>>> US After Hours Summary: SMAR +12%, LULU +10.4%, SMTC +6.3% higher on earning

After Hours Summary: SMAR +12%, LULU +10.4%, SMTC +6.3% higher on earnings; CXM -19.6%, FIVE -14.1% lower on earnings; COST -0.1% reports May comps

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: SMAR +12% (also authorizes new $150 mln share repurchase program), LULU +10.4% (also authorizes $1 bln increase in share repurchase program), SMTC +6.3%, RNW +4%, BASE +2.2%, GEF +1.6%

Companies trading higher in after hours in reaction to news: RLAY +5.3% (RLAY announces clinical trial collaboration with PFE), HALO +2.3% (granted European patent), NVAX +2.2% (to deliver JN.1 non-mRNA COVID-19 vaccine this fall), TRIN +1.3% (TRIN exits its equity position in CORZ), UHT +0.8% (increases dividend), WY +0.8% (files mixed shelf securities offering), DOMO +0.3% (launches its Integration Suite), RCEL +0.3% (first US burn center treats patient using its RECELL GO System)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: CXM -19.6% (also names Trac Pham as co-CEO), FIVE -14.1%, VSCO -3.5%, CHPT -1.8%

Companies trading lower in after hours in reaction to news: LPG -6.6% (2 mln share offering), VTYX -5.3% (announces preclinical data for VTX3232), NN -4.1% (two stock offerings by selling shareholders), ODFL -3.4% (reports operating metrics for May), DX -2.9% (10.5 mln share public offering), HYLN -2.7% (commences manufacturing of additive parts for the KARNO generator), CORZ -1.3% (TRIN exits its equity position in CORZ), BTBT -1.1% (provides May production update), CNA -0.4% (names new CEO), PFE -0.3% (RLAY announces clinical trial collaboration with PFE), CDNS -0.1% (stock offering by selling shareholders), PLTR -0.1% (to unveil new customer and product announcements on Jun 6), COST -0.1% (reports May comps), INTC -0.1% (to use Sharp's Japan LCD plants to conduct research)

>>> DuPont evaluating considerations related to the capital structures of its th

DuPont evaluating considerations related to the capital structures of its three future companies following its previously announced plan to separate into three independent publicly traded companies (80.62 +0.28)
  • DuPont, with its advisors, is evaluating considerations related to the design of the capital structures of the three "FutureCos". These considerations include the impact of executing the separations in accordance with the announced plan on the Company's existing indebtedness, including the Company's senior notes. DuPont currently has senior notes outstanding in the aggregate principal amount of ~$7.8 billion, with maturities on the notes in 2025, 2028, 2038 and 2048.
  • As part of establishing the capital structures of the three "FutureCos", DuPont has delivered a notice of redemption to the bond trustee with respect to a partial redemption of $650 million aggregate principal amount of its 2038 notes in accordance with their terms. DuPont expects to repay, redeem, repurchase, or exchange some or all of its other senior notes, which could include redemptions, tender offers, open market purchases, privately negotiated transactions, or other transactions or a combination of any of them, which will be on pricing terms that are determined at the time of any such transaction. Such transactions will depend on liquidity considerations, contractual and legal restrictions, prevailing market conditions and other factors.

>>> US Close Dow +0.25% S&P +1.18% Nasdaq +1.96% Russell +1.74%

Closing Stock Market Summary
Stocks rallied today, leading the S&P 500 (+1.2%) and Nasdaq Composite (+2.0%) to close at fresh all-time highs.

This price coincided with NVIDIA (NVDA 1224.40, +60.03, +5.2%) jumping 5% today, taking its market value over $3 trillion. It is now the most valuable stock by market cap after Microsoft (MSFT 424.01, +7.94, +1.9%). Other mega caps and chipmakers were also among the influential winners today, boosting the broader market. Meta Platforms (META 495.06, +18.07, +3.8%) and Broadcom (AVGO 1413.09, +82.27, +6.2%) were standouts in that respect.

The Vanguard Mega Cap Growth ETF (MGK) settled 1.8% higher and the PHLX Semiconductor Index (SOX) saw a 4.5% gain.

Strength in the aforementioned areas propelled the information technology (+2.6%), communication services (+1.5%), and consumer discretionary (+0.7%) sectors toward the top of the leaderboard today.

Still, many stocks participated in today's broad advance after the market showed nice resilience to selling efforts this week. The equal-weighted S&P 500 rose 0.6% and market breadth favored advancers by a 2-to-1 margin at the NYSE.

A drop in Treasury yields again acted as support for equities today after acting as a limiting factor in recent sessions. The 10-yr note yield settled five basis points lower at 4.29% and the 2-yr note yield fell four basis points to 4.73%. This activity followed an ISM Non-Manufacturing Index for May that showed some deceleration in the Prices Index from April.
  • Nasdaq Composite: +14.5% YTD
  • S&P 500:+12.3% YTD
  • S&P Midcap 400: +6.1% YTD
  • Dow Jones Industrial Average: +3.0% YTD
  • Russell 2000: +1.8% YTD

Reviewing today's economic data:
  • Weekly MBA Mortgage Applications Index -5.2%; Prior -5.7%
  • May ADP Employment Change 152K (consensus 175K); Prior was revised to 188K from 192K
  • May S&P Global US Services PMI - Final 54.8; Prior 51.3
  • May ISM Non-Manufacturing Index 53.8% (consensus 50.7%); Prior 49.4%
    • The key takeaway from the report is that it signals a pickup in activity in the nation's largest sector with prices paid remaining elevated, albeit less so than the prior month. Altogether it is a report that doesn't command a rate cut soon.

