Daily US Equity Opening News - TGT sinks on earnings miss; NVDA open to AVGO collab; TSLA to deploy 1mln NVDA GPUs

TODAY'S AGENDA:

• 
  US INDEX FUTURES: ES -0.7%, NQ -0.7%, YM -0.9%, RTY -1.1%.


• 
  DAY AHEAD: Despite a quiet docket for economic data releases, the G7 Central Bank and Finance Minister Meeting is taking place in Canada, and will garner headline attention with tariffs and trade tensions dominating the agenda; reports note that G7 finance ministers are aiming to find trade common ground while avoiding public disputes with the US amid new US tariffs on steel, aluminium, and autos, and a worsening global economic outlook. ECB chief Lagarde, Nagel and Cipollone will deliver remarks from the event. ECB's Lane is also due to release a slide deck today on negative interest rates. From the Fed, Barkin (2027 voter) and Governor Bowman (voter) will host a 'Fed Listens' event. The EIA will report its weekly energy inventory data; for reference, the API data was said to have shown headline crude stocks posting a surprise build of +2.5mln bbls (exp. -1.3mln), Distillates (exp. -1.4mln), Gasoline (exp. -0.5mln), Cushing -0.4mln bbls; in products, distillates stocks drew down as expected at -1.4mln (exp. -1.4mln), while gasoline inventories saw a larger than expected draw of -3.2mln bbls (exp. -0.5mln). Today's supply comes via a US USD 16bln auction of 20yr bonds. Today's corporate earnings slate includes TJX, SNOW, and ZM.


• 
  BROKER MOVES: HD upgraded at Stifel; UNH downgraded at HSBC. To see the full list, please click here.
  


• 
  MAJOR MORNING MOVES RECAP: TSLA/NVDA, TGT, NVDA/AVGO, AAPL, TOL, PANW, LOW, TTWO, MDT, SMCI. To see the full list, click here.
  


• 
  DAILY US CONFERENCE CALENDAR: To see the full calendar, click here.
  

EQUITY NEWS:

MACRO

• 
  US Stocks - Morgan Stanley (MS) strategists have upgraded US stocks to Overweight and Treasuries to overweight from neutral, expecting multiple Fed rate cuts to support bonds and boost earnings. The bank's analysts forecast the S&P 500 to reach 6,500 by Q2 2026, suggesting clients buy America, except for the US dollar; sees EUR/USD at 1.25 and USD/JPY at 130 by Q2 2026. Separately, Goldman Sachs (GS) said that hedge funds reduced holdings in the Magnificent Seven tech stocks while increasing exposure to US-listed Chinese companies in Q1, despite ongoing trade tensions; popular Chinese ADRs bought include Alibaba (BABA), PDD Holdings (PDD), and Baidu (BIDU), Goldman said.


• 
  US Fiscal - House GOP leaders and Republicans from high-tax states are nearing a deal to raise the SALT deduction cap to USD 40,000, up from USD 10,000 this year and USD 30,000 in the current Republican bill. The agreement could speed up the passage of the tax-and-spending legislation in the House.


• 
  US-China Trade - A temporary 90-day trade truce between the US and China led to a surge in export activity, with bookings on freighters from China to the US more than doubling to around 228,000 TEUs in the week starting May 12th, according to container-tracking data cited by Bloomberg. Separately, DigiTimes notes that Chinese smartphone exports to the US dropped in April to their lowest level since 2011, driven by the impact of US tariffs; the decline affects shipments of Apple’s (AAPL) iPhone and other devices, highlighting ongoing trade tensions between the two largest economies.


• 
  US-Japan Trade - Japan’s export growth slowed to 2% Y/Y in April, down from 4% in March, as US tariffs weighed on shipments, especially cars and steel. Imports fell 2.2% Y/Y, led by coal and crude oil. The slowdown raises recession risks after Japan’s economy contracted before the tariffs took full effect.


• 
  US-South Korea Trade - South Korea’s early May exports fell 2.4% Y/Y, led by a slump in shipments to the US amid ongoing tariff negotiations. April exports declined 0.7%, adj. for working days. Imports dropped 2.5%, resulting in a trade deficit of USD 300mln.


• 
  US-UK - UK Chancellor Rachel Reeves will meet US Treasury Secretary Scott Bessent this week at the G7 finance ministers’ meeting in Canada to finalise details of a trade deal aimed at reducing tariffs imposed by the Trump administration. It will be their first in-person discussion since announcing the deal outline.

