Wake Up Call
- Hello ! Stock futures rose & bond yields fell after the Fed’s favorite inflation gauge reinforced speculation policymakers will have room to cut rates this year.
- Treasury yields dropped after April PCE came in line with exp, but real personal spending unexpectedly contracted. On the margin, that supports the narrative that the US consumer may be flagging, but it’s also likely that traders were positioned for an upside surprise on PCE that they didn’t get. SOFR futures yields are little changed on the day, while the yield on two-year Treasuries tested session lows.
- DATAS (In detail) :
* US PCE Price Index YY * (Apr) 2.7% vs. Exp. 2.7% (Prev. 2.7%)
* US Core PCE Price Index MM * (Apr) 0.2% vs. Exp. 0.3% (Prev. 0.3%)
* US PCE Price Index MM* (Apr) 0.3% vs. Exp. 0.3% (Prev. 0.3%)
* US Core PCE Price Index YY* (Apr) 2.8% vs. Exp. 2.8% (Prev. 2.8%)
* US Personal Income MM* (Apr) 0.3% vs. Exp. 0.3% (Prev. 0.5%)
* US Consumption, Adjusted MM* (Apr) 0.2% vs. Exp. 0.3% (Prev. 0.8%, Rev. 0.7%)
* US Personal Consump Real MM* (Apr) -0.1% (Prev. 0.5%, Rev. 0.4%)
* Canadian GDP QQ Annualized* (Q1) 1.7% vs. Exp. 2.2% (Prev. 1.0%, Rev. 0.1%)
* Canadian GDP Implicit Price QQ* (Q1) -0.3% (Prev. 1.4%, Rev. 1.5%)
* Canadian GDP QQ* (Q1) 0.4% (Prev. 0.2%)
Wall Street Movers
- AMBARELLA +17% 1Q Rev $54.5mn (est $54mn). raised 2Q rev $60m to $64m (est 59m).
- COOPER COS +4.40% boosts FY rev 4cst $3.86bn to $3.91bn, saw $3.85bn to $3.90bn ($3.88bn exp). Adj EPS $3.54 to $3.60 ($3.54 exp). 2Q net sales $942.6m ($948.6m exp).
- COSTCO -1.80% 3Q EPS $3.78 ($3.70 exp). Total company comparable sales, including gas, currency +6.6% (+6.27% exp). Total rev $58.52bn ($57.98bn exp) but shares of the membership-based warehouse retailer pulled back from a record high.
- DELL -15% after 1Q rev increase since 2022 wasn’t enough to impress investors with high expectations for the company’s AI server business. 1Q Infrastructure solutions net rev $9.23bn ($9.06bn exp). Adj EPS $1.27 ($1.23 exp). Total net rev $22.24bn ($21.62bn exp). Co. returned $1.1bn to shareholders through share repurchases and dividends and ended the quarter with $7.3bn in cash and investments.
- GAP +23% 1Q total comp sales +3% (est +0.91%). 1Q net sales $3.4bn (est $3.28bn). Boost FY sales & margin projections 4cst.
- GILEAD SCIENCES -2% says Phase 3 TROPiCS-04 study did not meet primary endpoint
- MARVELL TECHNOLOGY -4.6% 1Q net rev $1.16bn. Adj EPS 0.24$ (0.24$ exp). 2Q net rev is expected to be $1.250bn +/- 5% ($1.23bn exp).
- MONGODB -21% cut 2Q rev view $460m to $464m (est 473m). 2Q adj EPS 46c to 49c (est 59c). Upgrades FY sales and margins but cut FY25 4cst >> DATADOG -3.3%
- NETAPP -1% sees FY25 adj EPS 4cst $6.80 to $7.00 ($6.70 exp). 4Q adj EPS $1.80 ($1.78 exp). Net rev $1.67bn ($1.66bn exp). Co. announces an increase in its quarterly div to $0.52 and new $1bn shares repurchase.
