From Nasdaq

May 27, 2025 12:08:00 PM:

Moody’s recently downgraded U.S. debt, moving its rating from AAA to Aa1, citing higher interest rates and growing debt burden. While this marks a symbolic shift, the U.S. remains the world’s reserve currency. The market is looking for signs that the deficit will be controlled to regain confidence in U.S. debt.

On another note, Coinbase has joined the S&P 500, signaling crypto’s legitimacy. Meanwhile, more people are packing lunch instead of dining out, impacting the restaurant industry. In light of these changes, investors are advised to consider the 10 best stocks to buy now, excluding Coinbase, for potential high returns. The federal government’s role in borrowing and debt impacts corporate finance, with rising interest rates affecting corporations’ ability to access bond markets and commercial paper. This financial ripple effect can lead to reduced capital investment and increased costs for corporations and consumers.

Tariff escalations in April have stirred concerns in the market, challenging the long-held belief that there is no alternative to investing in US markets. While there are options like German bonds, the globalized economy may lead investors to explore opportunities in Europe and Asia, potentially shifting away from US treasuries.

Walmart’s discussions with Secretary of Treasury Scott Bessent highlight the connection between tariffs, corporate taxes, and consumer prices. The company’s revenue, tax breaks, and potential impact of tariffs on prices demonstrate the complex interplay between business operations, government policies, and consumer spending. The debate over who bears the burden of tariffs continues, with implications for corporate profits and consumer costs. President Trump suggests that companies like Walmart should “eat” the tariffs, pointing out their billions in profits. Walmart, with a 4.3% operating margin, faces potential challenges absorbing 30% tariff increases. The company may push back against the Trump administration to protect shareholder interests amid escalating trade tensions.

Coinbase joins the S&P 500 as Discover exits, marking a milestone for the legitimacy of crypto. The exchange’s earnings call highlights its role in driving industry growth, expanding beyond a global spot market for crypto to derivatives and stablecoins. Coinbase’s inclusion reflects the increasing acceptance of crypto as a financial asset.

Investors in index funds now have exposure to crypto through Coinbase’s addition to the S&P 500, regardless of their stance on digital assets. While this move signifies a significant shift in the financial landscape, concerns linger about the company’s reliance on Bitcoin’s success and potential risks associated with market volatility. Industry expert David Henkes discusses the decline in lunch purchases at restaurants, citing a 3% drop in 2024. He attributes this to broader consumer pullback from restaurants due to inflation and menu price increases. Henkes also mentions tip fatigue as a factor, with the tipping culture developed during the pandemic contributing to consumer reluctance to dine out. The restaurant industry is facing challenges with rising costs impacting smaller independent restaurants more severely than major chains. In 2024, chain data showed that chains only grew by about 3%, with over 30 restaurant company bankruptcies. Despite this, some chains like Chili’s and Taco Bell are thriving with 31% and 9% same-store sales growth, respectively.

Consumers are choosing establishments that offer great value, leading to some legacy brands struggling while smaller chains like Dutch Bros are thriving. Chili’s success can be attributed to their relevance to younger consumers and value offerings, like their three for me deal. Other chains like Applebee’s are not seeing the same level of growth despite similar offerings. Chili’s, a casual dining chain, has seen a resurgence in popularity due to social media marketing and value promotions like margarita deals. The company focuses on providing a mix of low-priced options and premium experiences to attract customers, resulting in a 15% increase in sales last year compared to competitors like Applebee’s and TGI Friday’s.

David Henkes, a Senior Principal at Technomic, discusses his top dessert choices, including key lime pie, cheesecake, and gelato from Europe. He highlights the unique flavors and experiences he has had with these desserts, emphasizing his preference for savory over sweet options. Henkes also praises the quality of gelato in Europe compared to the United States.

Dylan Lewis, host of Motley Fool Money, announces that this is his last Monday episode as he prepares to leave the company after over a decade. He expresses gratitude for the time spent with listeners and analysts, noting the value of time in investing and personal life. Lewis emphasizes the importance of making informed decisions based on research and not solely on podcast content. The Motley Fool Money team, including Dylan Lewis, discussed stock positions with Asit Sharma in McDonald’s. The team has no positions in Chipotle Mexican Grill, Coinbase Global, Moody’s, Starbucks, or Texas Roadhouse, but recommends them. The Motley Fool also recommends Dutch Bros and has a disclosure policy.

The views and opinions expressed by the Motley Fool Money team do not necessarily reflect those of Nasdaq, Inc.

Read more at Nasdaq: There Is No (Convenient) Alternative