The S&P 500 futures are up 8 points and are trading 0.2% above fair value. The Nasdaq 100 futures are up 37 points and are trading 0.3% above fair value. The Dow Jones Industrial Average futures are up 18 points and are trading fractionally above fair value.
Stock futures are modestly higher driven by carryover momentum from yesterday's rally, continued strength in regional bank stocks, and a positive response to Walmart's (WMT) earnings results. Ongoing optimism about the debt ceiling discussions is also helping.
Treasuries are little changed from yesterday's settlement levels. The 2-yr note yield is up three basis points to 4.18% and the 10-yr note yield is up three basis points to 3.60%.
Market participants will receive the following economic data today:
8:30 ET: Weekly Initial Claims (Briefing.comconsensus 259,000; prior 264,000), Continuing Claims (prior 1.813 mln), and May Philadelphia Fed Survey (Briefing.comconsensus -16.0; prior -31.3)
10:00 ET: April Existing Home Sales (Briefing.comconsensus 4.30 mln; prior 4.44 mln) and April Leading Indicators (Briefing.comconsensus -0.5%; prior -1.2%)
10:30 ET: Weekly natural gas inventories (prior +78 bcf)
In corporate news:
Walmart (WMT 151.96, +2.43, +1.6%): beats by $0.15, beats on revs; guides Q2 EPS below consensus, revs in-line; raises FY24 EPS guidance; Q1 Wal-Mart US comps +7.4%
Snowflake (SNOW 177.88, +3.86, +2.2%): jumping on reports it is in talks to buy Neeva, which develops software combining search with large-language models, according to The Information
Alibaba (BABA 89.77, -0.88, -1.0%): beats by RMB1.24, reports revs in-line
Cisco (CSCO 45.85, -1.78, -3.7%): beats by $0.03, beats on revs; guides JulQ EPS above consensus, mid-point of revs above consensus; Total product orders were down 23%.
Bath & Body Works (BBWI 37.35, +3.33, +9.8%): beats by $0.07, reports revs in-line; guides Q2 EPS in-line, revs in-line; guides FY24 EPS in-line, reaffirms FY24 revs guidance
Take-Two (TTWO 141.03, +16.01, +12.8%): misses by $2.37, beats on revs; guides JunQ EPS below consensus, bookings below consensus; guides FY24 EPS below consensus, bookings below consensus; expects next phase of growth in FY25 with over $8.0 bln in net bookings
Synopsys (SNPS 384.31, +7.23, +1.9%): beats by $0.07, reports revs in-line; guides Q3 EPS above consensus, revs in-line; guides FY23 EPS above consensus, revs in-line
Netflix (NFLX 345.50, +5.54, +1.6%): President of worldwide advertising Jeremi Gorman at conference last night said that ad supported tier now has 5 million global monthly active users
Canada Goose (GOOS 23.35, +2.91, +14.2%): beats by CAD0.07, beats on revs; guides Q1 EPS below consensus, revs in-line; guides FY24 EPS in-line, revs above consensus
Reviewing overnight developments:
Equity indices in the Asia-Pacific region ended Thursday on a mostly higher note with Japan's Nikkei (+1.6%) approaching its high from September 2021. Japan's Nikkei: +1.6%, Hong Kong's Hang Seng: +0.9%, China's Shanghai Composite: +0.4%, India's Sensex: -0.2%, South Korea's Kospi: +0.8%, Australia's ASX All Ordinaries: +0.5%.
In economic data:
Japan's April trade deficit JPY1.02 trln (expected deficit of JPY1.08 trln; last deficit of JPY1.21 trln). April Imports -2.3% yr/yr (expected -0.3%; last 7.3%) and Exports 2.6% yr/yr (expected 3.0%; last 4.3%)
Australia's April Employment Change -4,300 (expected 25,000; last 61,100) and full employment change -27,100 (last 82,500). April Unemployment Rate 3.7% (expected 3.5%; last 3.5%) and April Participation Rate 66.7%, as expected (last 66.8%)
New Zealand's Q1 Input PPI 0.2% qtr/qtr (expected 0.5%; last 0.5%) and Output PPI 0.3% qtr/qtr (expected 0.8%; last 0.9%)
Hong Kong's April Unemployment Rate 3.0% (expected 2.9%; last 3.1%)
In news:
Several large chipmakers announced their intentions to invest in Japan after executives met with Prime Minister Kishida.
