Inflation and business activity, corporate news ConocoPhillips, Chewy, American Airlines, CRM and others

• The lack of fresh market catalysts on Thursday means talk of higher and longer-term rates will persist, at least until the next economic indicators prove otherwise.

• The two-year U.S. Treasury yield hovered around 5% on Thursday, while the 10-year yield also remained near its highest level in several weeks. US bond yield spreads relative to other jurisdictions may not be widening much in favor of the dollar, but they remain wide enough to ensure the dollar remains investors' currency of choice.

• “Beige Book” from the Fed: Economic activity in the US continues to grow. Prices grew at a moderate pace.

• Inflation in Germany in May increased from 2.2% to 2.4% y/y. As expected.

• The US dollar M2 money supply grew for the first time in more than a year. The Fed has entered a phase of stable monetary policy - from tightening to stability. What the next step will be - resumption of tightening or easing - will depend on inflation data.

• The Bank of Japan reported record gains in equities over the past fiscal year. Japan's central bank reported record unrealized gains on shares it bought in the fiscal year ended March, reflecting a historic rally in Tokyo stocks.

• Dell should continue to shine in Nvidia's Halo - WSJ. Rapid growth in demand for artificial intelligence servers is fueling the tech giant's growth as the personal computer industry recovers.

• Bitcoin fell below $68 thousand. The reason may be the transfer of $9 billion from the Mt Gox exchange, which went bankrupt in 2014, planning to return funds to affected clients – Coindesk. BlackRock's spot ETF overtakes Grayscale's ETF in size to become world's largest - Bloomberg.

• ConocoPhillips (COP) will acquire Marathon Oil (MRO) for $17.1 billion - WSJ. MRO shares rose 8%. COP shares fell 3% on the news.

• PwC, the management consulting giant, has become OpenAI's largest client. The company's 100,000 employees in the US, UK and the Middle East will use ChatGPT at the corporate level.

• Chewy (CHWY) shares soared 27%. The company's adjusted earnings per share of $0.31 were significantly higher than Wall Street's forecast of $0.20. The online pet supplies retailer also announced a $500 million share buyback program. Once the darling of the pandemic, Chewy shares are still down more than 80% of their 2021 peak.

• American Airlines (AAL) shares fell 14%. The airline has lowered its profit forecast for the current quarter. The airline now forecast earnings per share in the range of $1 to $1.15 for the current quarter, up from its previous forecast of $1.15 to $1.45. The airline also expects overall revenue per available seat to decline 5% to 6% compared to last year. American Airlines had previously expected the figure to decline by between 1% and 3%.

• Activist investor Nelson Peltz sold his stake in Disney (DIS). A few weeks after losing the proxy fight.
He sold the shares for about $120, still making about $1 billion. DIS is now trading at $101.

• CRM shares fall 16% after the report. This adds to the decline in the Dow Jones Industrial.
The company's report and forecast were quite a bit worse than expected. One of the likely reasons for the disappointment in the results was the company's preferred indicator of business dynamics. The metric, which management refers to as "current remaining performance obligations," combines deferred revenue and backlog. Salesforce told analysts it expects CRPO to grow 12% in the April quarter. In reality it grew by 10%.

• C3 (AI) shares are up 9% after the report. Revenue grew by 20% y/y (+5% was expected).
“Demand for enterprise AI is growing and our first market advantage in enterprise AI positions us to capitalize on it.”

• NTNX shares fall 11% after the report. The cloud computing company reported mixed quarterly results, missing revenue expectations significantly and offering weaker guidance for the current quarter.

• PATH shares fall 29% after the report. The company is struggling and is reappointing co-founder Daniel Dines as CEO after he stepped down as the company's chief executive earlier this year.

• Inflationary fears caused a weak auction of US government bonds. Bond yields continue to rise. The US dollar has risen in price, and raw materials have fallen in price.

Today
- Reports: Best Buy, Birkenstock, Burlington Stores, Canadian Imperial Bank of Commerce, Cooper Cos., Costco, Dell, Dollar General, Gap, Hormel Foods, Marvell Technology, MongoDB, NetApp, Nordstrom, Royal Bank of Canada, Ulta, Veeva Systems and Zscaler release quarterly results.

- The Bureau of Economic Analysis will release its second estimate of US GDP growth in the 1st quarter. Economists forecast growth of 1.6% y/y.
The National Association of Realtors releases its April Home Sales Pending Index. The index is expected to rise 0.4% m/m after rising 3.4% in March. The March value was the highest for the year.

- Sanofi (SNY) plans to spin off Inhibrx Biosciences (INXB) after acquiring Inhibrx (INBX).

- Ford (F) will attend the Bernstein Strategic Decisions Conference in New York. CEO Jim Farley will discuss Ford+'s customer-focused plan to grow, improve profitability and capital efficiency while enhancing business resiliency.

- Federal Reserve Bank of New York President John Williams will speak before a joint signature luncheon hosted by the Economic Club of New York.