After Hours Report

The stock market hit a wall today, and it didn't have so much to do with the disappointing earnings report and outlook from Target (TGT 93.01, -5.11, -5.2%) as it did with the concerning movement in Treasury yields.

The 10-yr note yield settled the cash session at 4.60%, up 12 basis points, while the 30-yr bond yield settled the day at 5.09%, up 13 basis points. The selling interest in the Treasury market was precipitated initially by inflation angst after the UK printed a hotter-than-expected CPI number for April and deficit angst. Press reports highlighted an agreement to raise the SALT deduction cap to $40,000 (from $10,000) and noted that conservative House GOP members were dropping their demands for larger cuts to Medicaid.

It is unclear at this point if the latter is the case, as the debate within the GOP continues as of this writing. There has been a suggestion, though, that the House may press ahead with a full vote on the reconciliation bill as early as tonight.

Treasury yields took another turn for the worse in the afternoon following a $16 billion 20-yr bond auction that saw some relatively soft dollar demand, evidenced by a 2.46 bid-to-cover ratio that fell short of the prior 12-auction average of 2.58. The high yield of 5.047% at the auction tailed the when-issued yield of 5.035% by more than a basis point.

The major indices, which had been vacillating with relatively modest changes, saw selling interest pick up and bids fall by the wayside after the auction. The spike in yields triggered renewed growth concerns that hit the small-cap Russell 2000 (-2.8%) the hardest and that ultimately contributed to losses in 10 of the 11 S&P 500 sectors.

The lone holdout was the communication services sector (+0.7%), which garnered support from Alphabet's (GOOG 170.06, +4.74, +2.9%) outperformance following its I/O event. 

The real estate (-2.6%), health care (-2.4%), financials (-2.1%), consumer discretionary (-1.9%), and utilities (-1.9%) sectors were the biggest losers.

Market internals showed decliners outpacing advancers by a nearly 9-to-1 margin at the NYSE and by a 4-to-1 margin at the Nasdaq. Dow component UnitedHealth Group (UNH 302.98, -18.60, -5.8%) was among the decliners, pressured by an HSBC downgrade to Reduce from Hold and a report in The Guardian that chronicled allegations of the company paying nursing homes to reduce transfers between hospitals. UnitedHealth denounced the report, saying the DOJ investigated the allegations and declined to pursue the matter due to its finding of significant factual inaccuracies in the allegations.

Still, that didn't help the managed care company's stock, which joined many others today on the losing end of things. The major indices closed just off their worst levels of the session.

The only economic data out this morning was the MBA Mortgage Applications Index. It was down 5.1% week-over-week, with refinance applications and purchase applications both down 5.0% as demand weakened with rising mortgage rates.

• DJIA: -1.6% YTD
• S&P 500: -0.6% YTD
• Nasdaq Composite: -2.3% YTD
• S&P Midcap 400: -4.3% YTD
• Russell 2000: -8.2%

Overseas:

• Europe: DAX +0.3%, FTSE +0.1%, CAC -0.4%
• Asia: Nikkei -0.6%, Hang Seng +0.6%, Shanghai +0.2%

Commodities:

• Crude Oil -0.47 @ 61.58
• Nat Gas -0.02 @ 3.73
• Gold +28.50 @ 3313.30
• Silver +0.48 @ 33.64
• Copper +0.01 @ 4.67

After-Hours Spotlight:

• American Superconductor (AMSC) beats by $0.02, beats on revs; guides Q1 EPS above two analyst estimate, revs above two analyst estimate... AMSC up 6.5%
• AT&T (T) to acquire substantially all of Lumen's (LUMN) Mass Markets fiber business for $5.75 billion... T up 0.3%/LUMN up 14.4%
• Domo (DOMO) beats by $0.10, beats on revs; guides Q2 EPS in-line, revs in-line; raises FY26 EPS and revenue guidance... DOMO up 3.6%
• Enersys (ENS) beats by $0.19, reports revs in-line; guides Q1 EPS below consensus, revs below consensus... ENS down 1.8%
• LiveRamp (RAMP) beats by $0.02, beats on revs; guides JunQ revs above consensus; guides FY26 revs in-line... RAMP up 3.3%
• NVIDIA (NVDA) and Navitas Semiconductor (NVTS) announce a collaboration on next-gen 800 V HVDC architecture to support ‘Kyber’ rack-scale systems... NVDA down 0.3%/NVTS up 166.5%
• Snowflake (SNOW) beats by $0.03, beats on revs, easily beats product revenue guidance; Issues upside Q2 product revenue guidance, raises FY26 product revenue guidance... SNOW up 6.4%
• Urban Outfitters (URBN) beats by $0.32, beats on revs... URBN up 9.1%
• Zoom Communications (ZM) beats by $0.12, reports revs in-line; guides Q2 EPS above consensus, revs above consensus; guides FY26 EPS above consensus, revs above consensus... ZM up 0.7%

Fair Value for Thursday, May 22:

• S&P 500: 5,861
• Nasdaq 100: 21,148
• DJIA: 41,946

For a full rundown of today's market and after hours developments, see Live In Play

