Fri 8 May: After the Bell
Equities Rally on Strong Jobs Data + AI Momentum
📈 Today’s performance tables. These are not emailed.
Good evening,
Wall Street stocks surged to fresh record highs on Friday as investors largely looked past conflicting geopolitical headlines from the Gulf and focused instead on resilient economic data and renewed AI momentum. April nonfarm payrolls rose 115,000, beating expectations, while unemployment held at 4.3%, reinforcing the view that the labour market remains healthy enough to keep the Fed on hold as inflation concerns persist.
The rally gained further momentum after reports that Apple and Intel reached a chip supply agreement, sending Intel up 14% to a record high and lifting the broader IT sector 3.4% on the day and 8.4% for the week. Meanwhile, energy (-5%) and utilities (-4%) lagged this week as crude oil ended down 7%, while Treasury yields were little changed and the $ Index weakened modestly, mainly against the € and £.
Economics: → US nonfarm payrolls rose 115k in April, comfortably beating expectations, while March hiring reached 185k, marking the strongest two-month job gain since 2024. The unemployment rate held steady at 4.3%, reflecting continued labour-market resilience despite broader macro uncertainty. The data also showed the recent energy shock has yet to materially hit hiring, with job gains spread across healthcare, retail, transportation and warehousing, while federal government and tech employment declined. Markets interpreted the report as reassuring: bond yields moved lower, and equities gained, reflecting relief that growth remains intact without signs of a sharp employment-market deterioration.
Earnings: → Network equipment firm Ubiquiti Inc. (mcap $50bn) fell 9% after missing Wall Street expectations on both revenue ($788mn vs. $814mn exp) and EPS ($3.86 vs. $4.29), despite posting solid YoY growth. While results topped the company’s own guidance, investors likely focused on the consensus miss after the stock’s sharp rally this year (+50% YTD).
→ Cloud services provider Cloudflare (mcap $70bn) shares plunged 24%, sharply underperforming a broader tech rally, after the company announced plans to cut 20% of its workforce (1,100 jobs) as part of an AI-driven restructuring. The selloff overshadowed an otherwise strong earnings report (yday), where Cloudflare beat both revenue and profit estimates with sales rising 34% YoY, as investors focused on concerns around future growth and execution.
→ In European banks, Italy’s Intesa Sanpaolo beat expectations, posting a record €2.7bn net profit, helped by strong fees and trading income, but shares slipped 2% after management kept full-year guidance unchanged rather than raising it after a strong quarter.
→ Germany’s Commerzbank also delivered solid results (Q1 net profit +9% YoY to €913mn) and even raised full-year guidance, but shares still fell 4% as investors focused on its plan to cut 3,000 jobs by 2030 and ongoing uncertainty around UniCredit’s takeover pressure.
Central Banks: → The overall Fed tone from policymakers’ speeches today remained cautious-to-hawkish, reinforcing a higher-for-longer and ‘no rush to cut’ narrative after the stronger jobs report. Goolsbee said the Fed needs clearer evidence that inflation is moving back toward 2% before cutting again and warned that AI-driven productivity gains could actually fuel demand (inflation) if spending accelerates too quickly. Bowman and Daly also emphasised patience amid sticky inflation and geopolitical uncertainty, while the strong payrolls report further reduced pressure for near-term easing.
Corporate Deals: → In private markets, adults online platform OnlyFans agreed to sell a 16% minority stake to US-based Architect Capital for $535mn, valuing the creator platform at $3.15bn. The deal follows months of negotiations and comes after the March death of owner Leonid Radvinsky, with proceeds expected to support creator tools and payment infrastructure improvements.
→ In IPOs, Odyssey Therapeutics (ODTX), a Boston-based clinical-stage biotech developing treatments for autoimmune and inflammatory diseases, priced its IPO at $18/share, the top of its marketed range, raising $304mn and valuing the company at ~$800mn. Shares received a lukewarm reception, slipping 9% in their Nasdaq debut.
→ Enhanced Group (ENHA) began trading today on the NYSE after completing its merger with SPAC A Paradise Acquisition Corp. (formerly Nasdaq-listed: APAD). The company is behind the controversial Enhanced Games, a Las Vegas-based sports event that allows performance-enhancing drugs under medical supervision and also operates a direct-to-consumer health/performance products platform. The transaction valued Enhanced at $1.2bn enterprise value.
Week Ahead:
Data → This weekend: China inflation CPI & PPI, trade balance. Next week: US, Brazil and India inflation; UK GDP; US retail sales.
Earnings → Constellation Energy, Tencent, Siemens, Applied Materials, MUFG, Mizuho.
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