Japan and the U.K. signed The Hiroshima Accord, formalizing their partnership on defense and technology collaboration.
China will resume imports of Australian timber after halting most shipments in late 2020.
Australia reported its sharpest fall in jobs since January.
Major European indices trade on a firmly higher note with Germany's DAX (+1.7%) reaching its best level since January 2022. STOXX Europe 600: +0.6%, Germany's DAX: +1.7%, U.K.'s FTSE 100: +0.5%, France's CAC 40: +0.9%, Italy's FTSE MIB: +1.1%, Spain's IBEX 35: +0.7%.
In economic data:
Spain's March trade deficit EUR160 mln (expected deficit of EUR720 mln; last deficit of EUR2.46 bln)
In news:
European Central Bank policymaker de Guindos said that the bulk of policy tightening has been done already but services inflation remains worrisome for the ECB. Meanwhile policymaker Muller said that it is premature to expect a rate cut in early 2024.
The EU and U.K. are reportedly looking to boost cooperation on regulation of financial services.
U.S. equity futures:
S&P 500 Futures: +6 @ 4,165
DJIA Futures: -10 @ 33,411
Nasdaq 100 Futures: +33 @ 13,622
Overseas:
Europe: DAX +1.7%, FTSE +0.5%, CAC +0.9%
Asia: Nikkei +1.6%, Hang Seng +0.9%, Shanghai Composite +0.4%
Commodities:
Crude Oil -0.14 @ 72.69
Nat Gas +0.044 @ 2.409
Gold -7.90 @ 1977.05
Silver -0.199 @ 23.698
Copper -0.0385 @ 3.716
Earnings/Guidance:
Advanced Drainage Systems (WMS) beats by $0.26, beats on revs; guides FY24 revs below consensus; raises total annual cash dividend 17% to $0.56/share
Alibaba (BABA) beats by RMB1.24, reports revs in-line
Archrock (AROC) detailed guidance in presentation; Trending toward the high-end of 2023 Adjusted EBITDA guidance range of $400-430 mln
Bath & Body Works (BBWI) beats by $0.07, reports revs in-line; guides Q2 EPS in-line, revs in-line; guides FY24 EPS in-line, reaffirms FY24 revs guidance
Boot Barn Holdings (BOOT) beats by $0.09, misses on revs; guides Q1 EPS below consensus, revs below consensus; guides FY24 EPS below consensus, revs below consensus
Bowlero (BOWL) reports Q3 (Mar) results, beats on revs
Brady (BRC) beats by $0.06, misses on revs; raises bottom end of FY23 EPS above consensus
Canada Goose (GOOS) beats by CAD0.07, beats on revs; guides Q1 EPS below consensus, revs in-line; guides FY24 EPS in-line, revs above consensus
Canadian Solar (CSIQ) beats by $0.46, reports revs in-line; guides Q2 revs above consensus; raises bottom end of FY23 guidance
Cisco (CSCO) beats by $0.03, beats on revs; guides JulQ EPS above consensus, mid-point of revs above consensus
Copart (CPRT) beats by $0.08, beats on revs
dLocal Limited (DLO) reports EPS in-line, beats on revs
Dole plc (DOLE) beats by $0.16, misses on revs
Eagle Materials (EXP) beats by $0.49, beats on revs
Grab (GRAB) beats by $0.01, beats on revs; reaffirms FY23 revs guidance
KE Holdings (BEKE) beats by RMB1.20, beats on revs; guides Q2 revs above consensus
Kimbell Royalty Partners (KRP) raises FY23 production guidance
Lightspeed (LSPD) beats by $0.03, reports revs in-line; guides Q1 revs below consensus; guides FY24 revs in-line
Madison Square Garden Entertainment (MSGE) beats single estimate on top and bottom lines
Monro Muffler (MNRO) misses by $0.24, misses on revs; guides Q1 EPS in-line, revs below estimate
Moody's (MCO) provides medium-term guidance assumptions in presentation
National Grid (NGG) reports FY23 results; beats on revs
Sociedad Quimica y Minera (SQM) reports Q1 (Mar) results, misses on revs
StoneCo (STNE) beats by $0.07, beats on revs; guides Q2 revs above consensus
Synopsys (SNPS) beats by $0.07, reports revs in-line; guides Q3 EPS above consensus, revs in-line; guides FY23 EPS above consensus, revs in-line