• Earnings/Guidance (Full Earnings Calendar):
  • Baidu (BIDU) beats by RMB4.16, beats on revs
  • Canada Goose (GOOS) beats by CAD 0.10, beats on revs; not providing FY26 guidance
  • Dycom (DY) beats by $0.35, beats on revs; guides Q2 EPS in-line, revs above consensus; guides FY26 revs above consensus
  • James Hardie (JHX) reports EPS in-line, misses on revs
  • Keysight (KEYS) beats by $0.05, beats on revs; guides Q3 EPS in-line, revs above consensus
  • Lowe's (LOW) beats by $0.04, reports revs in-line; reaffirms FY26 EPS guidance, revs guidance
  • Medtronic (MDT) beats by $0.04, beats on revs; guides FY26 EPS below consensus; announces intent to separate Diabetes business
  • Modine Manufacturing (MOD) beats by $0.17, beats on revs; guides FY26 revs in-line
  • Palo Alto Networks (PANW) beats by $0.03, reports revs in-line; guides JulQ EPS in-line, revs in-line
  • Target (TGT) misses by $0.31, misses on revs; lowers sales guidance; guides FY26 EPS in-line
  • TJX (TJX) beats by $0.01, reports revs in-line, comps +3% vs +2-3% guidance; guides Q2 EPS below consensus; reaffirms FY26 EPS and comps guidance
  • Toll Brothers (TOL) beats by $0.67, beats on revs; Issues guidance for Q3 and FY26, including Deliveries of 11,200-11,600 units for FY26
  • V.F. Corp (VFC) beats by $0.01, misses on revs
  • Viasat (VSAT) reports Q4 (Mar) results, beats on revs; guides FY26 revs above consensus
  • Weibo (WB) beats by $0.07, reports revs in-line
  • WeRide (WRD) reports Q1 results; authorizes $100 million share repurchase program
  • Wix.com (WIX) beats by $0.06, reports revs in-line; guides Q2 revs below consensus; reaffirms FY25 revs guidance; increases buyback
  • XP (XP) beats by $0.10, beats on revs
  • XPENG (XPEV) Reports First Quarter 2025 Unaudited Financial Results
  • ZTO Express (ZTO) reports Q1 results; reiterates its 2025 parcel volume guidance
• General News
  • Republican leadership is getting close to a deal with holdouts on large reconciliation bill. House rules committee is meeting now and the final House vote is expected this week (possibly tonight). Deal will raise state and local tax deduction to $40,000 & phase out clean energy tax cuts faster. Conservatives drop demands for larger Medicaid cuts, according to Politico
  • House Freedom Caucus Chair Andy Harris says "White House put forward a proposal that has support in the group — but leadership has to “figure out” how to incorporate it. He doesn’t think it can get passed today, though"
  • Intelligence suggests Israel is preparing to strike Iran's nuclear facilities, according to CNN
  • DoD confirms plans for "Golden Dome for America"
  • G-7 countries are considering tariffs on low value products from China, according to Bloomberg
  • The Trump administration considering plan to open retirement accounts to private equity, according to Financial Times
  • Senate votes to advance stablecoin legislation to a full Senate vote; procedural vote was 69-31
  • 20-yr bond auction saw the high yield of 5.047% tail the when-issued yield of 5.035% by more than a basis point. Dollar demand was relatively soft compared to the prior 12 auctions, as the 2.46 bid-to-cover ratio failed to match the prior 12-auction average of 2.58.
  • EU will soon share revised trade proposal with U.S. officials, according to Bloomberg
  • FDA provides updates amid meeting of the Oncologic Drugs Advisory Committee
  • EU Commission agrees to defense loan instrument program
  • FDA takes steps to enhance state importation programs to help lower prescription drug prices
  • Alphabet (GOOG): Waymo CEO Tekedra Mawakana says the company reached 10 mln robotaxi trips, according to CNBC
  • APi Group (APG) announces new long-term financial targets; announces three-for-two stock split
  • Apple (AAPL): Epic Games returns to Apple application store, according to Reuters
  • Apple (AAPL) CEO Tim Cook met with President Trump at White House yesterday, according to Politico
  • AstraZeneca (AZN) to provide portfolio and pipeline updates at the American Society of Clinical Oncology (ASCO) Annual Meeting
  • Bausch Health (BHC) entered into letter agreements with Carl Icahn, John Paulson, among others
  • Belite Bio (BLTE) receives FDA Breakthrough Therapy Designation for Tinlarebant
  • Boeing (BA) getting close to 737 factory milestone, according to Bloomberg
  • BYD Company (BYDDY) launches €22,990 "Dolphin Surf" EV in Europe, undercutting rivals in affordable electric segment, according to Reuters
  • Carter's (CRI) declares a quarterly dividend of $0.25/share, down from $0.80/share
  • China Automotive's (CAAS) Jingzhou Henglong Auto Parts Manufacturing won its first R-EPS product order from a large, well-known European automobile producer
  • CONMED (CNMD) announces that LaVerne Council has been appointed to succeed Martha Goldberg Aronson as the new Independent Chair of its Board of Directors, effective May 21, 2025
  • Exxon Mobil (XOM), BP (BP), and Shell (SHEL) consider partnership with India's Oil and Natural Gas Corp, according to Economic Times
  • Ford (F) will allow Nissan (NSANY) to use part of its battery plant as Ford pulls back on electric car ambitions, according to the Wall Street Journal
  • Genfit (GNFT) announces that Ipsen’s (IPSEY) Iqirvo has been granted pricing and reimbursement in Italy for Primary Biliary Cholangitis, unlocking a new milestone payment of €26.5 mln
  • Granite Constr (GVA) awarded a Federally funded $54 million contract to build the first of two construction phases under a Construction Manager/General Contractor contract with the Alaska Department of Transportation and Public Facilities
  • IDEX Corp (IEX) CFO Abhishek Khandelwal to resign
  • IonQ (IONQ) partners with Sweden’s Einride to develop quantum supply chain and quantum-enhanced logistics for autonomous driving solutions
  • Johnson & Johnson (JNJ): FDA Oncologic Drugs Advisory Committee votes in favor of the benefit-risk profile of DARZALEX FASPRO
  • Kraft Heinz (KHC) has been evaluating potential strategic transactions to unlock shareholder value; Also announces that Berkshire Hathaway Inc. will no longer hold Board seats at the company
  • Logitech Int'l SA (LOGI) increases quarterly cash dividend to CHF 1.26/share from CHF 1.16/share
  • Metallus (MTUS) Promotes Kristopher Westbrooks to President and Chief Operating Officer; appoints John Zaranec III as Executive Vice President and Chief Financial Officer, both effective June 16
  • Moderna (MRNA) announced that in consultation with the FDA, the Company has voluntarily withdrawn the pending BLA for mRNA-1083, its flu/COVID combination vaccine candidate for adults aged 50 years and older
  • Motorola Solutions (MSI) in discussions to acquire Silvus Technologies for $4.5 bln, according to Bloomberg
  • National Grid (NGG) and Kraken sign deal to bring globally proven customer-service platform to over 6 million U.S. energy customers
  • Northrop Grumman (NOC) increases quarterly cash dividend 12% to $2.31/share from $2.06/share
  • Nu Holdings (NU) announces that President and COO is stepping down; current remit will be absorbed by CEO David Velez
  • Nvidia (NVDA) CEO Jensen Huang wants U.S. to ease curbs on artificial intelligence, according to Bloomberg
  • Principal Fincl (PFG) announces appointment of Joel Pitz as executive vice president and chief financial officer, effective immediately
  • Sapiens Int'l (SPNS) announced that a state-run auto insurance placement and claims organization has selected Sapiens ClaimsPro for Property & Casualty (P&C) to support its modernization efforts
  • Solaris Resources Inc. (SLSR) enters into $200 million financing agreements with Royal Gold (RGLD) to advance the Warintza project
  • Soleno Therapeutics (SLNO) Announces Data Presentation Showing that Resumption of Treatment with VYKAT(TM) XR after a Randomized Withdrawal Period was Associated with Significant Improvements in Hyperphagia and Behavioral Symptoms in Participants with Prader-Willi Syndrome
  • Super Micro Computer (SMCI) plans to expand U.S. server production capacity, according to the Wall Street Journal
  • Target (TGT) establishes multi-year Enterprise Acceleration Office to drive even greater speed and agility across the company, positioning Target to deliver faster progress on its roadmap for growth
  • Target Hospitality (TH) has been awarded a seat on a multi-year, $4.0 Billion, Emergency Detention and Related Services Strategic Sourcing Vehicle
  • Tesla (TSLA) follow up: Musk confirms Tesla plan for robotaxis, says Tesla has seen seen a major rebound in demand, sees no need to buy UBER, according to CNBC
  • UnitedHealth (UNH) allegedly paid nursing homes to reduce transfers between hospitals, according to The Guardian
  • UnitedHealth (UNH) issues statement regarding May 21 article in The Guardian; says "Department of Justice investigated these allegations, interviewed witnesses, and obtained thousands of documents that demonstrated the significant factual inaccuracies in the allegations"
  • Visa (V) announces the general availability of Visa AR manager in the U.S
  • Volvo (VLVLY) and Google (GOOG) expand partnership with Gemini integration and accelerated automotive innovation
  • Wolfspeed (WOLF) preparing to file for bankruptcy within weeks, according to the Wall Street Journal
  • XP (XP) approves new share repurchase program for up to the dollar equivalent of R$1.0 bln of common shares; Also announces that its Board of Directors approved the cancellation of existing treasury Class A shares held by the company

