Daily US Equity Opening News - US warns against Huawei chips; Trump to rescind Biden-era chip export curbs; Foxconn profits surge

TODAY'S AGENDA:

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  US INDEX FUTURES: ES +0.2%, NQ +0.3%, YM +0.2%, RTY -0.1%.


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  DAY AHEAD: The data releases docket is light today, with an absence of Tier 1 releases. The EIA will report weekly energy inventories; for reference, API data showed headline crude stocks posting a surprise build of +4.3mln bbls (exp. -1.1mln), Cushing stocks drew down by -0.9mln bbls; distillate inventories saw a surprise draw of -3.7mln bbls (exp. 0.1mln), and gasoline stocks saw a larger than expected draw of -1.4mln bbls (exp. -0.6mln). On the speakers' slate, remarks are due today from Fed's Jefferson (voter) and Daly (2027 voter). Notable US companies reporting today after the US cash close include CSCO and CRWV.


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  BROKER MOVES: KKR upgraded at Morgan Stanley, CBOE downgraded; ABBV downgraded at Citi. To see the full list, please click here.
  


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  MAJOR MORNING MOVES RECAP: AEO, HNHPF, TSLA, WMT, GSK, NVO/SEPN, ABBV, PVH. To see the full list, click here.
  


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

EQUITY NEWS:

MACRO:

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  GOP Tax Bill - House Republicans have proposed a tax bill that would end duty-free imports of cheap foreign goods, targeting the "de minimis" exemption for items under USD 800, which has benefited global companies. The move aligns with President Trump's executive order from May 2nd, impacting Chinese imports specifically.


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  Fed - President Trump again urged the Fed to lower interest rates, citing a softer-than-expected inflation report for April. Trump highlighted falling prices in gasoline, energy, and groceries, and said the Fed should follow the actions of Europe and China in reducing rates.


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  US Debt Ceiling - Bloomberg notes that investors are adjusting their positions on Treasury bills maturing in August after Treasury Secretary Bessent warned that the US could run out of borrowing authority if the debt ceiling is not raised or suspended by then. As a result, bills maturing in late August are yielding 4.38%, reflecting growing concerns, the report says.


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  Ukraine Minerals Deal - Ukraine and the US have signed additional agreements on a natural resources deal, advancing a key profit-sharing arrangement aimed at securing US investment opportunities in Ukraine. This deal is vital for maintaining military aid for Kyiv, per US President Trump’s demands.

TECH

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  Hon Hai Precision Industry (HNHPF) - Apple (AAPL) supplier Foxconn reported Q1 net profit rose +91% Y/Y to TWD 42.12bln (exp. 37.8bln), driven by strong AI server demand. Outlook: Q2 expectations include flat Y/Y revenue for smart consumer electronics (prev. saw 'flat'), strong growth for cloud and networking products (prev. saw 'strong growth'), and flat Y/Y revenue for computing products (prev. saw 'slight decline'). Components and other products are expected to see significant growth (prev. saw 'strong growth'). Anticipates high double-digit Q/Q and Y/Y growth for AI servers in Q2. For 2025, it expects significant Y/Y revenue growth (prev. saw 'strong growth'). Exec said that market demand was still strong for servers, but added that it has had a more cautious outlook due to tariffs, warning that the impact on supply chains would not be small.


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  Apple (AAPL) - Chinese e-commerce platforms are offering discounts of up to USD 351 on Apple's latest iPhone 16 models, Reuters checks showed. JD.com is selling the iPhone 16 Pro with storage of 128GB at 5,469 yuan, down 2,530 yuan from Apple's official price of 7,999 yuan.


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  AI Chip Curbs - The Trump administration plans to rescind Biden-era AI chip export regulations, which had faced opposition from companies like Nvidia (NVDA) and allies. The move, announced by the Commerce Department, will replace Biden's AI diffusion rule with a new approach, potentially involving individual country deals.


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  Nvidia (NVDA), AMD (AMD) - President Donald Trump's visit to the Middle East has opened the door for increased AI collaboration, with Saudi Arabia and the UAE set to gain greater access to advanced AI chips from Nvidia and AMD, Bloomberg notes. It comes as US tech companies plan to invest billions in the region’s AI sector under new agreements expected soon.


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  Nvidia (NVDA) - Nvidia CEO Jensen Huang's compensation rose +46% to nearly USD 50mln in FY25, driven by a surge in AI spending and the value of his stock awards, Bloomberg reports.


