintech strategy By Investing.
co ...
17 Apr 2025 Wall Street analyst highlights this winning ’permanent portfolio’ strategy By Investing.co ..
. 18 Apr 2025 BCA sees 35% chance of China-Taiwan military escalation in next 12 months By Investing.co .
.. 18 Apr 2025 Trump threatens to tie defense costs to trade terms with key allies in Asia By Investing.
co ...
17 Apr 2025 Nasdaq 100 Drops as Nvidia Leads Techs Lower Amid Trade War Uncertainty By Fawad Razaqz ...
16 Apr 2025 Silver: Gold Ratio Reversal, US Dollar Weakness Set Stage for Run Toward $35 By Damian Nowis ...
16 Apr 2025 Solana (SOL) Price Prediction 2025, 2026-2030 By The News Cry ...
15 Apr 2025 Netflix Earnings: Resilient Demand, Tariff Immunity Set Stage for Strong Quarter By Damian Nowis ...
17 Apr 2025 Bitcoin Holds Above $85K: Are Bulls Gathering Strength Amid Uncertainty? By Günay Caymaz 18 Apr 2025.
