- Asian Stocks Advance After S&P 500 Reaches Record: Markets Wrap
(Bloomberg) — Asian equity markets rose, after the world’s largest technology companies helped send US shares to a fresh all-time high. Shares in Japan and Australia climbed in early Thursday trading, while futures also pointed to a gain in Hong Kong. Contracts for US equities steadied after the S&P 500 notched its 25th record close this year. Nvidia Corp. - JAPAN INSIGHT: Yen Has Spidey Sense on Rates
(Bloomberg Economics) — The yen’s rise against the dollar in volatile trading over the past few days suggests markets could be positioning further for shifts in monetary policy in Japan (rate hikes) and the US (cuts). Going by pricing in rates markets the yen may have more upside in coming months due to a more favorable yield differential if Bloomberg Economics’ calls on the Bank. - S&P 500 Hits 25th Record This Year as Tech Soars: Markets Wrap
(Bloomberg) — The world’s largest technology companies drove stocks to all-time highs, while bond yields fell with traders almost fully pricing in two Federal Reserve rate cuts in 2024. The S&P 500 hit its 25th record this year, while the tech-heavy Nasdaq 100 climbed 2%. Nvidia Corp. the poster child of artificial-intelligence frenzy led a rally in the “Magnificent Seven”. - SEC Hedge Fund Fee Disclosure Rule Struck Down by US Court
(Bloomberg) — A federal appeals court struck down the US Securities and Exchange Commission’s rules requiring hedge funds and private equity firms to detail quarterly fees and expenses to investors — a significant setback in the regulator’s clampdown on the private-funds industry. - Nvidia Tops $3 Trillion in Market Value, Leapfrogging Apple
(Bloomberg) — Nvidia Corp. was already the world’s most valuable semiconductor firm. Now, it’s become the first computer-chip company ever to hit $3 trillion in market capitalization. The shares of the Santa Clara, California-based firm have rallied roughly 147% this year, adding about $1.8 trillion as the insatiable demand for its chips used to power artificial. - China’s Dwindling ‘Snowball’ Derivatives Deliver a Big Payout
(Bloomberg) — More investors in the Chinese index-linked derivatives known as snowballs are cashing in, reaping gains just as regulators are trying to rein in the popular but potentially risky products. Gains in the underlying indexes triggered payouts for 64 snowball products in May. - Big Take: Billionaire-Friendly Modi Spurned by India’s Have-Nots
(Bloomberg) — At the start of the year, Narendra Modi hailed the opening of a huge new Hindu temple as a once-in-a-millennium turning point in India’s history. The lavish event, broadcast across the nation, was timed to generate a wave of religious fervor that would carry him in a landslide to a third term as prime minister. - Rising US Debt Load Poses a Growing Risk for Treasury Market
(Bloomberg) — Bond industry leaders see a bleak US fiscal outlook that will keep debt growing and sustain elevated long-dated Treasury yields. Speaking during a panel discussion at the ISDA/Sifma Treasury forum in New York Wednesday. - Britain’s Rich Race to Protect Their Wealth From Election Hit
(Bloomberg) — Wealthy people in the UK, from foreign billionaires to City of London bankers, are rushing to shelter their money after Prime Minister Rishi Sunak surprised the country by calling a summer election. Some are cashing in investments, paying off bills that may soon rise or leaving the UK entirely. - Trump Quickly Surpasses Biden on TikTok With Just One Video
(Bloomberg) — Former President Donald Trump posted his first video to TikTok on Saturday, and has already amassed more followers and likes than President Joe Biden’s campaign account as the two men vies for attention before November’s general election. - JPMorgan Poaches From Goldman, UBS for Lemkau’s Wealth Business
(Bloomberg) — JPMorgan Chase & Co. made a pair of hires from rivals Goldman Sachs Group Inc. and UBS Group AG, the latest in its years-long effort to expand its wealth-management business led by Kristin Lemkau. Anne Black, who had been president of Goldman’s donor-advised fund Goldman Sachs Gives. - SAP to Buy Israeli Software Firm Walk Me for $1.5 Billion
(Bloomberg) — SAP SE will acquire Walk Me Ltd., an Israel-based software company that collects and analyzes data about how employees use apps, in an all-cash transaction with an equity value of about $1.5 billion. The boards approved the deal for $14 per share, representing a premium of 45% to Walk Me’s closing price on Tuesday. - Netanyahu warns of ‘very intense’ action against Hezbollah in Lebanon, as talk of a new war intensifies.
Prime Minister Benjamin Netanyahu of Israel on Wednesday threatened further military action against Hezbollah in Lebanon, amid growing talk of another full-scale war, even as Israel fights Hamas in the Gaza Strip. - ASML Holding shares jumped 8.10%, becoming Europe’s second-biggest listed company, overtaking LVMH by market value for the first time ever.
The company’s surge was helped by news that its biggest client, chipmaker Taiwan Semiconductor Manufacturing Company (TSMC), will receive the high-NA extreme ultraviolet machine by the end of 2024. This is ASML’s most powerful chipmaking tool, which carries a high price tag of €350 million apiece. For ASML investors, this offers reassurance about futures sales, as TSMC has previously raised concerns about the machine’s pricing. - Inditex SA climbed after the fashion retailer said shoppers are snapping up its summer fashions despite poor weather that’s hampered rivals.
