Mid-Morning Look

Monday, April 28, 2025

U.S. stocks come into the start of the new week riding a 4-day winning streak (longest streak since mid-January), as the Nasdaq is now up on the month of April and the S&P 500 has cut its monthly losses to -1.3% after being down as much as -13% this month in what has been a major turnaround in just 2-weeks. Still, there remains a cautious tone to financial markets with the US dollar edging slightly higher, bonds and gold are higher. A very busy week of earnings coming up with roughly 180 S&P 500 companies expected to report this week while 183 S&P 500 companies have reported thus far this quarter (as per Reuters) with 78% beating and 22% missing; the average beat was 30%, and average misses -5%; avg yr/yr earnings growth 17% and median yr/yr earnings growth 7%. Treasury Secretary Bessent said on Sunday (and reiterated again this morning on CNBC) that some tariff negotiations with Asian countries “are moving along very well.” Still, the US and China seem to be at an impasse, while big US price hikes from Shein and Temu are an early sign of the potential impact on American consumers. Russia’s Vladimir Putin announced a cease-fire in Ukraine for three days next month, the second time in less than two weeks the Russian President has called a halt to fighting without committing to a long-term end to the conflict, the WSJ reports. Parts of Spain and Portugal were hit by a power outage Monday, causing widespread disruption to transport and traffic in major cities. The Dow last week closed up 971 points, or 2.5% in its largest one-week point and percentage gain since the week ending April 11, but the Dow is off 5% since Trump announced his broad-based tariffs on April 2 and is down 5.7% so far this year. On Friday, major indexes logged their fourth-straight positive sessions, though just barely in some instances and for the week, the S&P 500 gained 4.59%, the Nasdaq climbed 6.73%.

• In Consumer Staples: Wells Fargo downgrades the consumer staples sector to Neutral from Overweight. Oppenheimer said ahead of earnings in Consumer Staples, they expect earnings resets for CHD, EL and FRPT given tariff developments, competitive dynamics, and/or a fluid demand backdrop in certain categories. For longer-term players, OPCO would continue to take advantage of any dips with its Outperform-rated names including CHD, PBH, and SN.

• BHVN +9%; as announces investment up to $600M by Oberland Capital.
• CGON +30%; as announces best-in-disease durability data in Bond-003 cohort C and promising early signal in cohort P for cretostimogene grenadenorepvec at the AUAA Annual Meeting; Cretostimogene monotherapy shows 42.3% response rate at 24 months and 58.3% I, patients show durable response at 24 months.
• JACK +5%; was upgraded to Buy from Hold at Stifel (but lower tgt to $32 from $35) saying views last week’s announcement as a clearing event for the stock as new CEO Lance Tucker has created a viable plan to strengthen the balance sheet and simplify the investment narrative.
• NIO +6%; after Citigroup earlier added an upside 30-day catalyst watch citing the company’s new model launches, new advanced driver assistance systems chips, and cost savings for the catalyst watch.
• ONON +3%; was upgraded to Buy from Neutral at Citigroup (tgt trimmed to $60 from $65) while reduces ests, but notes it has the fastest growing brand within athletic with “very strong brand heat,” a geographically diverse sales base, and low sourcing exposure in China.
• PTON +4%; was upgraded to Buy from Hold at Truist with a price target of $11 saying the stock is finally nearing a point where the company’s improving fundamentals should support a gradual recovery of its equity.

• DG -1%; as defensive/discount retailers underperform broader retail
• DPZ ; as Q1 EPS $4.33 tops ests $4.07 but Q1 revs $1.11B miss est. $1.12B on weaker comp sales which fell -0.5% vs. est. +0.23%; Q1 Int’l same-store sales grew 3.7%, ahead of analyst estimates of 1.93% growth
• LLY -1%; was double downgraded to Reduce from Buy and cut PT to $700 from $1,150 at HSBC
• NVDA -2%; as China’s Huawei develops new AI chip, seeking to match Nvidia, WSJ reports.
• PDD -1%; along with weakness in BABA and other China retailers on reports Discount Chinese retail app Temu appears to be passing on nearly all of Donald Trump’s new import taxes to US consumers, more than doubling the cost of some products.