- Asian Stocks Decline as Meta Weighs on Big Tech: Markets Wrap
(Bloomberg) — Asian equity markets dropped after Meta Platforms Inc.’s disappointing outlook raised concern on whether the industry that has powered the bull market in equities has run too far. Equity benchmarks dropped in Japan and South Korea, while futures for Hong Kong also declined. Australian financial markets are shut for a holiday. - BOJ to Stand Pat as Yen Lifts Odds of Hawkish Signals: Day Guide
(Bloomberg) — The Bank of Japan is forecast to keep its interest rate settings unchanged Friday, with the yen’s plunge this week to a fresh 34-year low making it more likely the bank will tone down its stance on keeping policy easy. Almost all BOJ watchers predict no policy change at the Friday conclusion of a two-day gathering. - Meta Platforms shares fell 15.1% in afterhours trading on a disappointing forecast as Meta said it will spend billions more than previously expected.
Meta revealed that it will spend billions of dollars more than expected this year — fuelled by investments in artificial intelligence. The spending forecast, coupled with slower sales growth than anticipated, sent the shares tumbling in extended trading. The Facebook parent is plowing ever more resources into artificial intelligence, which requires significant investments in computing power. Zuckerberg warned that the investments would increase “meaningfully” and take a long time to generate returns for the social networking company — perhaps years — but urged them to see the long-term benefits that AI has to offer. “Smart investors see that the product is scaling and that there is a clear monetizable opportunity there even before the revenue materializes,” CEO Mark Zuckerberg said. The company already credits AI for some of its recent user growth and advertising success, pointing to improvements within its recommendation algorithms. - BHP Taps UBS, Barclays for Potential Anglo American Deal: AFR
(Bloomberg) — BHP Group, the world’s largest miner, has tapped UBS and Barclays to help work on a potential takeover of Anglo American, the Australia Financial Review reported, citing unnamed sources close to the discussions. NOTE: Anglo American said late Wednesday that it received an unsolicited all-share merger proposal from BHP, and its board is reviewing the proposal. - Biden Signs Ukraine Bill, Offers Long-Range Missiles Kyiv Sought
(Bloomberg) — President Joe Biden signed a $95 billion national security package into law and said assistance to Ukraine would begin to move within “hours,” capping off a bruising fight with Republicans over long-delayed assistance for Kyiv and other besieged US allies. Biden’s signature clears the way for the US to quickly resume arms shipments for Kyiv, whose efforts to repel Russia’s invasion have faltered amid the eight-month funding impasse. - Yen Weakens Past Key 155 Level, Adding to Intervention Risk
(Bloomberg) — The yen weakened beyond 155 per dollar for the first time in more than three decades, fuelling risk that the key level may prompt Japan to step into the market. The Asian nation’s currency depreciated as much as 0.4% to a session low of 155.37 on Wednesday, marking the first time since June 1990 the yen crossed the 155 level against the greenback. - Russia Asset Seizure Law Spurs Yellen Praise, Dollar Angst
(Bloomberg) — Congressional passage Tuesday of authority granting President Joe Biden new powers to seize Russian dollar assets to aid Ukraine has intensified debate over the potential consequences of foreign demand for US Treasuries and use of the dollar. The so-called REPO provision was added to a $95 billion Ukraine, Taiwan and Israel aid package by House Republican leaders and Biden signed the measure into law Wednesday. - Sticky Inflation, Strong GDP to Immobilize the Fed: Economics
(Bloomberg Economics) — Real GDP likely cooled in the first quarter of the year, but still ran above the longer-run sustainable pace, suggesting persistent inflationary pressure. We believe the stimulus unleashed by Fed Chair Jerome Powell’s dovish pivot in December accounts for the magnitude of the inflation and growth surprise so far this year. - Trump to Convene Donors, Vice President Hopefuls in Palm Beach
(Bloomberg) — Republican nominee Donald Trump and his campaign will host a donor retreat next week in Palm Beach, Florida, with some prominent Republicans who have been discussed as his potential running mate. Senators Marco Rubio of Florida and Tim Scott of South Carolina; North Dakota Governor Doug Burgum and South Dakota Governor Kristi Noem; and Representatives Elise Stefanik of New York and Byron Donalds of Florida are scheduled to appear, according to an invitation obtained by Bloomberg News. - Lemssouguer’s Hedge Fund Drops 6.6% in March as Credit Bets Sour
(Bloomberg) — Former Credit Suisse trader Hamza Lemssouguer’s hedge fund suffered its second biggest monthly loss in March as some of his credit bets soured. His Arini Credit Master Fund lost 6.6% in the month, according to an investor letter seen by Bloomberg. - Microsoft-Backed Rubrik Is Said to Raise $736 Million in IPO
(Bloomberg) — Cybersecurity firm Rubrik Inc., a cloud and data security startup backed by Microsoft Corp., is raising $736 million in its initial public offering priced above a marketed range, according to a person familiar with the matter. Rubrik is selling 23 million shares for $32 each after marketing them for $28 to $31 each. - IBM Acquires Software Maker HashiCorp in $6.4 Billion Deal
(Bloomberg) — International Business Machines Corp. said it has agreed to buy HashiCorp Inc. in a transaction valuing the software company at $6.4 billion on an enterprise basis. IBM is paying $35 a share for San Francisco-based HashiCorp, according to a statement Wednesday confirming an earlier report by Bloomberg News. - Boston Scientific shares rose 5.7% after the medical device firm boosted its adjusted earnings per share guidance for the full year. The updated view beat the average analyst expectation. The company also reported first quarter results that topped estimates.
