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Director of Research Jim Kelleher, CFA, has surveyed the Argus analyst team about the impact of tariffs on companies in the Argus Universe of Coverage. The tariff environment is dynamic, to say the least. The White House has levied tariffs or threatened to levy tariffs, but often paused, postponed, or withdrawn pledged tariffs. Most recently, China and the U.S. agreed to reduce baseline tariffs to 10% for 90 days (30% in the U.S. reflecting a 20% fentanyl penalty). More than the tariffs themselves, the lack of a finished tariff infrastructure complicates business planning, staffing decisions, and capital investment. Within this dynamic environment, companies are focused on taking actions in areas they can control and planning proactively for a range of tariff scenarios. Companies are anticipating both direct and indirect tariff impacts. Direct impacts would include higher costs for imported finished goods and components, foregone sales as a result of reciprocal tariffs in other nations, and other factors. For example, a manufacturing company would face direct impacts as it pays higher prices for imported parts. Indirect impacts would include a slowing in business related to a broad softening in the economy. All companies likely will feel indirect impacts. A utility, for example, could begin to see a slowing in industrial and commercial kilowatt-hour sales, particularly in niches such as warehousing, trucking and rail, and other freight-related functions. We asked Argus analysts to survey their companies for their commentary on direct and indirect tariff impacts, as well as actions these companies are taking to mitigate the challenging trade environment. Nearly every company in Argus analyst coverage has issued commentary regarding tariffs, much as (five years ago) nearly every company in coverage had something to say about the then-developing COVID-19 pandemic. Below we offer a sampling of company responses to the unfolding tariff environment across a range of sectors and industries. We intend to update our survey on a regular basis at least until the tariff environment, in whatever shape or form, becomes a stable part of the U.S. economy.

Albemarle is a global manufacturer of highly engineered specialty chemicals for a wide range of markets. The company became a top manufacturer of lithium - used in a number of industries but particularly for batteries in electric cars - through its January 2015 acquisition of Rockwood Holdings. Its other leading products are bromine, which is used in fire safety solutions, and catalysts used in oil refining. The ALB shares are a component of the S&P 500. The company has approximately 8,300 employees.

When global economic conditions become uncertain or unpredictable, investors often flock to gold. According to Trading Economics, the yellow metal is currently trading above $3,200 per ounce, up 25% for the year and near the high end of its five-year range of $1,660-$3,325. Essentially, gold has been on an upward arc since the start of the pandemic. During the first phase of the unanticipated global health crisis, the spot price for an ounce of gold jumped 33% in six months and broke through the $2,000 level. Gold also spiked in 2022 due to the war in Ukraine. Over the past year, gold has jumped another 40%, driven in part by global uncertainty over tariffs and trade wars. The current price of gold reflects the perceived safety of hard assets amid the global conflicts, as well as expectations for lower U.S. interest rates, which tend to weaken the dollar (the currency in which gold is priced). The outlook for Federal Reserve rate cuts also helps gold, as lower rates reduce the risk for a global economic recession and thus a potential decline in gold purchased for jewelry. Looking ahead, our forecast trading range for gold in 2025 is $2,500-$3,500 and our average price forecast for the year is $3,000. This compares to average gold prices of $2,450 in 2024, $1,960 in 2023, $1,873 in 2022, $1,806 in 2021, $1781 in 2020, $1,400 in 2019, $1,265 in 2018, $1,277 in 2017, $1,258 in 2016, and $1,155 in 2015. As long as geopolitics are flaring and the global economy is wobbling, gold is likely to remain at elevated levels.

Shopping Report Some of the country's biggest retailers report this week and multiple Federal Reserve officials will take to the podium, including Chairman Powell. Last week, the Dow Jones Industrial Average gained 3.4%, the S&P 500 rose 5.3%, and the Nasdaq was up 7.2%. For the year to date, the DJIA and the S&P 500 have turned positive, up 0.3% and 1.3%, respectively. The Nasdaq, down 0.5%, is close to moving into the green. Earnings season is winding down. The list of reports this week includes Palo Alto Networks on Tuesday; Target, TJX, Lowe's, and Zoom Communications on Wednesday; Intuit, Analog Devices, Williams-Sonoma, and Ralph Lauren on Thursday; and Nordstrom on Friday. Some 92% of S&P 500 companies have reported, and earnings for the quarter are up 14% from the prior-year quarter. That is far above the consensus call for EPS growth of about 3%-8% and follows 17% growth in 4Q24 EPS and 9% growth in 3Q24, according to LSEG. For 1Q, Healthcare is the leading sector, up 46%, and Energy is at the bottom, down 17%. For all of 2025, the Argus full-year earnings estimate is for low-double-digit growth from 2024. On the economic calendar, Existing Homes Sales are due out on Thursday and New Home Sales on Friday. As well, multiple Fed officials will speak publicly. The Economic Call of the Week from Argus' Chief Economist Chris Graja, CFA, is for growth in home prices to slow further. Prices of new and existing homes are reported along with home sales. On Thursday, the National Association of Realtors will report existing home sales for April. We expect sales of 4.1 million homes at a seasonally adjusted annual rate. On Friday, the Department of Housing and Urban Development will report new home sales for April. We expect sales of 650,000 homes at an annual rate. In March, the 'months supply' of existing homes rose to a still-healthy 4.0 months from 3.5 in February, though growth in existing home prices eased to 2.7% from 3.4% on a year-over-year basis. In the new home market, supply declined to 8.3 months in March from 8.9 in February, but prices slumped 2.9%. The Zillow Home Value Index for all homes rose 1.4% in April, compared with 2.6% in January, this as mortgage rates near 7% strain affordability. For other data, the Atlanta Fed GDPNow measure forecasts 2.4% for 2Q. This follows the surprise decline of 0.3% for 1Q GDP. The Argus 2025 GDP growth estimate has been lowered to 0.5% from 1.3%. The Cleveland Fed Inflation Nowcast forecasts a 2.4% rate for CPI in May, higher than the April rate. Mortgage rates inched higher last week, with the average 30-year fixed-rate mortgage at 6.81%, according to FreddieMac. Gas prices ticked down three cents to an average of $3.12 per gallon for regular gas. Looking ahead, the next Fed rate decision is on June 18, with odds at 9% for a rate cut, according to the CME FedWatch rate tool. The next meeting after that is on July 30, when odds jump to 33% for a cut.