Archives May 2025

Duolingo (DUOL) shares soared to an all-time high on Friday, a day after the language education platform topped expectations for the first quarter.

After the bell Thursday, Duolingo reported earnings per share of $0.72 on revenue that soared 38% year-over-year to $230.7 million, both topping Visible Alpha consensus estimates.

The company saw a 40% jump in paid subscribers to 10.3 million and a nearly 50% annual jump to 46.6 million daily active users (DAUs). Both metrics also topped projections.

Duolingo also lifted its full-year revenue projections to a range of $987 million to $996 million, up from the previous range of $962.5 million to $978.5 million.

Duolingo shares were up 19% to more than $477 in recent trading, and set an intraday record of $480 earlier in the session.

Duolingo’s DAUs Have Room to Keep Growing, JPMorgan Says

In a note following Thursday’s report, JPMorgan analysts maintained their “overweight” rating and lifted their price target to $500 from $360, above the Visible Alpha consensus of roughly $446. The analysts said they see room for Duolingo’s DAUs to continue growing from a wider adoption of its English lessons, and its non-language-focused material like a chess course, which Duolingo is expected to launch in the coming weeks.

The analysts also said Duolingo’s recently announced effort to more than double its language library with 148 new language courses, with an increasing amount of educational content created by generative AI, “will support strong user & paid subscriber growth.”

Wendy’s (WEN) is the latest fast-food chain to express wariness about the months ahead, trimming its earnings outlook for the year and saying sales in 2025 may fall year-over-year.

The burger chain known for square patties anticipates finishing 2025 with sales that are flat or down as much as 2% from the year prior, Wendy’s said Friday. The company previously had forecast a 2% to 3% increase for the year.

Wendy’s sales and profit for the first quarter, which ended March 30, missed expectations. The company reported $39.2 million in net income, just under the $39.8 million analysts expected, according to consensus estimates from Visible Alpha. Wendy’s $523.5 million in revenue came in below the $524.9 million consensus estimate. 

“We saw broad-based pressure in the quarter,” CFO Ken Cook said, according to a transcript made available by AlphaSense. That pressure, he said, was particularly acute with households that make under $75,000.

Wendy’s report comes after McDonald’s (MCD) told investors the day before that economic stress already seen by the fast-food giant among low-income consumers appears to have spread to middle-income households.  

Domestic Same-Store Sales Sagged in Quarter

Although sales improved 8.9% year-over-year in international markets, domestic same-restaurant sales dropped 2.8% in the first quarter—more than the 1.7% Wall Street expected, according to the consensus estimates.

Wendy’s said inflation pushed up the cost of supplies and labor, while traffic declined at company-operated U.S. locations.

Consumer pullback was most evident during breakfast hours and in the month of March, Cook said. During parts of that month, the broader industry experienced a low-double-digit drop in traffic among households making less than $75,000 annually, Cook said on an earnings conference call Friday.

In response to waning demand, Wendy’s plans to run a “100 Days of Summer” promotion with innovative items and a focus on value when “our customers need it most,” CEO Kirk Tanner said in the call.

Wendy’s shares were up less than 1% in recent trading Friday. However, the stock has lost more than a fifth of its value this year.

Shares of DexCom (DXCM) jumped more than 15% to pace the S&P 500‘s advancers Friday, a day after the maker of glucose monitoring devices for people with diabetes reported better-than-expected quarterly revenue and announced a $750 million stock buyback program.

After the closing bell Thursday, San Diego-based DexCom reported first-quarter revenue that grew 12% year-over-year to $1.04 billion. Analysts surveyed by Visible Alpha expected $1.02 billion. Adjusted earnings per share of 32 cents missed estimates by a penny.

DexCom affirmed its full-year outlook for revenue of $4.6 billion, adjusted operating margin of approximately 21%, and adjusted EBITDA margin of about 30%.

However, it lowered its 2025 projection for adjusted gross profit margin to approximately 62% because of “incremental costs related to near-term supply dynamics.”

