Closing Recap

Monday, June 02, 2025

Monday saw lackluster trading action starting the new month, with the S&P 500 (SPX) pinned around 5,900 most of the morning before melting higher throughout the afternoon led by Technology and Energy with no notable downside sectors. There were a few weaker-than-expected economic data points (ISM Manufacturing and Construction Spending) that weighed on sentiment early but was just used as another buying opportunity for investors and funds that have missed this massive rally since mid-April. In trade news this afternoon, the Trump Administration has set a firm deadline of July 8th to finalize trade deals. President Trump is also urging countries to submit their best offers by Wednesday to avoid reinstatement of tariffs. Trump is making it clear that the tariff “pause” ends in 36 days. In Fed speakers, Chicago Federal Reserve Bank President Austan Goolsbee said he continues to think the U.S. central bank will be able to lower short-term borrowing costs after the “dirt in the air” of uncertainty from tariff policies gets cleared up. “If we can get past this bumpy period, the dual mandate (of full employment and price stability) looks pretty good,” Goolsbee said. In stock news, U.S. steel makers outperformed (CLF, NUE, STLD) after President Trump said late on Friday, he planned to increase tariffs on imported steel and aluminum to 50% from 25% starting Wednesday. U.S.-listed energy stocks (XLE) advanced after producer group OPEC+ kept output increases in July at the same level as the previous two months. No major earnings tonight.

• US April construction spending -0.4% (vs. consensus +0.3%) to $2.152 trillion, vs March -0.8% (prev -0.5%); US April private construction spending -0.7%, public spending +0.4%.
• S&P Global May final manufacturing PMI at 52.0 (vs flash 52.3).

• Oil prices surged on Monday, with U.S. WTI crude oil futures +1.73 or 2.85% to settle at $62.52 per barrel, driven higher by a flare-up in tensions in the Russia-Ukraine war and a lower-than-expected output hike by the OPEC+ cartel of producers. Oil prices are looking to add to last week’s gains. Crude was rallying after Ukraine launched drone attacks on four military airports in Russia, destroying more than 40 warplanes. OPEC+ agreed to hike production by 411,000 barrels a day, upping its output by less than what some traders were expecting.

• BYDDF reported 382,476 new energy vehicle (NEV) deliveries in May 2025, a 15.3% increase year-over-year. This includes 89,047 overseas sales, up 137% year-over-year, marking a record high for the sixth consecutive month. Passenger battery electric vehicles (BEVs) rose 39.6% year-over-year.
• LI delivered 40,856 vehicles, marking a 16.7% year-over-year increase. This brought the company’s cumulative deliveries to over 1.3 million units. In the first five months of 2025, Li Auto delivered 167,659 vehicles, up 18.73% year-over-year
• NIO delivered 23,231 vehicles in May, representing a 13.1% increase year-over-year. The deliveries included 13,270 vehicles from the NIO brand, 6,281 from the ONVO brand, and 3,680 from the FIREFLY brand. Cumulative deliveries reached 760,789 as of May 31, 2025.
• XPEV delivered 33,525 vehicles in May, up 230% from last year
• In other auto data: TSLA new car sales in Spain and Portugal fell in May from the same month in 2024, registration data released by industry groups in both countries showed on Monday, while sales of electric cars from other brands soared. The U.S. EV maker sold 794 cars in Spain and 292 cars in Portugal in May, year-on-year drops of 29% and 68%, respectively.

• In Food & Beverages: CPB beat Q3 sales estimates and profit helped by strong demand for its popular canned food and soups; reported Q3 sales rose 4% to $2.5B during the quarter above ests $2.43B and EPS of $0.73 topped the $0.66 estimate as volumes for the company’s meals and beverages unit rose 7%, while its snacks business reported a 5% fall; maintained its fiscal 2025 forecast for net sales growth.
• In Consumer Products/Staples: CHD was upgraded to Outperform from Sector Perform at RBC Capital and raise PT to $114 from $100 noting shares have underperformed following a soft Q1 print impacted by destocking, slower category growth, and the impact of tariffs. RBC is also bullish on the acquisition of Touchland.

• In Online betting (OSB): shares of DKNG, FLUT, PENN and others are weaker initially after Illinois lawmakers approved a fiscal year budget on Saturday and the $55.2 billion budget includes another sports betting tax hike. A $0.25 tax will be included on the first 20,000,000 bets taken in the state, and $0.50 for every bet thereafter. This comes less than one year after Illinois vastly overhauled its sports betting tax system to increase rates for nearly every licensed operator in the state.

• In Aerospace & Defense: BA was upgraded to Buy from Neutral at Bank America with a $260 price target saying aircraft have emerged as the favored trade tool for the Trump Administration in recent trade deals. BAML views those recent deals struck in the UK (32 aircraft orders), Qatar (210 aircraft orders), UAE (28 aircraft orders), and China (removing the ban on BA aircraft), as setting a precedent for future global trade deals. In Gov’t IT Services, SAIC shares slipped after Q1 EPS of $1.92 missed the $2.12 consensus estimate on in-line revs of $1.88B while backing its year EPS and rev outlooks.
• In Industrials: SPXC was upgraded to Buy, driven by increasing confidence in the outlook for the HVAC segment and is raising its ’26 EPS estimates by 9% based on analysis of the company’s Cooling business, which it thinks suggests an incremental 1.5%+ growth opportunity from SPX’s expanding presence in data centers.
• In Transports: Goldman Sachs said to lean into Trucking (LTL and Truckload) as believe Truck earnings are finally nearing a bottom. The firm said green shoots are elusive as the industry remains depressed, but historically, this has been the best time to engage in stocks. They upgraded ODFL, SAIA, ARCB, KNX, WERN, SNDR to Buy from Neutral and WERN from Sell to Buy. Conversely, the firm adopts a more neutral view on the Rails and Rail-adjacent sector (intermodal) and downgraded NSC, UNP, CP, CSX and JBHT to Neutral. In Airlines, JBLU CEO Joanna Geraghty said the company’s partnership with UAL would not lead to a merger between the two carriers after last week announcing a collaboration between the two carriers.

