U.S. Stock Outlook | Three Major Index Futures All Decline, U.S. April PPI and Retail Data Coming Tonight

Pre-Market Market Trends

1. As of May 15 (Thursday) pre-market, the three major U.S. stock index futures are all down. As of the time of writing, Dow futures are down 0.38%, S&P 500 futures are down 0.49%, and Nasdaq futures are down 0.61%.

1. As of the time of writing, the German DAX index is up 0.04%, the UK FTSE 100 index is up 0.23%, the French CAC40 index is down 0.20%, and the Euro Stoxx 50 index is down 0.36%.

1. As of the time of writing, WTI crude oil is down 3.25%, priced at $61.10 per barrel. Brent crude oil is down 3.06%, priced at $64.07 per barrel.

Market News

U.S. April PPI and "terrifying data" to be released tonight. The market currently expects the U.S. April PPI to grow by 2.5% year-on-year, down from the previous value of 2.7%; the core PPI for April is expected to grow by 3.1% year-on-year, also lower than the previous value of 3.3%. Data released on Tuesday showed that the consumer price index (CPI) for April unexpectedly cooled, with the overall inflation rate dropping to 2.3% year-on-year, down from 2.4% in March. If tonight's U.S. April PPI data is also below expectations, it may indicate that U.S. inflation is still under control. Additionally, the U.S. retail sales data, known as "terrifying data," will also be released tonight. The market currently expects U.S. April retail sales to grow by 0% month-on-month, far below the previous value of 1.4%.

Options traders shift from defense to offense! Big bets on the continuation of the U.S. stock market rebound. For stock options traders, greed has now firmly replaced fear, as they buy call positions, betting that the U.S. stock market will continue its rebound from last month's lows. In U.S. exchanges, the volume ratio of call options to put options is hovering at its highest level since February 18, which was the day before the S&P 500 index set its previous historical high. Meanwhile, according to Susquehanna International Group, the options market also reflects increasing confidence that the S&P 500 index will rise to a new high of 6150 points in September. With the easing of U.S.-China trade tensions and U.S. April inflation data coming in below expectations, the worst-case scenario that the market feared has not materialized, prompting options traders to bet on further gains in the U.S. stock market. RBC Capital Markets' head of derivatives strategy, Amy Wu Silverman, stated: "Compared to the panic during previous declines, the market is now more concerned about missing out on the upward trend." Hedge Fund Point72 Founder: The Probability of a U.S. Economic Recession is Currently 45%. Steve Cohen, founder of Point72 Asset Management, stated that the probability of the U.S. economy entering a recession is currently about 45%. Cohen said at the Sohn Investment Conference in New York on Wednesday, "We are not in a recession yet, but economic growth has clearly slowed." He expressed that he does not believe the Federal Reserve will cut interest rates immediately, as "they will be concerned about inflation caused by tariffs." He expects U.S. economic growth to slow to 1.5% or lower next year, saying, "That's okay, but not great." He noted that the stock market's sharp drop and rebound in April were unusual in terms of the speed of reversal, adding that he is watching what happens when the next batch of U.S. economic data is released. "I want to see how the market reacts, which will tell me a lot about whether our pricing is correct." Even if the market does decline, he anticipates a drop of 10% or 15%, stating, "That's not a disaster." He added that the U.S. stock market could remain range-bound for a while. "The market doesn't have to go up every year," he said. "The market can consolidate, and that's perfectly normal."

San Francisco Fed President Daly Supports Powell's Hawkish View: The Fed is Not in a Rush to Cut Rates. Daly stated that the strong performance of the U.S. economy allows Fed policymakers to remain patient and wait for more evidence on how the new round of tariffs led by the Trump administration will affect U.S. businesses and households. Daly's latest remarks echo Fed Chairman Powell's hawkish comments from last week, when Powell emphasized at a press conference following the interest rate meeting that the Fed does not need to rush to adjust the benchmark rate, as the U.S. economy continues to show resilience. He noted that the current policy is moderately restrictive and that the cost of further waiting is relatively low, also stating that President Trump's calls for rate cuts will not influence the Fed's work. Daly indicated that the Fed's monetary policy is currently in a moderately tight state and is prepared to respond to any changes in the economy. She pointed out that the Fed's monetary policy "is in a good position" to respond promptly to any unexpected situations arising from the Trump administration's policies on tax cuts, trade tariffs, immigration, and deregulation.

