Earnings Season Highlights on Tariffs, Consumer Spending, and More

*** ONE-TIME USE *** A trader works on the floor at the New York Stock Exchange (NYSE) in New York, on Monday, Aug. 25, 2025. (Michael Nagle/Bloomberg)

This commentary was issued recently by money managers, research firms, and market newsletter writers and has been edited by Barron’s.

Earnings Season Highlights

The Pulse of the Market
RBC Capital Markets
Aug. 29: Earnings results were light this past week, but we still came away with a few interesting nuggets from our S&P 500 transcript reading. Key takeaways are:

Demand/Consumers: We took note of NetApp’s reference to the persistence of some ongoing macro-related spending caution. Meanwhile, Williams-Sonoma weighed in on the pull-forward debate, saying they had not seen indications of it. HP highlighted consumer strength in back-to-school. Dollar General noted growth across all income cohorts. Best Buy described consumers as resilient and deal-focused.

Tariffs: Williams-Sonoma stood out for a concise description of their six-point mitigation plan, which included cost concessions, re-sourcing, supply chain efficiencies, cost controls, expanding their made-in-the-USA products, and price increases. This is also a fairly good summary of what we read on this topic throughout reporting season. They highlighted difficulty in knowing where tariffs will land, and a desire to avoid knee-jerk reactions. The idea that companies are being careful and deliberate in their responses is something we picked up on with a few other companies in 2Q reporting season, as well. Mitigation remained a key theme this past week, along with the volatile or evolving nature of tariffs. A few companies alluded to margin pressures, which we’re seeing show up in data on shifts in consensus margin forecasts.

Other Topics: Pricing strategies remained in focus this past week. Williams-Sonoma once again caught our attention by saying it was too early for 2026 guides.

Lori Calcasina & Team

Healthcare Builds a “Bottom”

deGraaf’s Daily
Renaissance Macro Research
Aug. 29: Our S&P 500 SERM (Standardized Excess Return Model) in Healthcare is at its worst reading since the mid-1980s, which was rivaled only by the late 1970s as the worst three-year period for risk-adjusted returns. The good news is this is the zone where bottoms are built; the key in that phrase is “built.” Johnson & Johnson looks like a big base formation with building momentum, but rival Cooper broke to a new relative and absolute low on earnings.

Pharma is equally negative, but we should note that AstraZeneca in London had a golden cross Thursday while relative new-comer Galderma made a 52-week high. [A golden cross is a bullish chart pattern that depicts a stock’s short-term moving average crossing above a long-term moving average.] There is hope for the group, but with all bottoming processes, it starts with single stocks and builds from there.

Jeff deGraaf

ECB Rate Hike in ’26?

THINK economic and financial analysis
ING
Aug. 29: This week’s ECB [European Central Bank] minutes had a hint of an easing bias, even if officials seem fairly content with the level of rates so far. ING’s Carsten Brzeski writes that another cut is still possible, given the downside risks to inflation.

But the debate on cuts is nearing its conclusion, and soon enough we’ll be talking about rate hikes. And what if the true surprise this autumn is if markets start pricing one in 2026?

Next week’s eurozone inflation is an unlikely catalyst. But German fiscal stimulus is coming, and it pits the country as a potential outperformer on growth next year. Signs of that boost coming through earlier than expected are a potential wild card for the final months of 2025.

James Smith

Don’t Fight the Trump

GeoMacro August 2025
BCA Research
Aug. 28: “Don’t Fight the Trump.” The Trump administration has finally focused on its macro North Star: lower yields. Finally, after several months of back and forth and often inconsistent policies, the White House knows what it needs to do. The OBBBA [One Big Beautiful Bill Act] risk is behind us. Fiscal policy is not austere, but it is not profligate either. New tax increases (yes, that is what you should call tariffs) are in. Fiscal deficit is on pace to decline over the next five years. Now the difficult work of bending the Fed’s perceived independence toward the long arch of lower borrowing rates begins.

We don’t want to short the S&P 500 in this environment, just the dollar. But remember, the S&P 500 is a nominal asset priced in dollars. If the dollar goes down, the S&P 500 goes up.

Marko Papic

A Good Year on the Farm

Regional Commentary
Wells Fargo
Aug. 25: Earnings prospects have brightened for the agricultural sector. The U.S. Department of Agriculture expects net cash farm income to jump nearly 22% in 2025, driven by firm livestock prices, a modest reduction in expenses and increased government support from the 2025 Farm Bill. Total net farm income, a broader measure accounting for both cash and non-cash earnings, is projected to rise to $180.1 billion this year, just 1% shy of the record-high reached in 2022. Farmers and ranchers are highly optimistic as a result. Expectations among agricultural producers are currently sitting near their highest point since 2021, according to the July Purdue University/CME Group Ag Economy Barometer. That said, this sentiment gauge has backpedaled somewhat since May amid elevated economic uncertainty.

Strong growth in selling prices relative to input costs is a main factor underpinning farm sector optimism. According to USDA, prices received for agricultural products rose 9.2% year-over-year in June, outpacing the 7.1% uptick in prices paid. Although the inflationary impulse behind prices received has moderated, growth in selling prices has outpaced growth in operating costs for eight straight months. Put another way, the ratio of prices received to prices paid picked up to 93.0 as of June, well above the pre-pandemic average of 85.5 from 2015 to 2019.

Charlie Dougherty, Jackie Benson, Ali Hajibeig

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