Closing Recap

Thursday, May 01, 2025

The party continues on Wall Street as U.S. stocks remain in cruise control higher, as the new month kicked off with big gains, extending the late rally in April as sentiment improves with earnings season going better than feared thus far. From duds to studs, U.S. stock markets have been raging higher for 2 weeks now as the S&P 500 advanced for an 8^th straight session and has now retraced roughly 75% of the Feb-April decline, as investors concerns on tariffs and the impact on the economy have eased thanks in part to strong earnings results for Q1. Through this morning, 285 S&P 500 companies reported thus far (fiscal qtr ending Feb-April) as 76% beat, 24% miss, the avg beat 24%, avg miss -10% and avg yr/yr earnings growth 16%. Results from META and MSFT overnight helped jump start the technology/AI rally, with chips, data centers, AI related plays leading the market today while Smallcaps lagged. The fun isn’t over as results from Apple (AAPL) and Amazon (AMZN) highlight tonight’s expected quarterly earnings, along with AMGN in biotech, ABNB in lodging, MSTR in crypto, AIG in insurance and then oil giants XOM, CVX tomorrow AM. And while attention remains on earnings, the busy week of economic continues again on Friday with the monthly payrolls report on tap at 8:30 am et. Estimates are for Nonfarm Payrolls for April +130K (prior +228K), Private Payrolls est. +125K (prior +209K), Manufacturing Payrolls est. -5K (prior +1K), and the unemployment rate for April est. 4.2%.

Tech heavy Nasdaq outperformed rising 2% as Microsoft (MSFT) beat estimates and showed strong growth in its key Azure cloud business (lifting software names), while Meta (META) also topped estimates and raised its full-year capex forecast as it continues to invest in AI (boosting Ai related chips/data centers/power stocks – names like NVDA, AMD, AVGO, VRT, ANET, CRWV, DELL, HPE). AMZN’s AWS expectations are ticking up a bit into earnings tonight after MSFT results. Meanwhile cloud names (SNOW, MDB, DDOG) also benefit from cloud revs by MSFT. Ad names also up on the META results, easing fears created by SNAP the day prior (ROKU, APP, PINS, RDDT, etc.). Next up, Apple (AAPL) and Amazon (AMZN) earnings results tonight to see if the tech party can continue. Defensive consumer staples (XLV) and healthcare (XLV) were the biggest drags on S&P, which rose over 1%.

Lots of trade/tariffs news again today: President Trump said the US had “potential deals” with South Korea, Japan, and India, though he was “in less of a hurry” than others concerned about the economy. Trade Representative Jamieson Greer also said the US is close to announcing the first tranche of agreements. Overnight, the US and Ukraine signed an “economic partnership” deal on Wednesday that will give Washington access to the country’s critical minerals. Also, it was reported Thursday that the Trump administration has quietly reached out to Beijing to kick off tariff talks. Beijing and Washington have been locked in a game of “he said, she said” over the past month, with each side claiming that the other has reached out to discuss scaling back levies.

Sentiment readings improving: 1) This week’s NAAIM Exposure Index reading at 59.92, rising from last week’s 40.67 level – recent peak of 99.24 from 12/11 – recent trough from 4-17 of 35.16; 2) The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was -38.4 vs -33.7 last week. Bulls fell to 20.9% from 21.9%, while Neutrals fell to 19.8% from 22.5%, and Bears rise to 59.3% from 55.6%; 3) Fear & Greed Index: 46/100 – Neutral (from 31 prior day).

• Weekly Jobless Claims climbed to 241,000 in the latest week from 223,000 prior (and vs. consensus 224,000) as the 4-week moving average climbed to 226,000 from 220,500 prior week (previous 220,250); continued claims climbed to 1.916M Apr 19 week from 1.833M prior week (prev 1.841M); the US insured unemployment rate climbed to 1.3% Apr 19 week from 1.2% prior week.
• March construction spending declined -0.5% (vs. consensus +0.2%) to $2.196 trln, vs Feb +0.6% (prev +0.7%); US March private construction spending -0.6%, public spending -0.2%.
• ISM U.S. manufacturing activity index 48.7 in April (vs. consensus 48.0) vs 49.0 in March; prices paid index 69.8 in April (consensus 70.3) vs 69.4 in March; new orders index 47.2 in April vs 45.2 in March; and the employment index 46.5 in April vs 44.7 in March.
• The Atlanta GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2025 is 1.1% on May 1, down from 2.4% on April 30 after this morning’s releases from the US Census Bureau and the Institute for Supply Management.
• S&P Global April final manufacturing PMI at 50.2 (vs flash 50.7).

• The US dollar index (DXY) rises 0.78% at 100.25 as the dollar rises to 145.60 vs. the Japanese Yen, a 1.79% move on the day as the Yen was the weakest of the G-10 currencies after the Bank of Japan pushed back the timing for when it expects to reach its inflation target and slashed its growth forecasts. Treasuries slipped, reversing earlier gains as yields move to highs (10-yr at 4.23% highs) after earlier lows of 4.13% and falling 7bps in April. The euro is back below 1.13. Bitcoin, no weakness, rose another 2% around $96,500.