U.S. Treasury Yields Approach 5% Threshold! Market Veteran: A "Truss-style Collapse" May Be Needed to Force Fiscal Reform. As of the time of writing, the yield on the 10-year U.S. Treasury bond is reported at 4.517%, and the yield on the 30-year U.S. Treasury bond is at 4.956%. In light of the new government's continued fiscal stimulus, Stephen Jen, head of Eurizon SLJ Capital and a seasoned market veteran, expressed deep concern and even began to question whether the U.S. needs to experience a bond market collapse similar to that during former UK Prime Minister Truss's time to compel the government to change course. He stated, "I have not completely given up hope. But I admit that we do not seem to be moving in the right direction, and I am worried about what might happen. Perhaps it is necessary to recreate the situation that Truss experienced, forcing the U.S. bond market to push yields close to or above 5%, to compel all parties to take the right actions." Trump claims the U.S. and Iran are close to reaching a nuclear deal, causing international oil prices to drop. Trump stated on Thursday that the U.S. may be close to reaching a nuclear agreement with Iran. He said, "I think we might be close to a deal. You may have read reports that Iran has agreed to these terms." According to reports, on May 14 local time, Ali Shamkhani, a senior advisor to Iran's Supreme Leader Khamenei, stated in an interview that Iran is willing to destroy its stockpile of highly enriched uranium that can be used for weaponization and agrees to only enrich uranium to a lower concentration needed for civilian use in exchange for the lifting of economic sanctions against the country.

Individual Stock News

UnitedHealth (UNH.US) falls pre-market, under investigation for Medicare fraud. Reports indicate that the U.S. Department of Justice is conducting a criminal investigation into UnitedHealth, which may involve Medicare fraud. Recently, UnitedHealth has faced a tumultuous period. Just a day before the news of the criminal investigation by the U.S. Department of Justice broke, on May 13 local time, UnitedHealth suddenly announced that long-time CEO Andrew Witty resigned for "personal reasons," and 72-year-old Chairman and former CEO Stephen Hemsley will take over the company again after an 8-year hiatus. Meanwhile, the company withdrew its previously issued financial guidance for 2025, citing "a sudden change in the operating environment due to a surge in medical demand." As of the time of publication, UnitedHealth's stock fell nearly 7% in pre-market trading on Thursday.

AI computing power demand continues to surge! Cisco (CSCO.US) exceeds performance expectations with a "second spring." For the third quarter of fiscal year 2025 ending April 26, Cisco's sales grew by 11% year-on-year to $14.1 billion, in line with Wall Street's average expectations. Excluding certain items, earnings per share rose to $0.96, higher than the average Wall Street analyst expectation of $0.92 and last year's $0.88. Cisco's earnings report also showed that product orders increased by 20% year-on-year; excluding the contribution from Splunk, new orders still grew by 9%. In the third quarter, AI infrastructure hardware orders from large network customers exceeded $600 million, surpassing Cisco's management's target of $1 billion a quarter ahead of schedule. The company's management expects sales for the quarter ending July 31 to reach between $14.5 billion and $14.7 billion, exceeding the average Wall Street analyst expectation of $14.5 billion; excluding certain items, Cisco's management expects earnings per share to reach up to $0.98 (with a forecast range of $0.96-$0.98), while the average Wall Street analyst forecast is $0.95. As of the time of publication, Cisco's stock rose over 3% in pre-market trading on Thursday.

AI computing service provider CoreWeave (CRWV.US) sees Q1 revenue surge by 420%, but Q2 profit guidance falls short of expectations. The cloud computing newcomer CoreWeave (CRWV.US) released its first earnings report since going public, but faced a negative market reaction due to profit guidance falling short of expectations. This computing service provider backed by OpenAI disclosed after the market closed on Wednesday that although Q2 revenue is expected to reach $1.06 billion to $1.1 billion (higher than the market expectation of $1.04 billion), the operating profit range is only $140 million to $170 million, significantly lower than the analyst forecast of $192 million Financial data shows that CoreWeave's revenue in the first quarter increased by 420% year-on-year to USD 982 million, exceeding the market's general expectation of USD 862 million. However, the rapid business expansion also brought growing pains: the loss per share for the quarter widened to USD 1.49, doubling from a loss of 62 cents in the same period last year. As of the time of publication, CoreWeave's stock fell nearly 5% in pre-market trading on Thursday.

Alibaba (BABA.US) reported double growth in revenue and net profit for the fiscal year 2025, with net profit attributable to shareholders increasing by 62% to RMB 129.47 billion. For the fiscal year ending March 31, 2025, revenue was RMB 996.347 billion (USD 137.3 billion), a year-on-year increase of 6%. Operating profit was RMB 140.905 billion (USD 19.417 billion), a year-on-year increase of 24%. Net profit attributable to ordinary shareholders was RMB 129.47 billion (USD 17.841 billion), a year-on-year increase of 62%. Net profit was RMB 125.976 billion (USD 17.36 billion), a year-on-year increase of 77%. Non-GAAP net profit was RMB 158.122 billion (USD 21.79 billion), remaining stable year-on-year.

