Daily US Equity Opening News - CSCO beats, raises guidance; DKS to acquire FL for ~USD 2.4bln; DoJ probes UNH for Medicare fraud

TODAY'S AGENDA:

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  US INDEX FUTURES: ES 0.4%, NQ -0.6%, YM -0.4%, RTY -0.1%.


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  DAY AHEAD: The US Day sees the release of US industrial production (seen +0.2% M/M from -0.3%), manufacturing output (exp. -0.2% M/M from +0.3% prior), the NAHB Housing Market Index, and business inventories. Note, there has already been a deluge of US data this morning (PPI, Retail Sales, NY Fed, Philly Fed, Jobless Claims). Fed's Barr (voter) will also give a pre-recorded interview today. From the BoE, Dhingra will speak. In fixed income, the US Treasury will announce auction sizes for next week's 20yr bond and 10yr TIPS supply (no changes are foreseen). Notable corporate earnings reports due today include: AMAT and TTWO. In geopolitics, attention will be on the Ukraine-Russia talks in Turkey; Russian President Putin will skip the peace talks, sending a low-level delegation instead; the US will not send President Trump, but will send other officials.


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  BROKER MOVES: CSCO upgraded at Wells Fargo; AA downgraded at UBS. To see the full list, please click here.
  


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  MAJOR MORNING MOVES RECAP: WMT, CSCO, CRWV, DK/DKS, UNH, BABA, DE, LMT, COIN. To see the full list, click here.
  

MACRO

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  US/Japan - The US is reportedly considering the possibility of revising the Japan-US trade agreement in bilateral tariff negotiations, according to JiJi.


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  US/India - US President Trump said India has offered to drop all tariffs on the US.


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  US/Iran - US President Trump said the US getting close to doing a deal with Iran; in serious negotiations to achieve peace; Iran has "sort of" agreed to the terms of a deal.


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  US Treasuries - Taiwan’s Finance Ministry found no major issues in its April review of US Treasuries exposure and risk management at nine state-backed banks, addressing public concerns over their US government bond holdings.


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  GOP Tax Plan - A Republican tax plan aims to cut clean-energy subsidies by disqualifying companies using components or critical minerals from China, Russia, or North Korea. This threatens to end US solar and battery tax credits earlier than scheduled, also affecting incentives for nuclear, carbon capture, geothermal, heat pumps, and biofuels.


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  SALT Deduction - House Republicans are deeply divided over the state and local tax deduction in Trump’s tax bill. Pro-SALT members back a USD 30k cap, but some from high-tax states want USD 40k, threatening the bill’s passage, NBC reports. Tensions peaked when Rep. Nicole Malliotakis was asked to leave a pro-SALT meeting amid distrust. Speaker Mike Johnson seeks a deal, balancing moderate and far-right demands ahead of a key vote.


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  US-China - Seventeen Republican lawmakers urged the US Commerce Department to ban TP-Link Systems Inc., a Wi-Fi router maker, over concerns about its ties to China’s Communist Party. They described TP-Link as a “clear and present danger” amid ongoing US investigations into the company’s links to China.


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  France/China - French Finance Minister Lombard said after talks with Chinese Vice Premier Lifeng, they did not find a solution to the cognac trade issue with China; the door remains open to talks.

EQUITY NEWS:

CONSUMER STAPLES

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  Walmart Inc (WMT) Q1 2025 (USD): Adj. EPS 0.61 (exp. 0.58), Revenue 165.61bln (exp. 165.93bln), US Comp sales +4.5% (exp. 4.0%). Guidance: Q2 net sales +3.5-4.5%, withholded Q2 operating income growth and EPS forecasts, noting near-term outcomes are exceedingly wide and difficult to predict. For FY26, reiterated its outlook, seeing Q1 26 Walmex comp sales +1.5 (prev. +4.1% in Q425), Q1 26 Canada comp sales +0.9% (prev. +5.8% in Q425). Commentary: CEO, "We're well positioned, maintaining flexibility to navigate the near-term while continuing to invest to create value for the long-term"; CFO warned it cannot hold off price increases forever and price hikes from tariffs could start later this month, via CNBC. Moreover, the CEO said the larger tariffs on China are having the biggest impact; restoration of dramatically higher tariff levels, the impact on financials could be significant and even jeopardize ability to grow earnings Y/Y.