• In Consumer Staples: CHD cut its guidance for organic sales growth to 0%-2% from 3%-4% and cuts FY25 adjusted EPS growth view to 0%-2% from 7%-8%; EL posts a smaller-than-expected drop in quarterly sales as Q3 sales fall -10% y/y to $3.55B which topped the estimate $3.52B; Q3 EPS $0.65 beat the $0.32 consensus; guides net sales for fiscal 2025 to be down 8% to 9% vs estimates of a 7.07%; KMB is investing $2B to expand its U.S. manufacturing capabilities over five years, making a long-term bet on the American consumer even as it cut its profit forecast, the WSJ reported.
• In Retailers: mattress retailer SNBR 1Q results were below expectations, pressured by a soft demand environment while tariffs are expected to weigh on margins in 2H, but SNBR is initiating incremental cost efforts to more than offset headwinds. In furnishings, Wayfair (W) posted a surprise profit for Q1 and topped sales expectations, as revs 42.73B topped the $2.71B est. as U.S. sales ticked up 1.6% y/y to $2.4B. KSS said it terminated Ashley Buchanan as chief executive for cause after an investigation found he violated company policies related to conflicts of interests with certain vendors.
• In Food & Beverages: HSY Q1 adj EPS $2.09 tops the $1.96 est. on in-line sales $2.81B; sees FY tariff expense about $15M-$20M in Q2; PPC posted better-than-expected sales due to a strong performance in the U.S. and Mexico. Consumer staples/foods were among the worst performers on the day in the S&P, with sharp declines for UTZ which declined on earnings and guidance, but CPB, GIS, CAG, MDLZ, KHC were all weak today.

• In Leisure Products: CWH was upgraded to Overweight at JP Morgan after the shares declined -14.4% Wednesday vs the S&P 500 +0.1%, seemingly in reaction (in its view, overreaction) to a softer trend to Q1 Average Selling Prices (ASPs) despite numerous other aspects of the firm’s performance indicating the beginning stages of an expected sharp profit pivot driven by largely idiosyncratic factors remains on track. . HOG pulled its 2025 financial outlook, citing tariffs while reported Q1 revs that missed estimates.

• In Insurance: AFL Q1 operating EPS of $1.66 was in-line with the Street’s $1.66 as US and Corporate results come in better than expected, offsetting a weaker Japan print; ALL Q1 operating EPS comes in well estimates as ALL showed a considerable amount of favorable development in auto, flexed expense discipline, and posted strong net investment income; MET Q1 normalized EPS came in at $2.02 as Group Benefits reported strong mortality offset by Asia and announced a deal with Talcott to reinsure $10B of US retail variable annuities; PRU points to a better-than-expected run rate of earnings as Group and Individual Retirement show strength, while net flows and sales growth metrics also came in better.

• BDX shares fall; reported revenues of $5.272B (vs. $5.355B consensus), with Organic Growth of 0.9% (vs. 2.7% consensus); EPS was $3.35 (vs. $3.28 consensus); updated its expected organic revenue growth guidance to 3% to 3.5% (from 4% to 4.5% prior), maintaining its underlying EPS guide.
• BIIB Q1 adj EPS $3.02 tops the $2.52 estimate and revs $2.43B above est. $2.23B; strong demand for its rare disease drugs helped offset declining sales of its multiple sclerosis drugs; expects 2025 profit per share of $14.50 to $15.50, compared with its previous forecast of $15.25 to $16.25.
• CVS shares rise; Q1 adj EPS $2.25 tops the $1.70 estimate; Q1 medical benefit ratio decreased to 87.3% vs estimate 88.9%; Q1 revs $94.59B vs. est. $93.64B; raises adjusted full-year profit forecast to $6 to $6.20 per share from $5.75 to $6 previously
• LLY Q1 revenue of $12.73B, slightly beating expectations; strong sales of Mounjaro and Zepbound drive 45% YoY growth; CEO Ricks highlights pipeline progress and plans for four new manufacturing facilities; Q1 EPS $3.34 topped the $3.26 consensus but lowered year view to $20.78-$22.28 from $22.50-$24 prior. CVS also said its PBM unit also plans to drop LLY’s weight-loss drug Zepbound as a preferred product from its list of drugs eligible for reimbursement and would retain NVO’s Wegovy.
• MDGL reported Q1 sales $137.3M for its MASH drug Rezdiffra, topping consensus analyst estimates.
• MRNA said after earnings results that it planned to cut costs by around $1.5 billion by 2027, adding $700 million to $1 billion on top of more modest cuts announced last year; also said it no longer expected to receive approval for its combination Covid/flu vaccine shot in older adults this year.
• OGN shares tumbled after the results beat but cut its dividend to $0.02 from $0.28.
• The Trump administration is shifting away from funding next-generation COVID-19 vaccines and are instead investing $500M in a vaccine project involving producing vaccines from chemically inactivated whole viruses.