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  Sony Group (SONY) - Reported a 4.6% rise in Q4 net profit to JPY 197.73bln (exp. 153.6bln), driven by strong performance in its music and movie divisions; FY24/25 net profit rose +17.6% Y/Y to 1.14tln. Will submit a resolution for the execution of the spin-off to the board in early September 2025, while it plans to distribute slightly more than 80% of Sony Financial Group shares to shareholders through dividends in kind at a one-to-one ratio for SFGI and Sony shares. Said it would buy back up to 1.66% of shares for JPY 250bln. Guidance: Projects lower net profit for the current fiscal year, citing the impact of US tariffs as a contributing factor; sees FY26 operating profit JPY 1.28tln (exp. 1.5tln), hindered by a JPY 100bln impact from US tariffs.


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  Samsung Electronics (SSNLF) - Agreed to acquire FlaktGroup Holding for EUR 1.5bln, marking its largest overseas takeover in eight years. The deal, which involves purchasing all shares from Triton Investments Advisers, is expected to close in 2025.


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  Huawei - The US Commerce Department has clarified that using Huawei’s Ascend chips anywhere violates US export controls, FT reports. The chips likely contain US technology, raising concerns over Huawei’s advancing AI capabilities. The US has become increasingly wary of Huawei’s competition with Nvidia (NVDA) and its impact on global AI hardware markets.


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  PagerDuty (PD), Amazon (AMZN) - PagerDuty renewed its global strategic collaboration agreement with Amazon's AWS to integrate generative AI services into its Operations Cloud, enhancing IT issue detection and remediation. This extends their decade-long partnership.


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  Akamai Technologies (AKAM) - Announced a proposed offering of USD 1.35bln in convertible senior notes due 2033, subject to market conditions.


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  Aurora Innovation (AUR), Uber Technologies (UBER) - Uber announced a USD 1.0bln offering of exchangeable senior notes due 2028, with each unit of reference property consisting of one Aurora Innovation share. Proceeds will be used for general corporate purposes, including potential strategic investments.


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  Pony AI (PONY) - Said to confidentially file for an HK listing, according to Bloomberg.

COMMUNICATIONS

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  Alphabet (GOOG) - Saudi venture capital firm STV has launched a USD 100mln AI fund, with backing from Google. The fund will focus on early-stage AI startups in the Middle East and North Africa, particularly those working on application-layer AI and infrastructure development. The exact contribution from Google was not disclosed. Separately, Google unveiled a major update to its Android operating system, introducing a new design language called Material 3 Expressive; the redesign will affect both Android itself and Google’s apps like Gmail, ahead of Apple’s (AAPL) anticipated iPhone software preview.


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  Meta Platforms (META) - Austrian advocacy group NOYB said it would seek an injunction against Meta that could lead to billion euro damages claims if Meta goes ahead with plans to use Europeans' personal data to train its artificial intelligence models.


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  Warner Bros. Discovery (WBD) - WBD's CNN plans to launch a new subscription streaming service this autumn, featuring live and on-demand content, Deadline reports. It would follow its failed CNN+ effort in 2022. The move aims to expand its digital reach beyond Max and tie in with its revamped CNN.com paywall offering.


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  Verizon (VZ) - Said they believe that churn will normalise in H2 2025.


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  Tencent (TCEHY) Q1 (CNH) Revenue 180.02bln (exp. 175.6bln), Op. Profit 57.57bln (exp. 59.2bln), Adj. Net Income 61.33bln (exp. 59.68bln)


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  Telefonica SA (TEF) - Reported a Q1 net loss of EUR 1.3bln (exp. -1.32bln) due to write-downs from the sale of units in Argentina and Peru; excluding these, profit was EUR 427mln. Telefonica maintained its FY guidance.

CONSUMER DISCRETIONARY

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  Tesla (TSLA) - Tesla’s board has formed a special two-person committee to consider a new stock option package for Elon Musk, amid legal uncertainty over his voided 2018 award, FT reports. The new deal may be proposed ahead of a delayed shareholder meeting; no structure is final. Musk has threatened to leave without greater control. Meanwhile, Tesla plans to begin shipping components from China to the US for producing the Cybercab and Semi trucks at the end of this month, Reuters reports, citing a person with direct knowledge.


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  Ford (F) - Recalling 273k vehicles due to loss of brake function, via NHTSA.