TECH

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  Cisco Systems (CSCO) Q3 2025 (USD): EPS 0.96 (exp. 0.91), Revenue 14.1bln (exp. 14.1bln); Remaining Performance Obligations +7% Y/Y 41.7bln, with 51% of this amount expected to be recognised as revenue over the next 12 months; product RPO +10%, services RPO +5%. Said AI infrastructure orders exceeded 1.25bln YTD, one quarter ahead of target. CFO Scott Herren to retire in July, succeeded by strategy chief Mark Patterson. Outlook: Q4 adj. EPS 0.96-0.98 (exp. 0.95), Q4 revenue 14.5bln-14.7bln (exp. 14.58bln), raised FY25 adj. EPS view to 3.77-3.79 (exp. 3.73), and sees FY revenue at 56.5-56.7bln (exp. 56.47bln). Reaction: PT was upgraded at Piper Sandler, Citi, Wells Fargo, JPM, and Barclays, ranging from USD 64 to 75 (prev. 60-72). Wells Fargo upgraded Cisco to 'Overweight' from 'Equal Weight', citing Cisco's accelerating AI momentum for the upgrade. With increasing confidence in a normalizing order growth recovery, WFC sees Cisco as presenting a continued earnings upside and "value re-rate story."


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  CoreWeave (CRWV) Q1 2025 (USD): EPS -1.49 (exp. -0.17), Revenue 982mln (exp. 853.04mln). The profit miss was largely due to 177mln in IPO-related stock-based compensation. Outlook: Q2 sales 1.06–1.1bln (exp. 986.7mln); FY revenue guide raised to 4.9–5.1bln (exp. 4.61bln). Capex for the year is expected to reach 20–23bln, driven by client demand including a new 4bln post-quarter contract with OpenAI, in addition to an earlier 11.9bln 5yr agreement. Its Q3 revenue backlog rose +63% to 25.9bln, though the remaining performance obligation fell slightly to 14.7bln (vs 15.1bln at end of 2024). Commentary: No single client represented more than half of the backlog. CEO attributed increased spend to client uptake, not pricing, and said new classification delays were affecting how backlog metrics were interpreted. CEO said the company will advance investments to meet this demand, expecting these higher costs to pressure near-term margins. The company stated it does not expect a material impact from recent US tariffs.


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  Apple (AAPL) - US President Trump is asking Apple CEO Tim Cook to stop building plants in India to make devices for the US, pushing for Apple to add domestic production, Bloomberg reports. Trump in Qatar spoke of his conversation with Cook, "I had a little problem with Tim Cook yesterday"; "He is building all over India. I don't want you building in India." As a result of their discussion, Trump said Apple will be "upping their production in the US.


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  OpenAI - Members of the 'Not for Private Gain' group argued OpenAI's announcement to dial back some of its restructuring might "be a step in the right direction," but does not adequately prevent the company from straying from its original mission to ensure AI developed benefits humanity, Reuters reports.


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  Salesforce (CRM) - Signed definitive agreement to acquire Convergence AI; no additional details are being disclosed at this time.


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  SMIC (SMICY) - Chinese foundries SMIC and Hua Hong Semiconductor are increasing efforts to secure orders from US-based IC design firms rather than building fabs in the US, following a local-for-local, China-for-China strategy to expand their American presence amid rising competition in the chip market, DigiTimes reports.


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  DXC Technology (DXC) Q4 2025 (USD): EPS 0.84 (exp. 0.77), Revenue 3.17bln (exp. 3.13bln). Outlook: Q1 EPS 0.55-0.65 (exp. 0.77), Q1 revenue 3.04-3.09bln (exp. 3.12bln), FY26 EPS 2.75-3.25 (exp. 3.41), FY revenue 12.18-12.44bln (exp. 12.41bln).


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  Xiaomi Corporation (XIACY) - Xiaomi’s EV sales in China dropped sharply after a fatal highway crash and consumer backlash over false advertising of its SU7 sedan. Orders fell 55% M/M to around 36,000 units in April, with the decline continuing into May, according to Deutsche Bank.


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  Akamai Technology (AKAM) - Priced an upsized USD 1.5bln convertible senior notes offering due 2033, increased from USD 1.35bln. The initial conversion rate is 10.7513 shares per USD 1,000 principal, or a USD 93.01 conversion price, representing a 20% premium to the May 14th closing stock price of USD 77.51.


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  Samsung Electronics (SSNLF) - Reportedly considering outsourcing memory photomask production, raising concerns about domestic supply security.


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  TP-Link Systems - Seventeen Republican lawmakers urged the US Commerce Department to ban TP-Link Systems, a Wi-Fi router maker, over concerns about its ties to China’s Communist Party. They described TP-Link as a “clear and present danger” amid ongoing US investigations into the company’s links to China.

