Closing Recap

Friday, May 16, 2025

What a week for U.S. stocks, as the S&P 500 advanced for its 5^th straight day, along with broad gains in the Nasdaq, Dow, and Russell 2000 on Friday as investors have been “bulled up” since the April “Liberation Day” tariff sell-off into “Bear Market” territory following upbeat trade/tariff talks since, including deals announced this week with China and several nations in the Middle East. With today’s gains, the S&P 500 index (SPX) is close to the 6,000 level now less than 4% of its all-time highs after its more than 20% surge off the April lows. Markets were steadily higher all morning into the afternoon into option expiration, melting higher all day, where over $2.8 trillion of notional option exposure expired today including $1.2 trillion of SPX options and $580 billion notional of single stock options (as per Goldman Sachs). No real trade news today, though President Trump said the U.S. is on the verge of “incredible” investment inflows—around $12–14 trillion already announced or soon to be—with some 150 countries (especially China) lining up for trade deals, while Washington will issue letters spelling out what nations must pay to do business in America and has struck a UAE–U.S. agreement to allow advanced AI semiconductor sales. A monster week for several sectors, paced by the biggest jumps in Tech (XLK) and Consumer Discretionary (XLY), both up over 7% WTD, followed by 5% advance for Industrials (XLI) and 3% for Energy (XLE) and Financials (XLF). Healthcare (XLV) and REITs (XLRE) lagged the most. Note Q1 earnings season is now mostly behind us, but there are still some notable names coming up next week including in retail: HD, TJX, LOW, ROST, TGT and more reporting as well as some software/tech names: INTU, PANW, ADSK, SNOW, WDAY among others. The S&P 500 (SPX) is up 16 out of the last 19 days, can it continue?

• University of Michigan surveys of consumers 1-year inflation outlook prelim May jumped to 7.3% vs final April 6.5% while the consumers 5-year inflation outlook prelim May 4.6% vs final April 4.4%.
• U.S. April export prices edge higher +0.1% (vs. consensus -0.5%) and vs March +0.1% (prev unchanged) while Import Prices rose +0.1% vs. est. -0.4%).
• April Housing Starts rose +1.6% m/m vs. +3% est. & prior month reading -10.1%; April building permits fell (-4.7%) vs. (-1.2%) est. and prior +1.9%; Housing starts 1.361M unit rate (consensus 1.365M), vs March 1.339M units; April single-family starts -2.1% to 927,000-unit rate; multifamily rate +10.7% to 434,000-unit rate.

• Gold prices finished lower on the day and week, as Jue gold slid -$39.40 or 1.22% to settle at $3,187.20 an ounce posting its worst week in six months down over -3% (Nov ’24), as a higher dollar and a temporary U.S.-China trade agreement dented demand for the safe-haven metal among investors. Earlier this week, the U.S. and China agreed to temporarily slash the harsh tit-for-tat tariffs imposed in April, lifting sentiment.

• In Consumer Staples/Beverages: STZ shares rose after 13F filing showed Warren Buffett’s Berkshire Hathaway more than doubled its stake in the company as stake grew to ~12 million shares worth $2.2 billion from 5.6 million shares at year end, giving Berkshire a 6.6% stake in Constellation. EL shares rose after Michael Burry’s Scion Asset Management buys shares of EL, according to 13F regulatory filing. Shares of MNST, CELH slipped off highs midday after a media report in People magazine noted a common energy drink ingredient (Taurine) has been linked to the progression of the blood cancer leukemia, prompting researchers to voice concerns about the consumption of those beverages. https://tinyurl.com/3tbu87j7
• In Food: FLO shares fell after cutting their annual sales forecast to about $5.297B-$5.395B or 3.8%-5.7% growth, down from prior view of $5.4B-$5.487B or 5.9%-7.5% growth to reflect first quarter performance, the challenging consumer environment, and potential for increased tariff costs. The FDA is planning to expand its review of food additives beyond artificial dyes, targeting preservatives and chemicals used as whitening agents and dough conditioners. Piper said they see no catalysts for cocoa cost relief, adding further stress to HSY’s 2026 EPS as consumers are increasingly price sensitive.
• In Restaurants: CAVA reported a 1Q EBITDA beat driven by higher comp store sales +10.8%, vs. est. +10%, helped by traffic +7.5% and check +3.3%, reflecting strength in underlying demand despite multiple crosswinds observed across the industry including weather and the LA fires; maintained its annual same-restaurant growth target of 6% to 8% (but midpoint remains below consensus est. 7.9%); WING active after showcased its new Smart Kitchen operating platform to analysts; Goldman Sachs said it Restaurant Monthly Dashboard shows mixed monthly traffic and observed sales, with LSR and FSR accelerating while fast casual slows. Positive standouts include EAT and DPZ in April.

