Early Look

Monday, May 13, 2024

U.S. futures are looking slightly higher to kick off the trading week, adding to last week gains, with earnings results from Wal-Mart, Cisco Systems and Home Depot in focus as well as key inflation data in the form of April Producer Prices (PPI) and Consumer Prices and Retail Sales data mid-week. For last week, the S&P 500 gained 1.85%, the Nasdaq climbed 1.14%, and the Dow climbed 2.16% (the Dow rising 8- straight days coming into Monday). The S&P also just recorded a 3-week winning streak, immediately following a 3-week losing streak and closed Friday at its best levels since April 1^st and less than 1% from its all-time highs (SPY up 7 straight days longest since December 2023). All three indexes have advanced by at least 3.7% so far this month. The Dow is up the first 8 days of the month of May. That is the longest win streak in the month of May EVER. This is the longest win streak to start any new month since 10 in a row in March ’13. In Asian markets, The Nikkei Index dropped -49 points to 38,179, the Shanghai Index dipped -6 points to 3,148, and the Hang Seng Index rose 151 points to 19,115. In Europe, the German DAX is down -37 points to 18,735, while the FTSE 100 is flat at 8,433. In a notable comment this morning, Stifel strategists say, “the next 500 points for the S&P 500 are down”. Stifel forecast a decline in the S&P 500 to about 4,750 in Q2 or Q324, a correction of roughly 10%. While most strategists were expecting a recession last year or are eagerly attempting to call the start of one in the next year, Stifel has been of the view that the ~5 quarters Q122 to Q223 were a “pseudo-recession” and the Fed already harvested all the normal post-recession disinflation it would expect. No key economic data this morning, with a few Fed speakers on tap.

• The Dow Jones Industrial Average rose 125.08 points, or 0.32%, to 39,512.84.
• The Nasdaq Composite slipped -5.40 points, or 0.03%, to 16,340.87.
• The Russell 2000 Index declined -13.85 points, or 0.67% to 2,059.78.

• Earnings After the Close: AGYS ALLO BIOL BZFD CAPR CARA DERM DRRX FBIO GUTS HLTH HROW IDN LUCD MNR NATL PACS RCEL SENS SLRN SMTI SND STXS TKNO VXRT VYRG

• Mizuho Industrials & Specialty Materials Bus Tour, 5/13-5/14

• China April CPI: m/m 0.1% vs -0.1% consensus; y/y 0.3% vs 0.2% consensus; China April PPI: m/m -0.2%; y/y -2.5% vs -2.3% consensus; China April M2 Money Supply: y/y 7.2% vs 8.3% consensus.
• China will start selling the first batch of its 1 trillion yuan ($138 billion) of ultra-long special sovereign bonds this week, as officials ramp up efforts to support the world’s No. 2 economy – Bloomberg.

• Ford Motor (F) has begun cutting orders from battery suppliers to stem growing electric-vehicle losses that topped $100,000 per car in the first quarter, Bloomberg reported late Friday.
• GameStop (GME) shares rise as much as 20% pre mkt after Roaring Kitty is back as Keith Gill, whose bullish analysis of the video-game retailer GameStop on Reddit during the pandemic created a national phenomenon, made his first social media post on the X service in three years, in a cryptic post meant to show he was paying attention. https://tinyurl.com/2k3bzhrv
• Kenvue Inc (KVUE) files for offering of 182.3M shares of common stock by selling shareholders – SEC filing; all 182.3M shares of common stock that are being offered and sold in the offering are currently held by Johnson & Johnson (JNJ).
• Penn Entertainment (PENN) downgraded to Neutral from Buy at Bank America with a $17.50 price target and upgraded Red Rock Resorts (RRR) to Neutral from Underperform (cut tgt to $5 from $7) in casinos and gaming sector.

• Kuwait raised the official selling price (OSP) for Kuwait Export Crude (KEC) to Asia in June by $1.20 from the previous month to $2.35 a barrel above the average of Oman/Dubai quotes, a price document reviewed by Reuters showed.

• Bristol Myers Squibb (BMY) said the Phase 3 CheckMate-73L trial evaluating a combination therapy including Opdivo failed to meet its primary endpoint in patients with stage 3 lung cancer.
• DocGo Inc. (DCGO) failed to protect the personal information of current and former patients in connection with a data breach announced by the company earlier this week, a proposed federal class action said.
• Rallybio (RLYB) files to sell 3.64M shares of common stock for holders.
• Regeneron (REGN) and Sanofi (SNY) announced that the FDA has accepted for Priority Review the supplemental Biologics License Application, or sBLA, for Dupixent as an add-on maintenance treatment for adolescents aged 12 to 17 years with inadequately controlled chronic rhinosinusitis with nasal polyposis.

• Amazon (AMZN) said the top US auto-safety regulator has opened an investigation into Zoox, the autonomous-vehicle subsidiary of Amazon.com Inc., after two incidents in which its SUVs suddenly braked and were rear-ended.
• Applied Materials (AMAT) downgraded to Hold from Buy at Jefferies with a price target of $210, down from $215 and downgraded Texas Instruments (TXN) to Hold from Buy in semiconductors.
• Arm Holdings (ARM) is setting up an AI division and will have a prototype in the spring of next year, Japan’s Nikkei news agency reported.
• Nexstar (NXST) upgraded to Overweight from Equal Weight at Wells Fargo.
• SoftBank Group (SFTBY) swung to a net profit in the final quarter of its financial year, saying it booked a profit of 328.9 billion yen ($2.11 billion) in January-March, compared to a loss of 32 billion yen a year earlier. Overall, SoftBank’s fourth-quarter net profit compared with a 32-billion-yen loss in the same period a year earlier.