Closing Recap

Monday, May 05, 2025

U.S. stocks ended the day in negative territory, snapping its longest win streak in 20-years, but finished off its worst levels. After 9-straight days of gains for the S&P and the Dow Jones Industrial Average (and 8 of 9 for the Nasdaq 100), major averages climbed all afternoon, helped by positive ISM services data and upbeat comments again from Treasury Secretary Bessent on trade talk/tariffs that boosted markets off their lows, before giving most of it back in the last 30-minutes of the trading day. Three days into the month and so far, no real, “Sell in May Go Away” with major stock averages in the U.S. adding to their late April market rally thus far (that saw a 10% rebound off lows late last month). Despite the saying, the S&P had hefty gains of 4.88% in May 2024 and 5.8% in May 2023 (after small losses in 2021-22), will it continue again this year? Note a big week for central banks coming up with the FOMC results/comments on Wednesday (no rate changes expected) while the Bank of England (BoE) also is later this week. Also, another busy week of earnings (last onslaught of results this quarter) as roughly 19% of the S&P 500 expected this week (36% was last week and roughly 24% the week prior), though overall volume this is the busiest week while last week was highest by market cap – roughly over 350 S&P companies have reported thus far for Q1.

Oil prices declined after reports that OPEC+ will accelerate oil output hikes and could bring back to the market as much as 2.2M barrels per day by November. Gold prices surged, crypto prices slumped, and Treasury yields ended higher. On trade/tariff news, President Trump said this weekend in an interview that aired Sunday on NBC’s Meet the Press that he is willing to lower tariffs imposed on China at some point, though Trump didn’t elaborate in more details. “At some point, I’m going to lower them, because otherwise, you could never do business with them, and they want to do business very much,” Trump said. When aboard Air Force One, Trump told reporters that he has no plans to speak with his Chinese counterpart Xi this week.

• U.S. S&P Global April final composite PMI at 50.6 (vs flash 51.2) while U.S. S&P Global April final services PMI at 50.8 (vs flash 51.4).

• U.S. Treasury sold $58B in 3-year notes at high yield 3.824%, vs. 3.826% when issued prior, as bid-to-cover ratio 2.56, vs. 2.47 prior auction as primary dealers take 13.92% of U.S. 3-year notes sale, direct 23.71% and indirect 62.37%. Overall, Treasury yields edged higher, especially at the long end of the curve after strong ISM Services data, with prices paid, an inflation gauge, hitting a two-year high. Volume was lighter than usual, with financial markets closed in the U.K., Japan, Hong Kong and mainland China.

• In Retail: SKX shares jumped after it announced that it has agreed to be acquired by 3G Capital for $63 per share in cash or $57.00 per share in cash and one LLC Unit (such consideration, subject to the proration as described below, the "Mixed Election Consideration"). PDD’s Temu said it stopped shipping goods directly from China to customers in the US as a result of US tariffs. FRPT Q1 EPS loss (-$0.26) vs. est. $0.09; Q1 revs $263.2M vs. est. $258.27M; lowers 2025 revenue view to $1.12B-$1.15B from $1.18B-$1.21B (est. $1.17B).

• In Oil Refiners: SUN to acquire Parkland Corporation (PKIUF) in transaction valued at $9.1B. Parkland shareholders will receive 0.295 SUNCorp units and C$19.80 for each Parkland share, implying a 25% premium based on the 7-day VWAP’s of both Parkland and Sunoco as of May 2, 2025. Parkland shareholders can elect, in the alternative, to receive C$44.00 per Parkland share in cash or 0.536 SUNCorp units for each Parkland share
• In Utilities/Coal/Solar: BTU shares rose after the co informs Anglo American that it may terminate its $3.78 billion acquisition deal if a Material Adverse Change concerning the Moranbah North Mine is not resolved. Solar names are broadly lower, as recent earnings season a disappointment for many including FSLR, ENPH.
• In Heavy Duty machinery: CMI reported Q1 results, but withdrew its guidance citing tariff uncertainty; also, CMI and PCAR shares active as Class 8 truck orders fell sharply in April amid economic and tariff uncertainty. ACT Research reported that preliminary North America Class 8 net orders of 7,600 units of April were down on both a month-over-month and year-over-year comparison.
• In Metals & Mining sector: gold miners (AEM, AU, GOLD, NEM) back on the rise given the 2% bounce in gold prices; WOR was upgraded to Buy from Hold at Canaccord and raised tgt to $67 from $54 following recent mgmt meetings as the conversations demonstrated a humble, yet confident management team that believes it is well positioned with predominant domestic manufacturing in a tariff-riddled environment.
• In Defense Sector: PLTR to report after the close tonight. Citigroup maintain Buys in several defense stocks saying defense spending looks to be headed higher during the Trump administration. Citi noted the Administration introduced its FY26 budget on Friday, including a 13% y/y increase for national security that creates a $1T+ topline number. Importantly, Citi estimate the plan would spend roughly $70B more than that proposed by the Biden Administration through FY29. Further, all addressable markets for contractors appear to be up ~9% y/y, with growth at DoD, Homeland Security, offset by proposed cuts at Commerce, NASA, and HHS.

