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Tuesday, May 13

Noteworthy macro moves today: Oil (WTI) +1.4%. STI 30 Index (Singapore) +1.6%. Noteworthy US mega-cap moves today: UnitedHealth Group Inc (UNH) -10.1%.

Recent developments in the U.S.-China trade relationship have significantly influenced market sentiment this week. The two countries agreed to a temporary reduction of tariffs for 90 days, lowering rates from as high as 145% on Chinese goods down to an effective rate of around 30%. This announcement led to substantial gains across major U.S. stock indices, with the S&P 500 rising by approximately 3.3% yesterday.

In addition, key inflation data released today showed that annual consumer price growth in the United States eased slightly to 2.3% for April while core inflation remained steady at a four-year low of 2.8%. These figures are being closely monitored ahead of potential Federal Reserve policy adjustments amid ongoing discussions about interest rates and their implications given recent tariff changes.

Meanwhile, labor statistics from the UK indicate an increase in unemployment rates up to 4.5%, marking its highest level since August last year; however, wage growth remains robust despite this rise in joblessness which could influence Bank of England monetary policy moving forward amidst concerns over persistent inflation pressures within both domestic and global contexts.

Health Care Select Sector SPDR Fund (XLV) [-0.4%]
The Health Care Select Sector SPDR Fund (XLV) has declined by 0.4% in pre-market trading. This movement coincides with a broader market trend, as the Dow Jones Index has also dropped. The recent U.S.-China trade truce has fostered optimism for economic growth, yet uncertainty remains ahead of today's inflation data releases, which could influence Federal Reserve policy. Notably, several significant holdings within XLV have contributed to its performance. UnitedHealth Group (UNH) fell sharply following the announcement of its new CEO and the suspension of its 2025 outlook due to rising medical costs. Other notable declines include Elevance Health (ELV), Merck (MRK), Eli Lilly (LLY), and CVS Health (CVS), all of which have posted negative returns, further weighing on the ETF's performance. Recent U.S. inflation reports elicited minimal reactions from XLV, despite historical volatility suggesting stronger responses.

SPDR Dow Jones Industrial Average ETF Trust (DIA) [-0.3%]
The SPDR Dow Jones Industrial Average ETF Trust (DIA) has seen a decline of 0.3% in pre-market trading on Tuesday. This movement coincides with a broader downturn in the Dow Jones Index, which has also dropped by 0.6%. Notably, the S&P 500 Index has decreased by 0.20%, suggesting a correlation between these indices and the ETF's performance. Among the ETF's holdings, UnitedHealth Group has experienced a significant drop due to leadership changes and concerns over its financial outlook, while other major contributors such as Microsoft and Visa have also reported slight declines. This decline follows a recent rally in the Dow, which had surged over 1,100 points due to an agreement between the U.S. and China to suspend punitive tariffs for 90 days, marking a notable shift in market sentiment that has not fully insulated the Dow from current volatility.

UNH | -9.4% | -29.7B
UnitedHealth Group Inc | Managed Health Care
UnitedHealth Group Inc has appointed Stephen Hemsley as CEO, succeeding Andrew Witty, who resigned for personal reasons. Hemsley, who previously led the company from 2006 to 2017, will also retain his position as chairman of the board. The company has suspended its 2025 outlook, attributing this decision to unexpectedly high medical costs associated with new Medicare Advantage beneficiaries and accelerated care activity. This suspension follows a period of increased expenditures, with a projected return to growth anticipated in 2026. In pre-market trading, the stock has dropped significantly, with reports indicating a decline following these announcements.

COIN | +10.3% | +5.8B
Coinbase Global Inc | Financial Exchanges & Data
Coinbase Global Inc. will replace Discover Financial Services in the S&P 500 effective prior to the opening of trading on May 19, 2025. This marks a significant milestone as Coinbase becomes the first cryptocurrency-focused company in the index, which includes major players such as Apple and Microsoft. Bernstein has projected potential capital inflows of up to $16 billion due to this index entry, with approximately $9 billion anticipated from passive funds and $7 billion from active managers. Coinbase currently holds a market capitalization of around $53 billion and processes over $1.5 billion in daily trading volume. The firm is also forecast to grow its earnings per share at a 38% compound annual growth rate. Following this announcement, COIN's stock price surged, with reports of increases of up to 6% in after-hours trading, reflecting excitement on social media regarding its inclusion in the S&P 500.

FSLR | +6.9% | +1.2B
First Solar Inc | Semiconductors
First Solar Inc has experienced a notable price movement, increasing by 6.9% since Monday. Recently, Wolfe Research upgraded the stock from Peer Perform to Outperform, setting a price target of 221.00. This upgrade reflects a positive shift in analyst sentiment. Conversely, Goldman Sachs lowered its price target from 235.00 to 204.00 while maintaining a Buy rating. Social media discussions have highlighted the upgrade and noted that First Solar is performing well, with recent metrics showing favorable trends over the month and week. Additionally, posts have detailed the company’s operations in designing and manufacturing advanced thin-film solar panels using cadmium telluride technology for large-scale utility projects.

HTZ | -8.1% | -158.8M
Hertz Global Holdings Inc | Passenger Ground Transportation
Hertz Global Holdings Inc reported a Q1 adjusted loss of $1.12 per share, missing analyst expectations by over 15%. This loss represents an improvement from the previous year's loss of $1.28 per share. The company generated total revenue of $1.81 billion, falling short of the anticipated $2.00 billion and reflecting a decline from $2.08 billion year-over-year. A reduction in fleet capacity, down 8% from the previous year, contributed to this revenue drop. Additionally, Hertz's Q1 interest expense was noted at 14.73% of revenues, up from 10.38% a year earlier. Following the earnings announcement, shares declined approximately 3.6% in after-hours trading. Concurrently, 3D Systems Corp experienced a significant decline of nearly 23% due to disappointing financial results and a withdrawal of full-year guidance, which may reflect broader market sentiment impacting Hertz as well.

SE | +13.0% | +12.0B
Sea Ltd | Interactive Home Entertainment
Sea Ltd reported its Q1 earnings, revealing an adjusted EPS of 0.65, surpassing the estimate of 0.64. Revenue reached 4.84 billion, slightly below the consensus of 4.89 billion, marking a year-over-year increase of 29.6%. The company achieved a net income of 410.8 million, a notable recovery from a loss of 23 million in the same quarter last year. Adjusted EBITDA more than doubled to 946.5 million from 401.1 million a year ago. The e-commerce segment saw revenues increase by 28.3%. Following the announcement, Sea's shares rose approximately 12% in premarket trading, reflecting positive market sentiment despite the revenue miss. Additionally, SeaMoney, rebranded as Monee, experienced over 50% year-on-year revenue and EBITDA growth, contributing to the overall strong performance against competitors like TikTok and Lazada.

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