• ALGN Q1 beat revenue, cases, EBIT and EPS while Q2 rev guidance was slightly ahead of consensus and maintained FY25 +MSD% case volume guidance and embedded the weaker dollar into guidance.
• GH posted Q1 revenue growth ahead of consensus, and increased revenue guidance by $40M at the midpoint; did well on oncology volumes, which were up 25% Y/Y and is increasing Screening guidance by $15M at the midpoint.
• GKOS slides as Q125 revenue beat consensus and, while management reiterated its 2025 revenue guidance, the implied iDose contribution increased by ~$5M.
• ICLR Q1Top-line and bookings miss as weaker demand environment persists; Q1 revenue of $2.00B missed consensus of $2.02B.
• TDOC reported Q1:25 adj-EBITDA of $58.1M (vs. Street $54.2M and guidance of $47-$59M and revs. of $629M above ests; while the company met its Q1 expectations across both businesses, it is lowering FY2025 due in part to $10-$15M of headwinds from the newly announced Uplift acquisition and other investments; is lowering FY2025 adj-EBITDA guidance to $263-$304M (vs. prior $278-$319M).
• TNDM delivered record Q1 sales with WW growth of 22%, 28k new pumps shipped, 500bps Adj. EBITDA expansion, and progress towards its 2025 catalysts – Type 2 launch (Mar’25), Mobi pharmacy expansion (30% mix vs. 20% prior), sales rep productivity (expansion complete, minimal disruptions).

• CAT was upgraded from Perform to Outperform at Oppenheimer with $395 tgt saying while the global macro-outlook is likely to remain a near-term overhang, CAT’s better than feared quarter highlighted relative resiliency of the demand and margin outlook.
• CHRW reported another good quarter, highlighted by continued cost improvement despite contraction in core truckload volumes; posted strong performance in NAST segment – North American Surface Transportation – helped to offset Forwarding headwinds.
• CNH lowered its 2025 adj EPS outlook to $0.50-$0.70 from prior view $0.65-$0.75 citing subdued demand for its machines amid economic uncertainty; posted in-line Q1 EPS and sales $3.83B vs. est. $3.51B.
• CP reported better than expected results; however, management reduced 2025 EPS guidance to 10%-14% (from 12%-18%).
• IEX beat Q1 profit and revenue, driven by a sustained recovery in the demand for its health and science-related products and maintained its full-year earnings forecast of $8.10 and $8.45 per share.
• PWR shares surged in the E&C sector behind better earnings as Q1 revs $6.2B vs. est. $5.86B and better earnings; results come ahead of MTZ earnings after the bell in sector.

• HWM shares lead as the supplier of castings and fasteners lifted its 2025 EPS outlook to $3.36-$3.44 from $3.1343.21 prior following a quarterly beat saying it expects to pass on higher costs while continuing to fulfill strong demand from increased jet production.
• SAIC awarded a new $55M mission integration contract from Space development agency.

• In Materials: GPK follows recent IP quarterly results with weakness, sending shares tumbling further in the paper and packaging sector as Q1 revs missed consensus; SW also weak after results in the sector and said are definitely forecasting a lot of nervousness among customers, not yet any material issue other than uncertainty; said the European market was a bit better and that while demand may not be strong, it is "reasonable" and on an improving trend.

• AAPL shares active after U.S. District Judge Yvonne Gonzalez Rogers said the iphone maker failed to comply with her prior injunction order, which was imposed in an antitrust lawsuit brought by “Fortnite” maker Epic Games. "Apple’s continued attempts to interfere with competition will not be tolerated."
• ANSS reported a light F1Q ACV, reiterated double-digit growth guidance for FY25, and reiterated its expectation that its planned acquisition by SNPS would close in 1H25.
• CFLT shares fell on results/guide; reported good 1Q25 results above Street estimates on subscription revs, total revs, and non-GAAP op income driven by strong Confluent Platform growth; but lowered its 2025 subscription revenue guidance and the 2Q guide to be $1mn below the Street on macro fears.
• PTC posted solid FQ2 results and continues to see a strong pipeline but is lowering FY25 C.C. ARR growth guidance to 7-9% citing heightened macro uncertainty and some customer conversations pointing to potential for deal pushouts and longer sales cycles.
• RBLX Q1 bookings ($1.21B vs. est. $1.14B) beat estimates and raised its FY bookings, a measure of in-game spending, to be between $5.29B-$5.36B from prior $5.2B-$5.3B and posted smaller EPS loss for Q1.
• TTMI tops both estimates and guidance, including $649M revenue, $99M EBITDA, and $0.50 pro forma EPS, beating our $626M/$81M/$0.38 and consensus $621M/$84M/$0.40. Ongoing strength in A&D, Data Center, and Networking verticals, with new strength in Industrial.

• KLAC reported modest revenue, and better EPS beat on stronger GMs and opex control while noting revenue is expected to remain at similar levels in FQ4(Jun), with 2H revenue expected to be similar to 1H.
• NVDA shares jumped on better META capex numbers overnight for AI, raising sentiment in the AI space and then got another bump after Bloomberg reported the Trump administration is weighing a potential easing of restrictions on Nvidia sales to the United Arab Emirates.
• QCOM shares slid after reporting in-line results and FQ3 outlook; guided the Q3 revenue range to $9.9B to $10.7B, below consensus est. $10.33B.