Mid-Morning Look

Wednesday, May 28, 2025

U.S. stock futures held in a tight range overnight following a trend day higher on Tuesday, but so far today, action looking choppy as major averages bouncing between gains and losses. Market participants turn their attention the FOMC Meeting Minutes later this afternoon (2:00 pm et) and of course NVDA earnings results after the bell which could move the needle for major averages/technology. With a few days left in May, the S&P 500 Index and Nasdaq remain on track for their best monthly returns since November of 2023, up 6.5% and +10.3% respectively following several trade/tariff announcements between the U.S. and trading partners, hopes for a tax cut bill and upbeat sentiment about the economy – though spending and rising US debt remains a concern. Treasury yields rebound this morning as the 10-yr moves back near 4.5%, the dollar jumped initially but has pared gains and Bitcoin prices slip. In sector movers, 9 of 11 S&P sectors are lower with only modest gains for Healthcare, and Communications.

• In Oils, Equipment, Refiners: the U.S. barred CVX from exporting crude from Venezuela and production shut-ins from Canada, while markets eyed an expected production increase from OPEC+. In Equipment, JP Morgan lowered its North American rig and frac ests/PTs, but offshore driller ests slightly above street while upgraded shares of NE to Overweight from Neutral as its updated estimates are slightly above the Street and it believes the dividend is safe (~8% yield). In Refiners, PARR was downgraded from Buy to Neutral at Goldman Sachs saying while they remain constructive on the refining sector, they continue to be selective in its stock preferences; sees less relative upside vs Buy-rated stocks including VLO, MPC and DINO.
• In Retailers: ANF rises on earnings (see below); CPRI reported Q1 EPS loss (-$0.30) vs. est. loss (-$0.15) as revs fell -15.4% y/y to $1.04B but was above the consensus $986.57M; reported Q1 Michael Kors revenue fell 15.6% to $694M; CEO said confident in ability to grow Michael Kors to $4 billion in revenue and Jimmy Choo to $800 million over time. GME announced that it has purchased 4,710 Bitcoin as shared fall. Macy’s (M) Q1 comparable sales were down 2% on an owned basis, while sales $4.6B topped est. $4.5B on better Q1 adj EPS of$0.16 vs est. $0.14 while reaffirms 2025 net sales, comparable owned-plus-licensed-plus-marketplace sales guidance; outlook 2025 ADJ EPS $1.60 to $2.00 vs est. $1.93.

• BOX +17%; shares jumped on results as Q1 adj EPS $0.30/$276M revs beat consensus of $0.26 and $274.8Mm while guides Q2 revs $290-291Mm above the est. $285.11Mm on better earnings while also raised its year EPS and sales outlook saying AI is helping boost its products.
• FICO +6%; rebounds after 34% decline over the last 5-days on regulatory concerns; analysts out positive today.
• FNMA +6%; and FMCC also gains after U.S. President Donald Trump said he was working on taking the housing giants public in a post on Truth Social. “I am working on TAKING THESE AMAZING COMPANIES PUBLIC, but I want to be clear, the U.S. Government will keep its implicit GUARANTEES, and I will stay strong in my position on overseeing them as President,” Trump wrote in the post late on Tuesday.
• ITOS +21%; after the company said it plans to wind down operations, it explores potential asset sales.
• JOBY +24%; as closed on the first $250M payment of its previously disclosed partnership with Toyota Motor (TM). The payment comes after Toyota said in October that it would invest an additional $500M to support certification and commercial production of Joby’s electric air taxi as it seeks to boost air mobility.
• MTN +12%; on news of the return of Rob Katz as CEO, succeeding Kirsten Lynch who has been in the seat since November 2021 when Mr. Katz vacated it as he transitioned to the role of Chairman.
• SPRO +213%; and partner GSK said to stop trial of experimental urinary tract drug tebipenem HBr due to early success after it met the main goal of a late-stage study. In the trial, the drug showed it was at least as good as an existing intravenous treatment in hospitalized adult patients

• BAH -3%; was downgraded to Sell from Neutral at Goldman Sachs and cut tgt to $94 from $108 as it sees limited revenue and earnings growth over the medium-term, while valuation still has a downside risk.
• BSX -2%; said it is discontinuing worldwide sales of its experimental heart device and will no longer seek US FDA approval in the country or other regions; says the decision was made due to increased regulatory requirements; said expects to meet its Q2 and FY25 sales and adjusted earnings forecast.
• OKTA -12%; after delivering a solid FQ126 print, with all key metrics above guidance and/or street estimates, but did post a q/q decline in cRPO in FQ1 (+14% vs. +15% q/q and vs. est. 12%) and guidance for another q/q decline in FQ2
• TEM -15%; after short seller Spruce Point Capital Management issued a report entitled, “The Tempest Surrounding Tempus AI”, that outlines why the firm believes and estimates that shares of Tempus AI face up to 50%-60% potential downside risk, or $26.35 – $32.95 per share.
• VIK -1%; as prices secondary offering of 30.53M shares at $44.20 per share.