CONSUMER DISCRETIONARY

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  Footlocker (FL), Dick's Sporting Goods (DKS) - Dick’s Sporting Goods is to acquire Foot Locker for around USD 2.4bln, or USD 24/shr. Dick's expects the deal to close in H2 of 2025, the transaction to be accretive to EPS in the first full FY post-close, and to deliver cost synergies of USD 100-125mln.


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  Foot Locker (FL) Q1 prelim (USD): Adj. EPS 0.07 (exp. -0.02), adj. net income US -6mln (exp. -4mln); will not be updating guidance. Q1 comps -2.6% (exp. +0.75%).


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  Dicks Sporting Goods (DKS) Q1 prelim (USD): Adj. EPS 3.24 (exp. 3.21).


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  Ford (F) - CEO Jim Farley told the New York Post that despite the tariffs, he has never been more optimistic about the company's future.


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  Tesla (TSLA) - Last November, Tesla ended its policy that prohibited US leasing customers from buying their cars at lease-end, Reuters reports. The policy started in 2019, when Tesla announced that customers could lease its mass-market Model 3 sedans but would have to return them, at the end of the lease, for use in Tesla's planned "robotaxi" network. Despite repeated promises, the robotaxis never came. Tesla instead found an unusually lucrative way to make money by flipping many of the off-lease cars to new buyers, according to four people familiar with Tesla's retail operations.


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  Alibaba (BABA) Q4 (CNY): Revenue 236.5bln (exp. 237.9bln), EPS 12.52 (exp. 12.71), Adj. EBITDA 41.78bln (exp. 41.23bln); Co. is confident in its business outlook. Commentary: CEO, "We are confident in our business outlook"; "Looking ahead, we will remain focused on our core businesses and continue to drive AI + Cloud as a new engine for our long-term growth”.


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  Starbucks (SBUX) - Exploring options for its China business, including a potential stake sale, by reaching out to private equity firms, tech companies, and others, according to sources cited by Bloomberg. The company has solicited investor feedback this week via a financial adviser, the report said, adding that its China assets could be valued at several billion dollars.


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  Shein - Shein Group lowered US retail prices by about 13% after the Trump administration temporarily cut tariffs on Chinese imports, Bloomberg reports. The average price of 98 tracked products fell to USD 5.56 (from USD 6.38), as the online retailer aims to regain consumers deterred by previous tariff-driven price rises.


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  Amazon (AMZN) - Cutting around 100 roles in its devices and services division, including Alexa and Kindle teams, as part of efforts to streamline operations and align with its product roadmap.


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  Rakuten Group (RKUNY) - Shares dropped 10% in Tokyo trading after reporting a 19th consecutive quarterly loss. Net loss widened to JPY 73.47bln (exp. loss of 40.38bln; vs prev. loss of 42.39bln Y/Y), driven by higher financing costs and challenges in its wireless business.


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  Boot Barn Holdings (BOOT) Q4 2025 (USD): EPS 1.22 (exp. 1.25), Revenue 453.7mln (exp. 458.4mln); SSS +6.0%. The board authorised a 200mln buyback. Outlook: Q1 EPS 1.44-1.52 (exp. 1.46), Q1 revenue 483-491mln (exp. 486.1mln), Q1 SSS growth +4-6%; FY26 EPS 5.50-6.40 (exp. 6.39), FY revenue 2.07-2.15bln (exp. 2.17bln).


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  Carvana (CVNA) - CEO Ernest Garcia filed to sell shares worth USD 192mln, marking his largest planned sale since the IPO. The 630k shares (~ 2% of his stake) will be sold under a 10b5-1 plan established last December amid a surge in the used car retailer’s stock.


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  Penn Entertainment (PENN) - Expects to repurchase at least USD 350mln of common stock in the calendar year 2025.


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  Geely Automobile (GELYY) Q1 2025 (CNY): Net profit 5.67bln (vs 1.56bln Y/Y), matching its guidance. Revenue increased +25% to 72.5bln as the company boosted sales and continued cost-cutting efforts amid China’s car market.


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  Harley-Davidson (HOG) - Harley-Davidson shareholders rejected activist H Partners’ proposal to remove three board members, including Chairman and CEO Jochen Zeitz, ensuring the current leadership remains in place despite the proxy fight.


