Mid-Morning Look

Thursday, May 01, 2025

U.S. stocks are broadly higher as the S&P kicks off the new trading month just as strong as it left April, trying to extend its winning streak to 8-days (last 7-day win streak was 7/1-7/10/24 stretch). Tech heavy Nasdaq outperforms up around 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 overnight now 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 sectors such as Consumer Staples and Healthcare are biggest market laggards as Tech, Energy and Industrials are among the best.

Lots of comments and news in trade/tariffs again (no surprise) as 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

The Yen is the weakest of the G-10 currencies, falling 1.34% to 145.00 against the greenback after the Bank of Japan pushed back the timing for when it expects to reach its inflation target and slashed its growth forecasts; Treasuries reverse earlier gains, falling now as yields move to highs (10-yr at 4.19%) after earlier lows of 4.13% (after falling 7bps in April). WTI crude +0.58% to 458.56 off earlier lows of $56.39 and Brent back above $60 per barrel, trying to recover after crude oil plunged nearly 18% in April, its worst month since the onset of Covid. The US dollar index (DXY) back above 100 in dollars recovered to start May; euro back below 1.13.

• 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.
• S&P Global April final manufacturing PMI at 50.2 (vs flash 50.7).

• In Brokers/Exchanges: HOOD posted a top/bottom line Q1 beat as EPS $0.37 topped the $0.33 estimate while revs jumped 50% y/y to $927M, above ests $920M, saying trading volumes and net deposits ($18B) were incredibly strong for the quarter and in April; the board also authorized an additional $500 million in share repurchases. Total funded customer accounts increased by 1.9 million, or 8% y/y, to 25.8 million; SCHW CEO notes retail investors pulling back on risk taking slightly; notes record volumes “peel back” during April; ICE Q1 profit topped Wall Street estimates on robust trading volume/said revenue from trading in energy-related products surged by 22% from a year earlier to $557M.
• In Chemicals: APD cut its earnings outlook for the year as lower volumes and higher costs pressured results in Q2; Q2 adjusted EPS $2.69 missed the consensus $2.83 and revs $2.92B vs. est. $2.93B; now expect adjusted earnings of $11.85-$12.1, down from its prior $12.70-$13 view; ASH Q2 EPS and revs well below consensus and lowered FY25 revenue view to $1.83B-$1.90B from $1.9B-$2.05B and cut FY25 adjusted EBITDA view to $400M-$420M from $430M-$470M; FMC shares fell after results and weaker guidance; guided Q2 revs $940M-$1.1B, down -2% vs. Q2 2024; TROX 1Q adj. EBITDA $112m vs $114m Street; FY’25 EBITDA reiterated at $525M-$625M vs $560M Street.

• META +6%; as Q1 revenue at $42.3B, up 16.1% y/y, 2% ahead of estimates, respectively and guidance for Q225 revenue of $45.5B at the high-end, 16.5% y/y growth and 3% above street estimates; raised capex to $64B-$72B from $60B to $65B previously; ad price growth of 10% from a year ago more-than-doubled projection.
• MSFT +7%; after reporting better-than-expected Q3 results as EPS/revs beat ($3.46/$70.1B topped ests $3.22/$68.4B) and up from $2.94/$61.9B y/y; Q3 cloud revenue rose 20% y/y to $42.4B while its closely watched Azure public-cloud business saw 33% growth, a pickup from last quarter’s 31% growth.
• NVO +3%; after CVS 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.
• RBLX +4%; as 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.
• TNDM +15%; 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.
• TTMI +15%; 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.

• ARVN -27%; after results and after disclosing the Co and its partners at PFE have removed plans for a Phase 3 first-line combination trial with atirmociclib, as well as the planned Phase 3 second-line combination trial with a CDK4/6 inhibitor, from our joint development plan.
• CFLT -16%; 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.
• CHD -6%; after cutting 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%.
• GKOS -14%; Q125 revenue beat consensus and, while management reiterated its 2025 revenue guidance, the implied iDose contribution increased by ~$5M.
• LLY -7%; Q1 revenue of $12.73B, slightly beating expectations; strong sales of Mounjaro and Zepbound drive 45% YoY growth; Q1 EPS $3.34 topped the $3.26 consensus but lowered year view to $20.78-$22.28 from $22.50-$24 prior; CVS said its PBM unit also plans to drop LLY’s Zepbound as a preferred product.
• MRNA -5%; on results and said it no longer expected to receive approval for its combination Covid/flu vaccine shot in older adults this year.
• OGN -26%; cuts its dividend to $0.02 from $0.28 after reporting Q1 results
• QCOM -7%; shares slid after reported in-line results and FQ3 outlook; guided Q3 revenue range to $9.9B to $10.7B, below consensus est. $10.33B.