Shares of the Zara owner rose 3.7% as it reported an upbeat start to the second quarter and first-quarter sales and profit that met expectations. Sales rose 12% at constant exchange rates from May 1 to June 3, in a sign that the second quarter could be on track to report double-digit growth. The company also posted operating income of €1.6 billion in the three months to April 30, meeting the average estimate from analysts. The update marks “an impressive start” to the second quarter, Jefferies analyst James Grzinic said, noting that he expected “modest upgrades to consensus” as a result. The 12% sales growth at the start of the second quarter suggests some “pent-up demand following a cool and rainy start to spring in southern Europe,” said RBC Capital Markets analysts. - Cisco Systems analysts are mixed on the networking company after it hosted an investor event where it affirmed its financial targets. Brokers see some bright spots from the event, but remain cautious on its near-term growth prospects.
Citi (neutral, PT $52): The company’s targets are in line with consensus estimates, but “despite a current TAM that is growing at 6%, the outlook suggests little acceleration in the core business”. “Bright spots included more details on CSCO’s cloud AI orders and pipeline, as well as updates on the Splunk integration”. Melius Research (hold, PT $53): “The long-term growth doesn’t start until after a down year in FY2025, which is a bit far away – so Cisco remains a show-me story”. “The degree that Nvidia gains traction in the good ol’ enterprise, Cisco is one of the partners of choice, along with Dell”. - Dollar Tree shares fell 4.9% after the retailer reported weaker-than-expected comparable sales for its first quarter and cut its annual EPS forecast. Investors are also weighing the announced strategic review of its Family Dollar unit, which was acquired in 2015.
FIRST QUARTER RESULTS: Adjusted EPS $1.43 vs. $1.47 y/y, estimate $1.44. EPS $1.38 vs. $1.35 y/y. Net sales $7.63 billion, +4.2% y/y. Enterprise comparable sales +1% vs. +4.8% y/y, estimate +2.33%. Gross profit margin 30.8% vs. 30.5% y/y, estimate 30.8%. Total location counts 16,397, -0.1% y/y, estimate 16,613. COMMENTARY: Dollar Tree said total company comparable sales reflect a 2.1% increase in traffic, offset by a 1.1% decrease in average ticket. On April 28, a tornado destroyed the Marietta facility; Dollar Tree incurred losses totalling $117.0 million as of May 4, consisting of $70.0 million related to damaged inventory and $47.0 million related to property and equipment. Believes these property and inventory losses will be fully offset by insurance recoveries. - Lululemon Athletica Inc. raised its profit outlook for the full year while also beating market
expectations for earnings in the first quarter, driving shares up 9.7% in afterhours trading.
The yoga wear brand now sees its earnings per share up 27 cents from the previous view and above the average analyst estimate. Profit in the fiscal first quarter, which ended April 28, was also higher than expected, while Lululemon also boosted its share buyback program by $1 billion. Sales were largely in line with expectations, and Lululemon maintained its earlier full-year sales guidance at as much as $10.8 billion. First-quarter comparable sales were flat in the Americas, while they rose 25% in the international segment — continuing the company’s trend of faster growth in markets such as China while US momentum cools. US consumers are “still spending, but I think they’re being selective of where they spend and what they choose to buy,” Chief Executive Officer Calvin McDonald said in an interview. He attributed the company’s higher earnings outlook to better sales of more profitable items. - PVH shares advanced 3.8% after the Calvin Klein owner reported first-quarter adjusted earnings per share that came ahead of consensus expectations. While it was not the “prettiest” quarter, Wedbush said there were enough encouraging data points for it to remain constructive on the stock.
The company also announced Martijn Hagman, CEO of Tommy Hilfiger Global and PVH Europe, is leaving the company. FIRST QUARTER RESULTS: Adjusted EPS $2.45 vs. $2.14 y/y, estimate $2.16. Revenue $1.95 billion, -9.5% y/y, estimate $1.94 billion. Inventory -21.6%, estimate -15.6%.
SECOND QUARTER FORECAST: Sees revenue -6% to -7%. Sees 2Q EPS ~$2.25. 2025 YEAR FORECAST: Sees adjusted EPS $11 to $11.25, estimate $10.99; saw $10.75 to $11. Still sees revenue -6% to -7%. - EU elections kick off against a backdrop of China disputes, ‘greenlash’ and possible Trump return
The EU has been walking a tightrope regarding its links with China.
The European Commission, the executive arm of the EU, is expected to announce new tariffs on Chinese EVs just days after the election takes place. The future of the transatlantic relationship is still uncertain as U.S. voters go to the polls in November. - Bank of Canada Cuts Rates to 4.75%, Signals More to Come
(Bloomberg) — The Bank of Canada cut interest rates as it sees a soft landing on the horizon, making it the first Group of Seven central bank to kick off an easing cycle. Policymakers led by Governor Tiff Macklem lowered the benchmark overnight rate by 25 basis points to 4.75% on Wednesday, as widely expected by markets and economists in a Bloomberg survey. - Market Chatter: BlackRock and Citadel-Backed Group to Launch Texas Stock Exchange Next Year
A group backed by BlackRock (BLK) and Citadel Securities plans to launch a stock exchange in Texas to challenge the New York Stock Exchange and Nasdaq (NDAQ), the Wall Street Journal reported on Wednesday. The Texas Stock Exchange, which has raised about $120 million
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