Greetings from our annual Easter abroad (this time in Mexico). Note that next week will be a full Brief thanks to a flurry of earnings reports (each of the Telco Top Five + Google/ Alphabet this week, and the remaining Fab Five the week of April 28).
April has not been a stable month for the markets, particularly the Fab Five (-$481B for the shortened trading week, +$266B for the last two weeks). Many factors are coming into play, including tariffs (now at a baseline 10% except for China) and exchange rates (latest dollar index from Bloomberg here; latest Euro to American Dollar here; latest Chinese Yuan to Euro here). We are particularly intrigued by the Euro to Yuan ratio, and can only surmise that China is going to aggressively seek out Europe to take the place of US trade (however, looking at the 10 or 15-year view, it’s much less volatile than the period from 2000-2015).
The Telco Top Five continue their slow and steady upward trajectory (+$9B this week, +$82B so far in 2025). Each stock was up. Two of the Telco Top Five are up 19% thus far in 2025 (AT&T and T-Mobile) – we will have additional information to judge their long-term growth prospects after this week’s earnings announcements. Our guess is that tariffs will be the primary topic, and the fact that Apple airlifted $2 billion in devices (roughly 1.5 million devices at full retail value) prior to April 2nd should keep the “free every two years” model going for the foreseeable future. More from Reuters here.
Finally, there are eight days left in the T-Mobile/ US Cellular approval clock (here) as of Easter Sunday. There are three possible outcomes: 1) the deal is approved with additional conditions tied to rural coverage (which is an important growth vector for the company); 2) the deal is not approved and the DOJ sues T-Mobile to block the deal, or 3) the timeline is extended. We lean towards #1 based on our sources and the overall structure of the deal (see original announcement here), but know that it’s in the hands of White House officials which means anything could happen. Perhaps we will get a two-fer with the Metronet transaction also approved.
File is below. Full Brief next week – say tuned for lots of news! Happy Easter!