TECH

• 
  Apple (AAPL) - Apple CEO Tim Cook met President Trump at the White House on Tuesday, days after Trump criticised Apple’s plans to shift iPhone production to India and urged more US-based manufacturing, Politico reports. Separately, Epic Games’ Fortnite has returned to Apple’s US App Store after more than four years, ending a prolonged legal dispute; Epic had sought a court order to compel Apple to allow Fortnite access despite a previous ruling in Epic’s favour; a US judge urged Apple to resolve the issue or face further court action.


• 
  Nvidia (NVDA), Broadcom (AVGO) - Nvidia CEO said it is open to collaborating with Broadcom on NVLink Fusion. Nvidia estimates the China AI market at USD 50bln next year; said its China market share fell from 95% to 50% since Biden’s term started, adding that US AI chip export controls to China were deemed a failure.


• 
  Microsoft (MSFT) - Chief Commercial Officer Judson Althoff sold 16K shares on May 19th for a total of USD 7.33mln.


• 
  Wolfspeed (WOLF) - Reportedly preparing for a Chapter 11 bankruptcy filing within weeks after rejecting multiple out-of-court debt restructuring proposals, according to the WSJ. The company has about USD 6.5bln in debt, including a UDS 575mln balloon payment due to convertible noteholders in May 2026.


• 
  AMD (AMD) - Gigabyte Technology (GGBYY) launched AMD Radeon RX9060XT and Radeon AI Pro R9700 graphics cards at Computex 2025. Acer (ACEYY) unveiled Nitro graphics cards powered by AMD and Intel (INTC) for DIY gaming enthusiasts.


• 
  SoftBank (SFTBY) - Securing a USD 15bln 1yr bridge loan to fund its AI investments; the loan involves 21 banks, with major contributions including USD 1.35bln from Mizuho, USD 1.25bln from SMBC, and USD 1bln from JPMorgan.


• 
  OpenAI - Open AI's biggest data centre secures USD 11.6bln in funding for an expansion, via WSJ; will use up to 50k Nvidia (NVDA) Blackwell chips per building, facility is expected to have eight buildings (currently two).


• 
  Uber Technologies (UBER) - Issued USD 1.2bln exchangeable senior bonds linked to its stake in self-driving truck firm Aurora Innovation. The zero-coupon deal included a 16.1% conversion premium, above the marketed range, highlighting why this financing route can be more attractive than a typical stake sale.


• 
  Palo Alto Networks (PANW) Q3 2025 (USD): Adj. EPS 0.80 (exp. 0.77), Revenue 2.29bln (exp. 2.28bln); RPO grew 19-20% Y/Y to 13.5bln and next-gen security ARR grew e4% Y/Y to 5.1bln, but both metrics fell short of expectations. Guidance: Q4 adj. EPS 0.87-0.89 (exp. 0.87), Q4 revenue 2.49-2.51bln (exp. 2.50bln), raised FY adj. EPS view to 3.26-3.28 (exp. 3.22), and narrowed FY revenue view to 9.17-9.19bln (exp. 9.17bln).


• 
  Keysight Technologies (KEYS) Q2 2025 (USD): Adj. EPS 1.70 (exp. 1.64), Revenue 1.31bln (exp. 1.28bln). Outlook: Q3 EPS 1.63-1.69 (exp. 1.69), Q3 revenue 1.305-1.325bln (exp. 1.30bln), Raised FY growth outlook to +5-7%, with exec citing strong execution, customer engagement, and a healthy opportunity pipeline despite macro uncertainty.


• 
  Infineon Technologies (IFNNY), Nvidia (NVDA) - Infineon will collaborate with Nvidia to develop high-voltage direct current power delivery chips for AI data centres, aiming to reduce energy losses from current alternating current distribution methods, Reuters reports.


• 
  Super Micro (SMCI) - CEO said it plans to expand its server production capacity in the US amid rapidly growing global AI demand, WSJ reports. The company sees significant growth opportunities in the US, Europe, and Japan driven by the accelerating AI market.


• 
  Shift4 Payments (FOUR) - Announced it's further extending its previously announced all-cash tender offer to purchase all of the outstanding shares of Global Blue Group Holding (GB).

CONSUMER DISCRETIONARY

• 
  Tesla (TSLA), Nvidia (NVDA), AMD (AMD) - Tesla CEO Musk plans to deploy 1mln Nvidia Blackwell chips at a new xAI facility and expects to buy "a lot" of next-gen GPUs from Nvidia and AMD. He said merging Tesla and xAI is possible with shareholder approval and noted plans to visit the White House regularly.


