Trade deal with UK as Fed hold rates, Disney steals the earnings show

The gains were modest but there were gains over the past week, something that has been in short supply for much of 2025. It was a narrow ‘general terms’ sort of a trade deal struck with the UK, described as the ‘first of many’, by president Trump, stoking hopes for a flurry of trade deals ahead.

Under the deal, the 10% tariff that was imposed on goods imported from the UK remains in place, while the UK agreed to lower its tariffs to 1.8% from 5.1% and provide further access to US goods. But steel and aluminium imports to the US would be exempt from the US’s 25% levy.

Elsewhere, the Fed kept interest rates steady as widely expected on Wednesday (7 May) but warned that risks of higher inflation and unemployment had increased, further clouding the economic outlook in the face of Trump’s trade tariffs.

US economy anybody's guess

Chair Jerome Powell said it was unclear if the economy would continue to grow steadily or shrink due to a potential spike in inflation. It only needs Q2 GDP growth to go negative for it to be officially a recession in the US, after Q1’s slowdown, blamed on Biden by Trump, of course.

Powell flagged heightened uncertainty over just what Trump will do with his tariff agenda and signalled that the central bank will not make any changes until the outlook was clear.

That said, the Fed chief also noted that the US economy remained relatively resilient. The number of Americans filing new applications for unemployment benefits fell more than expected last week as initial claims for state unemployment benefits dropped 13,000 to a seasonally adjusted 228,000 for the week ended 3 May, versus 231,000 expected by economists.

Packed earnings continued over the past week but will slow considerably next week, with Walmart and Cisco Systems the ones worth looking out for.

Walt Disney

Walt Disney surprised investors this week with a barrage of good news sending shares over 12% higher.

Revenue for the second quarter was up 7% to $23.6 billion no doubt benefiting from the success of box office sequels Moana 2, Inside Out 2 and Mufasa: The Lion King, analysts had expected $23.14 billion.

Disney+ its streaming business added 1.4 million customers, a fall in subscribers was previously forecast due to a price increase.

The House of Mouse also raised its full year profit forecast to $5.75 a share and reported a rebound in its domestic parks business.

Revenues for Disney Parks and Experiences rose 9% to $2.5 billion, and it saw an increase in cruise ship bookings with the launch of a new vessel, Disney Treasure.

The media giant will open its first theme park in the Middle East on Abu Dhabi’s Yas Island.

Disney’s CEO Bob Iger described the plans for the new park as ‘thrilling’ and said it would be ‘authentically Disney and distinctly Emirati.’

Iger is due to step down as Disney CEO at the end of 2026 when his contract expires, Disney plans to name a successor early next year.

Moderna

Biotechnology firm Moderna fell 13% on Tuesday (6 May) after the FDA (Food and Drug Administration) named Vinay Prasad as the director of its CBER (Centre for Biologics Evaluation and Research) unit.

Prasad has been a critic of the Covid-19 vaccine and mask policies and a frequent critic of the drug industry. In a research note RBC analyst Brian Abrahams described Prasad as an ‘anti-establishment physician.’

In a blog the oncologist has urged the authorities to stop using the Covid-19 vaccine in childhood immunisation programmes, citing a lack of scientific evidence for its use in children.

Jefferies analyst Andrew Tsai believes Prasad could make it more difficult for drug companies to get new treatments approved where there is no standard alternative.

‘We suspect he will require sponsors to produce more supporting clinical evidence (taking less 'shortcuts'),’ said Tsai.

Moderna reported better than expected first quarter earnings on 1 May driven by the company’s cost cutting efforts to mitigate waning demand for its Covid-19 vaccine.

Skechers

Skechers’ shares sprinted 27.5% higher to $61.5 after the sneaker brand, championed by Martha Stewart and Bayern Munich marksman Harry Kane, agreed (5 May) to be taken private for $9.4 billion (£7 billion) by 3G Capital.

The global investment firm has offered $63 per share in cash for California-headquartered Skechers, a rough 30% premium to the undisturbed share price. New York Stock Exchange-listed since 1999, Skechers is the world’s third biggest footwear company and recently reported (24 April) record quarterly sales of $2.4 billion, although guidance was withdrawn on account of tariff-related uncertainty.

Skechers may be showing the public markets a clean pair of heels, but under 3G’s ownership, it plans to press on with its successful strategy of selling stylish-yet-comfortable footwear at affordable prices and will continue to be led by CEO Robert Greenberg.

‘Given their (3G) remarkable history of facilitating the success of some of the most iconic global consumer businesses,’ commented Greenberg, ‘we believe this partnership will support our talented team as they execute their expertise to meet the needs of our consumers and customers while enabling the company’s long-term growth.’