Closing Recap

Friday, May 02, 2025

A truly remarkable run for U.S. stocks continued, now fully recouping the April “Liberation Day” tariff event sell-off that triggered the Nasdaq and S&P 500 fall into bear market territory (defined as 20% down from highs), as the S&P 500 and Dow Jones Industrials each made it a 9^th straight day of gains Friday, starting off the new month strong. Global stock markets surged overnight and the dollar lost ground as investor appetite for risk was revived by a strong U.S. employment report and signs China is open to tariff negotiations. The April jobs data and trade talk commentary helped offset declines in Dow component Apple (AAPL) as shares fell on guidance after the iPhone maker estimated $900 million in tariff costs. Following the strong jobs report, President Trump again called for the central bank to lower interest rates, though given the better jobs, the Fed is unlikely to change its current stance that it needs more clarity on how Trump’s tariffs will affect the economy in the months ahead. Today’s gains were broad-based as all eleven S&P sectors were higher, with the biggest gains coming in Financials (XLF) and Industrials (XLI). On Monday the S&P 500 (SPX) will go for its 10th green day in a row according to media reports, something it has not done since September 1995!  Treasury yields rose on the strong data, with the 10-yr yield up over 10-bps to 4.32%. Note the QQQ’s are up over 20% in the last 18 trading days as tech has been a big leader in the recent market recovery. Also, according to media stats, the last time S&P rallied 9 straight sessions before today was November 2004 and the last time it advanced 10 sessions in a row was September 1995! For the week, the S&P 500 gained 2.92%, the Nasdaq rose 3.42%, and the Dow climbed 3%.

In trade/tariff news, Overnight, China’s Commerce Ministry said it is evaluation the possibility of trade talks with the US, following messages from senior US officials expressing their willingness to talk. Stocks got another boost after the WSJ reported midday Beijing is considering ways to address the Trump administration’s gripes over China’s role in the fentanyl trade, potentially offering an off-ramp from hostilities to allow for trade talks to start. Also, Canada’s Prime Minister Mark Carney said he would meet with President Trump in Washington on Tuesday May 6th. Carney said talks would focus on near-term trade pressures and broader economic prospects. The newly elected leader said it was important to engage with the White House immediately.

U.S. President Donald Trump unveiled his budget proposal for the 2026 fiscal year on Friday, which would include increases in spending on defense and homeland security and a decrease in non-defense spending, according to a release by the White House Office of Management and Budget. The proposed budget would raise defense spending by 13% and homeland security spending by nearly 65% compared to 2025 enacted levels, according to the office. Non-defense spending would be reduced by approximately 23%, the lowest level since 2017.

Some upcoming events for next week of note: On Monday 5/5 – Hong Kong Holiday, Japanese Holiday, UK Holiday and ISM Services PMI in the US; Tuesday 5/6: Chinese Caixin Services PMI, Eurozone Composite/Services Final PMI; Wednesday 5/7: Central bank action with the FOMC, BCB policy meetings; Thursday 5/8: Bank of England rate decision as well as Riksbank & Norges Bank Policy meetings; Friday 5/9: Chinese Trade Balance.

• The April unemployment rate stood at 4.2%, in-line with consensus 4.2%, April average workweek all private workers 34.3 hours (cons 34.2 hours) and average hourly earnings +3.8% from year earlier (est. +3.9%), while April average hourly earnings climb +0.2% m/m below the est. +0.3%.
• March Factory orders +4.3% (consensus +4.5%) vs Feb +0.5% (prev +0.6%); factory orders ex-transportation -0.2% vs Feb +0.3% (prev +0.4%); factory orders ex-defense +4.8% vs Feb +0.4%; March Durables orders unrevised at +9.2%; nondurables orders -0.3% vs Feb +0.1%

• Brent Crude futures settle at $61.29/bbl, falling -$0.84 or 1.35% while WTI crude dropped -$0.95 or 1.6% to settle at $58.29 per barrel, falling over -7% this week (which followed a -16% decline in April). traders weighed signs of a thaw in the US-China trade war and Trump’s threats toward Iran against the prospect of more supply from the OPEC+ alliance.
• On Monday, the OPEC+ voluntary cutters are expected to announce their decision about the June output level. On April 3rd, the group released three times the amount of production compared to the initial plan for May (411kbd of cuts unwound vs 137kbd planned), which was a main driver of the oil sell off and put rally. There is significant uncertainty around Monday’s decision.
• The U.S. dollar index (DXY) ended near the highs, paring losses to -0.2% around 100, off morning lows of 99.40 as the Euro at intraday lows 1.1293 flattish on day (off highs 1.138). Treasury yields ticked higher all day, finishing around 4.32% after the latest jobs data showed little sign of deterioration in the labor market just as tariffs started going into effect. The solid jobs report, while expected, may ease some investors’ anxieties about the economy and cause them to dial down bets on Federal Reserve interest-rate cuts.

