Rover's Weekly Market Brief - 05/09/2025

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Economy

The ISM® (Institute for Supply Management®) Services PMI® reported continued expansion in April, registering 51.6%, a 0.8 percentage point increase from the previous month and the tenth consecutive month of growth. The Business Activity Index recorded a 53.7% reading, showing ongoing expansion for the 59th straight month, although its rate of increase slowed. The New Orders Index bolstered the outlook, climbing to 52.3%. However, hiring remained in contraction, with the Employment Index staying below the expansion threshold, at 49.0% for the second consecutive month. Supplier delivery times continued to lengthen, with the Supplier Deliveries Index increasing to 51.3%. Inflationary pressures intensified, as reflected in a 4.2-percentage point increase in the Prices Index to 65.1%. Inventory levels continued to rise, with the Inventories Index reaching 53.4%, the third consecutive month in expansion, while the Backlog of Orders Index remained in contraction for the second consecutive month at 48.0%.

The Energy Information Administration (EIA) reported that U.S. crude oil inventories, excluding those in the Strategic Petroleum Reserve, declined by 2.0 million barrels for the week ending May 2nd, bringing total stocks to 438.4 MMbbl. This is approximately 7% below the five-year average for this time of year. Gasoline and propane/propylene stocks increased by 0.2 MMbbl and 1.0 MMbbl, respectively, while distillate inventories fell by 1.1 MMbbl. Overall, total commercial petroleum inventories rose by 1.2 MMbbl. Refineries processed an average of 16.1 million barrels per day of crude oil, operating at 89% capacity—up slightly from 88.6% the prior week. Gasoline production averaged 9.7 MMbbl/d, and distillate fuel production averaged 4.7 MMbbl/d. Crude oil imports averaged 6.0 MMbbl/d, an increase of 0.5 MMbbl/d from the previous week. Over the past four weeks, total petroleum products supplied averaged 19.8 MMbbl/d, down 0.6% from the same period last year.

The Federal Open Market Committee (FOMC) announced that it will leave the federal funds rate within a range of 4.25% to 4.50%, the same level as in March, January, and December. The FOMC statement indicated growing concerns over rising inflation and potential increases in unemployment, adding “Uncertainty about the economic outlook has increased further. The Committee is attentive to the risks to both sides of its dual mandate and judges that the risks of higher unemployment and higher inflation have risen“. Fed Chair Jerome Powell faced repeated questions during his news conference about the timing of a potential rate cut. Powell indicated the core components of the economy are healthy and growing at a solid pace, the labor market is solid, inflation at a bit above 2% is under control, and the economy is resilient and in good shape. Given these factors, Powell emphasized that the FOMC remains comfortable adopting a wait-and-see approach, despite the uncertainties surrounding tariffs and potential shifts in the labor market.

Upcoming Economic Reports:

Tuesday May 13 – CPI (MoM) (April)

Thursday May 15 – PPI (MoM) (April)

Earnings Calendar:

 

Monday	Tuesday	Wednesday	Thursday	Friday
Bridgestone (BRDCY)	Bayer (BAYRY)	Cisco Systems (CSCO)	Deere (DE)	Flower Foods (FLO)
Hertz Global Holdings (HTZ)	Rakuten Group (RKUNF)	Steris (STE)	Walmart (WMT)	RBC Bearings (RBC)