Morning Bites - May 15, 2023

🔮 Welcome back to Finsights, fellow financial wizard. Let’s get you up to speed on the market with a flick of your finger! 🪄

• 🕺Asian stocks lead the way for higher close this morning

• 🤝 Debt ceiling agreement by June?

• The Empire Report doesn’t look so hot

Market Levels Snapshot: Good news! US equity futures indices are in the green 📈: S&P up 0.33%, Dow up 0.31%, and Nasdaq up 0.28%. Major Eurozone indices are on the rise, too, with a 0.15-0.20% lift. But, Turkey's market is down 3-4% due to election uncertainty 😮. Over in Asia, it's mostly a sea of green with only Taiwan's TAIEX down slightly. Treasury yields are slightly up, and the DXY is holding steady after strong gains last week. Meanwhile, Brent crude is unchanged, natural gas is on the rise, and gold is up a touch. Bitcoin? It's bouncing back, sitting around $27.4K 🚀.

Morning Developments: Stocks are performing well globally, thanks to a triple-threat of good news: progress on the US debt ceiling, M&A activity, and inflation. The debt ceiling negotiations are moving forward, and we're expecting another big meeting on Tuesday 🤝. While it may not be smooth sailing, the chances of an agreement by early June are looking better this week.

Our Take on Stocks: We're sticking to our guns 🎯. Our outlook hasn't changed. We're banking on earnings strength, the end of Fed rate hikes, continued US disinflation, and market negativity to act as tailwinds for equities. Sure, there are things we're not fans of, like high valuations, breadth, and debt ceiling risks. But, these don't outshine the positives we see. 💡

💸 Inflation Hangs On as Empire Report Takes a Dive: Today's Empire Manufacturing report for May was a shocker, falling to -31.8, a far cry from April's +10.8 and even further from the -3.9 predicted. 🎢 New orders, which give us a peek into future demand, also crashed from +25.1 to a worrying -28. 📦 Shipments went from a strong +23.9 to -16.4. Yet, despite these gloomy figures, inflation gauges refused to budge. 💰 Prices paid edged up from 33 to 34.9, indicating manufacturers are still feeling the pinch. 👀

What does this all mean? Well, we're seeing a troubling trend. This is the third report in as many days suggesting a 'hard landing' – an abrupt slowdown in economic activity – could be on the horizon. 🌆 Unemployment claims are up, sentiment is down, but inflation isn't going anywhere. It's a cocktail that could leave a bitter aftertaste for the economy. 🍸 While inflation remains a hot topic, the focus is shifting to these cooler growth figures. So, it's time to fasten our seatbelts; the economic ride might get a bit bumpy. 🎢

Consumer Discretionary

🎰 NGMS (NeoGames), the tech-savvy lottery system provider, is hitting the jackpot! They're being bought by Australia's Aristocrat Leisure for $29.50/share. That's a lucky 130% premium!🍀

🍔 SHAK (Shake Shack), the modern-day "roadside" burger stand, is in a bit of a shake-up! They're facing a proxy battle from Engaged Capital, which is eyeing three board seats. Looks like there's more sizzling here than just their burgers.🔥

Energy

🏗️ Wood Group, the energy services company, is in a free fall in London trading. Apollo has decided not to proceed with a takeout bid. Looks like Wood Group needs to find another builder. 🚧

Healthcare

🔬 CTLT (Catalent), the wizards behind advanced delivery technologies, is playing the suspense card by delaying their earnings report, now expected on May 19th. After a dramatic ~50% stock tumble in the past month, Deutsche Bank has downgraded the company from Buy to Hold. Seems like they're not the chosen ones after all. 😬

💊 $ATNX (Athenex), the biopharmaceutical firm that's been fighting cancer, has now to fight bankruptcy. They've filed for Chapter 11, making this a tough pill to swallow. 😥

🏥 Envision Healthcare, the company that's been providing physician services, has also landed in the sickbay. Just five years after being bought by KKR, they're filing for bankruptcy. Now that's a check-up gone wrong. 🌡️

Industrial

💼 NEM (Newmont), the gold mining giant that's been around for a century, is about to get even bigger! They're buying Newcrest Mining for A$28.8B. This golden handshake is expected to conclude by the end of 2023. 😮

🔥 Kidde-Fenwal, owned by Carrier and usually putting out fires, is now in one. They've filed for bankruptcy amidst a wave of "forever chemical" lawsuits. Talk about getting burned! 🧯

🛢️ OKE (ONEOK Inc.), the silent hero ensuring your gas stoves work, is set to merge with MMP (Magellan Midstream Partners) in a deal worth $18.8B. MMP shareholders must be feeling gassed up with a total of $67.50/share coming their way.💰

Tech

🤖 AI (CS.AI), on the frontier of AI, is proving that Skynet is not the only profitable AI in town. They posted a Q1 revenue of $72.3M, outsmarting Wall Street's guess of $71.1M. Also, their non-GAAP operating loss was smaller than expected at $23.8M compared to the predicted $25.4M. Way to pull a fast one on the analysts! 🎯

💻 HRB (H&R Block) and INTU (Intuit), your mom and dad's favorite tax software, might have to contend with a new player: Uncle Sam. The government is considering launching its own free tax prep website. But keep calm and carry on, folks, as both H&R Block and Intuit already offer free federal filing software for simple returns. 🔄

📅 MNDY (Monday), making our workweek more manageable, just dunked on Wall Street with a Q1 profit of $0.14 per share compared to the anticipated loss of $0.29. That's a LeBron James-style comeback! They're also looking to turn profitable by 2023, two years earlier than expected. Watch out, world! 🚀

🏢 TSEM (Tower Semiconductor), the unsung hero behind our gadgets, quietly beat the Street's revenue prediction with $355.6M, while their EPS of $0.64 per share was a slam dunk over the forecast of $0.47. Looks like they're playing 3D chess while we're all playing checkers. 🎉

📺 VICE (Vice Media), the edgy news and culture platform for millennials, is filing for Chapter 11 bankruptcy. Seems like they're looking to re-write their financial headlines. ✍️

💽 WDC (Western Digital), your trusted partner for data storage, is speeding up merger talks with Japan's Kioxia. Amidst a downturn in memory, it seems they're hoping to save their financials on a new hard drive. 🔄

🌯 Small wrap for earnings. Have a fantastic day! 🌯

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Fin-specto Revelio!