Early Look

Monday, May 19, 2025

Stock futures fell Sunday evening as investors responded to Moody’s downgrade of the U.S. credit rating as weakness carried over into Monday morning. Treasury yields spike as the 10 bps jumps to 4.54% and the 30-yr yield +12 bps to 5.017%, its highest since November 2023. The U.S. dollar falls 1% against the euro while gold prices jump 1.75% to $3,244 an ounce. Moody’s downgraded the United States credit rating late Friday to AA1 from AAA due to concerns about the nation’s growing, $36 trillion debt pile. Moody’s was the last of the major credit-rating firms to strip the U.S. of a triple-A rating. U.S. futures slip coming into Monday, with a 5-day win streak for the S&P 500 Index on the line after hefty gains last week where the S&P 500 gained 5.27%, Nasdaq up 7.15%, Dow up 3.41%. Treasury Secretary Bessent on Sunday said on NBC that tariff rates would go back to the elevated levels that President Donald Trump announced on April 2, if countries “are not negotiating in good faith”. In Asian markets, The Nikkei Index dropped -255 points to 37,498, the Shanghai Index was little changed, and the Hang Seng Index slipped -12 points to 23,332. In Europe, the German DAX is down -15 points to 23,752, while the FTSE 100 drops -54 points to 8,629. A busy week ahead on the macro front which includes The Reserve Bank of Australia rate decision (25-bps rate cut is widely expected), a busy data schedule including global PMIs, central bank speeches, and trade talks will keep traders on their toes this week. A May 20-22 meeting of G7 finance chiefs in Canada will also be watched for any discussion on foreign exchange rates. In the U.S., at least 12 Federal Reserve speakers are scheduled to speak this week.

• The Dow Jones Industrial Average rose 331.99 points, or 9.78%, to 42,654.74
• The Nasdaq Composite gained 98.78 points, or 0.52%, to 19,211.10
• The Russell 2000 Index advanced 18.56 points, or 0.89% to 2,113.25

• Earnings After the Close: AGYS EGHT PPSI QFIN SB TCOM TRNS

• Microsoft (MSFT) is holding its Build conference in Seattle on May 19

• Former U.S. President Joe Biden has been diagnosed with an “aggressive form” of prostate cancer that has spread to his bones, his office said in a statement on Sunday.
• China’s April retail sales growth of 5.1% missed expectations as consumption remains a worry. Retail sales rose 5.1% from a year earlier in April, missing analysts’ estimates of 5.5% growth, according to a Reuters poll. Sales had grown by 5.9% in the previous month.
• China Industrial output grew 6.1% year on year in April, stronger than analysts’ expectations for a 5.5% rise, while slowing down from the 7.7% jump in March.
• China Fixed-asset investment for the first four months this year, which includes property and infrastructure investment, expanded 4.0% from a year earlier.
• Japan suspended imports of poultry meat from the city of Montenegro and live poultry from the broader Brazilian state of Rio Grande do Sul last Friday following an outbreak of bird flu, an official at Japan’s agriculture ministry said on Monday.
• TIC data late Friday revealed record-high overseas US Treasury holdings at $9.05 trillion in March, a $233.1 billion increase, with Japan, the UK, Canada, and Belgium as key contributors

• Wal-Mart (WMT) a focus of President Trump this weekend, saying on Truth Social, “Walmart should STOP trying to blame Tariffs as the reason for raising prices throughout the chain. Walmart made BILLIONS OF DOLLARS last year, far more than expected. Between Walmart and China, they should, as is said, “EAT THE TARIFFS,” and not charge valued customers ANYTHING. I’ll be watching, and so will your customers!!!”
• Williams-Sonoma (WSM) upgraded to Equal Weight from Underweight at Barclays and raised the price tgt to $166 from $131

• JPMorgan Chase (JPM) said it was expecting the card services net charge-off rate, which represents the proportion of credit card debt the bank does not expect to collect, to be between 3.6% and 3.9% for 2026. That is higher than the 3.6% net charge-off rate the bank is expecting for 2025, it said on Monday.
• Reddit (RDDT) downgraded to Equal Weight from Overweight at Wells Fargo PT $115, down from $168.

• GSK (GSK) said combinations of its blood-cancer treatment, Blenrep, have been approved by Japan’s Ministry of Health, and that it expects more approvals through the year.
• The U.S. FDA approved Novavax’s (NVAX) COVID-19 vaccine but limited its use to older adults and people over the age of 12 with conditions that put them at risk due to the illness.
• UnitedHealth (UNH) shares rebound after form 4 filings late Friday showed President John Rex bought 17,175 on 5/16 at $29.112 per share valued at $5M dollars and Chairman Hemsley bought 86,700 shares on 5/16 at $288.57 valued at $25M.

• Netflix (NFLX) downgraded to Neutral from Overweight at JPMorgan, PT $1,220, up from $1,150.
• Nvidia Corp. (NVDA) Chief Executive Officer Jensen Huang expressed confidence in his company’s trade partners and said there’s no evidence of its prized semiconductors being diverted to the Chinese market
• Qualcomm (QCOM) said it will make custom data center central processing units, CPUs, that use Nvidia (NVDA) technology to connect to Nvidia’s AI chips – Reuters reports.
• Xiaomi (XIACY) is slated to introduce a 3-nanometer mobile chip this week and plans to invest around $7 billion in chip design over a decade, its founder said. Founder and CEO Lei Jun disclosed the investment amount in a post on Chinese social-media platform Weibo on Monday