Morning in New York: investors in search of guidance

Daily review and forecast of events on the U.S. stock market from Mikhail Denislamov, Deputy Director of Capital Markets Research, Freedom Broker.

Geopolitics and the oil market remain the key external factors determining the movements of stock exchange quotations. The participants of the OPEC+ agreement agreed to increase production by 188 thousand barrels per day in June at the first meeting after the UAE left the alliance, but the effect of the decision is limited due to the continuing disruptions in supplies through the Strait of Hormuz.

US President Donald Trump has expressed doubts about the acceptability of another Iranian peace proposal and announced a program to withdraw civilian ships from the Persian Gulf, dubbed Project Freedom. This may partially reduce tensions, although risks of escalation remain. Oil prices are consolidating near local highs. Against the backdrop of increased energy inflationary pressures, Fed officials are making it clear that more clear signs of cooling in the economy, primarily the labor market, are needed to discuss rate cuts.

The new week will be calmer than the previous one, which was full of hawkish comments from the monetary authorities, important reports and macro statistics. Today we will see the release of industrial orders data for March (consensus: +0.5%, February: 0%) and the final report on durable goods orders (preliminary estimate: +0.8%). The figures will help to clarify the dynamics of industrial demand, but in the absence of a strong deviation from the forecast, they are unlikely to be an important driver for the market.

Loews (L) and Norwegian Cruise Line (NCLH) report for the past quarter. Hess Midstream (HESM), Pinnacle West Capital (PNW), Axsome Therapeutics (AXSM), and Tyson Foods (TSN) will also report quarterly results before the main session. Palantir (PLTR), ON Semiconductor (ON), Diamondback Energy (FANG), Vertex Pharmaceuticals (VRTX), Williams Companies (WMB), Fabrinet (FN), and Pinterest (PINS ) will report after the close.

Futures on S&P 500 show a moderate decline. We assess the balance of risks for the upcoming trades as neutral with moderate volatility. A strong reporting season supports bullish sentiment, while high oil prices and geopolitical risks limit risk appetite.

- Shares of eBay (EBAY) and GameStop (GME) could be in focus after reports of GameStop' s non-binding offer to acquire eBay for $125 per share. In the premarket, eBay's securities were up more than 10%, while GameStop's are down nearly 6%. GameStop's CEO announced plans to transform eBay into an Amazon competitor. At the same time, the implementation of the deal, given GameStop's capitalization of about $12 billion versus eBay's $46 billion, carries significant financing risks.

- Berkshire Hathaway (BRK.B) reported operating income of $11.35 billion (~$5.26 per share) for the latest quarter. The figure cleared from investment losses of $1.24 billion (vs. $5.04 billion a year earlier), signaling the strength of the underlying business. Insurance cash flow increased to nearly $177 billion from about $176 billion at the end of 2025. The first-quarter buyback waiver could be seen by the market as a signal of a more cautious approach to capital allocation. CEO Greg Abel emphasized that Berkshire Hathaway is in no rush to place capital into questionable deals, even though it has a record cachet of about $380 billion, and continues to gradually reduce its public portfolio.

- Indices of South Korea and Taiwan have updated highs on the background of strong growth of quotations of the largest corporations of these countries - SK Hynix and TSMC (TSM). It became known that TSMC resumed preparation of the site for the production of next-generation chips on the 1.6 nm process.

- Shares of Lockheed Martin (LMT) and Boeing (BA) may react positively to news that Israel has approved the purchase of the F-35 and F-15IA by Israel as part of its $119 billion defense program. The deal, which is valued in the tens of billions of dollars, creates certainty for long-term orders and confirms a steady demand for military aircraft.

- Defense sector stocks may enjoy increased buyer demand following the U.S. administration's decision to bypass the congressional approval process to approve over $8.6 billion worth of military supplies to allies. The package includes Patriot air defense systems for Qatar ($4 billion), combat systems for Kuwait ($2.5 billion) and weapons for Israel and the UAE, which supports demand for defense products.

- The aviation sector may be supported by the news about the liquidation of Spirit Airlines, which was unable to cope with rising costs amid rising jet fuel prices (additional costs were estimated at $10-15 mln per week). The departure of a major low-cost carrier can reduce competition and improve price discipline in the industry.

- Shares of General Motors (GM), Ford (F) and Stellantis (STLA) may react negatively to the news of rising costs due to the rise in the cost of raw materials, logistics and components due to the Middle East conflict by about $5 billion. In particular, GM estimates the negative effect on profits up to $2 billion, Stellantis - in € 1 billion, and Ford forecasts about $2 billion of additional costs in the supply chain. Against this background, the margins of the automotive industry are likely to decline.

Trading on Ma 1 on American stock exchanges ended mostly in the positive territory. S&P 500 added 0.29%, Nasdaq 100 grew by 0.94%, Russell 2000 rose by 0.46%, only Dow Jones lost 0.31%. The main driver of growth was favorable corporate news, primarily in the technology segment. The overall dynamics was determined by the "Magnificent Seven" companies, including Apple (AAPL: +3.24% at the close of trading on Ma. 1), whose quotes were moving up against the background of reporting. In the broad market, the IT sector (XLK: +1.49%) emerged as a growth leader, supported by demand for semiconductors and software companies. The energy sector (XLE: -1.34%) was the outsider due to the correction in oil prices.

Macro statistics was mixed. The ISM manufacturing index for April amounted to 52.7 points, unchanged from March and below consensus. Despite the growth of the new orders component, the decline in production and employment figures, as well as increased price pressures point to persistent inflationary risks. Against this backdrop, UST yields at the long end of the curve declined by 1-3 bps, reflecting moderate demand for safe-haven assets.

Reports of a new Iranian peace proposal partially reduced tensions and contributed to a correction in oil prices, in particular WTI fell in price by 3%. At the same time, the lack of progress in the negotiations between Washington and Tehran, as well as the tough rhetoric of the White House keep the risk of prolonged pressure on the energy market. This remains an important factor for inflation expectations and the trajectory of monetary policy.

- Cboe Global Markets (CBOE: +9% at the close of trading on May 1) reported revenue and earnings above average expectations for the latest quarter. This was supported by record derivatives trading volumes and increased activity in spot markets. The company raised its revenue guidance and announced a restructuring, including the reduction of about 20% of its workforce.

- MasTec (MTZ: +5.9%) posted strong results, with the pipeline infrastructure segment making a major contribution. Management raised its full-year guidance as record backlog of $23 bln strengthens earnings outlook.

- Estée Lauder (EL: +3.4%) beat average expectations on earnings, revenue and margin. These metrics were supported by strong perfume sales and improved momentum in the Chinese market, which allowed the company to raise its full-year guidance.

- Colgate-Palmolive (CL: +2.2%) organic revenue exceeded consensus thanks to strong revenue growth in Latin America and Asia, which offset weak results in North America. The full-year guidance was confirmed.

- Clorox (CLX: -9.7%) generated earnings above average market expectations, but worsened its EPS and revenue guideposts amid rising costs, which is unfavorable for margins.

- Rivian (RIVN: -8.4%) reported revenue in line with expectations and EPS above estimates, while its EBITDA loss was below consensus. The company reaffirmed its 2026 delivery target (62,000-67,000). At the same time, rising expansion costs, including the launch of the Georgia plant, heightened free cash flow concerns.

This article was AI-translated and verified by a human editor