Take-Two (TTWO) misses by $2.37, beats on revs; guides JunQ EPS below consensus, bookings below consensus; guides FY24 EPS below consensus, bookings below consensus; expects over $8.0 bln in bookings in FY25
Viasat (VSAT) reports Q4 (Mar) results, beats on revs; expects FY24 adjusted EBITDA to grow high single-digits to low double-digits yr/yr; expects to achieve FY25 target of doubling revs relative to FY20
Walmart (WMT) beats by $0.15, beats on revs; guides Q2 EPS below consensus, revs in-line; raises FY24 EPS guidance; Q1 Wal-Mart US comps +7.4%
ZTO Express (ZTO) beats by RMB0.25, misses on revs
News:
Florida Governor Ron DeSantis is expected to launch his campaign for presidency next week, according to the Wall Street Journal
Montana Governor signs bill banning TikTok in the state, according to the Wall Street Journal
10x Genomics (TXG) announces it has won an injunction in its patent litigation against NanoString Technologies (NSTG)
Adicet Bio (ACET) Presents Positive Preclinical Data on ADI-270 at the American Society of Gene and Cell Therapy (ASGCT) 26th Annual Meeting
Air Products (APD) extends Seifi Ghasemi's term as Chairman, President and Chief Executive Officer
Alibaba (BABA) provides updates to business group spin-offs and capital raisings
Amazon (AMZN): AWS to invest INR 1,05,600 crores (US $12.7 billion) into cloud infrastructure in India
Apple (AAPL) getting involved with display production to lower dependence on Samsung (SSNLF), according to Nikkei
Becton Dickinson (BDX) launches world's first spectral cell sorter with high-speed cell imaging
Big Lots (BIG) announced that, by mutual agreement, Gene Eddie Burt, Executive Vice President, Chief Supply Chain Officer, would separate from the Company effective June 2, 2023
Bio-Techne (TECH): Exosome Diagnostics releases interim results from clinical study of prostate cancer risk test
Cara Therapeutics (CARA) announces Kapruvia (difelikefalin) recommended by England's NICE for the treatment of adults with moderate-to-severe CKD-associated pruritus
Chubb (CB) increases quarterly cash dividend 3.6% to $0.86/share from $0.83/share
Community Healthcare Trust (CHCT) appoints William Monroe as CFO, effective as of June 1, 2023
CVS Health (CVS): The Federal Trade Commission seeking information from two companies associated with CVS Health and Cigna (CI) as part of probe into pharmacy benefit managers, according to Reuters
Deutsche Bank (DB) will pay $75 mln to settle Jeffrey Epstein related lawsuit, according to the Wall Street Journal
Ecolab (ECL) announces new partnership and multi-million dollar investment in Miso Robotics, the creator of the robotic kitchen assistant automating the fry station
Elbit Systems (ESLT) awarded $305 million contract to supply PULS rocket artillery systems to the Royal Netherlands army
Eli Lilly (LLY) peresolimab Phase 2a rheumatoid arthritis trial published in The New England Journal of Medicine; Peresolimab met the primary efficacy endpoint in patients with refractory rheumatoid arthritis
Everest Re (RE) to rebrand, change name to Everest Group, Ltd. and trade under new symbol "EG" on July 10, 2023
FibroGen (FGEN) and its subsidiary, FibroGen Medical Technology Development, announce "positive" topline data from Company's Phase 3 clinical study of roxadustat for treatment of anemia in patients receiving concurrent chemotherapy treatment for non-myeloid malignancies in China
Freshpet (FRPT) advances operational improvement plan through Board changes; Current Director Walt George will be named Chair to replace retiring Charles Norris
Insight Enterprises (NSIT) approved the authorization of a new stock repurchase program pursuant to which the Company may purchase up to an aggregate of $300 million of the Company's common stock