• 
  Tesla (TSLA), Uber (UBER) - Elon Musk said there is 'no need' for Tesla to buy Uber, as Tesla plans to launch an autonomous robotaxi fleet starting in Austin next month, Business Insider reports. Tesla owners may add their vehicles to the fleet to earn income. Musk expects the service to scale to 1,000 vehicles within months.


• 
  Toyota Motors (TM) - Unveiled a revamped RAV4, its first model to feature the Arene software platform. The sixth-generation SUV will offer hybrid and plug-in hybrid variants and is set to launch in North America, Japan and Europe by March 2026.


• 
  Ford (F) - Plans to allow Nissan (NSANY) to use part of its Kentucky battery plant due to slower EV demand, WSJ reports, citing people familiar with the plan. Nissan is seeking US-made batteries to cut tariff exposure amid financial struggles and job cuts.


• 
  Lowe's Companies Inc (LOW) Q1 2025 (USD): EPS 2.92 (exp. 2.88), Revenue 20.94bln (exp. 20.96bln); SSS: -1.7% (exp. -2.0%). Guidance: Maintained FY EPS view of 12.15-12.40 (exp. 12.25) and backed FY25 revenue view of 83.5-84.5bln (exp. 84.31bln); SSS seen at 0.0-+1.0% Y/Y. Commentary: Notes near-term uncertainty and housing market headwinds.SSS: -1.7% (exp. -2.0%).


• 
  TJX Companies Inc (TJX) Q1 2026 (USD): EPS 0.92 (exp. 0.9), Revenue 13.11bln (exp. 12.99bln), SSS +3.0% (exp. +3.0%); expects to repurchase 2-2.5bln of stock in FY26. Guidance: Q2 EPS 0.97-1.00 (exp. 1.03, Q2 outlook includes an incremental negative impact from tariff costs.), FY26 SSS +2-3% (exp. +3%), backed FY26 EPS view of 4.34-4.43 (exp. 4.51).


• 
  Toll Brothers (TOL) Q2 2025 (USD): Adj. EPS 3.50 (exp. 2.86), Revenue 2.74bln (exp. 2.49bln). Outlook: Q3 deliveries 2.8-3k units with ASP of 965k–985k, reaffirmed FY25 guidance, which has FY25 deliveries seen at 11.2-11.6k units with an ASP of 945–965k.


• 
  VF Corp (VFC) Q4 2025 (USD) EPS -0.13 (exp. -0.14), Revenue 2.14bln (exp. 2.16bln); sees Q1 revenue down 5-3% Y/Y.


• 
  Kraft Heinz (KHC), Berkshire Hathaway (BRK.B) - Kraft Hezin said it was looking at strategic transactions as demand for its pricey snacks and ready-to-eat meals weakens in an uncertain economic environment, Reuters reports. Berkshire Hathaway will no longer hold Board seats, leading to the departure of Timothy Kenesey and Alicia Knapp, reducing the Board to 10 members. CEO Carlos Abrams-Rivera reaffirmed the focus on profitable long-term growth and iconic brands.


• 
  Nestle SA (NSRGY) - CEO said the company is not selling its water business, but may sell a stake. Also noted US market pressure and economic uncertainty affecting consumers. CEO said Nestle is regaining US market share, and will protect margins cautiously on Nespresso pricing. He also said that he was open to leading the consumer giant beyond age 65.


• 
  Modine Manufacturing (MOD) Q4 2025 (USD): Adj. EPS 1.12 (exp. 0.95), Revenue 647.2mln (exp. 631.5mln). CEO highlighted record revenue and EBITDA for FY25, driven by data centre growth and margin improvement despite vehicle market challenges. Outlook: FY26 adj. EBITDA 420–450mln (+7-15%), net sales expected up +2-10%, reflecting tariff uncertainties and broader market risks.


• 
  Carter's (CRI) - Cut its dividend to USD 0.25/shr from 0.80/shr, noting the current dividend is misaligned with the current level of profitability, especially against the backdrop of a challenging market environment and the possibility the company may incur significantly higher product costs as the result of the new proposed tariffs on products imported into the US.


• 
  XPeng Inc (XPEV) Q1 2025 (CNY): EPS -0.45 (exp. -1.15), Revenue 15.8bln (exp. 15.42bln). Guidance: Q2 revenue 17.5-18.7bln (Exp. 16.85bln), expects Q2 deliveries of vehicles to be 102-108k, a Y/Y increase of over 200%. expects to achieve mass production of vehicles with Level 3 autonomous driving features in China by the end of 2025.


• 
  BYD (BYDDY) - BYD Europe said by the end of 2025, will have more than 1k sales locations in Europe and this year will enter 12 new markets in Europe.