Friday’s surge moved shares of DexCom into positive territory for 2025. At around $81, they’re still a bit off Visible Alpha’s average analyst price target, which is currently a bit above $98.

If you’re waiting for borrowing costs to come down, the Federal Reserve is unlikely to make those dreams come true at its next meeting on Wednesday.

The central bank is widely expected to keep its key federal funds rate at a range of 4.25% to 4.5%, the same as it’s been since January. There’s just a 1.8% chance the Federal Open Market Committee will cut interest rates, according to the CME Group’s FedWatch tool, which forecasts rate movements based on fed funds futures trading data.

The Fed’s mantra this year has been “wait and see.” Officials have said that attitude is unlikely to change until there is enough hard evidence of the economic effects of President Donald Trump’s rapid overhaul of U.S. trade policy.

Economists expect Trump’s tariffs, which took effect in April, will push up prices and hurt employment, which would have implications for the Fed’s “dual mandate” to keep a lid on both inflation and joblessness using monetary policy.

However, the most recent data showed that inflation stayed tame in March, and the job market held steady in April.

“The data were strong enough to allow the Federal Reserve to remain on the sidelines as it monitors the impact of tariffs on inflation and inflation expectations,” Nancy Vanden Houten, lead U.S. economist at Oxford Economics, wrote in a commentary.

Although hard data has been stable, economic forecasts and surveys warn of trouble ahead. Business leaders and private individuals say they’re fearful the tariffs will push up the cost of living and hurt business in the coming months and years, possibly even leading to a recession.

So What’s Next For Rate Cuts?

Currently, the Fed is holding interest rates higher than usual to snuff out the last embers of the post-pandemic surge of inflation. The Fed’s favorite measure of the cost of living rose 2.6% over the year in March, still above the Fed’s goal of a 2% annual rate. The unemployment rate held steady at 4.2% in April, which Fed officials consider a sign the economy is at or close to “full employment.”

Going forward, the Fed could find itself in a bind because its main tool for managing the economy, the fed funds rate, is a blunt instrument.

By lowering interest rates, the Fed can encourage borrowing and spending, but at the risk of overheating the economy and stoking inflation. Or it can do the opposite, raising interest rates to subdue inflation, but slowing down the economy and risking a surge in unemployment. A stagnant economy combined with high inflation would force the Fed to choose which half of “stagflation” to tackle first.

Traders think the Fed will most likely start cutting interest rates in July as the economy weakens, according to the FedWatch tool. But for now, central bankers are likely to hold steady, seeing which problem becomes more urgent.

“The FOMC will remain on hold awaiting more information on how the tariff shock is propagating through the labor market and global supply chains,” Douglas Porter, chief U.S. economist at BMO Capital Markets, wrote in a commentary.

Trade tensions are stirring up fresh concerns for retirees. While economic uncertainty isn’t new, this round of volatility is being driven more by policy changes than typical business cycles. As a result, you might be wondering how to best protect your retirement savings.

Financial experts stress that most retirees should stay focused on a long-term strategy. That includes reviewing withdrawal plans, building flexibility into spending, and maintaining realistic expectations about market ups and downs.

Don’t Make Sudden Moves With Your Withdrawal Strategy

While tariffs and inflation may rattle the markets, most retirees don’t need to change their withdrawal plans immediately.

Kevin Jestice, CFA, CIPM, and Head of Nationwide’s Investment Management Group, said this is not the time for rash decisions. “Volatile times like this…are really good times to engage in a conversation with their financial advisor about whether their needs and circumstances have changed,” he said.

For retirees already drawing down their savings, maintaining flexibility around discretionary spending can help reduce the need to sell investments in a downturn. If you can afford to delay some purchases or scale back temporarily, you may avoid locking in losses. 

On the flip side, market dips may offer a chance to buy at lower prices for those still contributing to their retirement accounts. But, as Jestice put it, “Stocks are one of the few things people don’t like to buy at a discount,” even though they can represent good value during periods of market stress.