Intercept Pharma (ICPT) amends supply agreement
Kaiser Alum (KALU): union members at Warrick rolling mill in IN ratify new four-year labor agreement
Kymera Therapeutics (KYMR) presents "positive "Phase 1 clinical data from its lead program, KT-474
Kyndryl (KD) expands strategic partnership with SAP (SAP) focused on accelerating IT and digital transformation projects
MindMed (MNMD) Announces Enrollment Milestone in Phase 2b Trial of MM-120 in Generalized Anxiety Disorder
Monro Muffler (MNRO) announces agreement to eliminate Class C Preferred Stock; announces plan to declassify Board
NanoString (NSTG) responds to decision of the regional court of Munich
Netflix (NFLX) President of worldwide advertising Jeremi Gorman at conference last night said that ad supported tier now has 5 million global monthly active users
Ouster (OUST) confirms the ITC has voted to institute an investigation into the unfair trade practices of Hesai Group (HSAI) based in Shanghai, China, and related entities
Panasonic (PCRFY) in slide presentation says it aims to establish stable production at Wakayama factory at the earliest point and to roll out new large-scale production capacity in North America by 2030
Protalix BioTherapeutics (PLX) is eligible to receive a $20 million milestone payment from its commercial partner, Chiesi Global Rare Diseases
Revvity (RVTY) announced a new license agreement with AstraZeneca (AZN) for the technology underlying its Pin-point base editing system
Robinhood Markets (HOOD) reports operating data for April; monthly active users down about 300K from March 2023
Sony (SONY) holds strategy meeting; assesses partial spin-off
Tesla (TSLA) discusses car incentives with officials in India, according to Reuters
Voyager Therapeutics (VYGR) Presents Robust, Multi-Species Results from Preclinical Studies of IV-Delivered, TRACER-Generated Novel Capsids at the ASGCT 26th Annual Meeting
Zai Lab's (ZLAB) repotrectinib granted priority review by Center for Drug Evaluation (CDE) of China's National Medical Products Administration
M&A:
EyePoint Pharmaceuticals (EYPT) sold YUTIQ (fluocinolone acetonide intravitreal implant) 0.18mg to Alimera Sciences (ALIM)
Snowflake (SNOW) in talks to buy Neeva, which develops software combining search with large-language models, according to The Information
Urstadt Biddle Prop (UBA): Regency Centers (REG) to acquire Urstadt Biddle Properties in all-stock transaction valued at approximately $1.4 billion
Syndicate:
Applied Digital Corporation (APLD) files $175 mln mixed shelf securities offering
Boston Properties (BXP) files mixed shelf securities offering
Bowman Consulting Group (BWMN) files mixed shelf securities offering
Cabaletta Bio (CABA) prices offering of 7.25 mln shares of common stock at $12.00 per share
Caledonia Mining Corporation Plc (CMCL) Block Listing Application and "At The Market" Sales Agreement
CenterPoint (CNP) files mixed shelf securities offering
EVgo Inc. (EVGO) prices offering of 29,411,765 shares of common stock at $4.25 per share
Gates Industrial (GTES) prices secondary offering of 22.5 mln shares of common stock at $11.75 per share
GFL Environmental (GFL) announces upsizing and pricing of secondary offering by selling shareholders
Intapp (INTA) prices offering of 6.25 mln shares of common stock at $36.50 per share
P3 Health Partners (PIII) files for 139,847,114 shares common stock by selling shareholders
Super Group (SGHC) files $450 mln mixed shelf securities offering
Vivid Seats (SEAT) prices secondary offering of 16.0 mln shares of common stock at $8.00 per share
IPOs:
No IPOs expected to price.
