Wall Street will be focused on the Federal Reserve next week, with the central bank’s monetary policy committee scheduled to announce its third interest rate decision of the year on Wednesday.
According to the CME FedWatch tool, market participants are near certain that the federal funds rate will be kept on hold. Policymakers and Fed chair Jerome Powell have said that they are happy to take no action while considering further economic data. Powell’s post-decision press conference will be closely watched for commentary on tariffs.
Meanwhile, the first quarter earnings season will continue to chug along. Investors will receive quarterly results from major companies such as Ford (F), Walt Disney (DIS), AMD (AMD) and Palantir (PLTR).
The economic calendar will see readings on the U.S. services sector and the trade deficit.
Investing Group Spotlight – Tariffs
Value Investor’s Edge is closely tracking the escalating global tariff situation, as well as ongoing sanctions impacting both Russian exports and Iranian crude oil. Containership traffic is plummeting into May after a surge of tariff front-running during March and part of April. At the same time as containership freight rates are falling, the tanker market rates are strengthening, at least in part due to stronger sanction enforcement against Iran. It’s interesting to see these two segments moving in different directions, underscoring how dynamic the shipping sector can be!
We recently published our May 2025 model portfolio update, which focused on the 12 best-positioned stocks in this dynamic global environment. One of our recent picks is Teekay Tankers (TNK) which is benefitting from surging tanker rates yet has traded weakly because some investors seem to be mistakenly tracking it as an “oil services” play. We estimate that TNK will have a significant net cash position of over $650M (roughly $20/share) by the end of 2Q25, whereas the stock barely trades around the valuation of cash plus demolition value of TNK’s fleet. If tanker rates remain strong and investors recognize the earnings power, we could potentially see trading ranges as high as $60 by late summer (nearly 50% upside). This might sound like an aggressive target, but it’s worth noting TNK traded above $60 as recently as Oct. 2024 before shipping sentiment turned sour.
Discover more analysis and ideas from J Mintzmyer with his SA Investing Group service: Value Investor’s Edge.
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