Stick With Long-Term Allocation, But Consider Evolving Need

Short-term volatility, even when sparked by trade policy or interest rate fears, doesn’t justify a major portfolio overhaul for most retirees. “We wouldn’t recommend a significant asset allocation change as a result of a short-term phenomenon,” said Jestice, noting that many Americans now need their retirement savings to last multiple decades.

People retiring at 65 today may spend 20 to 30 years or more in retirement, which means their investments must continue working long after their final paycheck. In fact, Jestice noted a growing trend toward slightly higher equity allocations among older investors compared to previous generations, reflecting longer life expectancies and the need for continued growth.

Some retirees also turn to products offering income guarantees, such as annuities, to help buffer against market swings. While these tools aren’t right for everyone, they can help reduce volatility and provide more predictable income in uncertain times. As Jestice explained, these guarantees “change the risk-return profile of the total portfolio” and are increasingly seen as a complement to traditional allocations.

Cash Cushions Still Matter, But Don’t Overdo It

Maintaining some cash on hand is important for covering unexpected expenses, especially in retirement. But too much liquidity can hinder long-term growth. According to Jestice, retirees shouldn’t pivot in and out of cash in reaction to market headlines. “Stick with the plan that’s designed around your savings goals and time horizon,” he advised.

While a modest cash buffer can provide peace of mind and short-term flexibility, holding large amounts on the sidelines can mean missing out on growth opportunities. Especially during volatile periods, staying invested is often the better long-term move. Investors who maintain their original asset allocation strategy are typically better positioned to benefit from eventual market recoveries.

Sequence Risk Calls for Spending Flexibility

Retirees face the greatest risk when markets dip early in retirement—a concept known as sequence of returns risk. Market losses in those first few years can have a large impact on long-term portfolio health. That’s why spending flexibility becomes such a powerful tool.

Here’s how retirees can protect their savings during turbulent times:

• Reduce or delay discretionary expenses to avoid selling investments while values are down.
• Minimize debt, since fixed payments are harder to manage without steady income.
• Adjust withdrawals when possible, especially in years when the market underperforms.
• Build flexibility into your budget, so you’re not locked into a rigid spending plan.

Even small spending adjustments in response to market conditions can help your investments recover and last longer.

What Experts Are Watching Now

While tariffs have been front and center in recent headlines, they’re just one of several economic signals experts are watching closely. Jestice emphasized that tariffs may not directly impact individual retirees, but the ripple effects can create market swings that affect everyone’s portfolio.

Other key indicators include the shape of the yield curve, which helps signal investors’ expectations about future interest rates and recession risk, and ongoing trends in inflation. Persistent inflation can be especially harmful for retirees on fixed incomes, eroding purchasing power over time. Corporate earnings are also under the microscope, as their strength or weakness can indicate how resilient the broader economy might be in the face of policy shifts or global uncertainty.

Together, these signals help financial professionals gauge where the economy may be headed and how retirees should position themselves for the months ahead.

The Bottom Line

If you’re retired or approaching retirement, headlines about tariffs and economic volatility can be unsettling. But the fundamentals still apply: stick with your long-term plan, explore options for guaranteed income if appropriate, and be willing to adjust spending if needed.

Take advantage of any financial education tools available through your retirement plan or provider, even if you don’t work with a financial advisor. And remember, your time horizon is probably longer than you think. As Jestice put it, “There’s no better time to begin investing in a retirement plan than the present, regardless of the market volatility.”

If you’ve gotten used to “shopping like a billionaire,” those great deals on bargain sites like Temu and Shein are becoming casualties of President Donald Trump’s trade war with China.

On Friday, a White House executive order went into effect shutting down a tax loophole called the “de minimis” exemption. That exemption allowed packages valued less than $800 to be shipped directly to U.S. customers from China. That exemption was the foundation of the business model of discount shopping sites. Those deals are getting fewer and farther between now that packages are subject to the tariffs Trump has levied against China as part of his effort to bring manufacturing back to the U.S.

Both retailers have raised prices significantly in response to the tariffs going into effect, according to reporting by Bloomberg, which found some items on Shein had more than quadrupled in price. Temu had stopped shipping items from warehouses in China, and only offered items that were already in warehouses in the U.S.

