Market Snapshot

Morning Note

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Trading Observations

  • Futures soft to start with Ukraine/Russia strikes and triffs in the short-term headlines again China push/pull escalating https://tinyurl.com/594nvj8f [tinyurl.com]

  • Though if Trump and Xi do actually talk this week things calm down?

  • OPEC raised production by 411k barrels (less than talked about) so oil up

  • Powell speaks 1:00ET today, there is a rumor going around he will resign today (unlikely in my view) but the belief is, were that to happen, market would rally

  • ISM manuf pre-mkt with Jobs Friday

  • Market intermediate term overbought https://tinyurl.com/mpcw4mkb [tinyurl.com]

  • CTAs potentially a headwind https://tinyurl.com/39fsbjtj [tinyurl.com]

  • 5840 support, hopefully regain 5900 quickly vs. 5940/6000 resistance

  • Hedge funds bought Tech last week at the fastest pace in at least a decade https://tinyurl.com/mvjtu9yp [tinyurl.com]

  • Industrials close to MAJOR breakout, If can push thru, hard to be bearish

  • Small cap positioning https://tinyurl.com/3hsxmx23 [tinyurl.com] 

  • European outperformance topped? https://tinyurl.com/57edppvs [tinyurl.com]

Futures

DOW -118

S&P -20

Nasdaq -103

Charts/Sentiment

CNN Fear/Greed Index

U.S. 10 Year Treasury

Gold

Bitcoin

Financials / Consumer / Healthcare

JPM – Says retirement is “several years away”.

Macau gaming revenue up 5% for May driving casino stocks higher.

FI – Fiserv initiated buy at Truist.

XYZ – Rated new sell at Truist, down 2%.

V, MA – Rated new buy at Truist.

BPMC up 26% and VERA up 70% in healthcare land. Sanofi is buying BPMC and VERA announced new Phase 3 drug endpoints met a blood drug.

DKNG, FLUT – Down 6% on an Illinois increase to the Sports Betting Tax.

BF/B – Brown Forman up 3% after naming new distributors in 13 markets, adding 7 brand new distributors.

PYPL: -1.7% neg initiation @ Truist - "models the company's gross profit growth below the Street due mainly to competitive pressure in its branded checkout business from Apple Pay and Shop Pay as well as a lower level of float income as interest rates decline"

XYZ: -2.1% negative initiation at Truist - "believes this is a "really difficult stock to own late cycle" as its two business segments are sensitive to the macro environment. In addition, Block is leaning into growth of its lending products in order to reaccelerate growth throughout 2025, which may lead to higher credit losses and a tough grow-over in 2026"

HIMS to cut ~4% of its workforce in response to US ban on weight-loss drug copies

Technology

Anthropic: is generating ARR of ~$3B in May, a significant jump from $2B in Mar and $1B in Dec (Reuters)

APP: Friday saw the highest close since Feb 24th ... regaining lost momentum; S&P add hype building (again). Friday @ 515pm ET

AMD – WF Positive

GOOGL: -1.5% Samsung nearing deal to invest in Perplexity (Bloomberg) ... deal would allow Samsung to reduce its reliance on Google and work with a mix of AI developers

GOOGL: Goldman note from weekend - "detailed financial analysis of both Search and YouTube (ads + a growing contribution from subscription rev within YouTube’s monetization mix) – with GS landing at a ~$475B valuation for YouTube alone .. implying “Google Search & Other” is trading at ~5.3x EV/’26 EBIT at today’s prices"

GOOGL vs. TSLA – while Tesla’s autonomous driving ambitions get a lot of attention, Waymo is the dominant player in the driverless-taxi market, with a parabolic growth trajectory - WSJ

SNOW: Snowflake Summit kicks off ... keynote @ 8pm ET - Altman and S Ramaswamy

Industrials 

Drone makers should outperform today.  Politico reporting that the White House is set to issue Executive Orders boosting US drone-makers over China.  KTOS called out in X post below.  Thoughts from research – “AVAV will also benefit. Cheaper drones similar to the Russian operation this weekend. Cheaper, short-range drones and the deal with BlueHalo (closed 5/1/25) gives them significant counter unmanned solutions. KTOS definitely a beneficiary and even DRS (short range radars).”

LUV - announced on Monday that it is in talks with China Airlines Group to create an interline partnership in early 2026. The airline company expects to start selling published connections with China Airlines later this year.

Metal and mining stocks mixed in reaction to Trump comments at Friday rally in PA, to double steel and aluminum import tariffs to 50% from 25% effective 4-Jun-25. CLF +32%, NUE +14%, STLD +14%, CENX +13%, MP +5%, TECK +3%, FCX +3%. ASTL -12%, MT -2%, AA -2%

Nucor (NUE) Raised to Outperform at BMO; PT $145

Rollins (ROL) Raised to Buy at Jefferies; PT $65

Transports – Goldman pivots to Trucking, favoring LTLs and TLs on bottoming fundamentals, operational torque, and mid-cycle earnings power. Moved to Neutral view on Railroads, post outperformance.

  • ARCB, KNX, ODFL, SAIA, SNDR upgraded to buy from neutral

  • WERN upgraded to buy from sell

  • CP, CNX, JBHT, NSC, UNP downgraded to neutral from buy

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