Here’s what you’ll find in today’s edition:

• Felix crunches the numbers on this week’s data releases.

• Earnings season continues with solid reports from tech giants Meta and Microsoft. 

• How Robinhood is looking to diversify its crypto business.

Unpacking a big week for US economic data

This week is one of the biggest we’ve had in a while for economic data releases.

In the spirit of all this data, let’s run through some charts and takeaways. 

JOLTS report

On Tuesday we received the JOLTS report. It was a mixed one.

On one side, we saw job openings miss to the downside and begin to roll over after a few months of positive surprises:

On the other, we saw the quits rate actually increase, hinting at increased confidence in the jobs market by individuals willing to quit their jobs and find something better elsewhere: 

It’s pretty rare to see these two prints diverge. I think we’ll need to see the jobs report on Friday to get a cleaner read on the direction of the labor market, which is a key driver of the Fed’s reaction function. 

GDP print

As mentioned in yesterday’s newsletter, we received the first look at Q1’s GDP print, which was also quite mixed. The topline number of -0.3% quarter over quarter hid some interesting insights:

The big driver was net exports crashing lower, primarily due to a huge increase in imports. That mechanically lowers GDP growth:

However, looking at the more important components of GDP, consumption held up decently and investment actually surged!

This hints at something I’ve been thinking a lot about recently, which is that tariffs could be creating a mirage in the hard data. This mirage showcases a strong economy because of all the tariff frontrunning that occurs from both consumers and businesses trying to buy goods before the tariffs truly begin. 

Finally, we also got the Core PCE print, which came in at 0% month over month (vs. consensus expectations of 0.1%)!

This kind of data shines a light on how if it weren’t for the fear of tariff-induced inflation, inflation would be on a fast track back to target and the Fed would be cutting interest rates like mad. 

ISM survey

Finally, today saw the ISM Manufacturing PMI survey results, which provide a leading look into how the economy is digesting the tariff war. 

Overall, we’re seeing it hold strong and I think this validates the notion that a lot of manufacturing activity has been frontloaded due to tariffs:

Out of the subcomponents, the aspect that continues to be of more interest to me is the prices-paid component, which continues to surge: 

As one of the most leading indicators of inflation, this kind of uptick in prices paid does not bode well for the trajectory of rate cuts expected from the Fed.

— Felix Jauvin

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The value of the US Treasury bills that stablecoin issuer Tether held at the end of Q1, according to an attestation report published Thursday.

Its total exposure to US Treasurys is closer to $120 billion if including money market funds and reverse repo agreements. 

Tether’s US Treasury portfolio drove an operating profit of more than $1 billion during the quarter.

Stocks were back in the green after Magnificent 7 giants Meta and Microsoft reported better-than-expected Q1 reports after the close yesterday. 

Following their respective earnings releases, shares of Microsoft gained as much as 7.8% and Meta stock surged more than 5% in after-hours trading Wednesday night. At 2:15 pm ET Thursday, Meta was trading 5.2% higher, while Microsoft was up 9%. 

Meta reported earnings per share of $6.43 on revenue of $42.3 billion — coming in ahead of projections calling for $5.25 EPS on $36.4 billion in revenue. Executives also calmed investors by saying they’re not concerned about tariffs impacting ad revenue. 

“I think we’re well-positioned to weather the macroeconomic uncertainty,” CEO Mark Zuckerberg said on Wednesday’s call. 

In a rare move this earnings season, Meta also provided some positive guidance, upping its intended capital spend. Most of that is earmarked for AI investments. 

Microsoft also beat on EPS and revenue. The company reported EPS of $3.46 on $70 billion in revenue vs. the expected $3.22 EPS on $68.4 billion in revenue. 

Microsoft, like Meta, will also continue its investments in AI. Capital expenditures for the first quarter came in at $16.7 billion, slightly higher than projections. 

Microsoft execs uttered the word “tariff” just once on yesterday’s call, which shareholders surely loved. 

Overall, it’s two solid reports. But economic conditions still pose a threat for both firms. 

Next on the docket are Amazon and Apple, scheduled to post earnings this afternoon. Nvidia, the last of the Mag 7 to report, is scheduled to release on May 28.

— Casey Wagner

Casey’s been writing about Mag 7 and automaker earnings. But let’s jump to Robinhood, which is looking to wade deeper into crypto.

The trading platform’s transaction revenues amounted to $583 million in Q1. Roughly 43% of that ($252 million) came from crypto trading.

The $252 million total is less than last quarter’s record crypto transaction revenue of $358 million, Robinhood reported — but up 100% year over year. 

It appears concerns around the health of Robinhood's user base after April's market selloff have dissipated. After all, Compass Point analysts Ed Engel and Joe Flynn noted that net deposits accelerated last month ($6.5 billion) and margin balances “fared OK” ($8.4 billion). 

“Equities trading is at a four-year high,” Robinhood CFO Jason Warnick said on yesterday’s earnings call. “Options are in the zone of an all-time high, and crypto trading is north of $8 billion.” 

Compass Point increased its HOOD price target to $64. Robinhood shares were trading for around $47 at 2 pm ET — down nearly 4% on the day.

Robinhood CEO Vlad Tenev said that while the company seeks to make the company less reliant on crypto transaction volumes, it also looks to diversify the crypto business itself.   

We’ll be watching for product news that might come out of Robinhood’s June crypto rendez-vous in France. 

“Regulatory ambiguity has deterred HOOD from launching staking in the US, as well as listing a wider range of tokens,” Engel and Flynn wrote in a note. “With the SEC moving faster than expected, we see a chance that Robinhood announces staking and new token listings at the June event.” 

Tenev called clarity on listing crypto asset securities “a big opportunity” — adding “we're just in the early innings of having this technology permeate the financial system.” 

The CEO reiterated, too, that tokenizing private equities would be a huge unlock for individuals and companies. That is one of Robinhood’s top policy priorities.

And don’t forget about Robinhood’s acquisition of crypto exchange Bitstamp, which remains on track to close mid-year.  

It’s clearly a crypto-linked stock to keep an eye on.

— Ben Strack

• Bitcoin was trading around $96,800 at 2 pm ET — up nearly 3% from 24 hours prior. ETH had risen slightly more over that span, sitting around $1,855.

• Morgan Stanley is looking to offer crypto trading on its E*Trade platform, Bloomberg reported. We intend to have more on that in tomorrow’s Forward Guidance. 

• Charles Schwab plans to offer spot BTC and ETH trading within the next 12 months, CEO Rick Wurster told Reuters. That jibes with some of what we heard from the company in November. 

• Crypto ETP provider 21Shares has partnered with L1 network Sui and has filed to launch a US product that would invest in SUI tokens.