Traders Market Weekly: NVidia, AI and The Debt Celling

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    Have a great week everyone!


    Equity indices in the Asia-Pacific region began the week on a higher note.

    Japan’s Nikkei: +0.8%,
    Hong Kong’s Hang Seng: +1.8%,
    China’s Shanghai Composite: +1.2%,
    India’s Sensex: +0.5%,
    South Korea’s Kospi: +0.2%,
    Australia’s ASX All Ordinaries: +0.1%


    Japan’s April PPI 0.2% m/m (last 0.1%); 5.8% yr/yr (expected 7.1%; last 7.4%).
    April Machine Tool Orders -12.7% yr/yr (last -15.2%)

    South Korea’s April trade deficit $2.70 bln (expected deficit of $2.62 bln; last deficit of $4.63 bln).
    April Imports -13.3% yr/yr and Exports -14.3% yr/yr

    India’s April WPI Inflation -0.92% yr/yr (expected -0.20%; last 1.34%)

    Australia’s April Building Approvals -0.1% m/m, as expected (last 3.9%)
    Private House Approvals -2.8% m/m (last 11.3%)


    Japan’s Prime Minister Kishida will meet with President Biden on Thursday.
    Japanese utility providers are expected to raise their prices by up to 43% once the government allows price hikes to resume.


    The People’s Bank of China added some liquidity by rolling over CNY125 bln of maturing medium-term loans.

    National Australia Bank expects the Reserve Bank of Australia to announce at least one more rate hike.


    Major European indices trade on a mostly higher note while Spain’s IBEX (-0.1%) underperforms.

    STOXX Europe 600: +0.4%,
    Germany’s DAX: +0.2%,
    U.K.’s FTSE 100: +0.5%,
    France’s CAC 40: +0.5%,
    Italy’s FTSE MIB: +0.1%,
    Spain’s IBEX 35: -0.1%.


    Eurozone’s March Industrial Production -4.1% m/m (expected -2.5%; last 1.5%); -1.4% yr/yr (expected 0.9%; last 2.0%)

    Germany’s April WPI -0.4% m/m (expected 0.3%; last 0.2%); -0.5% yr/yr (expected -0.7%; last 2.0%)

    Swiss April PPI 0.2% m/m (expected -0.1%; last 0.2%); 1.0% yr/yr (expected 1.1%; last 2.1%)


    European Central Bank policymaker De Guindos said that the ECB is in the final stages of its hiking cycle while policymaker Kazimir said that hikes may continue for longer than originally thought.

    The EU Commission’s spring forecast raised the 2023 growth outlook to 1.1% from 0.9% while the outlook for 2024 was increased to 1.6% from 1.5%.

    The inflation outlook was raised to 5.8% from 5.6% for 2023 while the forecast for 2024 was increased to 2.8% from 2.5%.


    Turkish presidential election is headed for a run-off on May 18 after President Erdogan received just under 50.0% of the votes in this weekend’s election.


    Oneok (OKE 60.00, -3.72, -5.8%): Magellan Midstream (MMP) to be acquired by ONEOK (OKE) for implied value of $67.50 per unit

    Magellan Midstream Partners (NYSE:MMP) in a cash and stock deal valued at ~$18.8B including assumed debt, resulting in a combined company with a $60B total enterprise value.

    The consideration will consist of $25/share in cash and 0.667 common share of Oneok (OKE) for each outstanding Magellan (MMP) common unit, representing a current implied value to each Magellan unitholder of $67.50/unit for a 22% premium based on the May 12 closing price.

    Oneok (OKE) said it expects the deal to be earnings accretive beginning in 2024, with EPS accretion of 3%-7% per year during 2025-27 and free cash flow per share accretion averaging more than 20% during 2024-27; base synergies are expected to total at least $200M/year.

    The combined company will own 25K-plus miles of liquids-oriented pipelines, with significant assets and operational expertise at the Gulf Coast and Mid-Continent market hubs.


    Newmont Goldcorp (NEM 46.39, +0.45, +1.0%): to acquire Newcrest in approx. $19 billion cash and stock deal

    Newmont (NYSE:NEM) said Sunday it has entered into a binding agreement to acquire Newcrest Mining (OTCPK:NCMGF) (OTCPK:NCMGY) via an Australian court-approved scheme of arrangement.

    Newcrest (OTCPK:NCMGF) (OTCPK:NCMGY) said it recommends shareholders vote in favor of Newmont’s (NEM) offer, which comprises 0.400 of its own shares for each Newcrest share; Newcrest also is permitted to pay a special dividend of up to $1.10/share around the time any deal completes.

    Under the deal, Newcrest (NCMMGF) (OTCPK:NCMGY) shareholders would receive 0.4 Newmont (NEM) share for each share held, with an implied value of A$29.27/share (US$19.53/share), a 30.4% premium to where its shares were trading in early February before Newmont’s interest was known.

    The takeover requires approval from Australia’s Foreign Investment Review Board as well as favorable votes from shareholders of the two companies, among other regulatory approvals.


    Sarepta Therapeutics (SRPT 154.52, +34.32, +28.6%): receives Positive Vote from FDA Advisory Committee Meeting for SRP-9001 gene therapy to treat duchenne muscular dystrophy

    Participant (AI 19.87, +0.45, +2.3%): raises Q4 revenue guidance

    Artificial intelligence software maker (NYSE:AI) unveiled preliminary fourth-quarter results on Monday, stating that sales for the period topped expectations. (AI) generated revenue between $72.1M and $72.4M for the period ending April 30, exceeding the $71.1M estimate from Wall Street and the company’s own guidance.

    In addition, the company said it generated between $28.1M and $29.5M in net cash from operating activities, while free cash flow for the period was between $18M and $19.4M.

    On an adjusted basis, it lost between $23.7M and $23.9M from operations, exceeding its guidance.

    In a statement, the company said enterprise AI activity is more than the company has seen since its inception and “seems to be accelerating,” as it closed 43 deals during the quarter, including 19 pilots.

    Complete financial results will be reported on May 31.

    Participant (MNDY 151.39, +20.29, +15.5%): beats by $0.43, beats on revs; guides Q2 revs above consensus; guides FY23 revs above consensus


    H & R Block (HRB 28.98, -3.06, -9.6%): IRS mulling creation of government run tax preparation option, according to WSJ

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