NetEase (NTES.US) announced its first-quarter results: net profit attributable to shareholders was RMB 10.301 billion, a year-on-year increase of 34.94%, with a quarterly dividend of USD 0.135 per share. NetEase reported its first-quarter results for 2025, with net revenue of RMB 28.8285 billion, an increase of 7.4% year-on-year. Gross profit was RMB 18.5 billion (USD 2.5 billion), an increase of 8.6% year-on-year. Net profit attributable to shareholders was RMB 10.301 billion (USD 1.4 billion), a year-on-year increase of 34.94%; basic earnings per share were USD 0.45, with a dividend of USD 0.1350 per share for the first quarter of 2025. Among them, net revenue from games and related value-added services was RMB 24 billion (USD 3.3 billion), compared to RMB 21.2 billion and RMB 21.5 billion in the previous quarter and the same period last year, respectively. In this quarter, net revenue from online games accounted for approximately 97.5% of the segment's net revenue, compared to 96.7% and 95.2% in the previous quarter and the same period last year, respectively. As of the time of publication, NetEase's stock rose over 7% in pre-market trading on Thursday.

Beike (BEKE.US) released its first-quarter results, with total transaction volume increasing by 34.0% year-on-year and net revenue increasing by 42.4%. Beike reported its first-quarter results for 2025, with total transaction volume of RMB 843.7 billion (USD 116.3 billion), an increase of 34.0% year-on-year. The total transaction volume for existing home transactions was RMB 580.3 billion (USD 80 billion), an increase of 28.1% year-on-year. The total transaction volume for new home transactions was RMB 232.2 billion (USD 32 billion), an increase of 53.0% year-on-year. Net revenue was RMB 23.3 billion (USD 3.2 billion), an increase of 42.4% year-on-year. Net profit was RMB 855 million (USD 118 million), an increase of 97.9% year-on-year. Adjusted net profit was RMB 1.393 billion (USD 192 million), remaining basically flat year-on-year As of March 31, 2025, the number of stores was 56,800, an increase of 28.6% compared to the same period last year. As of March 31, 2025, the number of active stores was 55,200, an increase of 29.6% compared to the same period last year. As of March 31, 2025, the number of brokers was 550,300, an increase of 24.3% compared to the same period last year. As of March 31, 2025, the number of active brokers was 490,900, an increase of 23.0% compared to the same period last year. The average number of monthly active users on mobile in the first quarter of 2025 was 44.5 million, while in the same period of 2024 it was 47.7 million.

Youdao (DAO.US) released its Q1 2025 financial report: "AI-native" strategy drives operating profit up 247.7% year-on-year. During the reporting period, the company deepened its "AI-native" strategy while continuously increasing investment in core product research and model upgrades, promoting the further implementation of large model technology in education and advertising scenarios. Among them, the advertising business maintained a stable performance, providing stable support for the company's overall profit structure. The financial report shows that in Q1 2025, Youdao achieved a net income of 1.3 billion yuan (unit: RMB, the same below), with an operating profit of 104 million yuan, setting a historical high for the first quarter, a year-on-year increase of 247.7%; the net cash outflow from operations narrowed by 34.7% year-on-year, significantly improving financial efficiency. As of the time of writing, Youdao's stock rose over 9% in pre-market trading on Thursday.

Canadian Solar (CSIQ.US) Q1 photovoltaic module shipments exceeded expectations, and Q2 revenue guidance is above expectations. Canadian Solar's revenue in the first quarter decreased by 9.8% year-on-year to 1.2 billion USD, exceeding market expectations by 100 million USD. However, the non-GAAP loss per share was 1.07 USD, which was worse than market expectations. Looking ahead, the company expects total revenue in Q2 2025 to be between 1.9 billion and 2.1 billion USD, while the market expectation is 1.76 billion USD. For the full year of 2025, Canadian Solar expects total revenue to be between 6.1 billion and 7.1 billion USD, while the market expectation is 7.04 billion USD. As of the time of writing, Canadian Solar's stock rose nearly 4% in pre-market trading on Thursday.

Important Economic Data and Event Forecasts

Beijing time 20:30 US April PPI

Beijing time 20:30 US April retail sales month-on-month

Beijing time 20:30 US May New York Fed manufacturing index

Beijing time 20:30 US initial jobless claims for the week ending May 10

Beijing time 20:30 US May Philadelphia Fed manufacturing index

Beijing time 20:40 Federal Reserve Chairman Powell delivers opening remarks at an event

Earnings Forecast

Friday morning: Applied Materials (AMAT.US)

Friday pre-market: RLX Technology (RLX.US), So-Young (SY.US)