The Daily Breakdown: Negative GDP?!

The Every day Breakdown appears on the newest GDP print, which confirmed an financial contraction for the primary time since early 2022.

Thursday’s TLDR

META & MSFT ship
GDP turns detrimental
BTC hits multi-month excessive

What’s Taking place?

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Yesterday’s massive speaking level was the detrimental Q1 GDP print. Nevertheless, that dialogue appears to be taking a again seat to the large earnings responses from Meta and Microsoft. 

Whew!

Bulls wanted mega-cap tech to report robust outcomes. Tech has a 30% weighting within the S&P 500 and has been the second-worst performing sector to date this 12 months — about doubling the decline that SPY ETF has seen. Not solely are these a few of buyers’ favourite shares, however they’ve large weightings too. 

That is nice to see, however it doesn’t ease a few of the worries round that detrimental GDP print, so let’s break that down. 

Imports surged within the newest quarter, (which subtracts from US GDP). Imports jumped as companies positioned themselves forward of tariffs, making an attempt to keep away from pointless value will increase. Additional, after 10 straight quarters of optimistic contribution to GDP, authorities spending dipped. Given the Administration’s strategy to the federal authorities by way of DOGE, this contraction isn’t too shocking. 

However outdoors of the noisy import/export information, enterprise and shopper spending was first rate. We’ve heard on company convention calls that shopper spending has been just a little lumpy, however regular all through 2025. 

That is the large one to know: Private consumption is greater than two-thirds of the GDP report. It confirmed annualized development in Q1, however posted its lowest determine in nearly two years. Customers proceed to spend, which is nice, however falling confidence appears to be holding them again. 

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The Setup — Meta

Final night time, Meta beat on earnings and income expectations and spoke optimistically sufficient on its convention name to get buyers excited. In response, shares are increased by about 5% to six% in pre-market buying and selling. 

Yesterday we checked out some key ranges for Microsoft. With it above its 200-day in pre-market buying and selling, it’d be nice to see it clear this measure and keep above it in at the moment’s common session. 

Can Meta do the identical factor? 

Once I have a look at Meta, I see a inventory that discovered assist close to $480, then cleared downtrend resistance (the blue line) forward of earnings. 

You may discover the value vary I added to the suitable aspect of the chart, displaying what a 6% rally appears like from yesterday’s shut. That places it proper close to $580, $100 a share off the latest lows, and proper into the 50-day and 200-day transferring averages. 

Be at liberty so as to add a few of these measures to your personal Meta charts, too. 

From right here, bulls will need to see META inventory cost by means of these measures and begin to use them as assist. Bears will hope that these measures are resistance. If Meta does break by means of them although, a bigger rebound may ensue. 

Choices

For some buyers, choices might be one different to take a position on Meta. Bear in mind, the chance for choices consumers is tied to the premium paid for the choice — and dropping the premium is the complete danger. 

Bulls can make the most of calls or name spreads to take a position on additional upside, whereas bears can use places or put spreads to take a position on the beneficial properties truly fizzling out and Meta rolling over. 

For these seeking to study extra about choices, think about visiting the eToro Academy.

What Wall Avenue is Watching

MSFT – Microsoft shares are increased by about 9% in pre-market buying and selling. The corporate cruised previous analysts’ earnings and income expectations, and delivered robust cloud outcomes with its Azure unit. What’s extra, administration spoke favorably about enhancing working margins for the 12 months.  

BTC – Bitcoin has been holding up properly over the previous few weeks and continues to inch increased. It’s now at its highest stage since February twenty fourth, formally hitting a multi-month excessive. It’s obtained some questioning if $100K is subsequent and whether or not it may possibly elevate different cryptocurrencies, like ETH. Try the chart for BTC. 

Disclaimer:

Please notice that as a result of market volatility, a few of the costs might have already been reached and eventualities performed out.