• In Cruise Lines: CCL was upgraded to Hold from Reduce at HSBC and raised PT to $24 from $14 saying recent commentary from cruise peers has been positive, with healthy booking levels and strong pricing trends for December to March. CCL also recorded solid Q1 results with an EBITDA increase of 38% YoY, aided by a net yield increase of +7.3% YoY and raised EBITDA guidance by 2% for FY25.

• In Energy: the weekly US oil drilling rig count was down -1 at 473 (down 24 vs year ago) their lowest since January, while gas rigs fell by 1 to 100 in their first decrease since early April. he oil and gas rig count declined by about 5% in 2024 and 20% in 2023.
• In Industrials: UBS upgraded CAT, URI, and TEX to Neutral from Sell, maintain Buy OSK following the better-than-expected progress and outcomes of trade discussions with China and legislative discussions. The firm says they no longer see the same extent of downside risk to earnings and multiples. They said they now think recent actions by the US and foreign counterparts are driving towards the contained downside scenario. We still think lingering uncertainty will be somewhat of a drag on demand. See risk/reward as relatively balanced for the sector. Construction machinery demand was cyclically lower entering 2025, and we think economic/policy uncertainty serves as a further headwind for demand.
• In Building Products/Materials: MLM upgraded to Buy from Neutral at UBS to reflect continued above-market growth from both price and volume in what may be an extended period of industrial softness, and more confidence in margins due to price-cost dynamics and execution. Following a period of industrial weakness in 2025, UBS expects a re-acceleration in non-res construction spending in 2026, which should support higher aggregates volumes. The improvement is driven by infrastructure and structural investments in data centers and power.
• In Aerospace & Defense: ACHR announced that the electric vertical take-off and landing aircraft company had been selected as the ‘Official Air Taxi Provider’ for the LA28 Olympic and Paralympic Games; SPCE shares bounced after quarterly results better-than-expected and said it was keeping pace with plans to relaunch commercial spaceflights by the summer of 2026.
• In the Lithium sector: LAC filed for mixed shelf offerings of about $1B; said it plans to use proceeds from both share offerings to finance capital expenditures, repay debt and for other general purposes; had posted a Q1 net loss of $11.5M compared to a loss of $6.3M a year ago

• In Crypto: COIN shares jumped as they are expected to join the S&P 500 on Monday 5/19 (replacing DFS); Bitcoin prices advanced again on Friday, now up 10% this month alone but it was the impressive move higher in several Bitcoin miners that drew attention CLSK, HUT, HIVE, IREN, MARA, RIOT and WULF.