• In Crypto: Bitcoin prices pull back off 2025 highs last Friday just shy of $98,000 ahead of the Fed meeting this week. MSTR said purchases 1,895 Bitcoins between Apr 28 – May 04 at an average of $95,167; MARA said April production saw a 15% m/m decrease in blocks won, as global hashrate had its second largest monthly gain on record and mining difficulty grew 8% from March; but energized hashrate grew 5.5% over the prior month; RIOT mined 463 Bitcoins in April as the network experienced two successive difficulty adj during the month.
• In Real Estate: HHH shares jumped after Pershing Square to invest $900M to acquire nine million newly issued shares of Howard Hughes Holdings and transform HHH into a diversified holding company; Pershing Square’s primary purchase of HHH stock for $100.00 per share and will now own 46.9% of company.
• In Financial Services: RDDT was upgraded from Neutral to Buy at Seaport Global with $165 tgt after last week reported strong Q1 revenues (61.5% y/y) and EBITDA as well as strong Q2 revenue/EBITDA guidance. That said, slowing Q2 user growth (particularly in the U.S.) driven by Google search changes resulted in shares selling off.
• In Staffing Servies: MAN shares fell after cutting its semiannual dividend to $0.72 from $1.54 prior saying its board considered the current earnings environment and related payout and yield ratios in determining the new dividend

• AXSM Q1 sales net product revenue rose 62% y/y to $121.5M, Q1 AUVELITY revs rose 80% y/y to net product sales of $96M; sNDA submission for AXS-05 in Alzheimer’s disease agitation on track for Q3.
• BCRX shares rose after results/guidance; raises its 2025 revenue forecast for its skin disease drug, Orladeyo, to between $580M-$600M from prior $535M-$550M (vs. Street est. $514.29M) after Q1 rev beat for Orladeyo of $134.2M, compared with $88.9M a year ago.
• BNTX Q1 EPS EUR (1.73) vs. EUR (1.31) last year and Q1 revenue EUR 182.8M vs. EUR 187.6M last year; backs FY25 revenue view EUR 1.7B-EUR 2.2B and backs FY25 CapEx view EUR 250M-EUR 350M.
• CAPR shares fell after announcing the FDA to hold an advisory committee meeting for the company’s experimental cell therapy.
• ELAN sells royalty and milestone rights for lotilaner in human health to Blackstone for $295M.
• TEVA and ALVO announce FDA approval of interchangeability for Selarsdi™ with Stelara®
• PTCT shares fell after mid-stage study; it said its experimental drug to treat Huntington’s disease met the main goal of a mid-stage study; the drug, PTC518, helped significantly lower levels of a mutated protein in blood that causes the disease.
• UBX announces complete 36-week results from the ASPIRE Phase 2B Study of UBX1325; said UBX1325 demonstrated vision gains that were comparable and statistically non-inferior to aflibercept at week 36 in a difficult-to-treat DME patient population; UBX1325 generally outperformed aflibercept in a pre-specified subgroup of patients entering the study with CST <400 microns; to explore strategic alternatives to advance UBX1325, Tie2/anti-VEGF bispecific, and Tie2 agonistic antibody assets and reduce operational cash burn.

• IART shares tumble on results/guidance as Q1 revs $382.7M above est. $381.2M and Ebitda $63.6M vs. est. on earnings miss of $0.41 vs. est. $0.43; lowers adj 2025 EPS view to $2.19-$2.29 from $2.41-$2.51, while maintained its 2025 revenue view of $1.65B-$1.715B.
• ISRG said on May 1, the board authorized stock repurchase program increased to $4B.
• ZBH Q1 adj. EPS $1.81 topped estimates of $1.77 on revs $1.91B vs. est. $1.9B; cuts its annual adj profit forecast to a range of $7.9-$8.10 from prior view of $8.15-$8.35 per share but said expects 2025 rev growth to be 5.7% to 8.2% including co’s acquisition of orthopedic surgical devices maker Paragon 28.

• In Internet: Chinese Internet tech names BIDU, BABA, PDD, SINA, NTES in focus after the Financial Times reported US lawmakers Rep Moolenaar and Senator Rick Scott are calling on the SEC to force prominent Chinese co’s, to delist from US exchanges
• In Semiconductors: a U.S. lawmaker plans to introduce legislation in coming weeks to verify the location of artificial-intelligence chips like those made by NVDA after they are sold, Reuters reported. The effort to keep tabs on the chips aims to address reports of widespread smuggling of Nvidia’s chips into China. ON shares fell on results as Q1 EPS/revs beat but offered mixed Q2 guidance.