- Asian Stocks Slide as Fed’s Rate Cuts Seen Delayed: Markets Wrap
(Bloomberg) — Asian stocks tracked Wall Street lower following activity data that signalled the Federal Reserve may keep rates on hold for most of this year. Stocks fell in Australia and Japan, while equity futures in Hong Kong pointed to losses of more than 1% at the open Friday. The Golden Dragon Index of US-listed Chinese shares fell 3.7% Thursday, the most in six weeks. - Stocks Join Bonds in Falling as Fed-Cut Bets Wane: Markets Wrap
(Bloomberg) — Stocks and bonds retreated as data showing US business activity accelerated amid a pickup in inflation reinforced speculation the Federal Reserve will remain on hold. The S&P 500 dropped below 5,300, with all mega caps down except Nvidia Corp. The giant chipmaker jumped over9% on a solid outlook, topping the historic $1,000 mark. - Oil Holds Near Three-Month Low as Market Shows Signs of Weakness
(Bloomberg) — Oil traded near lowest level in over three months as the market flashed signs of weakness ahead of the US summer driving season. Brent crude was little changed near $81 a barrel, while West Texas Intermediate held below $77. Both benchmarks are set for a weekly loss. - SEC Opens Door for US Spot-Ether ETFs in Landmark for Crypto
(Bloomberg) — The Securities and Exchange Commission paved the way for the eventual launch of the first US exchange-traded funds investing directly in the Ether token, putting the crypto industry on the cusp of a major landmark. The SEC signed off on a proposal by venues run by Cboe Global Markets Inc., Nasdaq and the New York Stock Exchange to list products. - Alibaba Is Said to Price $4.5 Billion Convertible Bond Sale
(Bloomberg) — Alibaba Group Holding Ltd. has raised $4.5 billion from a convertible bond sale, in one of the largest such offerings in recent years, according to people familiar with the matter. The Hangzhou-based company priced the seven-year notes, due 2031, with a coupon of 0.5% and a conversion premium of 30%. - Nomura Pay for Top Executives Rises 150% After Profit Recovers
(Bloomberg) — Nomura Holdings Inc. more than doubled pay for its top managers last fiscal year, as earnings at Japan’s largest brokerage rebounded on better trading and the nation’s economic recovery. Total compensation paid to the firm’s eight executive officers rose 150% in the year ended March 31 to 4.46 billion yen ($28.4 million). - Japan’s Inflation Cools as BOJ Waits for Wage Gains to Kick In
(Bloomberg) — Japan’s inflation cooled for a second month while staying above the Bank of Japan’s price target as the yen’s recent depreciation fuels concerns that cost-push inflationary pressures may be here to stay. Consumer prices excluding fresh food rose 2.2% in April from a year ago, the ministry of internal affairs said Friday. - China, Japan and South Korea Revive Summit in Bid to Mend Ties
(Bloomberg) — China, Japan and South Korea are set to hold their first summit in more than four years, with a gathering in Seoul next week for talks that offer the Neighbours a chance to manage their relations amid heightened tensions between Washington and Beijing. - Haley Donors Will Vote But Not Give to Trump, GOP’s Sununu Says
(Bloomberg) — Many of Nikki Haley’s donors will vote for Donald Trump but won’t financially contribute to his campaign, said New Hampshire Governor Chris Sununu. “I think the majority of them will come over and vote for Trump,” Sununu, a Haley ally, said in an interview on Bloomberg Television’s “Balance of Power” Thursday. - Morgan Stanley Investors Vote Down Clean-Energy Financing Bid
(Bloomberg Law) — Morgan Stanley shareholders rejected proposals Thursday asking the company to disclose how its fossil-fuel and low-carbon energy financing compare, and seeking more transparency around the bank’s lobbying activities. The New York City Employees’ Retirement System said its bid for the bank to develop and share a clean-energy financing ratio. - Citi Delves Deeper Into Securitization to Ratchet Up Green Deals
(Bloomberg) — Citigroup Inc. is planning to expand its use of securitizations as part of the Wall Street bank’s strategy to scale up its climate finance business. Securitization — the pooling and repackaging of loans into new financial securities. - Live Nation Entertainment shares fell 7.8% as the Justice Department is reportedly set to sue over antitrust concerns tied to Ticketmaster’s grip on ticket sales for concerts. Analysts noted legal proceedings could take years to play out, while Benchmark sees an unwinding of the companies as unlikely.