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  Porsche SE (POAHY) Q1 2025 (EUR): Adj. group result after tax fell to 484mln (vs 1.06bln Y/Y); net debt stood at 5.26bln. FY adj. group result outlook seen at 2.4-4.4bln, with net debt expected at 4.9-5.4bln.


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  Baidu (BIDU) - Plans to trial its Apollo Go driverless ride-hailing service in Europe, beginning with Switzerland through discussions with PostAuto, WSJ reports. The company also intends to expand to Turkey. Apollo Go currently operates in multiple Chinese cities, with over 400 vehicles in Wuhan.


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  Burberry (BURBY) FY (GBP): Adj. operating profit 26mln (exp. 3.06mln), Revenue 2.46bln (exp. 2.45bln). It flagged macro uncertainty and plans to cut costs, potentially affecting 1,700 roles, as it aims for 60mln in cost savings by FY27. CEO said Q4 was "choppy" for the US consumer


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  Walmart (WMT) - The CFPB has dropped its lawsuit against Walmart and its fintech partner, marking another case abandoned under President Trump's administration. It follows a series of dismissals, including actions against Capital One (COF) and JPMorgan (JPM).


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  Starbucks (SBUX) - Hundreds of Starbucks employees have walked out at over 50 US stores to protest a new dress code, with more strikes expected. Starbucks Workers United, representing around 570 locations, reported minimal impact on national operations, with most stores continuing to serve customers as usual.


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  Airbnb (ABNB) - Launched a revamped app offering 10 new categories of services, including personal chefs, trainers, and hair stylists, expanding beyond vacation rentals. The company also relaunched its Experiences product, allowing users to book in-home services like catering, spa treatments, and personal training, even without a stay booked.


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  American Eagle Outfitters (AEO) Q1 2025 (USD): Reported preliminary results, Sees Q1 revenue at 1.1bln (exp. 1.08bln), Q1 SSS down 3.0% (exp. -3.0%). Expects adj. operating loss of USD 68mln due to higher promotions, and an USD 75mln inventory charge; GAAP operating loss seen at USD 85mln. Withdrew FY25 guidance citing macro uncertainty.


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  L'Oreal (LRLCY) - Raised USD 1bln in its first US corporate bond market deal, offering a 10-year note with a yield 0.625 percentage points above comparable Treasuries.

FINANCIALS

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  JPMorgan (JPM) - Chief Risk Officer Ashley Bacon sold 5,202 shares on May 13th at USD 262.5252/shr. CEO of Asset and Wealth Management Mary Erdoes sold 14,055 shares on May 13th at USD 262.5358/shr.


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  Carlyle Group (CG) - Seeks a USD 1.2bln syndicated loan to refinance debt from its acquisition of Hexaware Technologies.


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  Brookfield Asset Management (BAM) - Brookfield Properties has revived a USD 2.4bln debt package to refinance the Ala Moana Centre in Honolulu, a deal it previously halted due to market disruptions from tariffs.


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  KKR (KKR), Cboe (CBOE) - KKR was upgraded at Morgan Stanley to 'Overweight' from 'Equal Weight' with a USD 150 PT (prev. 120). The firm said KKR offers a way to play the market when anticipating a capital markets recovery. Meanwhile, Cboe was downgraded at Morgan Stanley to 'Underweight' from 'Overweight' with a USD 215 PT (prev. 256). MS note the "sooner and better than expected" tariff de-escalation with China reduces tail risk and volatility, which could limit upside to index options volumes on Cboe's exchange; now sees a slower volume growth outlook with more downside risk to estimates for the company.


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  Paypal (PYPL) - Partnered with Perplexity for in-chat shipping as the AI race heats up, via CNBC.


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  Aviva (AVVIY), Direct Line (DIISY) - Aviva’s proposed GBP 3.7bln acquisition of Direct Line faces a UK CMA Phase 1 inquiry. The regulator will assess the deal’s impact on competition in the motor insurance market, with a decision deadline set for July 10th. The merger would create the UK’s largest motor insurer.


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  Commonwealth Bank of Australia (CMWAY) - Profit increased in Q3, driven by growth in business lending. Transaction accounts rose 7%, and the division expanded faster than the broader market.


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  ABN Amro (AAVMY) - Q1 net profit fell 8% to EUR 619mln (exp. 586mln), supported by strong fee income despite margin pressure in mortgages and corporate loans; net interest income missed expectations at EUR 1.56bln. CEO stressed cost discipline and is maintaining its FY cost target of EUR 5.3bln.


