Louis Vuitton's Whiff Is a Good Sign for These 2 Holdings

Futures point to a mixed start when U.S. equity markets open on Tuesday morning as investors deal with the latest indication of consumers pulling back their spending and another layer in global trade developments.

On the economic front, disappointing quarterly results from LVMH Moet Hennessy Louis Vuitton SA LVMUY serve as a reminder that consumers of all shapes and sizes are being more cautious in their spending. To LVMH’s results, we can add a recent Bloomberg article that highlighted what’s referred to as the "beauty salon indicator" and also pointed to consumer retrenching.

Those comments support the Portfolio’s two consumer-related positions, Costco COST and Amazon AMZN, but it also has us closely watching TJX Companies TJX in the Bullpen.

The shares have moved higher in recent weeks, but what we see in Wednesday's March Retail Sales report could lead the market to re-think some consumer spending-related names. That monthly report should provide more insight into where consumers are spending and help frame March quarter expectations for the likes of Amazon, Starbucks SBUX, Walmart WMT and others. Also bringing more insight into the vector and velocity of the economy and consumers, we have quarterly results this morning from Albertsons ACI followed by United Airlines UAL on Tuesday afternoon.

As we digest those comments and revised outlooks, we will continue to update our thinking for the latest trade developments. For example, over the weekend, China altered the trade playbook from one focused on tariffs by halting rare earth exports. Earlier on Tuesday, China directed its airlines to suspend deliveries of Boeing BA jets as well as directed its airlines to stop buying aircraft components from U.S. suppliers.

Lest you think that means the emphasis is off of tariffs, President Trump’s administration pressed forward with plans to impose tariffs on semiconductor and pharmaceutical imports by initiating trade probes led by the Commerce Department. The filings, set to be published on Wednesday, set a 21-day deadline from that date for the submission of public comment on the issue and indicate the administration intends to pursue the levies under authority granted by Section 232 of the Trade Expansion Act of 1962. Such section 232 probes need to be completed within 270 days after being announced. To us, this seems to give Trump some tariff flexibility subject to trade negotiations that are expected to unfold over the coming several weeks.

In response to that chip uncertainty, South Korea increased its aid package for the semiconductor industry to 33 trillion won (about $23.25 billion), up from the 26 trillion won package introduced last year. We’ll also be very interested in comments about current and future capital spending plans when Taiwan Semiconductor TSM reports its quarterly results on Thursday. With an eye toward our various Portfolio holdings, including Apple APPL, Nvidia NVDA, Marvell MRVL, Qualcomm QCOM and Universal Display OLED, we’ll be digging into its end market mix for the quarter as well as its expectations for the current one.

Market Gloom Remains

If you’re thinking all of this paints an uncertain if not gloomy picture, the findings from Bank of America’s April 2025 fund manager survey should not surprise you. Fund managers are extremely gloomy, with 82% of respondents to BofA’s monthly survey expecting the global economy to weaken and 42% saying a recession is likely. Those findings and others in the report support BofA’s call that the stock market’s April lows will hold in the near term and that “big upside needs big tariff easing, big Fed rate cuts, and/or economic data resilience.”

We will agree with those three potential catalysts to drive the market higher. However, our view that business and tariff uncertainty as well as slowing consumer spending and China’s evolving playbook will lead companies to issue below consensus expectations for the current quarter and potentially 2H 2025 remains unchanged. In the near term, we will continue to focus on where companies, consumers and governments are poised to continue spending.

First Look at Bank of America’s Results

Shares of Bank of America BAC are indicated to open higher later on Tuesday morning after the company bested March quarter expectations as market volatility boosted trading fees.

BofA delivered EPS of $0.90 on revenue of $27.37 billion compared to the market forecast of $0.82 and $26.97 billion. Net interest income (NII) came in at $14.4 billion, up 3% year over year and 1% sequentially. Revenue from equity trading rose 17% to $2.18 billion, while BofA's investment banking fees fell 3% to $1.5 billion in the quarter. The bank also kept its forecast for quarterly NII to reach $15.5 billion to $15.7 billion on a fully taxable-equivalent basis by the end of the year.

We’ll have more once we’ve had a chance to digest BofA’s earnings conference call that began at 8:30 a.m. ET.

More Pro Portfolio

At the time of publication, TheStreet Pro Portfolio was long COST, AMZN, AAPL, NVDA, MRVL, QCOM, OLED and BAC.