GDP revision and US economic slowdown, inflation, reports and company news

• The wait is almost over today as inflation reports from Europe and the US top the agenda and any surprise is likely to weigh on markets as investors weigh changing expectations for global rates.

• First up will be Eurozone inflation, which is expected to come in at 2.5% in May after holding steady at 2.4% over the past couple of months, while core inflation is expected to remain steady at level of 2.7%.

• A downward revision to US GDP on Thursday increased expectations that the Federal Reserve has room to cut rates this year, although investors took the bad news (of weaker growth) as bad news for a change, sending US stocks, the dollar and Treasury yields. 

In the first quarter, the US economy grew expectedly slower than initially thought.
The second estimate of US GDP for the first quarter by the Bureau of Economic Analysis showed the economy grew 1.3% y/y, after the first estimate of 1.6% y/y.
Importantly, the core PCE deflator rose 3.7% - as expected.
That is, inflation ate up the lion's share of growth.
The number of people receiving unemployment benefits in the US remains stable.
The US trade deficit has grown to $99.41 billion.
This worsens economic growth in the United States, but helps to saturate the global economy with dollars.
The US housing market is cooling.
The index of pending sales in the US real estate market fell by 7.7% m/m in April (-1.1% was expected).

• Markets are still shrugging off Donald Trump's verdict after he became the first US president to be convicted of a crime on Thursday when a New York jury found him guilty of falsifying documents to cover up a payment to silence a porn star in the 2016 election. Shares of Trump Media & Technology Group, the parent company of The Truth Social, which is majority owned by Trump, fell 6.5% late Thursday after the verdict.

• For no apparent reason, many technology stocks sank in price yesterday – apparently a rebalance at the end of the month.

• In anticipation of the OPEC+ decision, oil sank. This, as well as the absence of unpleasant surprises from the GDP deflator, helped reduce US government bond yields.

• Foreign exchange market and crypto in consolidation.

• Fed's Williams reassures investors. Inflation is still too high but should fall in the second half of 2024.
US limits sales of AI chips to the Middle East

• Because there is a risk of technology transfer to China. Ban for NVDA and AMD.

• The value of the ten most expensive football clubs in the world has risen to almost $48 billion. For
the third year in a row, the annual Forbes ranking was topped by Real Madrid with $6.6 billion.
In second place is Manchester United with a valuation of $6.55 billion.
In third place is " Barcelona" $5.6 billion.

• Brookfield reaches a deal to buy French company Neoen for $6.6 billion. The deal is one of the largest private deals in Europe this year and comes amid strong investor interest in renewable energy assets.

• Sports and sunny weather will boost beer sales in Europe, analysts say. European brewers are hoping for a good summer as sporting events and better weather keep customers flocking to pubs.

• Faraday Future Intelligent Electric withdraws production plans. The electric vehicle maker said the decision was driven by current market conditions and funding levels. FFIE shares rose 27% yesterday after falling 62% on Wednesday.

• Private label brands in the US fill the majority of consumers' shopping baskets. Their desire to reduce their food costs has contributed to the rise in popularity of low-cost brands.

• British Royal Mail will be sold to a Czech billionaire. The owner of the British Royal Mail, which has been delivering letters for 500 years, agreed to a deal with a Czech billionaire for almost $5 billion.

• BYD makes hybrids with a range of 1,300 miles. Chinese automaker BYD produces cars that can travel the distance between New York and Miami without recharging.

• A $25,000 electric Jeep coming to the US "very soon." Stellantis says it already sells affordable electric vehicles elsewhere in the world at a profit.

• Shares of retailer Dollar General (DG) fell 8% yesterday. While the discount chain reported strong results for its fiscal first quarter, they were overshadowed by company comments about consumers' growing wariness about spending.

• Salesforce (CRM) shares fell the most in nearly two decades, down 20%. Salesforce's results raised concerns about potential setbacks in the artificial intelligence boom. Shares fell after the company said sales growth would slow to the lowest level in its history.

• Among yesterday's losers we note: PATH -34%, NET -10%, OKTA -8%, NOW -12%, RBRK -8%, ADBE -7%, ORCL -5%, MSFT -3%, CRWD -10 %, S -6%, PANW -4%, MDB -7%, INTU -6%, DOCU -7%, PD -8%, SNOW -5%.

• Businesses have switched on savings mode, which is hitting corporate software sales. In an interview with Barron's, C3 CEO Tom Siebel stated that AI may actually be a headwind rather than a tailwind for some legacy enterprise software companies: “These guys have technology stacks that they built literally in the last century. What they do is take an AI sticker and slap it on the front of their box - ServiceNow, Salesforce, Workday, Oracle, SAP. I'm not sure this will work.

• Nio shares rise 10% in Hong Kong. On expectations the Chinese electric vehicle maker's deliveries are likely to hit a record level in May. The strong sales may be due to ongoing discounts in vehicle and battery prices.

• Stocks after premarket reports: GPS +23%, ZS +16%, ULTA +6%, COST -2%, MRVL -4%, JWN -6%, DELL -18%, MDB -26%,

• BEA will release the Personal Consumption Expenditures Price Index for April. The PCE price index is expected to remain at 2.7% YoY.
And core PCE will remain at 2.8% y/y.

• The Institute for Supply Management publishes the Chicago Business Barometer for May. Forecast – growth to 41.1.

• CoinDesk Consensus event will feature presidential candidate Robert F. Kennedy Jr., Cathie Wood of ARK Invest, Mike Novogratz of Galaxy Digital, SEC Commissioner Hester Pierce, Ripple CEO Brad Garlinghouse and Lamina1 co-founder and author Neil Stevenson.

• Last trading day before the 37th OPEC+ ministerial meeting. The consensus is that an extension to existing voluntary OPEC+ cuts will be announced over the weekend.

• The FDA will rule on Bristol-Myers Squibb's (BMY) therapy Breyanzi (lisocabtagene maraleucel) for the treatment of follicular lymphoma.
The American Society of Clinical Oncology meeting begins in Chicago and runs through June 4. We're keeping an eye on Arcus Biosciences (RCUS), AstraZeneca (AZN), Pfizer (PFE) and Gilead Sciences (GILD).

• Moderna (MRNA) will speak at the Bernstein Strategic Solutions Conference.