1. White House debt ceiling meeting Tuesday. President Joe Biden and House Speaker Kevin McCarthy. There will be an acknowledgment only that there’s no deal. Some progress is being made but no sign of a recognition of the pending catastrophe. The nation’s borrowing limit must be raised by early June or risk historic default. The debt ceiling fight in 2011: It was finally raised then but the stock market suffered while Washington bickered.
2. Banks on the red hot griddle again; led by Charles Schwab (SCHW), which remains quizzical given the size of its bank versus the rest of its operation. Many regional banks are also back under pressure Tuesday. PacWest (PACW) and Western Alliance (WAL) are the two banks that people really seem to want to break.
3. The Dow, the S&P 500 and the Nasdaq open lower. Inflation data on Wednesday and Thursday loom. Stocks were pretty muted Monday. Club stock quartlery earnings coming this week: Wynn Resorts (WYNN) after the closing bell Tuesday and Disney (DIS) after the bell Wednesday.
4. Boeing (BA) gets a huge order from low-cost European carrier Ryanair. At least 150 of the U.S. aircraft maker’s 737 Max planes. Outspoken Ryanair CEO Michael O’Leary, who at times has been a critic of Boeing, in the end, stayed with it. Boeing has also pulled in big sales recently from Saudi Arabian Airlines, Air India, and United Airlines (UAL).
5. Palantir Technologies (PLTR) shares soar 15% early Tuesday. The big data analytics provider, which works with governments and big companies, delivers a better-than-expected quarter and forecasts full-year profitability. A major help to Jacobs Solutions (J), big infrastructure player, Hertz (HTZ), and Ukraine, where Palantir can predict things on the battlefield, according to CEO Alex Karp. Stunning transformation using AI.
6. PayPal (PYPL): Wall Street doesn’t like the margins. The stock down roughly 7% A very strange call because that’s the only metric that seems weaker. This is a growth company that doesn’t make enough money from its growth. Operating margin expansion in Q2 will be 100 basis points, not 125. I bet this is just optics and the stock ultimately rallies. Q1 earnings per share (EPS) and revenue beat.
7. Skyworks Solutions (SWKS) shares down nearly 12%. Managment cites slowdown in Android smartphone ecosystem. Low-end China not doing well leads to lower numbers. CEO Iam Griffin says China will come back and be “another catalyst” for Skyworks. Fiscal second-quarter EPS matches with a revenue beat. But guidance weaker.
8. Under Armour (UAA) shares down 5%. The athletic apparel and shoe company delivered fiscal fourth-quarter revenue and earnings that were slightly higher than estimates. But gross margin declined 310 basis points. Full-year fiscal 2024 guidance: Gross margin expected to be up 25 to 75 basis points compared to last year’s 44.9%. But that would still be way below estimates.
9. Disney expands federal lawsuit against Gov. Ron DeSantis, accusing the Florida Republican and possible 2024 presidential contender, of doubling down on his “retribution campaign” by signing legislation to void the company’s development deals in Orlando.
10. Bank of America cuts Devon Energy (DVN) price target to $60 per share from $67. Keeps neutral (hold) rating. The Club got out of Devon last month, consolidating our exposure around our two other oil and natural gas producers Coterra Energy (CTRA) and Pioneer Natural Resources (PXD), a position we added to on Friday. We also own oilfield services giant Halliburton (HAL).
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