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  Royal Caribbean (RCL) - Upsized and extended its two unsecured revolving credit facilities, increasing commitments by USD 2.28bln to a combined USD 6.35bln. The three-year facility’s maturity was extended from October 2026 to October 2030.

HEALTHCARE

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  Medicaid - The House Energy and Commerce Committee approved Republican plans to cut federal Medicaid funding, advancing the proposals to the full House. This move is part of a tax-cut extension package from Trump’s first administration, prioritised by the White House and Republican Party.


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  UnitedHealth Group (UNH) - The DoJ is investigating UnitedHealth for possible criminal Medicare fraud, WSJ reports citing sources. The probe, led by the healthcare-fraud unit of the DoJ’s criminal division, has been active since at least last summer, the report said. UnitedHealth denied notification from the DoJ regarding a reported criminal investigation into Medicare fraud, affirming confidence in the integrity of its Medicare Advantage programme.


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  STERIS (STE) Q4 2025 (USD): Adj. EPS 2.74 (exp. 2.60), Revenue 1.5bln (exp. 1.47bln); sees FY26 adj. EPS at 9.90-10.15 (exp. 9.88) and sees FY26 revenue up 6-7%.


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  Merck (MRK) - Announced phase 3 Keynote-B96 trial met the primary endpoint of progression-free survival in patients with platinum-resistant recurrent ovarian cancer whose tumours expressed PD-L1 and in all comers; also met secondary endpoint of overall survival. Meanwhile, Merck’s Welireg (belzutifan) was approved by the FDA for treating adults and children 12+ with advanced or metastatic pheochromocytoma or paraganglioma.


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  Takeda Pharmaceutical (TAK) - Reported Phase 2b data for oveporexton in narcolepsy type 1, showing significant improvements in wakefulness, sleepiness, cataplexy, disease severity, and quality of life versus placebo over eight weeks; most adverse events were mild, with Phase 3 data expected in 2025.


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  Merck KGaA (MKKGY) - Cut its FY25 outlook, citing a weak US dollar and tariff uncertainty.

FINANCIALS

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  Coinbase (COIN) - Said criminals targeted customer support agents overseas; account data for a small subset of customers was stolen; said it will not pay the USD 20mln ransom demand; expects expenses to amount to USD 180-400mln; no passwords, private keys, or funds were exposed and Coinbase Prime accounts are untouched.


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  Blackrock (BLK) - CEO Fink said markets have been disrupted, but risks are not systemic, via annual meeting.


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  Discover Financial (DFS) - Reported April-end net charge-offs of 5.04% (prev. 4.94% in March), while the delinquency rate for payments 30 days or more declined to 3.50% (prev. 3.66%).


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  JPMorgan (JPM) - Credit card charge-off rate 1.67% in April (prev. 1.85%); credit card delinquency rate 0.89% (unch M/M). Separately, Wendy Hohmann was named as the new head of its Dutch business, effective June 1, replacing Cassander Verwey, according to an internal note shared with Reuters.


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  Capital One Financial (COF) - April-end charge offs 5.66% (prev. 6.07% M/M); delinquencies 3.95%.


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  Allianz SE (ALIZY) - Q1 operating profit rose +6.3% Y/Y to a record EUR 4.24bln, matching estimates, driven by higher insurance income and asset management inflows. Allianz Global Investors chief expects private market assets to exceed EUR 100bln this year, and is open to acquisitions to grow the business.


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  Allstate (ALL) - Catastrophe losses (April): USD 594mln.

INDUSTRIALS

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  Deere & Co (DE) Q2 2025 (USD) EPS 6.64 (exp. 5.64), Revenue 12.76bln (exp. 10.79bln). Net sales breakdown: Production, Precision Ag 5.23bln (exp. 4.96bln), Construction, Forestry 2.95bln (exp. 3.06bln). Guidance/commentary: Cut the lower end of its annual net income view, sees FY net income at 4.75-5.5bln (exp. 5.12bln); said FY net income range broadened in response to a dynamic environment and cited softer tractor demand as more farmers opt to rent equipment.


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  GE Aerospace (GE), Qatar Airways - GE Aerospace and Qatar Airways agreed on over 400 widebody aircraft engines, including 60 GE9X and 260 GEnx units, plus options and spares, to power Boeing (BA) 777-9 and 787 planes. The deal, GE’s largest widebody engine purchase, includes maintenance, repair, and overhaul service agreements.


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  Boeing (BA) - US President Trump said Air Force will soon have the F-47 fighter jet.


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  General Dynamics (GD) - Received a USD 216.49mln Navy contract modification for DDG-51 Planning Yard Services.