• BMRN entered into a definitive agreement to acquire INZY for $4.00 per share in an all-cash transaction for a total consideration of approximately $270M. The transaction has been unanimously approved by the Boards of Directors of both companies and is expected to close in the third quarter of 2025.
• IOVA was downgraded to Neutral from Buy at UBS and slashed its tgt to $2 from $17 after Q1 Amtagvi sales were below expectations and its fiscal 2025 guidance was reduced, indicating a slower Amtagvi ramp.
• NVO said their CEO Lars Fruergaard Jorgensen will step down over concerns the company is losing its first-mover advantage in the highly competitive obesity drug market.
• SLDB reported Q1 financial results and provided an update saying dosing is ongoing in the Ph1/2 INSPIRE DUCHENNE trial, with next data update in ~10-12 patients expected in Q425 after planned FDA meeting to discuss the accelerated approval pathway.
• TVTX shares fell after the FDA accepted its supplemental New Drug Application for traditional approval of FILSPARI for the treatment of focal segmental glomerulosclerosis. The FDA has assigned a PDUFA action date of January 13, 2026, and has indicated that it is currently planning to hold an advisory committee meeting.
• UNH has had a week to forget, falling -28% on week, -32% on the month and -45% YTD hit by several factors, with the latest being the WSJ reporting midweek it is under criminal investigation for possible Medicare Fraud. The news came after its CEO stepped down for personal reasons and suspended its guidance.
• URGN shares tumbled after the FDA is committed to ensuring digital accessibility for people with disabilities. We are continually improving the user experience for everyone and applying the relevant accessibility standards. At the time of initial posting on May 16, 2025, the attached Event Materials may not be fully accessible to users using assistive technology.
• In Healthcare technology/Services: DOCS shares sunk after posting better Q4 results but guided Q1 revs $139M-$140M, below consensus of $143.4M and gave FY revenue outlook of +10% below ests of +12% view, shy of forecasts, as guidance includes macro-related risk for DOCS’ pharma customer base.

• IT Services & Consulting sector weaker as GLOB tumbles on guidance; GLOB was downgraded by a few firms (Goldman, Piper) as reported Q1 below the Street and lowered FY25 targets (sees FY25 adj EPS at least $6.10/$2.46B revs vs. consensus est. $6.82/$2.64B) and the company saw a decline in the number of $1M/$100K customers and in its headcount sequentially (ACN, EPAM, CTSH down in sympathy on guidance).
• In Video games Software: TTWO reported strong fiscal Q4 results, with broad-based outperformance across key titles driving bookings to the top-end of guidance, while F26 guidance was below as big news of the quarter came a few weeks ago when Take-Two announced the delay of GTA VI.
• In AI Data center & Quantum Compute names: QUBT shares climbed after the quantum optics technology company reported its Q1 results showed low, but growing revs on good margins, while expenses rose; CRWV shares surged, rising more than 25% late day above $83 after reporting stellar results the day prior but higher capex spending capped gains on Thursday – not to be on Friday.
• In Security Software: KeyBanc raised price tgts for PANW to $220 from $205, ZS to $290 from $250, CRWD to $495 from $450, OKTA to $155 from $135 and RBRK to $98 from $76 in April quarter security software previews. The firm said checks, similar to its initial read at RSA, suggest a solid April quarter for security overall; however, results and feedback are a downtick from the January quarter. Checks were relatively more positive for ZS and CRWD; checks for PANW were generally solid and most partners about in line; feedback on S was generally consistent with recent quarters; OKTA checks/feedback with a few partners were solid, and KEYB’s fieldwork has been positive on identity; RBRK channel feedback and peer results were solid.

• AMD price target raised to $130 from $110 at Barclays and kept a buy rating as updated its models for chipmakers following meetings with management teams. AMD and Nvidia this week separately announced multi-year AI infrastructure projects with Saudi company Humain.
• NVDA shares rose early after President Donald Trump said he was close to landing another deal that would send more American-made artificial-intelligence chips to the Middle East. Trump said Friday that the U.S. and the UAE had agreed to create a path that would allow Abu Dhabi to buy advanced American AI chip. NVDA however later noted it won’t be sending GPU plans to China following a report that the artificial intelligence chipmaker is working on a research and development center in Shanghai in light of recent U.S. export curbs.
• In AAPL supply chain, Keybanc said results from the April iPhone carrier survey and Key First Look Data were negative, reflecting a negative mix shift toward lower-end iPhone SKUs and panic buying ahead of tariff-related price increases. Their carrier surveys indicate iPhone 16 sell-through in April were slightly worse than store expectations and normal seasonal trends. Key First Look Data reflects a spike in y/y iPhone sales growth (+34% y/y) due to weak April comps and panic buying ahead of tariff-related pricing concerns. The firm said survey and KFL results seen negative for the Apple supply chain (ARM, AVGO, CRUS, QCOM, QRVO, and SWKS