Macquarie (outperform): Analyst Paul Golding writes that breaking up a company after the earlier merger had been approved “could be a high hurdle,” and he expects some volatility for the stock as the allegations are digested. “Ticketmaster would still have the largest US footprint for distribution of tickets across live event types and hence the most scaled service offerings for clients, while Live Nation as the largest promoter would continue to be best positioned to deliver major tours for global acts,” the analyst writes. - CVS Is Said to Seek Investor to Back New Oak Street Clinics
(Bloomberg) — CVS Health Corp. has been seeking a private equity partner to fund growth at Oak Street Health, the $10.6 billion primary care provider it bought a year ago, according to people familiar with the matter. The company has been working with financial advisers to help find capital to back new clinics that will be opened by Oak Street. - EQT Is Said to Explore Options for $8 Billion-Plus Waste Firm
(Bloomberg) — EQT AB is exploring strategic options including a minority stake sale for Reworld that could value the waste management company at more than $8 billion including debt, according to people with knowledge of the matter. The Stockholm-based firm owns Reworld — known as Covanta until last month — through its infrastructure arm. - Xiaomi reported revenue for the first quarter that beat analysts’ estimates.
The company reported a revenue of RMB75.51 billion, +27% YoY, beating estimates of RMB73.54 billion. Net income came in at RMB4.18 billion, -0.4% YoY, beating estimates of RMB4.07 billion. Following its upbeat earnings report, Xiaomi disclosed its latest goal to raise its sales targets and deliver 120,000 of its SU7 electric vehicles this year. - Boeing shares declined by 7.55% at the close, after it announced at a conference that it expects a net cash burn for the year.
The aircraft maker scrapped a plan to generate cash this year and said it will suffer another significant outflow in the current quarter, as it struggles to get production back in order and ramp up deliveries. Chief Financial Officer Brian West said that the cash burn in the second quarter will be similar or worse than that of the first quarter, when Boeing ran through almost $4 billion. - National Grid shares fell 10.9% after the UK electricity utility said it plans to raise £6.8 billion of capital to fund its £60 billion network spending plan over the next five years. Analysts said the announcement was bigger and came earlier than expected, though ultimately should help National Grid stabilize its balance sheet in the long run.
Citi (neutral): National Grid’s equity raise is a “surprise,” says analyst Jenny Ping, noting that it comes a bit earlier than expected; also, didn’t expect the firm to rebase its dividend. Size of equity increase is bigger than thought, and analyst had hoped for more disposal of assets; though sees it as a “clearing event” for the stock. Morgan Stanley (overweight): Analyst Robert Pulleyn is surprised National Grid’s action is so early, given expectation for guidance and addressing funding at the first-half 2025 results in November. However, recognizes that funding has been the key debate and the stock has a degree of equity overhang as a result. - Julius Baer shares erased losses to gain 3.2% after the Swiss lender’s higher-than-expected assets under management outweighed concerns over weak net new money.
FIRST QUARTER RESULTS: Assets under management CHF471 billion. COMMENTARY: AUM Grew by 10% to CHF 471B in First 4 MO of ’24. CET1 Ratio Improved to 15.3% at End of April’24. RBC’s Anke Reingen (outperform) lifts PT to CHF66 from CHF65, citing supportive capital markets driving earnings potential. FX effects drove assets under management and margins above estimates. Notes net new money was lower than RBC expected over the total period of four months, but returned after a negative January. Expects comments from FY results still stand and a stronger CET 1 ratio should provide some comfort that Julius Baer can resume buybacks later this year. - Workday shares fell 11.2% in afterhours trading, after the software company cut its full-year subscription revenue forecast.
