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Friday, May 2

Noteworthy macro moves today: USD/CNH -0.7%. S&P 500 Index (US) +1.4%. US 2Y Treasury Bond -0.1%. Noteworthy US mega-cap moves today: Meta Platforms Inc (META) +2.7%. Apple Inc (AAPL) -2.6%. Eli Lilly and Co (LLY) +2.5%.

Recent market movements have been significantly influenced by the latest U.S. employment data, which showed that non-farm payrolls increased by 177,000 in April—well above expectations of around 130,000—and maintained an unemployment rate of 4.2%. This positive job growth has contributed to favorable sentiment among investors and is likely impacting Federal Reserve interest rate considerations.

In Europe, optimism surrounding potential trade negotiations between the U.S. and China has bolstered equity markets across major indices such as Germany's DAX and France's CAC 40; both are showing substantial gains today amid easing tariff concerns from Beijing’s willingness to engage in discussions with Washington regarding tariffs on goods. Additionally, Eurozone inflation remained steady at 2.2%, slightly exceeding forecasts but still within acceptable limits for policymakers.

The overall risk appetite appears heightened as evidenced by rising stock futures ahead of key earnings reports from tech giants like Apple and Amazon later today; however, Apple's recent performance may temper some enthusiasm due to its reported decline following cautious guidance amidst ongoing geopolitical tensions affecting supply chains heavily linked to China.

iShares China Large-Cap ETF (FXI) [+3.1%]
The iShares China Large-Cap ETF (FXI) has experienced a notable price increase of 3.1% during the pre-market session. This uptick follows improved sentiment stemming from reports of easing trade tensions between the U.S. and China, with China's Commerce Ministry expressing a willingness to negotiate tariffs. Concurrently, strong job growth data from the U.S., which surpassed expectations, may bolster perceptions of global economic stability. Asian markets, including Hong Kong's Hang Seng, closed higher, reflecting positive momentum. Significant contributors to FXI's performance include notable gains in holdings such as XIACY, JD, and TCOM. Additionally, the movement in USD/CNH positively influenced the ETF's performance. The AUD/USD pair's increase further aligns with broader market sentiment, reinforcing the interconnectedness of global markets.

USD/CNH [-0.7%]
The USD/CNH exchange rate has dropped significantly, reflecting a daily return of -0.7%. This movement coincides with China's expressed openness to trade talks with the United States, suggesting a potential easing of trade tensions. Concurrently, the U.S. labor market demonstrated unexpected strength in April, with job additions reaching 177,000, exceeding expectations of 130,000. The unemployment rate remained steady at 4.2%, while the labor force participation rate increased slightly to 62.6%. Average hourly earnings showed a year-over-year growth of 3.8%, falling short of the anticipated 3.9%. These mixed signals from the U.S. economy contribute to ongoing uncertainty regarding currency stability amid evolving geopolitical dynamics.

DUOL | +9.5% | +1.8B
Duolingo Inc | Education Services
Duolingo Inc. reported robust Q1 financial results, with earnings per share of $0.72, surpassing the consensus estimate of $0.51 by a significant margin. Revenue reached $230.74 million, exceeding expectations and reflecting a year-over-year increase of 38%. The company also reported 46.6 million daily active users and raised its FY2025 sales guidance to between $987 million and $996 million. In addition, Duolingo projected Q2 sales between $238.5 million and $241.5 million, above the analyst estimate of $233.76 million. Following the earnings announcement, Duolingo's stock experienced a notable increase of approximately 10%. Social media discussions highlighted the company's impressive growth, although some concerns were raised regarding competition from AI translation technology. Nonetheless, optimism persists about Duolingo's expansion into new verticals, potentially enhancing average revenue per user.

RDDT | +4.3% | +874.6M
Reddit Inc | Interactive Media & Services
Reddit Inc. reported its first-quarter financial results, revealing substantial growth. Earnings per share were $0.13, far exceeding the consensus estimate of $0.02. Revenue reached $392.36 million, surpassing expectations of $370.01 million and representing a 61% year-over-year increase. Daily active unique users increased by 31% to 108.1 million, with international revenue growing by 82%, now comprising 20% of total revenues. The company anticipates second-quarter revenue between $410 million and $430 million, above the $395.48 million estimate. Following the earnings announcement, Reddit's stock experienced notable movement, rising significantly after hours, while analysts raised their price targets, with Citi increasing theirs from $150 to $158 and Piper Sandler from $140 to $150, reflecting the positive financial performance and anticipated growth in user engagement and revenue.

ABNB | -4.9% | -3.7B
Airbnb Inc | Hotels, Resorts & Cruise Lines
Airbnb Inc reported its first-quarter financial results on May 1, 2025, achieving revenue of $2.27 billion, slightly above expectations, with earnings per share matching forecasts at $0.24. Despite this, the gross booking value of $24.5 billion fell short of estimates, indicating potential challenges in bookings. For the second quarter, the company anticipates revenue between $2.99 billion and $3.05 billion, which is below analyst expectations. Additionally, net income decreased to $154 million from $264 million a year earlier. Social media discussions highlighted concerns over a decline in foreign travelers to the U.S., mirroring trends in the airline industry, and noted softer results attributed to broader economic uncertainties. Following the earnings announcement, shares declined approximately 4.3% in after-hours trading.

AAPL | -3.1% | -97.3B
Apple Inc | Technology Hardware, Storage & Peripherals
Apple Inc. experienced a notable decline of 3.1% in pre-market trading following a series of announcements from its fiscal second-quarter earnings call. CEO Tim Cook projected a $900 million impact from tariffs in the upcoming June quarter, primarily affecting iPhone production. Despite reporting revenue of $95.36 billion, surpassing expectations, and an earnings per share (EPS) of $1.65, slightly above estimates, the stock reacted negatively. The company also revealed a shift in manufacturing strategy, with most iPhones sold in the U.S. expected to be produced in India. While iPhone revenue reached $46.84 billion, exceeding forecasts, services revenue fell short at $26.65 billion. Additionally, Apple authorized a new $100 billion share buyback program and raised its quarterly dividend by 4% to $0.26 per share, yet concerns about ongoing tariff-related costs and future growth persisted among analysts.

XYZ | -22.1% | -6.2B
Block Inc | Transaction & Payment Processing Services
Block Inc reported disappointing first-quarter financial results, with earnings per share of 0.56 falling short of the consensus estimate of 0.87. Revenue also missed expectations, coming in at 5.77 billion against the anticipated 6.20 billion. Following this announcement, shares experienced a significant drop in after-hours trading. Analysts responded by lowering their price targets, with Canaccord Genuity reducing its target from 100 to 80, and KeyBanc cutting its target from 65 to 60. The company's guidance for fiscal year 2025 gross profit was set at 9.96 billion, below the expected 10.18 billion, and the Q2 gross profit forecast of 2.45 billion also missed estimates of 2.53 billion. Despite achieving a total gross profit of 2.29 billion in Q1, reflecting a year-over-year increase, the overall sentiment remains cautious following the earnings miss.

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