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Wednesday, May 7

Noteworthy macro moves today: Gold -1.2%. USD/CNH +0.3%. Copper -1.7%. Noteworthy US mega-cap moves today: JPMorgan Chase & Co (JPM) +0.9%. 

Recent developments in the global economy are significantly influencing market dynamics. Notably, U.S. Treasury Secretary Scott Bessent and Chinese officials will meet this weekend to discuss trade relations amid ongoing tariff tensions between the two nations. This meeting is framed as a step towards de-escalation rather than achieving an immediate trade deal, which has contributed to improved risk sentiment across markets.

In economic data releases, Germany's factory orders rose by 3.6% month-over-month in March 2025—well above expectations of 1.3%. This increase reflects robust domestic and foreign demand for various sectors including machinery and pharmaceuticals, suggesting resilience within Europe's largest economy despite broader uncertainties related to inflationary pressures from tariffs.

Additionally, mortgage applications in the United States surged by 11% during the week ending May 2 due to falling interest rates on home loans; this rebound follows three weeks of declines earlier that month. The average contract rate for fixed-rate mortgages decreased slightly further below previous levels. The development likely contributing positively toward consumer confidence ahead of today's Federal Reserve monetary policy announcement. No changes are expected but commentary may provide insights into future rate adjustments amidst rising concerns over economic growth prospects linked with international trade issues.

SPDR Gold Shares (GLD) [-1.1%]
SPDR Gold Shares (GLD) has seen a price decline of 1.1% since Tuesday. Recent discussions on social media highlighted fluctuations in GLD's price, with notable intraday movements. Concurrently, spot gold prices decreased by 1.2%, attributed to reduced safe-haven demand amid optimism surrounding US-China trade talks. Additionally, military tensions between India and Pakistan have escalated without significantly enhancing gold's appeal. Meanwhile, silver prices have also declined, which may correlate with the recent performance of GLD. In a noteworthy development, China has increased its state gold reserves for the sixth consecutive month, now totaling 73.77 million ounces, reflecting a rise in value from $229.6 billion to $243.6 billion.

SPDR S&P 500 ETF Trust (SPY) [+0.4%]
The SPDR S&P 500 ETF Trust (SPY) has seen a price increase of 0.4% in pre-market trading, coinciding with a rise in the S&P 500 Index, which is up approximately 0.8%. Positive market sentiment is fueled by anticipated high-level trade discussions between U.S. and Chinese officials scheduled for this weekend in Switzerland. Concurrently, the Federal Reserve's expected decision to maintain steady interest rates is contributing to a sense of economic stability amid ongoing tariff tensions. Notably, Walt Disney Co. reported strong fiscal Q2 results, significantly impacting SPY's performance, as Disney's share price rose following its earnings beat and positive subscriber growth in streaming services. Social media discussions have also highlighted excitement around SPY's recent price movements and upcoming economic events, including the Federal Open Market Committee meeting scheduled for later today.

DIS | +8.7% | +15.9B
Walt Disney Co | Movies & Entertainment
Walt Disney Co. reported its fiscal Q2 earnings, revealing adjusted earnings per share of 1.45, surpassing the consensus estimate of 1.20. Revenue increased year-over-year by 7% to 23.6 billion, exceeding expectations of 23.14 billion. The company added 1.4 million Disney+ subscribers and 1.1 million Hulu subscribers during the quarter, with operating income from the streaming division rising significantly to 336 million from 47 million a year earlier. Additionally, Disney announced plans for a new theme park resort in Abu Dhabi, its first new park in nearly a decade, following strong performance in U.S. parks where attendance and spending have increased. The adjusted EPS guidance for FY 2025 was raised to 5.75, compared to the prior consensus estimate of 5.44.

UBER | -3.9% | -6.6B
Uber Technologies Inc | Passenger Ground Transportation
Uber Technologies Inc. reported its first-quarter results for 2025, revealing gross bookings of $42.8 billion, a 14% year-over-year increase, though slightly below the expected $43.14 billion. Revenue rose 14% to $11.53 billion, missing analyst expectations of $11.62 billion. The company recorded adjusted EBITDA of $1.9 billion, exceeding estimates of $1.84 billion. Despite a strong performance in delivery bookings, which increased 15%, the mobility segment saw a more modest 13% rise. For Q2, Uber anticipates gross bookings between $45.75 billion and $47.25 billion, also falling short of Wall Street's estimate of $45.85 billion. Following these mixed results, Uber's stock experienced a notable decline in premarket trading.

NVO | +4.5% | +10.4B
Novo Nordisk A/S | Pharmaceuticals
Novo Nordisk A/S reported a first-quarter operating profit of DKK 38.79 billion, reflecting a 22% year-on-year increase, alongside revenue of DKK 78.09 billion, up 19%. The company has adjusted its 2025 sales growth outlook to 13%-21% from 16%-24%, citing lower-than-expected penetration of branded GLP-1 treatments in the U.S., where compounded alternatives now capture a significant portion of the market. Sales of Wegovy rose 83% year-on-year to DKK 17.36 billion, although this was below expectations, while Ozempic sales increased by 15% to DKK 32.72 billion, surpassing analyst estimates. Following these developments, Novo Nordisk shares rose approximately 5.5%, supported by anticipation of reduced competition for Wegovy as the FDA is expected to enforce a ban on compounded versions. The company's Q1 results also showed a net income of DKK 29.0 billion, exceeding expectations.

CRWD | -4.2% | -4.4B
CrowdStrike Holdings Inc | Systems Software
CrowdStrike Holdings Inc. has announced plans to lay off approximately 500 employees, which constitutes about 5% of its workforce. This move is expected to incur estimated charges ranging from $36 million to $53 million, with completion anticipated by the end of Q2 fiscal 2026. Despite these significant reductions, the company has reaffirmed its guidance for fiscal year 2026, suggesting that Q1 results may align with or exceed forecasts. Additionally, top executives have engaged in substantial stock transactions, with the Chief Financial Officer selling shares valued at nearly $7 million and the President and CEO selling shares worth approximately $25 million on May 5, 2025, primarily to cover tax obligations. Furthermore, CrowdStrike's offices will be closed on May 7-8, 2025, with staff advised to work from home during this period.

ANET | -6.4% | -1.7B
Arista Networks Inc | Communications Equipment
Arista Networks Inc reported its first-quarter results on May 6, 2025, posting adjusted earnings of $0.65 per share, exceeding analyst expectations of $0.59. Revenue surged by 27.6% to $2.00 billion, surpassing the anticipated $1.97 billion. The company guided for second-quarter revenue of approximately $2.1 billion, above the consensus estimate of $2.03 billion. Additionally, a new share buyback program of up to $1.5 billion was authorized. Despite these strong results, shares fell by 4.8% in premarket trading on May 7, reflecting market reactions to the outlook. Social media discussions highlighted the significance of Arista surpassing the $2 billion revenue milestone for the first time, with a gross margin of 64.1% attributed to an efficient supply chain.

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