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Thursday, May 15

Noteworthy macro moves today: Oil (WTI) -1.8%. Noteworthy US mega-cap moves today: UnitedHealth Group Inc (UNH) -7.2%. Exxon Mobil Corp (XOM) -2.0%. Meta Platforms Inc (META) -1.5%. 

Recent economic data releases have shown mixed results, impacting market sentiment. In the United States, core producer prices unexpectedly fell by 0.4% in April and overall producer prices dropped by 0.5%, marking significant declines that defied expectations of increases. This has raised concerns about inflation trends ahead of key upcoming reports on retail sales and jobless claims scheduled for later today.

In Europe, industrial production surged by 2.6% month-over-month in March—its strongest increase since November 2020—but Eurozone GDP growth was revised down to a slower pace of 0.3%. This backdrop is compounded by ongoing trade tensions between the U.S., EU, and China which continue to create uncertainty around future economic conditions despite some recent easing measures announced regarding tariffs.

Federal Reserve Chair Jerome Powell's speech at an important conference today will be closely watched as he discusses potential adjustments to monetary policy frameworks amid changing inflation dynamics post-pandemic; markets are currently pricing lower chances for aggressive rate cuts than previously anticipated due to improving growth outlooks following tariff relief discussions.

United States Oil Fund LP (USO) [-2.6%]
The United States Oil Fund LP (USO) is experiencing a notable decline, with its price down significantly since Wednesday. Oil prices have dropped for the second consecutive session, following reports suggesting Iran may be willing to abandon its nuclear weapons development to ease U.S. sanctions. Concurrently, Brent crude futures have also fallen amid concerns regarding a potential U.S.-Iran nuclear deal that could lead to increased oil supply. The International Energy Agency (IEA) has raised its 2025 global supply growth forecast, indicating an increase in oil supply by 310,000 barrels per day in 2025 and 150,000 barrels per day in 2026. Additionally, an unexpected rise in U.S. crude inventories by 3.4 million barrels last week has intensified fears of oversupply in the market, further contributing to the current bearish sentiment surrounding oil commodities.

Ethereum (ETH/USD) [-1.5%]
Ethereum (ETH/USD) has dropped significantly amid a broader decline in the global cryptocurrency market, coinciding with profit-taking following recent gains. The easing of geopolitical tensions between the U.S. and Iran regarding nuclear negotiations has reduced safe-haven demand, contributing to this downturn. In the past week, approximately $1.2 billion worth of ETH has been withdrawn from exchanges, reflecting a trend towards accumulation and decreased selling pressure. Notably, over 11,000 EIP-7702 authorizations have occurred since the Pectra update, enhancing user experience and smart wallet adoption. Additionally, BlackRock's spot ETFs have acquired 21,500 ETH. Concurrently, Bitcoin has also experienced a decline, which historically correlates with movements in Ethereum's price.

UNH | -6.7% | -17.8B
UnitedHealth Group Inc | Managed Health Care
UnitedHealth Group is currently under criminal investigation by the U.S. Department of Justice for potential Medicare fraud, specifically concerning its Medicare Advantage business practices. This investigation has been active since at least last summer and is overseen by the DOJ's healthcare-fraud unit. Following the news, UnitedHealth shares dropped significantly in after-hours trading, continuing a trend of volatility that has seen the stock decline more than 50% over the past month, erasing approximately $350 billion in market capitalization. The company has publicly stated that it has not been notified of any criminal investigation. Additionally, there are ongoing governmental inquiries into potential antitrust violations and civil inquiries related to its billing practices. As of the latest reports, shares were trading around $290 after hours.