- SENTINELONE -14% cut its FY25 rev $808m to $815 m, saw $812m to $818m ($816.6m exp) despite good 1Q results. Barclays analysts trimmed their net new ARR FY25 estimates as a reflection of macro headwinds and leadership changes at the firm.
- ULTA BEAUTY +5.50% cut FY25 EPS 4cst $25.20 to $26.00, saw $26.20 to $27 ($26.20 exp). Net sales $11.5bn to $11.6bn, saw $11.7bn to $11.8bn ($11.69bn exp). 1Q EPS $6.47 ($6.29 exp).
- VF +6% as Co. names Sun Choe as global brand president of Vans, beginning in late July, a positive news for Analysts raising hopes of a turnaround at the brand.
- ZSCALER +15% raises FY adj EPS 4cst $2.99 to $3.01, saw $2.73 to $2.77 ($2.76 exp). 3Q adj EPS 0.88 ($0.65 exp). Rev $553.2m ($536.8m exp) as demand for its platform grows. Analysts noted that Zscaler is defying a broader slowdown in the industry and increased their price targets on the stock.
At A Glance
- ALIBABA data center executive warned that the rapid internal development of AI may pose a challenge to its goal of becoming carbon-neutral by 2030.
- ASAN RBC says the application software company’s first-quarter results show signs of demand stabilization. 1Q rev $172.4m ($168.8 m exp).
- BLACKSTONE has agreed to buy Japanese e-comics provider Infocom (sources). Co. has offered $1.6bn.
- GOOGLE poached two cloud executives from rivals AWS and MICROSOFT as it builds out its AI ranks.
- INTEL prepares for AI demand shift away from public data centers
- JPMORGAN is in talks to arrange a three-year loan of about $1.1bn for two distressed Chinese builders, acc. to sources, as the companies work to clear a restructuring hurdle.
- NORDSTROM 1Q adj EBITDA $117m ($150.4m exp). Adj loss per share 24c (loss/shr 7.2c exp).
- PFIZER’s Dupveqtix gets EU Nod for new hemophilia Gene Therapy.
- SUBWAY has sold $3.35bn of asset-backed bonds to help fund its buyout by Roark Capital Group, in what is the largest securitization of its kind on record.
- TESLA shareholders are being urged by proxy adviser ISS Services to reject CEO Elon Musk’s $56bn compensation plan saying the pay package is “outside the from the start”.
- VEEVA cut FY revenue forecast.
- ZSCALER raises FY adj EPS 4cst $2.99 to $3.01, saw $2.73 to $2.77 ($2.76 exp). 3Q adj EPS 0.88 ($0.65 exp). Rev $553.2m ($536.8m exp) as demand for its platform grows. Analysts noted that Zscaler is defying a broader slowdown in the industry and increased their price targets on the stock.
Broker Moves
UPGRADES
- ASANA Raised to Neutral at Piper Sandler
- FITB Upgraded to Outperform at Wolfe; PT USD 43
- HORMEL Upgraded to Neutral at JPMorgan; PT USD 29
- WYNN RESORTS Upgraded to Buy at Seaport Global Securities; PT USD 116
DOWNGRADES
- MARAHON OIL Cut to Equal-Weight at Wells Fargo
INITIATIONS
- NETAPP Raised to Neutral at JPMorgan
Key Events
Friday
14:45 MNI Chicago PMI
Game Of Corporate Actions
DIV EX DATE
- Today : Allstate ($0.92); Baxter International ($0.29); Cboe ($0.55); Corning ($0.28); CSX ($0.12); Dominion Energy ($0.6675); Dover ($0.51); Dow ($0.7); DuPont de Nemours ($0.38); eBay ($0.27); Estee Lauder ($0.66); FactSet ($1.04); Fortive ($0.08); Hubbell ($1.22); Huntington Ingalls ($1.3); T-Mobile US ($0.65); Tyson Foods ($0.49); Union Pacific ($1.3); Weyerhaeuser ($0.2)