Wake Up Call

Hello ! Stocks fell while Treasury yields and the dollar edged higher as fresh concern US interest rates will stay elevated for longer weighed on markets. After spiking on Tuesday, 10-year Treasury yields inched two basis points higher. Yields on similar-maturity German bonds hit the highest since November.
On the corporate side, CONOCO agreed to acquire MARATHON OIL in an all-stock deal valuing the company at about $17bn, extending a major buying spree among the largest players in the US oil and gas industry. And AMERICAN AIRLINES spooked investors with a revised profit outlook that adds to uncertainty in the aviation industry already grappling with geopolitical tensions, scarce supplies of new aircraft and rising costs, sending Airlines stocks down in premarket.
LOOKING AHEAD - Fed Beige Book + Speech from Fed's Williams.

Wall Street Movers

ABERCROMBIE & FITCH +1.20% FY25 net sales boosted +10% (saw +4% to +6%). 1Q adj EPS $2.14 ($1.69 exp). 1Q Net sales $1.02bn ($958.7m exp). Gross margin 66.4%, est 64.4%.
ADVANCE AUTO PARTS +3% Q1 diluted EPS 67c, consensus 68c. Backs FY24 EPS view $3.75-$4.25, consensus $3.82. Announces merchandising leadership changes.
AMERICAN AIRLINES -8% cut 2Q adj EPS 4cst $1.00 to $1.15 ($1.3 exp). Sees total rev per available seat mile -5% to -6%, saw about -1% to -3%. Company announces the departure of CCO Vasu Raja >> DAL -2.1%, LUV 2.1%, UAL 1.1%
DICK’S SPORTING +7% boosts FY EPS 4cst $13.35 to $13.75 ($13.36 4cst). Comparable sales +2% to +3% (+2% exp) . Q1 EPS $3.30 ($2.93 exp). Declared a quarterly div $1.10/shr.
MARATHON OIL +9% to be acquired by CONOCOPHILLIPS (-2%) in a $22.5bn all-stock deal, extending a major buying spree in the US oil and gas industry. Marathon Oil shareholders will receive 0.2550 shares of ConocoPhillips common stock for each share of Marathon Oil common stock. ConocoPhillips expects share buybacks to be over $20bn in the first three years, with over $7bn in the first FY. The deal is expected to close in Q4 of 2024.
MERCK +0.5% to buy EyeBio for a $1.3bn ($0.5/shr) upfront payment and up to $1.7bn in future milestone payments for a potential value of $3bn. The company also agreed to buy Jeito Capital Sasu.
ROBINHOOD +2.5% after the board of directors approved a share repurchase program of up to $1bn. Analysts see mostly muted effects of the buyback, with those at Keefe Bruyette & Woods calling it a “conservative approach to capital return.”

At A Glance

ALTICE USA creditors have tapped PJT Partners for advice amid growing concerns that the troubled company will seek to restructure its debt load.
BLACKSTONE Real Estate today announced that it has reached an agreement to sell Turtle Bay Resort for $725mn. Host Totels will Turtle Bay Hawai for ~680mn.
CRYPTO NYSE announces collaboration with CoinDesk to launch financial products tracking spot bitcoin prices ; ICE (ICE) is developing options contracts tied to CoinDesk Bitcoin Price Index (XBX)
DOLLAR TREE today announced that it acquired designation rights for 170 leases of 99 Cents Only Stores across Arizona.
KKR backed Avendus has launched a fund with plans to raise about $350mn to invest in 10 to 12 Indian companies in growth sectors such as financial services, consumption, technology, health care and manufacturing.
MICROCHIP TECHNOLOGY to Offer $1.1bn of Conv Sr Notes
PEPSICO sold Russian milk plant to Ex-Minister’s firm.
UBER has been granted permission to operate throughout Paris, with dedicated pickup and drop off points around all Olympic venues; 40k drivers will be providing rides during the Olympic games in Paris.
UNITED AIRLINES affirms Q2 adj. EPS view 3.75-4.25 (exp. 4.02)
VERIZON to invest $100mn in AST's space wireless service.
VINFAST is considering to further delay a planned $4bn factory in North Carolina. Company pushed back the start of operations to 2025.
xAI and Chips: Elon Musk is fueling the AI frenzy. Nvidia shares surged on Tuesday after Musk’s AI startup, xAI, raised $6bn from investors (including Cathie Wood). The Information reported that Musk aims to connect groups of Nvidia’s H100 graphics processing units to construct an xAI supercomputer. The surge extended a post-earnings rally that’s added some $470 billion to the chipmaker’s market capitalization.

Broker Moves

UPGRADES

BERKSHIRE HATHAWAY upgraded to Buy at Argus; PT USD 450
INTEL Upgraded to Peerperform at Wolfe
MELCO RESORTS ADRs Upgraded to Buy at BofA; PT USD 10.40
NORWEGIAN CRUISE LINE Upgraded to Buy at Truist; PT USD 21
UNITED AIRLINES Upgraded to Buy at Jefferies; PT USD 65

DOWNGRADES
AMERICAN AIR Downgraded to Hold at Jefferies; PT USD 12 Bank
FIRST SOLAR cut downgrade to hold from buy at DZ Bank.
GRAINGER Downgraded to Neutral at Baird; PT USD 975

INITIATIONS
PALO ALTO Re-initiated at Outperform at Daiwa; PT USD 350
SAGE THERAPEUTICS Initiated at Sell at Citi; PT USD 8
SAGE THERAPEUTICS Initiated at Neutral at Baird; PT USD 15

Key Events

Wednesday
15:00 Richmond Fed Manufact. Index
18:45 Fed's Williams Joins Watertown Community Services Roundtable
19:00 Federal Reserve Releases Beige Book

Thursday
13:30 US GDP Annualized QoQ; Initial Jobless Claims; Wholesale Inventories MoM
15:00 US Pending Home Sales MoM
17:05 Fed's Williams Speaks at Economic Club of New York
22:00 Fed's Logan Speaks in Moderated Q&A

Friday
13:30 PCE deflator; US Personal Income & Spending
14:45 MNI Chicago PMI

Game Of Corporate Actions

DIV EX DATE

Today : Constellation Energy ($0.3525); Electronic Arts ($0.19); Everest ($2); Loews ($0.0625); S&P Global ($0.91)
Tomorrow : Goldman Sachs ($2.75); Home Depot ($2.25); QUALCOMM ($0.85); Valero Energy ($1.07); Xylem ($0.36)

EARNINGS

Today aft mkt : Agilent Technologies; HP ; Salesforce
Tomorrow bet mkt : Dollar General ; Best Buy
Tomorrow aft mkt : Costco Wholesale; Cooper; NetApp; Ulta Beauty