BABA | -4.5% | -111.1B
Alibaba Group Holding Ltd | Broadline Retail
Alibaba Group Holding Ltd reported its financial results for the quarter ended March 31, 2025, showing a revenue of RMB 236.45 billion, which fell short of analysts' expectations of RMB 240 billion. The adjusted earnings per share (EPS) was RMB 12.52, missing the estimate of RMB 12.81. Despite a significant increase in net income to RMB 11.97 billion from RMB 919 million the previous year, the earnings miss and lower quarterly sales contributed to a decline in share price, with a drop of approximately 5% in pre-market trading. Additionally, the company completed a share buyback worth $11.9 billion during FY2025 and declared a dividend of $2.00 per ADS, which included a one-time payout of $0.95 from asset sales. AI-related product revenue continued to grow at triple-digit rates for the seventh consecutive quarter, while free cash flow decreased sharply to $516 million from $1.54 billion year-over-year.

NTES | +8.6% | +32.3B
NetEase Inc | Interactive Home Entertainment
NetEase Inc. reported its first-quarter 2025 unaudited financial results, showing an adjusted EPS of RMB17.51, significantly exceeding the analyst estimate of RMB13.89. Revenue reached RMB28.8 billion, surpassing the consensus estimate of RMB28.51 billion. The company's non-GAAP net income attributable to shareholders was RMB11.2 billion, equivalent to approximately $1.5 billion, with a basic EPS of $2.24 per American Depositary Share (ADS). This represents a year-over-year revenue increase of 7.4%. Following the announcement, which occurred around 3:30 AM NY time, NetEase shares experienced a notable uptick in premarket trading, reflecting strong performance metrics that were also highlighted on social media platforms shortly after the Hong Kong market close.

DKS | -11.6% | -1.8B
DICK'S Sporting Goods Inc | Other Specialty Retail
DICK'S Sporting Goods has confirmed its agreement to acquire Foot Locker for approximately 2.4 billion, with the deal expected to close in the second half of 2025. Foot Locker shareholders can choose between 24 in cash or 0.1168 shares of DICK'S common stock per share of Foot Locker, representing a premium of about 66% to Foot Locker's 60-day volume weighted average price. This acquisition aims to create a global platform in sports retail and is projected to be accretive to DICK'S earnings per share in the first full fiscal year post-close. Concurrently, DICK'S reported preliminary first-quarter results showing comparable sales growth and earnings of 3.24 per share. Following the announcement, DICK'S shares dropped significantly in premarket trading.

FL | +83.3% | +1.9B
Foot Locker Inc | Apparel Retail
Foot Locker Inc. is experiencing significant upward price movement following news of a pending acquisition by Dick's Sporting Goods. Reports indicate that Dick's is nearing a deal valued at approximately 2.4 billion, with a proposed purchase price of 24 per share, representing a substantial premium over Foot Locker's recent closing price. Following this announcement, Foot Locker shares surged by about 82%. The acquisition is expected to be finalized soon, potentially enhancing Dick's footprint in the sports retail market and allowing for expanded international operations. The transaction has been unanimously approved by the boards of both companies and is anticipated to close in the second half of 2025. Under the merger agreement, Foot Locker shareholders will have the option to receive either 24.00 in cash or 0.1168 shares of Dick's common stock for each share of Foot Locker common stock.

CSCO | +2.1% | +5.4B
Cisco Systems Inc | Communications Equipment
Cisco Systems Inc reported strong third-quarter financial results, achieving revenue of $14.15 billion, surpassing estimates of $14.08 billion, with adjusted earnings per share (EPS) of $0.96, exceeding the consensus estimate of $0.92. The company raised its fiscal 2025 adjusted EPS guidance to a range of $3.77-$3.79 and increased its revenue outlook to between $56.50 billion and $56.70 billion, both above analyst expectations. Product orders rose 20% year-over-year, reflecting robust demand across markets. Following the earnings announcement, shares experienced an after-hours increase of approximately 3.90%. Social media discussions highlighted Cisco's exceeded targets for AI infrastructure orders and strong performance metrics, including service revenue of $3.78 billion and product revenue of $10.37 billion. Cisco's adjusted gross margin was reported at 68.6%, higher than the expected 67.8%.

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