Hi All - Happy Saturday and welcome back to Street Tweets from The Street Sheet. 

Welp. We’re officially halfway to a recession.

The Bureau of Economic Analysis announced this week that the US economy shrank by 0.3% in Q1.

A recession is typically considered to be two consecutive quarters of economic decline. So the country would officially enter a recession if this trend continues through April, May, and June. Looks like it might not just be Christmas coming in July…

Market Review:

The theme of the week? McRecession.

McDonald’s $MCD ( ▼ 0.45% ) reported disappointing earnings, a trend mirrored by Starbucks $SBUX ( ▲ 1.16% ) , Domino’s $DPZ ( ▼ 0.89% ) , and Wingstop $WING ( ▼ 1.77% ) . A pullback in fast food spending is usually a classic indicator of a recession. But are consumers cash-strapped? Or just being picky?

Fast food chains have received pushback from consumers in recent months for jacking up prices — without upping quality to match them. (Think: $3.99 McChickens that used to be on the Dollar Menu.) So there’s a chance Americans are just reevaluating their dining options. Evidence? Chili’s $EAT ( ▲ 0.69% ) just reported 31% same-store sales growth.

Despite the fast-food sector’s stale earnings, markets rallied ended the week on a positive note. The S&P 500 ended the week up nearly 3%, notching nine consecutive gains, its best record in 20 years. The Nasdaq Composite rose 3.4%, and the Dow Jones added around 3% as well.

Market Preview:

On Monday, the S&P global composite PMI and ISM services PMI will be released.

Tuesday will feature an update to the trade balance and the RCM/TIPP Economic Optimism Index.

Wednesday will be the marquee event, bringing the Federal Reserve’s May interest rate decision — and perhaps more importantly, accompanying comments from Fed Chair Jerome Powell, inevitable Trump shade and all.

On Thursday, investors will learn about initial jobless claims and non-farm productivity.

Finally, on Friday, we’ll get a speech from New York Fed President John Williams.

The AI bubble isn’t popping just yet.

Two years of AI hype and mind-numbingly large CapEx investments by Big Tech have caused some investors to start questioning: Are we in an AI bubble?

Well, if we are, the bubble isn’t popping just yet. Microsoft’s $MSFT ( ▼ 0.15% ) most recent earnings show that companies are still splurging on the technology.

Only time will tell if consumers are too…

Are Tesla and Musk having marriage problems?

Rumors circulated this week that Tesla $TSLA ( ▲ 0.51% ) might be searching for Elon Musk’s replacement.

In addition to Tesla, Elon currently serves as CEO of SpaceX, X, Neuralink, the Boring Company, and xAI. Oh, and he’s a top advisor to the US president, to boot. Safe to say, he may be spread a bit thin.

Tesla was quick to quell these rumors… but you never know.

Glad to know we’re not the only ones behind on our bills.

Jokes aside, this seems like a rather alarming issue that we, as a country, should be addressing.

We’re not economists, but it feels like the most obvious solution is less spend, more save… No?

QUESTION

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