• 
  Marks & Spencer (MAKSY) FY (GBP): Adj. operating profit 984.5mln (exp. 951.3mln), Revenue 13.82bln (exp. 13.76bln), PBT 875.5mln (exp. 831.8mln). It flagged a cyber incident impact of around 300mln on its 2025/26 profit. It also raised FY dividend by 20% to 0.036 and plans 600-650mln in capex.

HEALTHCARE

• 
  UnitedHealth Group (UNH) - Secretly paid nursing homes to reduce hospital transfers for ailing residents, part of a series of cost-cutting efforts that have saved millions, but at times risked residents' health, a Guardian investigation found. UNH responded to the article, "The US DoJ investigated these allegations, interviewed witnesses, and obtained thousands of documents that demonstrated significant factual inaccuracies in allegations". Note, that the DoJ declined to pursue the matter, after reviewing all the evidence during its multi-year investigation. UNH was downgraded to 'Reduce' from 'Hold' at HSBC with a USD 270 PT (prev. 490). The firm cited the company's CEO change, pulled 2025 guidance, and alleged Medicare fraud behind the downgrade and now sees risk to UnitedHealth's earnings growth along with a policy overhang; the risks outweigh the rewards at this juncture.


• 
  Medtronic (MDT) Q4 2025 (USD): Adj. EPS 1.62 (exp. 1.58), Revenue 8.9bln (exp. 8.81bln); raised the quarterly dividend to 0.71/shr (prev. 0.70). Guidance: FY26 EPS 5,50-5.60 (exp. 5.83), FY26 revenue 35.2-35.3bln (exp. 35.02bln), FY26 gross impact is ~ 700-950mln from tariffs. Announced its intent to separate its diabetes business into a standalone firm; separation is expected to be completed within 18 months through a series of capital markets transactions, with a preferred path of an initial public offering and subsequent split-off.


• 
  Roche (RHHBY) - FDA advisers voted 8-1 that Roche needs more US patient data for its blood cancer drug before expanding its use, as only 9% of trial participants were American. Roche said it will continue working with the FDA on a regulatory path forward.


• 
  Johnson & Johnson (JNJ) - JNJ's Darzalex Faspro received a 6-2 positive vote from the FDA Oncologic Drugs Advisory Committee for treating adult patients with high-risk smouldering multiple myeloma.

COMMUNICATIONS

• 
  Alphabet (GOOG), Kerring (PPRUY) - Google is partnering with Warby Parker and luxury fashion house Kering to develop AI-powered smart glasses, WSJ reports. It marks Alphabet’s renewed effort to enter the smart glasses market after a previous attempt was halted partly due to privacy concerns.


• 
  Take-Two Interactive (TTWO) - Announced a USD 1bln common stock offering, selling 4.75mln shares at USD 225.00, the low end of its USD 225.00–232.00 indicated range. Proceeds will be used for general corporate purposes, including debt repayment and acquisitions.


• 
  Baidu (BIDU) Q1 2025 (USD): EPS 2.55 (exp. 1.96), Revenue 4.47bln (exp. 4.30bln), FCF -476mln (prev. +6.34bln Y/Y); executive reported that AI cloud revenue in Q1 was CNY 6.7bln, +42%.


• 
  NetEase (NTES) - China gaming regulator grants license for 130 domestic and 14 imported online games in May; Includes video games from NetEase.

FINANCIALS

• 
  US Deposit Insurance - The US deposit insurance fund is set to reach its legal reserve ratio target of 1.35% by the end of 2025, about three years early. At the end of 2024, the fund balance was USD 137.1bln with a 1.28% reserve ratio, managed by the FDIC via bank assessments.


• 
  Charles Schwab (SCHW) - Co-chair Walter Bettinger Richard Fain sold 191.5K shares on May 19th for a total of USD 17.05mln.


• 
  TPG Inc. (TPG) - Announced that DB Holdings I, controlled by the estate of David Bonderman, will offer 21mln Class A shares in a secondary offering priced at USD 47.25, within the USD 46.75-48.25 indicative range. Proceeds go solely to the Bonderman Estate to meet estate obligations; TPG will not receive proceeds.

ENERGY

• 
  ConocoPhillips (COP) - Guangdong Pearl River Investment Management Group said it has signed a 15-year sales and purchase agreement to buy LNG from ConocoPhillips; the volume of LNG covered under the agreement was not disclosed.


• 
  EU-Russia - The EU is expected to propose a quota to enforce a bloc-wide ban on Russian gas imports by the end of 2027. The measure would set an import quota of zero, allowing companies to invoke force majeure and terminate long-term contracts with Russian suppliers, Bloomberg reports.


