Buffett Rides into the Sunset

End of an era as Buffett formally passes the baton

Summary: It's clear that, even though confidence has fallen, consumer spending has remained resilient. Tariffs are impacting supply chains and will probably drive some inflation, but consumers aren't changing behavior yet. Tech companies are full speed ahead on AI, which is seeing explosive growth by companies and consumers.

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Macro

Economic momentum has slowed
"The economic momentum of the world economy slowed slightly in the first quarter. A significant increase in the US trade deficit due to front-loading ahead of US import tariffs dampened growth there, while economic output in the Eurozone again expanded only marginally." – Mercedes-Benz Group ($MBG) Management Commentary

Consumer confidence is down
"I think, just, in general, customer -- consumer disposable income is down and their confidence levels, I think, are also down to kind of 2022 levels. And so, just, in general, right now, there's a headwind on the total business." – Domino's Pizza (DPZ 0.00%↑) CEO Russell Weiner

"Consumer sentiment has reached its second-lowest point in the last seventy years." – Kraft Heinz (KHC 0.00%↑) CEO Carlos Abrams-Rivera

Businesses are also cautious
"I'm also -- I also looked at inventories. Inventories have really not held up very well. And my concern there is that businesses are afraid that a recession will come into place. And they don't want to be stuck with inventory on their shelves. They'd rather have their shelves empty than be stuck with something that they'd have to sell at a much lower price." – U.S. Bancorp (USB 0.00%↑) Chief Economist Beth Bovino

"North American market has been tough for quite some time, but clearly turned tougher after the announcement of the tariffs in February. Consumer sentiment is weak and retailers are clearly cautious to build inventory ahead of high season." – Thule Group AB ($THLPF) CEO Mattias Ankarberg

"Tariffs and changes to certain customer requirements in the U.S. have created significant uncertainty for small businesses while concerns over escalating prices for imported goods have weighed on consumer confidence." – eBay (EBAY 0.00%↑) CEO Jamie Iannone

There's fear of a recession
"One other thing to take into account is that consumer expectations when we look at the conference board is already in recession territory. And why is that because of fear of inflation, tariffs or tax and they are inflationary. And that's where folks are concerned about." – U.S. Bancorp (USB 0.00%↑) Chief Economist Beth Bovino

But consumer spending has remained resilient
"Consumer and business sentiment has weakened primarily due to concerns surrounding the impact from tariffs and geopolitical tensions. On the other hand, so far this year, the fundamentals that support consumer spending have been solid and our drivers are generally stable." – Mastercard (MA 0.00%↑) CEO Michael Miebach

"Halfway through our fiscal year, consumer spending has been resilient and strong, but there's much uncertainty... While spending growth differs among consumer spend bands, with the most affluent growing the fastest, all spend bands remain resilient and consistent with past quarters... in Q2 and through April 21, we have not seen any signs of overall consumer spending weakening." – Visa (V 0.00%↑) CEO Ryan McInerney

Mixed outlooks on demand and stability
"Consumer spending and the labor market have proven resilient, but it remains to be seen how tariffs and other trading friction will impact global economic activity, consumer spending, and supply chains over time." – PayPal (PYPL 0.00%↑) CFO Jamie Miller

"North American and end market demand, as measured by our retail POS, in the first quarter was generally consistent with the stable trends we observed exiting 2024. The year started slow, but March improved and April looked solid as well." – Stanley Black & Decker (SWK 0.00%↑) CEO Donald Allan, Jr.

"The North American market has been largely unchanged versus Q1 2024. However, what we have been observing is a clear deterioration in consumer confidence in these three first months and we have to say that the market demand has been pretty resilient to this lack of consumer confidence." – Electrolux ($ELUXY) CEO Yannick Fierling

"I'd say the American consumer is actually doing quite well, and we haven't seen signs that cause us to get a bit concerned. We're 100% willing and able to change on a dime if we need to, but so far, no issues." – SoFi Technologies (SOFI 0.00%↑) CEO Anthony Noto

International