• Upgrades:
  • Acadia Pharmaceuticals (ACAD) upgraded to Buy from Hold at Deutsche Bank, tgt $35
  • AutoZone (AZO) upgraded to Buy from Neutral at BofA Securities, tgt $4,800
  • Bilibili (BILI) upgraded to Buy from Hold at HSBC, tgt $22.50
  • Home Depot (HD) upgraded to Buy from Hold at Stifel, tgt $425
• Downgrades:
  • CAE (CAE) downgraded to Sector Perform from Outperform at RBC Capital
  • Myriad Genetics (MYGN) downgraded to Sector Perform from Outperform at Scotiabank, tgt $6
  • PennantPark (PNNT) downgraded to Sell from Neutral at Compass Point, tgt $5.75
  • UnitedHealth (UNH) downgraded to Reduce from Hold at HSBC, tgt $270
• Others:
  • Atlas Energy (AESI) initiated with a Buy at Stifel, tgt $15
  • Atlantic Union Bankshares (AUB) initiated with a Buy at Jefferies, tgt $37
  • Axos Financial (AX) initiated with a Buy at Jefferies, tgt $90
  • Banc of California (BANC) initiated with a Buy at Jefferies, tgt $18
  • BankUnited (BKU) initiated with a Hold at Jefferies, tgt $39
  • BOK Financial (BOKF) initiated with a Hold at Jefferies, tgt $105
  • Cathay General (CATY) initiated with a Buy at Jefferies, tgt $53
  • CF Bankshares (CFBK) assumed with an Overweight at Piper Sandler, tgt $29
  • Citizens Financial (CFG) initiated with a Buy at Jefferies, tgt $50
  • Columbia Banking (COLB) initiated with a Hold at Jefferies, tgt $27
  • Comerica (CMA) initiated with an Underperform at Jefferies, tgt $47
  • Cullen/Frost (CFR) initiated with an Underperform at Jefferies, tgt $105
  • Eagle Bancorp (EGBN) initiated with a Hold at Jefferies, tgt $20
  • East West Bancorp (EWBC) initiated with a Buy at Jefferies, tgt $115
  • Fifth Third (FITB) initiated with a Buy at Jefferies, tgt $47
  • First Citizens (FCNCA) initiated with a Hold at Jefferies, tgt $2,050
  • First Foundation (FFWM) initiated with a Buy at Jefferies, tgt $7
  • First Horizon (FHN) initiated with a Buy at Jefferies, tgt $25
  • Flagstar Financial (FLG) initiated with a Buy at Jefferies, tgt $15
  • Huntington Bancshares (HBAN) initiated with a Buy at Jefferies, tgt $20
  • Intel (INTC) resumed with a Hold at Deutsche Bank, tgt $23
  • KeyCorp (KEY) initiated with a Hold at Jefferies, tgt $18
  • M&T Bank (MTB) initiated with a Buy at Jefferies, tgt $225
  • Old National Bancorp (ONB) initiated with a Hold at Jefferies, tgt $24
  • Pinnacle Financial (PNFP) initiated with a Buy at Jefferies, tgt $135
  • Prosperity Bancshares (PB) initiated with a Buy at Jefferies, tgt $85
  • Regions Financial (RF) initiated with a Hold at Jefferies, tgt $24
  • SelectQuote (SLQT) initiated with a Hold at Jefferies, tgt $2.75
  • South State (SSB) initiated with a Buy at Jefferies, tgt $110
  • Synovus (SNV) initiated with a Hold at Jefferies, tgt $55
  • Texas Capital (TCBI) initiated with a Hold at Jefferies, tgt $80
  • Tvardi Therapeutics (TVRD) initiated with an Outperform at Oppenheimer, tgt $65
  • Tyra Biosciences (TYRA) assumed with an Overweight at Piper Sandler, tgt $33
  • Valley National (VLY) initiated with a Hold at Jefferies, tgt $10
  • Webster Financial (WBS) initiated with a Buy at Jefferies, tgt $65
  • Western Alliance (WAL) initiated with a Buy at Jefferies, tgt $95
  • Wintrust Financial (WTFC) initiated with a Buy at Jefferies, tgt $145
  • Zions Bancorp (ZION) initiated with an Underperform at Jefferies, tgt $40