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  Rocket Lab USA (RKLB) - Will launch NASA’s Aspera astrophysics mission no earlier than Q1 2026 from Launch Complex 1. Aspera will use ultraviolet light to study hot gas in the intergalactic medium, aiming to advance understanding of galaxy formation and the origins of stars, planets, and life.


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  Siemens AG (SIEGY) Q2 2025 (EUR): Revenue +6% to 19.8bln, net income +11%, driven by a rebound in factory-automation sales in China and increased orders for trains in the US and Europe. Siemens confirmed its FY revenue growth guidance of up to 7%.

ENERGY

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  GOP Tax Plan - A Republican tax plan aims to cut clean-energy subsidies by disqualifying companies using components or critical minerals from China, Russia, or North Korea. This threatens to end US solar and battery tax credits earlier than scheduled, also affecting incentives for nuclear, carbon capture, geothermal, heat pumps, and biofuels.


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  US Sanctions - The US Treasury sanctioned Singapore-based CCIC Singapore Pte for inspecting Iranian oil shipments bound for China while concealing their origin, shaking Singapore’s trading community and spotlighting the secretive supply chain moving Iranian oil to China, Bloomberg reports.


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  Venture Global (VG) - Seeking approval by June 26 to construct its CP2 plant in Louisiana, according to a letter sent to the FERC on Wednesday. Venture Global has said it will give the financial go-ahead to the project by the middle of 2025 but doesn't have authorization to construct the plant because its original approval was rescinded by FERC pending a supplemental environmental study on the plant's effect on air quality.


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  Eni (E) - Entered exclusive talks with Ares Alternative Credit Management to sell a 20% stake in its renewable and retail unit Plenitude. The deal values Plenitude’s equity between EUR 9.8-10.2bln, with an enterprise value > EUR 12bln.


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  Diamondback Energy (FANG) - President Kaes Van't Hof sold 10k shares on May 12th at USD 142.6903/shr.


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  New Fortress Energy (NFE), Excelerate Energy (EE) - New Fortress Energy completed the USD 1.055bln sale of its Jamaican assets to Excelerate Energy, including LNG import and regasification terminals and a 150 MW power plant.

COMMUNICATIONS

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  US Radio Spectrum - Top Republicans plan to auction USD 88bln of radio spectrum to Verizon (VZ) and Elon Musk’s Starlink to fund their tax package, was approved by the House Energy and Commerce Committee. However, senators oppose the move over defence system risks, despite the appeal of raising revenue without tax hikes or benefit cuts.


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  Meta Platforms (META) - Appointed longtime Southeast Asia head Benjamin Joe as regional vice president for the entire APAC region, succeeding Dan Neary, who announced his departure in March.


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  Warner Bros. Discovery (WBD) - Village Roadshow and Warner Bros. agreed to delay disputes over up to USD 100mln in unpaid debt related to The Matrix films until after the auction of Village Roadshow’s film library, allowing the auction to proceed despite ongoing debt disagreements from the last Matrix movie, Bloomberg reports.


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  Electronic Arts (EA) - Now requires staff to return to the office at least three days a week, ending its fully remote work policy, Bloomberg reports.


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  Deutsche Telekom (DTEGY) - Raised its 2025 earnings forecast to about EUR 45bln (prev. 44.9bln) after Q1 adj. EBITDA rose +7.9% to EUR 11.3bln, topping estimates. Growth was supported by a 1.8% increase in German mobile subscribers to 69.8mln.


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  TikTok - Charged by EU tech regulators for breaching EU online content rules; TikTok doesn't provide necessary information about the content of advertisements and users targeted by ads, EU regulators said.

MATERIALS

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  Alcoa (AA) - Downgraded to 'Neutral' from 'Buy' at UBS. The firm believes alumina is likely to remain lower for longer and thinks near-term upside in LME aluminium will be capped by softening demand. UBS notes that Alcoa is more exposed to aluminium vs. alumina and could benefit from a reduction in U.S. tariffs, but the removal of section 232 is not the firm's base case and thinks the 2026 valuation is fair and that risk/reward is balanced.


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  Thyssenkrupp (TKAMY) - Reaffirmed FY guidance despite earnings falling due to weak automotive and industrial demand. The German steel and engineering firm expects an improved but challenging economic environment in H2, forecasting free cash flow before M&A between zero and EUR 300mln for the FY ending September.

15 May 2025 - 14:01- Fixed IncomeData- Source: Newsquawk