The immediate jump in prices could be a taste of things to come for U.S. consumers. Economists widely expect Trump’s broad tariffs to drive up the cost of living over time. Things like toys that are mainly made in China could see drastic price hikes and shortages, according to trade experts.

The White House said the exemption was hurting American businesses and had been abused to smuggle drugs, including fentanyl.

Palantir (PLTR) is scheduled to report quarterly results after the bell Monday, with analysts largely taking a wait-and-see approach on the artificial intelligence software firm.

Of the 12 analysts covering the stock who are tracked by Visible Alpha, just one has Palantir rated “buy,” compared with eight “hold” and three “sell” ratings. The stock has an average price target of nearly $88, well off Friday’s close above $124.

The Street expects Palantir to report revenue of $862.3 million, up 36% year-over-year, and adjusted earnings of $324.8 million, or 13 cents per share, up from $196.9 million, or 8 cents per share.

NATO Acquires Company’s AI-Enabled Military System

The results are due after the North Atlantic Treaty Organization last month said it acquired Palantir’s AI-enabled military system. The deal with the Brussels-based military alliance helped ease investor concerns that Europe may rely less on American defense contractors amid an uncertain trade outlook.

Shares of Palantir are up about 64% so far this year as of Friday’s close and some 450% over the past 12 months.

The S&P 500 on Friday rose for a ninth consecutive session, its longest winning streak in more than two decades. 

The benchmark index of U.S. stocks advanced 1.5% Friday after Chinese officials signaled interest in ending the trade war with the U.S. Friday’s gains capped off the index’s longest streak since November 2004.

Friday’s rally also erased all of the S&P 500’s post-“Liberation Day” losses. The index, which in mid-April was down more than 15% from the start of the year, is now down less than 4% year-to-date.

Investors have slowly regained their appetite for risk after President Trump’s “Liberation Day” tariff announcement in early April prompted one of the worst stock sell-offs in decades. A slew of solid earnings reports and hope for tariff relief have helped the S&P 500 rise nearly 8.7% in the last eight sessions, its biggest rally of that length since November 2020 when stocks were buoyed by the completion of Covid-19 vaccines.

Markets rose broadly Friday, with all three leading US indexes gaining more than 1%. Read Investopedia’s full coverage of today’s trading here.

Update—May 2, 2025: This story was updated to reflect the market close on Friday.

The economy is at a tipping point right now. It’s shifting faster and deeper than most investors realize.

Take the situation with tariffs, for example. Whether you’re a fan of President Trump or not, I think we can all agree that the rollout of the tariffs was quite a whirlwind. Things are moving fast, and for many, it’s starting to feel chaotic.

That’s why this week’s reports on GDP, inflation and jobs were so important. They offer the first real clues about what’s brewing beneath the surface.

But I’m here to tell you that a far bigger story is unfolding behind the scenes. And in just a moment, I’ll show you exactly what’s unfolding, and more importantly, what you can do about it.

But first, let’s discuss this week’s important economic data.

The GDP Report’s Hidden Strength

Let’s start with Thursday morning’s gross domestic product report.

At first glance, the headline number looked disappointing. GDP declined at an annualized rate of 0.3% in the first quarter – slightly worse than the 0.2% drop economists expected.

But if you dig a little deeper, the picture is a lot more encouraging.

The decline was largely the result of a 41.3% surge in imports ahead of the new tariff deadlines. That surge alone knocked 4.8% off the GDP number. Essentially, countries and businesses alike were trying to get their goods in before the tariffs hit – and that created a drag on the numbers that doesn’t reflect the true health of the economy.

If you back that out, growth was actually positive. So, the signs of recession aren’t there, folks.

The Fed’s Favorite Inflation Gauge

Next up is the latest look at inflation – the Personal Consumption Expenditures (PCE) index.

Remember, the core component of this report is the Federal Reserve’s preferred inflation gauge. So, it’s worth watching closely.