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  Robinhood (HOOD) - Reported 25.9mln funded customers and USD 232bln in total platform assets at the end of April. Net deposits were USD 6.8bln, a +37% annualised growth rate vs March. Equity trading volumes were USD 157.8bln, while options and crypto trading volumes were 167.5mln contracts and USD 8.6bln, respectively. Separately, Chief Brokerage Officer Steven Quirk sold 24.3K shares on May 9th for a total USD 1.34mln.


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  B. Riley Financial (RILY) - Missed another deadline for filing its quarterly results with the SEC, citing ongoing work on its overdue 2024 FY report. The delay follows deteriorating investments, which have impacted the company’s earnings, holdings, and stock performance, BBG writes.


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  Nu Holdings (NU) Q1 2025 (USD): EPS 0.11 (exp. 0.13), Revenue 3.25bln (exp. 3.23bln). Revenue was driven by a 62% increase in the interest-earning portfolio. Added 4.3mln customers in the quarter, reaching a total of 118.6mln. Sees significant market share gains, particularly in Brazil.

ENERGY

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  Venture Global (VG) - Edison said it received the first cargo of LNG from Venture Global, adding it would continue litigation over delays in its delivery. A cargo of 165,000 cubic metres of LNG from Venture Global's Calcasieu Pass export facility in Louisiana arrived at the Italian port of Piombino ready to be regasified and fed into the national network, Edison said.


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  Oil Prices - Goldman Sachs analysts noted that US President Trump seems to prefer oil prices between USD 40-50/bbl, based on an analysis of his social media posts. GS observed that his activity regarding oil prices tends to decrease when WTI prices fall within this range.


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  Canada Energy - Canada PM Mark Carney said he is open to modifying environmental regulations introduced by his predecessor to support investment in major projects in Canada, including oil and gas pipelines, Bloomberg reports.


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  US Energy Tax Credits - Key Senate Republicans are pushing back against a House plan to cut over USD 500bln in energy tax credits from Biden's climate law, aiming to soften the impact on emerging technologies. It follows the House's proposal to fund an extension of Trump's tax cuts via these reductions.


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  Energy Inventories - API data reportedly showed headline crude stocks posting a surprise build of +4.3mln bbls (exp. -1.1mln), Cushing stocks drew down by -0.9mln bbls; distillate inventories saw a surprise draw of -3.7mln bbls (exp. 0.1mln), and gasoline stocks saw a larger than expected draw of -1.4mln bbls (exp. -0.6mln).


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  Petrobras (PBR) - Petrobras CEO emphasised cost-cutting measures to navigate the current low oil price environment, focusing on replenishing reserves and boosting deep-water production. CEO noted that while higher prices allow for expansion, lower prices necessitate a more cautious approach.


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  TXO Partners (TXO) - Will acquire producing assets in the Elm Coulee field from White Rock Energy for USD 350mln, with USD 70mln deferred, for a total deal value of USD 475mln including North Hudson's 30% stake. The deal adds around 6,800 BOE/D and 25,000 MBOE in proven developed reserves. The deal is expected to close in Q3 2025. TXO Partners also announced a public offering of USD 175mln of shares, with proceeds intended to fund part of its acquisition; if the acquisition does not close, proceeds will be used to repay debt and for general purposes.


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  New Fortress Energy (NFE) - Said on Tuesday it would push its quarterly filing with the US securities regulator due to a delay in completing the previously announced sale of its business in Jamaica.

INDUSTRIALS

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  Southwest Airlines (LUV) - Filed with the US Transportation Department for permission to expand its international network, seeking authority to fly to countries with which the US has an Open Skies agreement. Approval could enable routes to Europe, the UK, Latin America, and parts of Asia and Africa.


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  United Airlines (UAL) - Anticipates continued flight reductions at Newark airport through summer and into fall due to air traffic control issues. The airline hopes staffing improvements at the FAA will allow for more flights, with a focus on ensuring on-time departures.


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  Rocket Lab (RKLB) - Announced its record turnaround of two Earth return missions in two months with its latest successful mission and Pioneer spacecraft for Varda Space Industries.


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  Lockheed Martin (LMT) - CEO said they are looking forward to strengthening Saudi Arabia's defences.