• Econ Data (Thursday):
  • 08:30 ET: Initial Jobless Claims (Briefing.com consensus 232K; prior 229K) and Continuing Jobless Claims (prior 1881K)
  • 09:45 ET: Preliminary May S&P Global US Manufacturing PMI (prior 50.2) and Services PMI (prior 50.8)
  • 10:00 ET: April Existing Home Sales (Briefing.com consensus 4.15M; prior 4.02M)
  • 10:30 ET: EIA Natural Gas Inventories (prior +110 bcf)
• Earnings:
  • Monday (May 19)
    • Pre-Market: TH
    • After-Hours: AEGHT AGYS TRNS TCOM
  • Tuesday (May 20)
    • Pre-Market: AS BILI EXP GDS HD HOV VIK VIPS
    • After-Hours: JHX KEYS MOD PANW SKY TOL VSAT ZTO
  • Wednesday (May 21)
    • Pre-Market: BIDU GOOS DY LOW MDT TGT TJX VFC WB WIX
      
    • After-Hours: DOMO ENS RAMP SNOW URBN ZM
  • Thursday (May 22)
    • Pre-Market: AAP ADI BJ LSPD RL TD
    • After-Hours: ADSK CPRT DECK INTU LGF.A ROST STEP WDAY
  • Friday (May 23)
    • Pre-Market: BAH BKE
    • After-Hours: None
  General Motors: 5,000 members at GM's Arlington, TX assembly plant join UAW strike