Gapping Up/Down
Gapping up:
DLO +16.4%, TTWO +11.8%, BBWI +6.5%, CARA+4.6%, MNMD +4.4%, SONY +4.3%, EXP +4.2%, DOLE+4%, ZTO +3.9%, CSIQ +3.3%, ACET +2.1%, BOWL+2%, SNOW +1.6%, SNPS +1.6%, KD +1.1%, SAP+0.9%, BEKE +0.9%, HOOD +0.8%, CABA +0.7%
Gapping down:
BOOT -14%, NSTG -7.1%, APLD -5%, CSCO -4.2%, OUST -3.9%, SQM -3.6%, GFL -3.2%, STNE -3.1%, VSAT -2.5%, NGG -2.2%, KALU -2.1%, FRPT -2%, EVGO -1.9%, LITE -1.4%, GTES -1.3%, TXG -1.2%, CB -1%, JNPR -0.8%, AVGO -0.7%, BWMN -0.7%
Analyst Research (see Upgrades/Downgradescalendarfor full list):
Upgrades
Albemarle (ALB) upgraded to Buy from Neutral at UBS; tgt raised to $225
Cincinnati Fincl (CINF) upgraded to Buy from Neutral at BofA Securities; tgt raised to $117
Dynatrace (DT) upgraded to Buy from Neutral at BTIG Research; tgt $57
RB Global (RBA) upgraded to Outperform from Sector Perform at National Bank Financial; tgt $61
Snap-On (SNA) upgraded to Buy from Neutral at ROTH MKM; tgt raised to $298
WEC Energy Group (WEC) upgraded to Buy from Neutral at Mizuho; tgt $98
Downgrades:
Amyris (AMRS) downgraded to Hold from Buy at Jefferies; tgt lowered to $0.65
Dr. Reddy's (RDY) downgraded to Mkt Perform from Outperform at Bernstein
Essential Utilities (WTRG) downgraded to Neutral from Buy at Northcoast
Futu Holdings (FUTU) downgraded to Neutral from Overweight at JP Morgan; tgt lowered to $46
Futu Holdings (FUTU) downgraded to Underweight from Equal-Weight at Morgan Stanley; tgt lowered to $34
Hanover Insurance (THG) downgraded to Neutral from Buy at BofA Securities; tgt lowered to $130
ICL Group (ICL) downgraded to Neutral from Buy at BofA Securities
Magellan Midstream (MMP) downgraded to Hold from Buy at Stifel; tgt raised to $64
Nu Holdings (NU) downgraded to Neutral from Buy at Citigroup; tgt lowered to $6.10
Procter & Gamble (PG) downgraded to Hold from Buy at Truist; tgt lowered to $155
Rambus (RMBS) downgraded to Hold from Buy at Jefferies; tgt raised to $65
Selective Insurance (SIGI) downgraded to Underperform from Neutral at BofA Securities; tgt lowered to $97
XP (XP) downgraded to Neutral from Outperform at Bradesco BBI; tgt lowered to $17
Others:
Acumen Pharmaceuticals (ABOS) initiated with an Overweight at Cantor Fitzgerald; tgt $13
Arcellx (ACLX) initiated with a Buy at Truist; tgt $60
Array Tech (ARRY) initiated with a Buy at Seaport Research Partners; tgt $30
Dynatrace (DT) resumed with an Outperform at William Blair
Genelux (GNLX) initiated with a Hold at Brookline; tgt $25
PLAYSTUDIOS (MYPS) initiated with a Neutral at JP Morgan; tgt $5
Pliant Therapeutics (PLRX) initiated with a Buy at Canaccord Genuity; tgt $48
Tarsus Pharmaceuticals (TARS) initiated with a Buy at Guggenheim
Varonis Systems (VRNS) initiated with a Buy at DA Davidson; tgt $30
Econ Data:
08:30 ET: Initial Claims for May 13 (Briefing.comConsensus 259K; Prior 264K)
08:30 ET: Continuing Claims for May 6 (Briefing.comConsensus NA; Prior 1813K)
08:30 ET: Philadelphia Fed Index for May (Briefing.comConsensus -16.0; Prior -31.3)
10:00 ET: Existing Home Sales for April (Briefing.comConsensus 4.30M; Prior 4.44M)