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  Hapag-Lloyd (HPGLY) Q1 2025 (USD): Said Group profit rose significantly Y/Y; net income 469mln, revenue 5.2bln in its liner shipping. EBITDA margin was 21% and EBIT margin was 9%. Terminal & infrastructure EBITDA was 36mln. Outlook/commentary: FY outlook was maintained; sees EBITDA at 2.5-4bln, EBIT 0.00-1.5bln. Exec said the company has seen an increase in orders for China-US shipments by more than 50% W/W; demand is considerably higher compared with the time before US tariffs.


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  CATL (300750 CH/3750 HK) - Set to price shares at HKD 263 each in its Hong Kong listing, raising at least USD 4bln, according to sources cited by Reuters. The offering size is set to increase by 17.7mln shares. Investors bidding below HKD 263 risk missing allocations, Reuters said. CATL has not yet commented on the pricing.

HEALTHCARE

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  AbbVie (ABBV) - Downgraded at Citi to 'Neutral' from 'Buy'. The firm cites AbbVie's "comparatively lighter late-stage" pipeline versus its biopharma peers and a higher perceived policy risk than peers for the downgrade.


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  GSK (GSK), Novartis Pharma (NVS) - GSK will acquire efimosfermin for USD 1.2bln upfront, with potential milestone payments of up to USD 800mln. GSK will also assume responsibility for milestone payments and tiered royalties owed to Novartis Pharma related to the asset.


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  Exelixis (EXEL) Q1 2025 (USD): Adj. EPS 0.62 (exp. 0.44), Revenue 555.4mln (exp. 500.96mln). Strong CABOMETYX demand drove performance. Outlook: Raised FY25 revenue view to 2.25-2.35bln (prev. saw 2.15-2.25bln; exp. 2.25bln), following regulatory approval and launch in advanced neuroendocrine tumours. Has begun the dose-escalation stage of its first-in-human Phase 1 trial of XB628, a first-in-class bispecific antibody NK cell engager for advanced solid tumours, developed in collaboration with Invenra.


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  Novo Nordisk (NVO), Septerna (SEPN) - To collaborate on oral small molecular modules; deal worth up to USD 2.2bln for Septerna


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  GRAIL (GRAL) Q1 2025 (USD): EPS -3.10 (exp. -3.80), Revenue 31.8mln (exp. 35.2mln). Completed over 37,000 Galleri tests in Q1; ended quarter with 677.9mln in cash and equivalents. The focus remains on expanding access to Galleri and improving cost efficiency.


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  Alcon (ALC) Q1 2025 (USD): EPS 0.73 (exp. 0.76), Revenue 2.45bln (exp. 2.52bln). Outlook: Cut FY25 EPS view to 3.05-3.15 (exp. 3.24, prev. 3.15-3.25) and raised FY25 revenue view to 10.40-10.50bln (exp. 10.43bln, prev. 10.2-10.4bln).


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  Pifzer (PFE) - The European Commission didn't provide credible reasons for rejecting a New York Times request to hand over text messages between its president and Pfizer's CEO related to COVID-19 vaccine contracts, a court ruled.

CONSUMER STAPLES

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  Tyson Foods (TSN) - CEO said "I think chicken supply will be in short supply for a bit" amid strong demand and industry production limits.


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  Imperial Brands (IMBBY) - Reported H1 EBIT of GBP 1.456bln, and said it's on track to deliver FY results in line with guidance. Confirmed CEO Stefan Bomhard will retire; Lukas Paravicini has been appointed as the new CEO, while Therese Esperdy will remain chair. It backed its medium-term outlook provided in its March 2030 strategy.


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  Kraft Heinz (KHC) - Investing USD 3bln in upgrading its 30 US factories

MATERIALS

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  Nucor Corporation (NUE) - Announced a cybersecurity incident involving unauthorized third-party access to certain information technology systems used by the company. Since detection, Nucor began promptly taking steps to contain and respond to the incident, including activating its incident response plan, proactively taking potentially affected systems offline and implementing other containment, remediation, or recovery measures.


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  Brenntag (BNTGY) Q1 2025 (EUR): EBITA rose to EUR 264.3mln (exp. 275.9mln). CEO cited ongoing geopolitical and economic uncertainty. Outlook: Sees FY EBITA at the lower end of its 1.1-1.3bln range (exp. 1.17bln). Said tariff developments are being closely monitored with mitigation plans in place.

14 May 2025 - 13:53- Data- Source: Newsquawk