Mid-Morning Look

Tuesday, April 29, 2025

U.S. stocks are choppy to kick off the trading day, with S&P futures posting modest gains overnight on reports the Trump admin was expected Tuesday to announce a change to soften the impact of his auto tariffs (which they did), preventing duties on cars stacking on top of other levies, and easing some tariffs on foreign parts. Futures faded however this morning after comments on trade deals with Treasury Secretary Scott Bessent (including comments on AMNZ). Stocks bounced on the open, but back lower as the S&P looks to make it a 6-day winning streak as we are at the heart of the earnings season this week (180 of the S&P 500 reporting on week). The S&P 500 is up 5 in a row for the first time this year and it hasn’t been up 6 in a row since November 2024. That one ended at 7. Bonds rally as the 10-yr yields new morning lows, down 2.1bps to 4.195%. Big movers high on earnings this morning include CCK, HON, LEG, SOFI HLT and declines from EAT, NXPI, PCAR, REGN and SPOT. The impact of goods coming from overseas starting to be felt as CNBC reported the Port of Los Angeles executive director says for May arrivals, see 20 canceled sailings, about quarter of normal arrivals we have; also said China shipments makes up about 45% of business here in Los Angeles. Economic data is plentiful (and just getting started in busy week) as Job opening falls, consumer confidence hits lowest level in years, and the March trade gap widens (ahead of jobs and inflation data this week). Treasury yields slip, the dollar partially rebounds, and commodity prices fall.

• JOLTS Job Openings for March reported at 7.192M (below est. 7.500M and vs. prior 7.568M.
• U.S. March goods-trade Gap widens to record $162B; vs. est. $145B; advance March wholesale inventories +0.5%; U.S. advance March retail inventories excluding autos +0.4%.
• US February 20-metro area home prices +4.5% (consensus +4.7%) from year ago vs +4.7% in January (previous +4.7%) — S&P CoreLogic Case-Shiller. US February home prices in 20 metro areas +0.4% seasonally adj (consensus +0.4%) vs revised +0.4% in January (previous +0.5%).

• In Aerospace & Defense: Texas space commission selects LUNR to advance earth reentry and microgravity biomanufacturing spacecraft; Texas space commission awards intuitive machines up to $10M grant; OSIS gets orders for $50M to support deployment of cargo and vehicle inspection solutions; S&P affirms BA ‘BBB-’ rating, removes CreditWatch negative on improving production and cash usage; outlook negative. WSJ reported that Airbus (EADSY) agreed to acquire some Spirit AeroSystems facilities that make parts for its jets, moving to take direct control of production in a bid to stabilize supply chains after months of disruption.
• In Industrials: HON better results as Q1 adj EPS 2.51 vs. est. $2.21; Q1 revs $9.82B vs. est. $9.6B; raises lower end of 2025 adjusted EPS forecast to $10.20-$10.50 from $10.10-$10.50 a share vs estimates of $10.29; trims FY sales guidance to $39.6-$40.5B from $39.6-$40.6B; CR was upgraded to Buy (raised tgt to $190) at UBS after the recent A&D investor event and yesterday’s Q125 update, saying they are increasingly confident in the long-term earnings outlook and M&A opportunity. PCAR slumped early on mixed results (EPS miss/revs beat).
• In Food & Beverages: Dow component KO reported a smaller-than-expected drop in Q1 revenue to $11.22B from $11.23B y/y and vs. est. $11.14B, benefiting from price hikes and strong demand for beverages; said q1 average selling prices rose 5% in the first quarter, while unit-case volumes increased 2%. KHC reports Q1 adj EPS $0.62 vs. est. $0.60; said the operating environment remains volatile, lowering our FY outlook & expanding range of expectations to better reflect potential outcomes; now expects Fy25 organic net sales to decline between 1.5%-3.5%, from its prior forecast of flat to down -2.5%.

• HIMS +24%; as announced a long-term collaboration with NVO designed to make proven obesity care and treatments more accessible, more affordable, and more connected for millions of Americans.
• HON +3%; better results as Q1 adj EPS 2.51 vs. est. $2.21; Q1 revs $9.82B vs. est. $9.6B; raises lower end of 2025 adjusted EPS forecast to $10.20-$10.50 from $10.10-$10.50 a share vs estimates of $10.29; trims FY sales guidance to $39.6-$40.5B from $39.6-$40.6B.
• LEG +24%; as reported adjusted 1Q25 EPS of $0.24, above the Street view of $0.22; sales were $1.02B, down 6.8%, with volume down 5% and selling prices and currency down 2%. Overall EBITDA margin increased 80 basis points to 9.6%. Maintains 2025 Sales and EPS Guidance.
• OKTA +5%; will replace BERY in the S&P MidCap 400 effective prior to the opening of trading on Thursday, May 1. S&P 500 constituent AMCR is acquiring Berry Global Group in a deal expected to close soon.
• RCL +3%; as Q1 adj EPS $2.71 beats est. $2.54; Q1 revs $4B vs. est. $4.02B; guides Q2 adjusted EPS $4.00-$4.10, vs. consensus $3.94 and raised its 2025 EPS view to range of $14.55 to $15.55 per share, compared with its prior forecast of $14.35 to $14.65.
• SOFI +9%; Q1 results beat, as EPS $0.06 topped the $0.03 consensus while revs rose 20% y/y to $771.8M vs. est. $739M; boosted its EPS outlook for 20205 to $0.27-$0.28 (from $0.25-$0.27) and revs $3.235B-$3.31B from prior $3.2B-$3.275B.
• UPST +5%; was upgraded to Neutral from Underperform at Bank America ($53 tgt) noting shares are down 45% since the company reported Q4 earnings in mid-February and thinks the risk-reward is more balanced at current levels.

• EAT -13%; shares slide despite reporting better Q3 top and bottom-line results ($2.66/$1.43B vs. est. $2.56/$1.38B) along with comp sales +28/2% as Chili’s saw a comp sales rise of 31.6% and guided year revs $5.33B-$5.35B vs. est. $5.25B.
• GM -3%; reported Q1 adj EPS $2.78, vs. est. $2.72; Q1 sales and rev. $44.02B, +2.3% y/y, vs. est. $43.03B; Q1 adj EBITDA fell -9.8% y/y to $3.49B vs. est. $3.45B; investor call for Q1 results delayed to May 1 “based on recent reports regarding updates to trade policy” said telling folks not to rely on prior guidance
• NXPI -7%; as says CEO Kurt Sievers will retire by year end and insider Rafael Sotomayor take over in October; reported Q125 results and Q225 guidance largely in line with Consensus; posted lower-than-expected gross margins on the print and guide.
• PDM -15%; shares hit over 17-month low after Q1 results, Co suspends quarterly dividend.
• REGN -9%; shares fall on miss as Q1 adjusted EPS $8.22 below consensus est. $8.48; Q1 revs $3.03B vs. est. $3.24B; cuts 2025 capex to $850M-$950M; Q1 sales of dry eye disease drugs Eylea and Eylea HD fell 26% to $1.4B; Q1 global sales for its blockbuster lung disease drug, Dupixent, rose 19% in Q1 to $3.67B.
• SPOT -8%; mixed results/guidance as Q2 revs $4.19B vs. est. $4.2B; Q1 MAUS 678M vs. est. 671.9M; Q1 premium subscribers 268M vs est. 265.3M; sees Q2 MAUs 689M vs. est. 684.9M and Q2 premium subscribers 273M vs. est. 271.5M; sees Q2 revs EU4.3B vs. est. EU4.38B.