10:00 ET: Leading Indicators for April (Briefing.comConsensus -0.5%; Prior -1.2%)
10:30 ET: EIA Natural Gas Inventories for May 13 (Briefing.comConsensus NA; Prior +78 bcf)
Earnings:
Monday (May 15)
Morning: AZUL CTLT MNDY SFL TSEM TPG
Afternoon: NVTS
Tuesday (May 16)
Morning: BIDU HD HUYA ONON PSFE SE SSYS TME
Afternoon: AGYS CPRT DOCS KEYS KD NXGN
Wednesday (May 17)
Morning: DT JACK RSKD TGT TJX TGI WKME WIX
Afternoon: BOOT CSCO DLO SQM STNE SNPS TTWO VSAT ZTO
Thursday (May 18)
Morning: WMS BABA BBWI BRC GOOS CSIQ DOLE EXP GRAB BEKE MNRO WMT
Afternoon: AMAT DXC FTCH FLO GLOB ROST
Friday (May 19)
Morning: DE FL RBC
Asia & Europe detail:
Asia: Nikkei +1.6%, Hang Seng +0.9%, Shanghai Composite +0.4%
Equity indices in the Asia-Pacific region ended Thursday on a mostly higher note with Japan's Nikkei (+1.6%) approaching its high from September 2021. Several large chipmakers announced their intentions to invest in Japan after executives met with Prime Minister Kishida. Japan and the U.K. signed The Hiroshima Accord, formalizing their partnership on defense and technology collaboration. China will resume imports of Australian timber after halting most shipments in late 2020. Australia reported its sharpest fall in jobs since January.
In economic data:
Japan's April trade deficit JPY1.02 trln (expected deficit of JPY1.08 trln; last deficit of JPY1.21 trln). April Imports -2.3% yr/yr (expected -0.3%; last 7.3%) and Exports 2.6% yr/yr (expected 3.0%; last 4.3%)
Australia's April Employment Change -4,300 (expected 25,000; last 61,100) and full employment change -27,100 (last 82,500). April Unemployment Rate 3.7% (expected 3.5%; last 3.5%) and April Participation Rate 66.7%, as expected (last 66.8%)
New Zealand's Q1 Input PPI 0.2% qtr/qtr (expected 0.5%; last 0.5%) and Output PPI 0.3% qtr/qtr (expected 0.8%; last 0.9%)
Hong Kong's April Unemployment Rate 3.0% (expected 2.9%; last 3.1%)
---Equity Markets---
Japan's Nikkei: +1.6%
Hong Kong's Hang Seng: +0.9%
China's Shanghai Composite: +0.4%
India's Sensex: -0.2%
South Korea's Kospi: +0.8%
Australia's ASX All Ordinaries: +0.5%
---FX---
USD/JPY: +0.1% to 137.75
USD/CNH: +0.6% to 7.0462
USD/INR: +0.1% to 82.53
Europe: DAX +1.7%, FTSE +0.5%, CAC +0.9%
Major European indices trade on a firmly higher note with Germany's DAX (+1.7%) reaching its best level since January 2022. European Central Bank policymaker de Guindos said that the bulk of policy tightening has been done already but services inflation remains worrisome for the ECB. Meanwhile policymaker Muller said that it is premature to expect a rate cut in early 2024. The EU and U.K. are reportedly looking to boost cooperation on regulation of financial services.
In economic data:
Spain's March trade deficit EUR160 mln (expected deficit of EUR720 mln; last deficit of EUR2.46 bln)
---Equity Markets---
STOXX Europe 600: +0.6%
Germany's DAX: +1.7%
U.K.'s FTSE 100: +0.5%
France's CAC 40: +0.9%
Italy's FTSE MIB: +1.1%
Spain's IBEX 35: +0.7%
---FX---
EUR/USD: -0.3% to 1.0813
GBP/USD: -0.5% to 1.2428
USD/CHF: +0.3% to 0.9007
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