Dow rose 568 (with buying into the close), advancers over decliners 5-2 & NAZ inched up pennies after being in the red all day. The MLP index gained 3+ to the 275s & the REIT index gained 6+ to the 372s, Junk bond funds were slightly higher & Treasuries were purchased which lowered yields. Oil was off 1 to the high 76s & gold dropped 20 to 2345 (more on both below).
Dow Jones Industrials
Dell (DELL) fiscal first-qtr results
that beat expectations & offered rosy guidance. The company said revenue for the period was $22.2B, which was
up from the $21.6B the estimate. For
its 2nd qtr, DELL expects EPS of $1.65 & expects sales to come of $23.5-24.5B. Analysts were expecting $23.3B. DELL guided
for $93.5-97.5B in sales in the full fiscal
year. The beat wasn't enough to appease investors, & shares tumbled. Bernstein
analysts said the “principle disappointment” in DELL's results was that
operating margins for its Infrastructure Solutions Group compressed
year over year. Additionally, operating profits were flat compared with
the same period last year, even though the company brought in around
$1.7B in incremental AI server revenues. They said
this resurfaced concerns that DELL's AI servers are being sold at
“near-zero margins.” In other words, the company's AI initiatives are
not translating into profits yet. “On net, relative to very high expectations, Dell’s Q1 25 results were disappointing,” the analysts wrote. The stock tumbled 30.23 (18%).
Shares of Dell fall 16% as AI servers are sold at ‘near-zero margins’
The Food & Drug Administration approved Moderna’s (MRNA) vaccine for respiratory syncytial virus for adults ages 60 & above, the company's 2nd-ever product to enter the US market. The decision is a win for MRNA, which desperately needs another revenue source amid plunging demand for its Covid jab, its only commercially available product. The approval of this shot is based on a late-stage trial
on older adults, who are more vulnerable to severe cases of RSV. The
virus kills 6-10K seniors every year & results in
60K - 160K hospitalizations, according to data from the Centers for Disease Control & Prevention. MRNA's
shot will be marketed under the brand name mRESVIA & is the first
messenger RNA vaccine to get approved for a disease other than Covid. The company’s shot is also the only RSV vaccine to be available in a
pre-filled syringe, which is designed to make it easier to administer to
patients. An advisory panel
to the CDC will vote in Jun on recommendations for the use &
intended population of MRNA's shot. The stock sank 8.92 (6%).
FDA approves Moderna’s RSV vaccine for seniors, the company’s
Pfizer (PFE) said its drug (Lorbrena) for an advanced form of lung cancer
showed promising long-term results in a late-stage trial, which may
help establish it as the new standard treatment for the condition. The medicine helped patients live longer
without seeing their cancer progress & most people experienced that
benefit for over 5 years. Lorbrena, also cut the
risk of the cancer progressing in patient' brains. Lorbrena is already approved in the US for treating adults with advanced non-small cell lung cancer who have a mutation in a gene called ALK. Only about 5% of all non-small cell lung cancer patients have the mutation, which causes cancer cells to grow & spread abnormally. But
that translates to 72K people who are diagnosed with that specific
form of lung cancer each year worldwide, according to PFE. That cancer is typically aggressive & often affects younger
people. More broadly, non-small-cell lung cancer is a common form of the disease. Lorbrena
is specifically approved as a first-line treatment for that form of
lung cancer, meaning patients who take it have not received any other
therapy. But the drug isn't currently considered the standard, or
the most appropriate & widely used, treatment for the condition. The company thinks the new 5-year data on the drug will change that. “In cancer medicine in general, you always want to give the best
medicine upfront first. So that’s why we believe this data … will lead
to [Lorbrena] becoming a standard” first-line treatment in this specific
form of lung cancer, Chris Boshoff, PFE's chief oncology officer, said. The stock rose 47¢.
Pfizer’s drug for advanced lung cancer shows promising long-term trial results
Gold prices eased as investors digested US inflation report that was largely in line with estimates, although expectations that the Federal Reserve will cut interest rates this year kept bullion on track for its 4th straight monthly gain. Spot gold gave up earlier gains to trade down 0.7% at $2325 per ounce & US gold futures settled 0.9% lower at $2346. However, bullion was up 1.8% for the month. On May 20, prices hit an all-time high of $2449. Gold is down despite the friendly PCE report & softer consumer spending, which could suggest near-term exhaustion in what has been a remarkable rally in 2024. Data showed the Personal Consumption Expenditures (PCE) Price Index rose 0.3% in Apr, in line with forecasts. In the 12 months thru Mar, PCE inflation gained 2.7% as expected.
Gold Posts Fourth Monthly Rise on Fed Rate Cut Hopes
West Texas Intermediate (WTI) crude oil fell for a 3rd-straight session as US inflation data met the forecast ahead of this weekend's OPEC+ meeting, which is expected to roll into the 3rd qtr or beyond production cuts slated to expire at the end of Jun. WTI crude for Jul closed down 92¢ to settle at $76.99 per barrel, while Jul Brent crude, the global benchmark, was last seen down 23¢ to $81.63. The Bureau of Economic Analysis released the Apr Personal Consumption Expenditure (PCE) Index, the Federal Reserve's preferred inflation measure. The index rose by 2.7% annualized last month, matching expectations, unchanged from Mar. Core PCE, excluding volatile items, rose 0.2% from Mar, matching expectations & down from 0.3% a month earlier. While coming in as expected, the index shows inflation remains stuck above the Federal Reserve's 2% target, though the $ & treasury yields weakened following the data. OPEC+ will meet virtually on Sun to decide on the future of 2.2M barrels per day of voluntary production cuts, with the cartel expected to roll the cuts forward. The group is looking to support prices that have been mostly stuck in a tight range since the beginning of the month despite the start of the high-demand US driving season.
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