• In Insurance: KBW said they estimate May 2025’s industry-wide homeowners renewal rate change at +6.8% y/y (April 2025: +7.2%), led by Nationwide’s +14.0% increase. Three top 10 insurers’ (USAA, Travelers, and Nationwide) May 2025 renewal rate changes exceeded their respective February 2025 rate changes, again suggesting that industry rate increases have peaked, although stable increases persist. Most homeowners’ insurers are still raising rates, reflecting still-high reinsurance costs and attachment points and ongoing significant weather-related losses, with the combined impact apparently varying materially by insurer.

• BMPC to be acquired by SNY for up to $9.5 billion to boost its position in rare immunology diseases; SNY would initially pay $129.00 per share in cash, or around $9.1 billion.
• BNTX and BMY announced a global partnership to jointly develop and commercialize an experimental cancer drug, BNT327 where BMY will pay BioNTech $1.5 billion upfront, up to $2 billion in non-contingent payments and up to $7.6 billion in additional milestones payments.
• KURA and Japan-based Kyowa Kirin say the US FDA accepted marketing application for ziftomenib; the drug, if approved, could be used to treat patients with acute myeloid leukemia, a type of blood cancer. Ziftomenib is a potential first-of-its-kind treatment for this aggressive form of leukemia
• KYMR disclosed positive clinical results from the Phase 1 healthy volunteer study of KT-621 saying the trial was a double-blind, placebo-controlled study that enrolled 118 subjects, consisting of single ascending dose and multiple ascending dose cohorts. The trial objective was to evaluate the safety and tolerability of escalating single and multiple ascending daily oral doses of KT-621 (competes w REGN/SNY’s Dupixent)
• LYRA shares surge after reporting positive results from the ENLIGHTEN 2 phase 3 trial of LYR-210 achieving statistically significant results for primary and key secondary endpoints in the treatment of chronic rhinosinusitis.
• MRNA said the FDA approved its newest Covid-19 vaccine over the weekend saying mNEXSPIKE was approved for use in all adults ages 65 and up, as well as individuals ages 12 to 64 with at least one or more underlying risk factors as defined by the Centers for Disease Control and Prevention.
• REGN signed a new licensing agreement with Hansoh Pharmaceuticals Group to develop and sell its weight loss therapy outside of China.
• VERA shares jump after saying the primary endpoint was met in the ORIGIN Phase 3 trial of atacicept for the treatment of immunoglobulin A nephropathy (IgAN) in adults.
• In Managed Care: UNH held its annual shareholder meeting; CNC was downgraded to Equal Weight from Overweight at Barclays and cut its tgt to $65 from $84 following Q1 earnings and citing several negative data points around Part D mix, Affordable Care Act trend, and preliminary 2026 ACA rates.

• In Other Metals: Goldman Sachs raises 2h2025 aluminium price forecast by $140/t to $2,280/t, said expects aluminium prices to decline to a low of $2,100/t in early 2026 and sees 2026/2027 price forecasts at $2,230/$2,500/t, down from $2,540/$2,800/t previously for aluminium. Gold (GLD) prices jumping as the dollar slides and global tensions rise between the US/China and Russia/Ukraine lifting gold miners AEM, NEM, KGC, GFI, AU, HMY, GOLD and others. AngloGold Ashanti (AU) said it agreed to sell its interest in a Brazilian mine to Aura Minerals for $76 million in cash. AU, EGO, CDE, WPM, SAND, SBSW among metals and mining names hitting 52-week highs today.

• In Cable & Telecom: CHTR was downgraded to Market Perform from Outperform at Bernstein but raised tgt to $410 from $385 noting shares are up 15% year-to-date and are “taking a breather."
• In Media: Citizens reiterate an Outperform rating and $95 price target on ROKU after tracking the share of Roku TVs presented on the first page of search results for TVs under $500. With Roku reaching more than 50% of U.S. broadband households and the Roku TV OS continuing to be the top-selling TV OS in the U

• In IT Services & Consulting: RXT was downgraded to Market Perform from Outperform at Raymond James following Q1 results and adjusting for the current outlook. Rackspace performed in line with strong bookings and issued positive Q2 guidance, but the path to improved growth and FCF is longer than anticipated. CDW and DELL shares fell after the WSJ reported this weekend that the General Services Administration contacted 10 technology providers Wednesday, including Dell and IT firm CDW, asking executives to justify their work and find areas to cut, The Wall Street Journal reported over the weekend
• In Semiconductors: all quiet on the day after big moves last week following the better NVDA earnings; in Memory (MU): inSpectrum released its memory contract pricing for the month of May. 8Gb DDR4 DRAM pricing was flat m/m and flat q/q, and 8GB DDR5 DRAM pricing was flat m/m and +1.6% q/q, while 512Gb NAND pricing was +3.4% m/m and +25.0% q/q.