Closing Recap

Monday, April 28, 2025

U.S. stocks end the day mixed/to higher, finishing well off the morning lows ahead of an extremely busy week of economic data (jobs, inflation, GDP, etc.) as well as the busiest earnings week of Q1. There are roughly 180 S&P 500 companies expected to report this week. So far, 183 S&P 500 companies have reported this quarter (as per Reuters) with 78% beating and 22% missing estimates, though guidance has been more subdued (or withdrawn in several cases) due to the uncertainty of global tariffs. The Nasdaq Composite fell more than -1% by midday while the S&P 500 and Dow industrials were also lower, led by weakness in technology as all seven of the Magnificent Seven large-cap tech stocks were down. But stocks recovered, pushing higher all afternoon, extending the S&P 500-win streak to 5-days now and is down -1.1% for the month with 2-trading days left in April (better than the -13% at mid-month). The Dallas Fed Texas manufacturing index of general business activity -35.8 in April vs -16.3 in March while Dallas Fed Texas manufacturing output index 5.1 in April vs 6.0 in March. The U.S. dollar index (DXY) posted a quick retreat, falling -0.3% to lows around 99.10 after the Dallas Fed data hit this morning and Treasury yields fell. U.S. Treasury yields eased to near three-week lows on Monday. Gold prices surged, while Treasury yields, and the dollar sunk.

• The U.S. Treasury said it expects to borrow $514B in the second quarter, $391B higher than its February estimate of $123B, mainly due to a lower cash balance at the beginning of the quarter and projected lower net cash flows. The second-quarter financing estimate assumes a cash balance of $850B at the end of June, the Treasury said. The Treasury also announced it expects to borrow $554B in the third quarter, assuming a cash balance of $850B at the end of September. In the first quarter, the Treasury said it issued $369B in privately held net marketable debt and ended that quarter with a cash balance of $406B.

• In Online Retailers: AMZN said some third-party merchants who previously sold China-made goods during Amazon’s premier Amazon prime July shopping event are sitting it out this year or reducing the amount of discounted merchandise they offer as the China tariffs, which stand at 145%, will more than double his costs of goods on newly imported merchandise, making it "unaffordable" according to some sellers.
• In Restaurants: DPZ shares slip as Q1 EPS $4.33 tops consensus $4.07 but Q1 revs $1.11B miss est. $1.12B on weaker comp sales which fell -0.5% vs. est. +0.23%; Q1 International same-store sales grew 3.7%, ahead of analyst estimates of 1.93% growth. JACK was upgraded to Buy from Hold at Stifel (but lower tgt to $32 from $35) saying views last week’s announcement as a clearing event for the stock as new CEO Lance Tucker has created a viable plan to strengthen the balance sheet and simplify the investment narrative. CMG was downgraded to Hold from Buy at Argus with no price target citing rising avocado, chicken and pepper prices, growing competition among restaurants, and higher wage and store location costs remaining headwinds.
• In Consumer Staples: Wells Fargo downgrades the consumer staples sector to Neutral from Overweight. Oppenheimer said ahead of earnings in Consumer Staples, they expect earnings resets for CHD, EL and FRPT given tariff developments, competitive dynamics, and/or a fluid demand backdrop in certain categories. For longer-term players, OPCO would continue to take advantage of any dips with its Outperform-rated names including CHD, PBH, and SN.

• In Casinos & Gaming: MGM provides Q1 business update saying they are off to a strong start to 2025 affirms strategic approach and confidence of positive EBITDA in 2025; said BetMGM’s strong momentum from 2H 2024 continued during Q1’25, driven by its leading iGaming offering and strengthened sports product, and refined approach to player management; Q1 revs up +34% y/y with strong growth across both iGaming (+27%) and Online Sports (+68%).
• In Autos: NIO was added to Citigroup as an "upside 30-day catalyst watch" while keeping a Buy rating on the name with an $8.10 price target citing the company’s new model launches, new advanced driver assistance systems chips, and cost savings for the catalyst watch. Porsche (POAHY) lowered its FY revenue forecast to a range of EU37B-EU38B, from prior EU39B-EU40B.
• In Ride Hailing/Food Delivery: On Friday (4/25), Deliveroo (DELVY) confirmed that DASH had submitted a non-binding all cash offer to acquire the company for 1.80GBP/share or $2.7B EV. DASH had net cash of $5.3B at the end of the year. In 2024, ROO-GB generated ~$10B GOV in 10 Int’l. markets, ~3x the size of Wolt when DASH acquired in 2022 (as per Oppenheimer).

• In Aerospace & Defense: BA was upgraded to Outperform from market perform at Bernstein noting that the aircraft maker is now making the progress it needed for the growth trajectory; also, Riyadh Air CEO Tony Douglas said that the Saudi startup carrier would be ready to buy Boeing aircraft destined for Chinese airlines if they are not delivered due to the escalating trade war.
• In Transports: SAIA shares tumbled on Friday after quarterly earnings miss/guidance, prompted a downgrade at Bank America, but Morgan Stanley saw the report/results as earnings reset saying believes this is more structural than cyclical but the reset brings the stock toward fair value in their view.

• In Crypto: MSTR sells 4,020,000 common stock shares for $1.40B from April 21-27 as per SEC filing, then snapped up 15,355 Bitcoins from April 21 to Sunday for $1.42 billion, or roughly $92,737 each (the latest purchase brings the company’s total holdings to 553,555 Bitcoins with an aggregate purchase price of $37.9 billion, or $68,459 per Bitcoin); COIN was double downgraded to Sell from Buy at Compass Point with an $180 price target as the firm transferred coverage of the stock, saying they are cautious heading into Q1 results and also concerned about second half performance as growth comes from lower margin institutional segments.
• In Insurance: PGR was upgraded to buy from Neutral at Bank America and raised tgt to $312 from $297 after recent underperformance; AON was upgraded to Overweight from Neutral at Piper following a disappointing quarter that drove shares down further than the firm said they thought was warranted.

• In Life Sciences: AVTR was downgraded from Buy to Hold at Stifel and lowering PT from $30 to $14 after missing Q1 and lowering the top-line organic growth guide by 200 bps, but the totality of the results and earnings call was worse than that.
• In Medical Equipment: CNMD was downgraded from Buy to Hold at Stifel and lowered PT from $75 to $55 citing ongoing macro-related tariff and economic uncertainty, the company’s back-end weighted 2025 guidance; and now (3) Stifel’s Q125 hospital purchasing data indicates that AirSeal disposables are declining y/y. RVTY posts Q1 profit and revenue above Wall Street estimates and maintains its full-year profit forecast; INMD shares fell after results and lowering FY adj gross margin 78% to 80%, vs. forecast 80% to 82%.

• In Semiconductors: NVDA shares fell initially on reports China’s Huawei develops new AI chip, seeking to match Nvidia, as per WSJ. For Smartphone semiconductors, Morgan Stanley adjusts their smartphone semiconductor estimates lower for 2h25 and beyond – 1h25 unchanged for now – and also revises their price targets lower to reflect a weaker smartphone outlook and preview earnings next week. QCOM Lower PT to $163 from $204, QRVO to $86 from $106 and SWKS to $67 from $72 in Smartphone semis.