• In Delivery: CART delivered a 1Q beat and better 2Q outlook, with strength in orders and advertising balanced against moderating AOV and transaction growth tied to recent affordability initiatives. 1Q order strength (+7.4% q/q) was attributed to both restaurant incrementality and more lower basket orders vis-à-vis its $10 order minimum/free delivery to Instacart+ users (cut from $35 in late Nov.). UBER announced a partnership with the autonomous driving technology company Momenta for robotaxi deployment. Momenta to introduce autonomous vehicles to the Uber platform in international markets outside the U.S. and China.
• In Movie Theatres: CNK Q1 revs fell to $540.7M from $579.2M y/y but above ests $524.3M, while attendance declined nearly 8% to 36.6 million moviegoers in Q1 and admissions revenue decreased nearly -9% to $264.1M y/y while concessions revenue decreased around -6% at $210.4M.
• In Lodging & Travel: airlines outperformed, led by big gains in UAL, DAL and leisure names like cruises RCL, CCL shares fell overnight on results/after issuing a weak outlook for the second quarter, citing economic uncertainties for softer travel demand in the US, but leveled off.

• In Oil EP& and Equipment: EOG Q1 adj EPS beat while lowered FY capex guidance; SM reported Q1 EPS beat with EBITDAX above expectations and in-line production for quarter; BOOM shares outperformed on better results as Q1 adj EPS $0.11 vs est. ($0.09), adj EBITDA $14.4Mm vs est. $9.867Mm on sales $159.3Mm vs es.t $149Mm; guides Q2 sales $149-157Mm vs est. $155.97Mm.  
• In Industrials: ETN Q1 EPS in line, Q2 EPS below consensus while reaffirms FY EPS guidance and organic rev growth of +7.5-9.5%; MTZ rose on strong results as Q1 EPS $0.51 vs. est. $0.34; Q1 revs $2.85B vs. est. $2.71B; outlook FY25 adj diluted EPS guidance increased 9% from prior midpoint of guidance; IR Q1 and revenue in line in qtr but lowered FY adj EPS and adj EBITDA guidance; TEX Q1 EPS beat on in line sales and reaffirms FY EPS and sales guidance, both ahead of consensus expectations; FLR Q1 EPS beat on lower revenue while reiterates FY EPS and EBITDA guidance.
• In Aerospace & Defense: U.S. President Donald Trump’s administration is seeking to axe key parts of NASA’s moon program in favor of commercial alternatives and his Mars-focused agenda. The proposal, cutting 24% of NASA’s current $24.8 billion budget – space and drone stocks were higher ACHR, ASTS, EH, JOBY, LUNR, RCAT, RDW, RKLB.
• In Transports: Airlines lying high all day, with strong gains for UAL, DAL, AAL, and others as the Dow Transports rises as much as 500 points to 14,130 (50dma resistance higher at 14,425). in Shipping: The Baltic Dry index added 10 points, or 0.8%, to 1,421. It was up 3.5% for the week. The Capesize index gained 36 points, or 1.8%, to 2,079. The index was up more than 10% this week; the Panamax index fell six points to 1,368 and slipped 1.8% for the week. The Supramax index shed one point to 955.
• In Chemicals: the negative earnings and outlook for the chemical space continues to weigh on stocks, with WLK the latest to disappoint as Q1 sales $2.84B missed the $2.95B estimate on EPS loss of (-$0.31) vs. +$1.34 y/y saying higher feedstock and energy costs in North America, planned turnarounds and unplanned plant outages that impacted EBITDA by about $80M, and changes in sales mix drove the lower EBITDA and EBITDA margin. DD reported Q1 beat, a lower Q2 guide, but backed its year outlook; OLN Q1 Adj EBITDA beat in qtr., guides Q2 EBITDA below consensus and said does not see significant impact from tariffs; HUN Q1 EPS loss in-line with consensus; EBITDA and revenue missed in qtr and guides Q2 adj EBITDA well below consensus.
• Homebuilders higher after BZH results last night; builders higher on day in reaction, LEN, KBH, TOL, MTH up despite spike in Treasury yields/mortgage rates.