• 
  European Energy - Goldman Sachs warned that Europe can secure enough LNG to refill storage for next winter at current prices, but if prices fall further, other global buyers could compete for supply. Prices must stay at or above current levels to suppress LNG demand outside Europe.

MATERIALS

• 
  China Critical Minerals Smuggling - Chinese authorities have questioned executives from leading metals merchants and producers amid a crackdown on critical-minerals smuggling, Bloomberg reports. The investigation targets companies producing and trading minor and strategic metals used in military and high-tech applications.


• 
  China Battery Materials - The Commerce Department has moved to impose anti-subsidy duties on imports of key battery materials from China, finding that these materials—such as graphite and silicon used in electric vehicle batteries—have been unfairly subsidised.


• 
  Rio Tinto (RIO) - Defended Australia’s Pilbara iron ore hub after Fortescue founder Andrew Forrest warned its prospects are at risk without more green investment; Forrest noted China’s potential shift from coal-powered blast furnaces could favour Brazil and Africa, which have higher grade ore better suited for greener steel production. Rio Tinto reaffirmed its long-term commitment to the Pilbara, highlighting an USD 18bln Brockman mine development, and efforts to reduce carbon emissions and improve efficiency amid the shift to greener steel production.

INDUSTRIALS

• 
  Northrop Grumman (NOC) - Raised its quarterly dividend 12% to USD 2.31/shr.


• 
  General Dynamics (GD) - Secured a USD 198.96mln Navy contract for USS America maintenance and modernisation.


• 
  ZTO Express (ZTO) Q1 (RMB): EPS 2.71 (vs 2.68 Y/Y), Revenue 10.891bln (vs 9.96bln Y/Y). Adj. Q1 parcel volume +19.1% to 8.54bln. CEO highlights strong service quality, 46% growth in retail volume, and focus on profitable growth amid fierce competition. Reaffirmed FY25 parcel volume at 40.8-42.2bln (+20-24% Y/Y).

CONSUMER STAPLES

• 
  Target Corp (TGT) Q1 2025 (USD): Adj. EPS 1.30 (exp. 1.69), Revenue 23.84bln (exp. 24.34bln); SSS: -3.8% (exp. -1.3%). The company has established an acceleration office led by COO Michael Fiddelke, to enable faster decisions and execution of its core strategic initiatives to support a return to growth. Guidance: Cut FY25 adj.EPS view to 7.00-9.00 (exp. 8.85) with FY revenue seen declining low single digits (prev. saw growth). Commentary: It does not say whether it will raise prices due to tariffs; supplier negotiations, orders, and sourcing can impact tariff exposure.


• 
  Home Depot (HD) - Upgraded at Stifel to 'Buy' from 'Hold' with a USD 425 PT (prev. 405) The firm is surprised the shares didn't rally yesterday post earnings, with accelerating comparable sales through fiscal Q1 "the key positive takeaway," with April US comparable sales up nearly 2.5%. This performance demonstrates Home Depot's "idiosyncratic advantages," suggesting upside potential to its reiterated fiscal year guidance.

UTILITIES

• 
  Southwest Gas (SWX), Centuri (CTRI) - Southwest Gas is offering 9mln existing shares of Centuri common stock in a secondary public offering, with underwriters having a 30-day option to buy an additional 1.35mln shares. Icahn-affiliated entities will concurrently purchase USD 50mln in Centuri shares in a private placement at the offering price.

GLOBAL RECAP

• 
  UK INFLATION: UK headline CPI rose to 3.5% Y/Y in April (exp. 3.3%, prev. 2.6%; the BoE had forecast 3.4%); services CPI jumped to 5.4% Y/Y (exp. 4.8%, prev. 4.7%), while core CPI rose to 3.8% Y/Y (exp. 3.6%, prev. 3.4%). The UK stats office said that significant rises in household bills, including gas, electricity, water, sewerage, and vehicle excise duty, pushed inflation to its highest level since early last year; this was partly offset by falling motor fuel prices and heavy discounts on children’s clothing and women’s footwear. Analysts said the data does little to change the calculus around its June decision, with no move expected at that confab anyway, but will likely lessen the odds of a move in August. Still, this argument could be somewhat clouded if price pressures drive a stagflationary environment within the UK, a concern that seemingly factored into the GBP reaction. In wake of the data, UK rate futures were little changed, foreseeing 35bps of cuts through the end of this year (vs around 36bps before the release).

21 May 2025 - 13:57- MetalsData- Source: Newsquawk