FIRST QUARTER RESULTS: Adjusted EPS $1.74 vs. $1.31 y/y, estimate $1.58. Revenue $1.99 billion, +18% y/y, estimate $1.97 billion. Backlog $20.68 billion, +24% y/y, estimate $20.66 billion. Adjusted operating margin 25.9% vs. 23.5% y/y, estimate 24.5%. SECOND QUARTER FORECAST: Sees subscription revenue $1.90 billion. 2025 YEAR FORECAST: Sees subscription revenue $7.70 billion to $7.73 billion, saw $7.73 billion to $7.78 billion. Sees adjusted operating margin 25%, saw about 24.5%, estimate 24.6%. Bloomberg Intelligence: The weaker outlook “supports our thesis of a weak environment for non-AI enterprise tech spending”. - Intuit shares are down 6.5% in afterhours trading, after the tax-preparation software company gave a forecast for adjusted fourth-quarter earnings that was weaker than expected. However, it raised its full-year revenue forecast. The company also said the CEO of its Credit Karma business will retire by the end of the year.
THIRD QUARTER RESULTS: Adjusted EPS $9.88 vs. $8.92 y/y, estimate $9.38. Net revenue $6.74 billion, +12% y/y, estimate $6.64 billion. FOURTH QUARTER FORECAST: Sees adjusted EPS $1.80 to $1.85, estimate $1.93. Sees revenue about +13% to +14%. YEAR FORECAST: Sees adjusted EPS $16.79 to $16.84, estimate $16.42. Sees revenue $16.16 billion to $16.20 billion, saw $15.89 billion to $16.11 billion, estimate $16.05 billion. - Medtronic shares dropped 5.1% after executives said that they expect gross margins to be flat year-over-year for fiscal 2025, citing currency pressures that should “move through the year and be gone as we exit the year.”
FOURTH QUARTER RESULTS: Adjusted EPS $1.46 vs. $1.57 y/y. Revenue $8.59 billion, +0.5% y/y. Adjusted operating margin 26.9% vs. 29.4% y/y, estimate 27.3%. 2025 YEAR FORECAST: Sees adjusted EPS $5.40 to $5.50. Sees organic revenue +4% to +5%. COMMENTARY: Raises dividend to $0.70/Shr. For FY, including other revenue and the impact of foreign currency exchange, if recent foreign currency exchange rates hold, FY25 revenue growth on a reported basis would be in the range of 2.4% to 3.7%. - CEOs of AI start-ups backed by Microsoft and Amazon are the new tech rockstars
Arthur Mensch, the CEO of Mistral AI and Dario Amodei, the CEO of Anthropic were in the spotlight at Viva Tech in Paris. Both lead companies backed by U.S. tech giants. Helped by his associates, Mensch was spotted quickly exiting the event, in what appeared to be an attempt to avoid interactions with any media or people in attendance. Amodei was surrounded by people with cameras and by other attendees as soon as he left the VIP lounge. - Tesla CEO Elon Musk says he favors ‘no tariffs’ on Chinese EVs
Tesla CEO Elon Musk said at a conference in Paris that he doesn’t agree with President Biden’s tariff on Chinese-made electric vehicle imports. Tesla competes quite well in the market in China with no tariffs and no deferential support,” Musk said. “I’m in favor of no tariffs.” - Stock futures are little changed after Dow posts worst session since March 2023: Live updates
Stock futures were little changed on Thursday evening, following the worst session in more than a year for the Dow Jones Industrial Average. Futures tied to the 30-stock Dow hovered near the flatline. S&P 500 futures ticked up by 0.06%, while Nasdaq 100 futures inched higher by 0.04%. In after-hours trading, Intuit shares slid 6% on soft guidance for the current quarter. - Gold slips to over one-week low on hawkish Fed, US data
Gold fell to more than a week’s low on Thursday, extending its decline for a third straight session, as investors grew apprehensive over U.S. rate cut timings and on strength in U.S. business activity. Spot gold fell 2.1% to $2,328.61 per ounce. The non-yielding bullion hit a record high of $2,449.89 on Monday and is up 14% so far this year. Making gold less attractive, dollar cut its losses for the day on U.S. business activity accelerating to the highest level in over two years in May, suggesting that economic growth picked up half-way through the second quarter.
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