# | Headline | Summary |
1 | China manufacturing falls for 2nd month | Over the weekend the Caixin/S&P Global PMI fell to 48.3, its lowest since September, 2022 and missed estimates of 50.6. Export orders hit their weakest levels since July 2023 as the uncertainty in U.S. trade policy starts impacting exports. Finished goods inventory has started accumulating due to delays in shipment and falling sales, analysts warn the ongoing trade uncertainty will put pressure on China’s industrial sector in Q2 of this year. |
2 | Treasury yields fall overnight | Driven by a strong demand in 10 year Japanese government bonds, the U.S. 10 year treasury fell 4.5 basis points to 4.416% overnight. Weaker than expected eurozone inflation helped keep yields lower, falling more than expected to 1.9% in May and under the European Central Bank’s inflation target. |
3 | Endowments are moving out of private equity | For a long time, university endowment funds used private equity (PE) as part of their allocation. Previous Yale endowment head David Swensen believed they fit well because they had infinite holding periods and were less obligated to be transparent. However, universities are starting to exit their PE positions as taxes included in the new GOP bill would increase the tax on endowment gains from 1.4% to as high as 21%. Although PE investments defer gains, the top endowments have allocations between 39-49% of PE already and can’t afford to put more into these long term investments. |
4 | Target falling behind other retail giants | Target has found itself on the losing end of the large U.S. retail market. Shares have fallen 43% over the past three years and from 2021-2024, Target was the only large national retailer that lost market share rather than gain. While they’ve done a good job moving into the ecommerce space, other retail giants like Walmart and Amazon invested billions into distribution and automation. As a result, Target is falling behind with its strategy of making employees handpick items from stores for online orders. Boycotts also have an effect on Target sales due to its DEI policies being stripped. Spokespeople from Target have said the company expects higher capital expenditures in FY 25 and 26 in order to renovate stores and improve shopping experience. TGT shares are trending higher today rising about 1.5% to $94.80. |
5 | Viking cruise line well positioned to grow | Viking stock has been volatile recently as investors worry about slowing bookings and a secondary offering just a year after its IPO. However, portfolio manager Jodi Love argues it will drive industry-best profitability over the next 3-5 years with a great balance sheet, return on invested capital, and capacity expansion. During an earnings call last month, the company announced 92% of 2025 capacity was already sold and they have a fleet of new ships coming in the next few years. EPS climbed more than 30% to $2.42 this year and the average analyst price target sits at $51, implying an 12% upside from todays price of $45.60. |
Morning Market Updates
June 04, 2025