FIRST QUARTER RESULTS: Adjusted EPS 56c vs. 47c y/y, estimate 51c. Net sales $3.86 billion, +14% y/y, estimate $3.68 billion. SECOND QUARTER FORECAST: Sees adjusted EPS of 57c to 59c, estimate 56c. Sees net sales reported basis of +10.5% to +12.5%. YEAR FORECAST: Sees adjusted EPS $2.29 to $2.34, saw $2.23 to $2.27, estimate $2.26. Sees net sales reported basis +11% to +13%. Cowen, Joshua Jennings (buy, PT $77): Calls the quarter results “exceptional”. Says the new guidance captures momentum. - Biogen shares climbed 4.6% after the drugmaker reported adjusted profit for the first quarter that topped Wall Street’s expectations. Analysts note strong sales of the firm’s Skyclarys as well as improving sales for its Alzheimer’s drug, Leqembi.
FIRST QUARTER RESULTS: Adjusted EPS $3.67, estimate $3.44. Revenue $2.29 billion, estimate $2.31 billion. Adjusted net income $535 million, estimate $505.3 million. YEAR FORECAST: Still sees adjusted EPS $15 to $16, estimate $15.49. RBC Capital Markets, Brian Abrahams (outperform, PT $326): Says Skyclarys drug sales had a notably strong quarter, helped by faster-than-expected uptake in the EU along with a better US trajectory. “We believe this helps reassure that the long-term ROI for the Reata acquisition should be favorable”. - Humana shares fell 3.7%, reversing an earlier gain, as Wall Street weighs the health insurer’s decision to pull its 2025 guidance amid pressures in its Medicare business. Management do not see clear visibility into the outlook until later this year and cited a need for “greater clarity” before providing new guidance.
Still, the health insurer reported adjusted profit for the first quarter that exceeded the average analyst estimate while reaffirming its adjusted earnings per share forecast for 2024. FIRST QUARTER RESULTS: Adjusted EPS $7.23 vs. $9.38 y/y, estimate $6.04. Revenue $29.61 billion, +11% y/y, estimate $28.38 billion. YEAR FORECAST: Still sees adjusted EPS about $16, estimate $16.12. Sees EPS about $13.93, saw about $14.87, estimate $16.12. - Old Dominion shares fell 11% after the company’s first-quarter revenue slightly lagged the average analyst estimate. Evercore ISI said the “broadly in-line” results may not be enough to impress investors this quarter.
FIRST QUARTER RESULTS: EPS $1.34 vs. $2.58 y/y, estimate $1.34. Revenue $1.46 billion, +1.2% y/y, estimate $1.47 billion. Operating income $386.4 million, +0.9% y/y, estimate $389.5 million.
COMMENTARY: “Less-than-truckload revenue per hundredweight increased 6.7% as compared to the first quarter of 2023. This yield improvement reflects our continued focus on revenue quality and our consistent, long-term approach to pricing, which is designed to offset our cost inflation while also supporting further investments in capacity and technology,” CEO says. - Ford Motor Co. reported its 1Q24 results that surpassed expectations, due to strong sales of work trucks. It reported an adjusted earnings per share of 49 cents, beating estimates of 42 cents.
Revenue of $42.8 billion, beating estimates of $40 billion. Adjusted Ebit of $2.8 billion, -18% YoY, beating estimates of $2.54 billion. Ford’s results were driven by a 36% jump in revenue, and stronger profit margins at its commercial Ford Pro unit, boosted by strong sales in their Super Duty pickup trucks. The company’s CFO John Lawler believes that Ford is on track for a strong performance for the year. - Kering shares fell 6.9% after the luxury goods maker warned that first-half recurring operating income would decline 40% to 45% in an update that analysts said was worse than expected. Brokers slashed their price targets on the stock, saying that a turnaround at Gucci, the company’s biggest label, remains uncertain.
FIRST QUARTER RESULTS: Comparable revenue -10%, estimate -10.2%. Revenue EU4.50 billion, -11% y/y, estimate EU4.47 billion. COMMENTARY: “While we had anticipated a challenging start to the year, sluggish market conditions, notably in China, and the strategic repositioning of certain of our Houses, starting with Gucci, exacerbated downward pressures on our topline,” CEO François-Henri Pinault says. - Biden Capital Gains Rate Proposal: 44.6%
Much has been made of President Biden’s proposal in the Budget of the United States Government, Fiscal Year 2025, to raise capital gains rates. The number being bandied about is 44.6%, which would be the highest formal federal capital gains rate since its inception. That rate comes with many caveats and asterisks. The source of the 44.6% rate is a footnote from the General Explanations of the Administration’s Fiscal Year 2025 Revenue Proposals, and it reads in relevant part.
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