In March, the headline PCE index was flat month-over-month. That brings the annual rate down to 2.3% – the lowest since last fall. Core PCE, which excludes food and energy prices, also remained flat for the month, with the annual rate falling to 2.6% from 3.0% in February.

Now, economists anticipated a 0.1% monthly increase for both headline and core PCE, with annual rates holding steady or ticking higher. So, this is really encouraging, folks. However, these figures came before the implementation of the tariffs in April.

Jobs Report: Not the “Bad” News I Wanted…

Now let’s turn to the labor market.

The jobs report was released this morning, and to be honest, I was a little disappointed with it.

The U.S. economy added 175,000 jobs in April – beating estimates for 138,000. The unemployment rate held steady at 4.2%. But I was actually hoping for a weaker headline number, because that would help bolster the case for key interest rate cuts.

Specifically, I wanted to see the impact of all the job cuts coming from the Department of Government Efficiency (DOGE). Unfortunately, that didn’t show up. The report only showed a decline of 9,000 federal workers. Whether that’s because of lagging severance packages or something else, the DOGE cuts just didn’t hit the numbers the way I expected.

There were, however, downward revisions to previous months. February and March job gains were revised lower by a combined 58,000. And while payrolls came in hotter than expected, wage growth was soft – average hourly earnings rose just six cents in April.

Sometimes, bad news is good news. And while we didn’t quite get the “bad news” I was hoping for, the reality is the cracks are starting to show.

The Case for Rate Cuts Is Growing

So, the big question is whether these reports will be enough to push the Fed toward cutting rates? That remains to be seen.

On balance, I think the slowing revisions and wage growth in the jobs report help build the case.

And while the PCE report was very encouraging, the issue here is that this data is before the tariffs hit. The Fed is worried that the tariffs could lead to price increases in the coming months. The reality is that the deflationary signs are building, and our dollar is incredibly strong.

So frankly, I think the Fed is being overly cautious here. If I were Fed Chair Jerome Powell, I’d go ahead and cut now.

In fact, I’m predicting four rate cuts this year. That’s more than most economists are calling for, but it lines up with what we’re seeing in the bond market.

In fact, in a recent appearance on Fox Business, Treasury Secretary Scott Bessent pointed out that the two-year Treasury yield (now at about 3.8%) is far below the current federal funds target rate range of 4.25% to 4.50%.

That’s a clear signal the Fed is behind the curve – and that multiple rate cuts may be needed just to catch up to market expectations.

Now, the 10-year Treasury yield has perked up a bit recently. It’s at about 4.3% right now. But the European Central Bank has already cut interest rates seven times since June 2024, bringing its benchmark rate down to 2.25%. And markets are expecting as many as three additional cuts in 2025, starting in June.

So, I expect our Treasury yields to continue meandering lower as global rates decline. Soon, they’ll be well below the federal funds rate, and the Fed be out of sync with the broader market. Then, it will have to cut.

Closing Thoughts

When that happens, it could be just the rocket fuel the market needs.

The fact is, I expect positive trade developments, upcoming key interest rate cuts and strong quarterly results should serve as the powerful “one-two-three” punch that propels fundamentally superior stocks much higher.

But I should add that one thing is clear amid all of the uncertainty right now, folks.

The market is adjusting to a new reality.

The fact is, we are in a period of dramatic upheaval, and it’s only getting started.

And it’s all thanks to what I’m calling the Economic Singularity.

This isn’t just another market cycle or recession. It’s a fundamental restructuring of how wealth is created, how work is valued and who gets left behind. 

Make no mistake: This could either cost you dearly or make you significantly wealthier.

That’s why I’ve broken my silence and filmed a special video to explain what’s happening.

I want you to have a clear-eyed understanding of what’s really driving these changes happening behind the scenes. That way, you can prepare for what’s next and learn exactly how to protect yourself – and profit – from these unprecedented economic changes.

To discover the precise strategies and specific stocks that are already thriving amid this turmoil, I urge you to watch my new presentation now.

The sooner you understand what’s really unfolding – and position yourself accordingly – the better off you’ll be when this shift accelerates.

Sincerely,

Louis Navellier