• In Financial Services: RDDT forecasts Q2 revenue between $410M-$430M, above the consensus estimate of $395.5M and said sees adj EBITDA $110M-$130M for Q2, also above estimates (was upgraded at Bernstein and raised tgt to $130).
• In Lending: TREE shares tumble as Q1 results beat, but guided Q2 below consensus and cuts FY25 revenue view to $955M-$995M (est. $1.01B) from prior view $985M-$1.025B and cuts FY25 adjusted EBITDA view to $116M-$124M from $116M-$126M.
• In Crypto: Bitcoin approached $98,000 midday now up 4.3% on the year as the crypto sector continues to push higher over the last few weeks; MSTR reported results and rallied with the general outperformance in Bitcoin while RIOT outperformed after its earnings results in the Bitcoin mining space.

• ARDX was downgraded to Outperform at Raymond James given their view that there is added uncertainty regarding the long-term growth of the Ibsrela and Xphozah franchises associated with recent net sales weakness in addition to a steadily growing SG&A spend.
• ASND shares jump Yorvipath momentum continues as 1Q sales easily tops consensus, awaiting TransCon CNP + GH combo study interim data.
• CYTK shares fell after the FDA has extended the PDUFA date for aficamten in obstructive cardiomyopathy (oHCM) by three months, to December 26, 2025. The extension stems from the company’s submission of a REMS program during the review, deemed a major amendment by FDA.

• CI posts 1Q results ahead on revenues ($65.5B, +8.3% est.), with CI HC and Evernorth higher, MLR was 82.2% (40 bps better than cons), with health plan segment EBIT slightly ahead and Evernorth more inline and guidance was raised marginally (EPS at least $29.60, +$0.10).
• DXCM posted Q1 beat as revs $1.036B (+1.8% vs consensus), with Organic Growth of +14% (vs. 10.4% est.) and reaffirmed its +14% revenue growth expectations and Operating margins of 21%, while lowering its Gross Margin expectations to 62% (from 64% to 65%) driven by incremental costs.
• EXAS reported  beat for Q1 and raised guidance for the remainder of the year with an incremental increase to the upside as the key growth driver for Exact in 2025 continues to be the Cologuard franchise, supported by a new version of the test (Cologuard Plus) and tailwinds from repeat screenings and Care Gap testing; raised FY25 revenue guidance to be in the range of $3.07B-$3.12B.
• MTD reported a solid quarter, revenue and EPS guidance lowered amidst geopolitical uncertainty; lowered their FY25 local currency sales guide to 1% to 2% (vs. prior guidance of 3% local currency sales growth) and adj. EPS of $41.25-$42.00 (vs. prior guidance of $42.35 to $43.00).
• TRUP Q1 results were slightly ahead of expectations, and full-year guidance was raised after another quarter of rebounding operating margins as the company has taken price-giving inflationary vet care costs.

• In Media & Cable: ROKU shares fell as Q1 revenue rose 16% to $1.02B, topping the est. $1.01B and reached an agreement to acquire streaming service provider Frndly TV for $185 million in cash but guided Q2 revs $1.07B, below analysts’ forecasts of $1.09B; CABO was downgraded by two analysts following its strategic decision to completely eliminate its dividend with no warning and no new financial change and as Q1 results disappoint with HSD net adds -10K, ARPUs down -3.1% y/y, and adj. EBITDA missing consensus by ~2%. The Information reported TV ad sales executives and ad buyers say marketers are already indicating plans to cut back spending on entertainment and news programming by as much as 10% in the coming year (impacts names like WBD, PARA), while noting DIS are well positioned given their sports programming.
• In Internet: GDDY reported solid Q1 results with a 1% sales beat vs the midpoint and 30.5% NEBITDA margins vs guidance of 30% while reaffirmed FY guidance, and announced a new $3B authorization for share repurchases. NFLX upside momentum continues since earnings, rising an 11th straight day.

• TEAM posted a beat in F3Q with Cloud Revs +25% y/y vs 23.5% guide (a ~5pt deceleration from last qtr) with DC revs growth +7% y/y; guides 4Q Cloud Revs +23% y/y and DC revs +16.5% y/y; guidance implies full-year FY25 Cloud revenue growth of ~27%.
• TTWO shares slipped after saying it was delaying Grand Theft Auto VI release to May 26, 2026 (which was expected to launch in the fall).
• TWLO Q1 results came topping expectations, showing further acceleration that was complemented by FCF leverage and a slightly better Q2 guide.