Welcome Back,

Still no debt ceiling deal in sight…

Let’s keep it concise.

Market Headlines 👀

• Facebook (META) is hit with a $1.3b fine by the EU over data transfers between the US and EU.

• US President Biden says relations with China will improve very shortly.

• US President Biden and GOP are still meeting over a debt ceiling dealing, with no resolution in sight as of now.

• US Treasury Secretary Yellen says June 1st remains the hard deadline for US debt ceiling deal.

• Micron (MU) China bans Micron products from its key infrastructure citing security risks.

• US companies pull forward investment grade bond issuance which has doubled YoY for the month of May with debt ceiling looming.

• SpaceX launched four private astronauts via its Falcon 9 rocket into space Sunday evening.

• Facebook (META) Instagram is preparing to release a Twitter competitor this summer.

• Apple (AAPL) is restricting employees from using OpenAi’s ChatGPT.

• Walt Disney (DIS) begins third round of layoffs, which will affect about 700 employees.

• US Pentagon fake images surfaced online using AI showing an explosion in DC, which was false.

• Mizuho Financial Group (MFG) set to buy investment bank Greenhill for $550 million.

• Chevron Corp (CVX) set to buy PDC energy for $7.6b.

Earnings 💸

• Zoom (ZM)

  • EPS: $1.16 beats (exp. $0.99)

  • Revenue: $1.1b beats (exp. $1.08b)

• Nanox (NNOX)

  • Revenue: $2.45m misses (exp. $2.90m)

S&P 500 Heap Map

Recap Around the Street 🧠

The resiliency of profit margins and a less concerning economic environment is evident in management commentary as well. Bloomberg’s measure of earnings call sentiment (in response to analyst questions) increased to the highest level since the fourth quarter of 2021, led by improved sentiment towards labor, inflation, and foreign exchange rates. At the same time the number of times management teams mentioned headwinds like inflation, labor, FX, and recession declined to multi-quarter lows. (Contributed by Cameron Dawson, CIO at NewEdge Wealth).

Overall equity funds have seen an outflow with the exception of US technology. The sector has enjoyed net positive flows over the growth prospects of generative AI and perceptions that enterprise tech spending and social media advertising can weather a recession.(Contributed by Benjamin Lavine, CIO at 3D/L Capital).

Market Preview 🎞️

• Tuesday, May 23rd: S&P Global US manufacturing/services PMI; New home sales

• Tuesday earnings: Lowes (LOW), Paloalto Networks (PANW), Toll Brothers (TOL), and Dicks Sporting Goods (DKS)

• Wednesday, May 24th: MBA mortgage applications; May FOMC minutes

• Wednesday earnings: Nvidia (NVDA), Snowflake (SNOW), Digital Turbine (APPS), and UIPath (PATH)

• Thursday, May 25th: Jobless claims; US GDP 2nd revision; Interest rate decisions due in Turkey, South Africa, Indonesia; Pending home sales

• Thursday earnings: Costco Wholesale (COST), Ulta Beauty (ULTA), Workday (WDAY), Dollar Tree (DLTR), and Medtronic (MDT)

• Friday, May 26th: Personal income and spending (PCE); Durable goods orders; University of Michigan sentiment and inflation expectations

• Friday earnings: Booz Allen Hamilton (BAH)

That’s all for today, folks! We’ll be back around the same time tomorrow with a curated list of important news, economic data and market highlights. 

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