Thursday's economic calendar features:
  • 8:30 ET: Revised Q1 Productivity (consensus 0.3%; prior 0.3%), revised Q1 Unit Labor Costs (consensus 4.7%; prior 4.7%), weekly Initial Claims (consensus 216,000; prior 219,000), Continuing Claims (prior 1.791 mln), and April Trade Balance (consensus -$76.5 bln; prior -$69.4 bln)
  • 10:30 ET: Weekly natural gas inventories (prior +84 bcf)

WSJ : Ukraine Strikes Inside Russia With U.S.-Made Missiles

Ukraine Strikes Inside Russia With U.S.-Made Missiles
Attack on air-defense system followed shift in policy by Biden administration to allow limited strikes with American weapons

KYIV, Ukraine—Ukraine used U.S.-made missiles to strike in Russian territory this week as it counters a Russian offensive in the northeastern Kharkiv region that appears to have stalled.

Ukraine’s military used Himars ground-to-ground missiles to hit a Russian air-defense system in the Belgorod region, according to a Ukrainian military officer in the area familiar with the strike. Western analysts earlier cited geolocated videos posted online in assessing that Ukraine had used the High Mobility Artillery Rocket System, or Himars, to strike an air-defense battery nearly 40 miles from the current front line.

The Biden administration reversed its policy on Thursday and permitted limited strikes on Russian territory with U.S. weapons to hold back the Russian offensive launched last month toward Ukraine’s second city of Kharkiv.

Russian President Vladimir Putin and other Russian officials have threatened serious consequences if Western weapons are used to strike within Russia. The Biden administration had long forbidden strikes in Russia in an effort to avoid the risk that the conflict in Ukraine could escalate into a direct clash between Washington and Moscow. But the White House changed its policy after Russia began the fresh thrust toward Kharkiv.

That offensive stretched a thinning defensive line of exhausted Ukrainian troops, and Russian forces quickly seized several villages. Ukraine rushed reinforcements to the area, including elite airborne units, and shored up defenses, largely halting the Russian advance by the end of May.

Ukraine’s top military commander, Lt. Gen. Oleksandr Syrskiy, said Wednesday on a visit to the region that Ukrainian troops were repelling fresh Russian assaults.

Russia has said it is aiming to create a buffer zone along its border. Ukrainian officials say they believe the Kremlin’s ultimate goal is to attempt to seize Kharkiv, although it currently lacks the forces in the area for such an operation.

Ukraine’s government had long pleaded for permission to use Western-provided weapons to strike Russian military targets such as artillery systems, logistics hubs and troop formations before they cross the border.

The new U.S. policy allows Ukrainian forces to use U.S.-supplied artillery and fire short-range rockets from Himars launchers against command posts, arms depots and other assets on Russian territory that are being used by Russian forces to carry out its attack on the Kharkiv region. But the policy doesn’t give Ukraine permission to use longer-range ATACMS surface-to-surface missiles inside Russia.

A video and photographs posted online this week showed smoke and flames coming from what analysts said were two air-defense missile launchers and a command post. Analysts geolocated the images to a field in the Russian border region of Belgorod, which the Institute for the Study of War, a U.S. think tank, said was within Himars range but beyond the range of other rocket systems used by Ukrainian forces.

FT : Themes matter more than geography for UK portfolio managers

Themes matter more than geography for UK portfolio managers

Exposure to the right theme is now a bigger driver of equity market outperformance than geography or style, according to a range of portfolio managers.

David Jane, who runs a range of multi-asset funds at Premier Miton said: “It used to be the case that sectors and regions drove things but in a globalised world themes are much more important for the big caps and many of those themes straddle sectors or exclude parts of sectors.”

He said macroeconomic factors tended to impact specific areas such as the oil price, which goes on to impact certain sectors of the stock market, but he said he had less value to add in terms of understanding these factors than he did themes.

Jane said: “Think how the renewable theme straddles energy, industrials or utilities and those with exposure do well when the theme is in favour. Alternatively consider the digital economy and how digital retailers now dominate the retail sector and how there performance has diverged from the historic cyclical nature of that sector.”

Matthew Yeates, deputy chief investment officer at 7IM, said: “It’s a nuance of equity investing generally that people tend to cut their equity exposure by the country of listing."

He said 'UK equity' or 'European equity' often simply meant 'listed in the UK' or 'listed in Europe'.

"When we look at our equity exposure we apply a look through across several different dimensions of sector exposure, factor grouping and in some circumstances these can be thought of as themes," Yeates said.

Among the themes in which he is invested right now is healthcare, a sector which he said gives global exposure that isn’t linked to the performance of individual markets or economies.

Luca Paolini, chief market strategist at Pictet Asset Management went further, believing that in the current market environment, clients seeking a normal level of equity market return would need to pick the right themes.

He said that while long-run average returns for most equity markets tended to be “double digits”, he predicted that in the coming years it would be closer to 7.5 per cent at the index level.

Paolini said: “Within equities, investors should focus more on specific sectors and themes rather than regions. We have identified three industries that should significantly outpace the wider equity market, thanks to structural trends that support their increasing share of corporate revenues and their outsized success at innovation: tech, industrials and healthcare.

"We also expect these sectors to outperform the global equity benchmark by a cumulative 20 per cent or so over the coming five years. By increasing portfolio weighting to these industries, investors will be able to lift their equity returns substantially."