Morning Brief

What to watch today: 'Sell in May, go away' is not materializing on first trading day

Share

BY THE NUMBERS

Dow futures jumped 200 points on the first trading day of May. The 30-stock average dropped 185 points, or 0.5%, on Friday but still closed out April with a monthly gain of 2.7%. The S&P 500 and Nasdaq fared worse than the Dow on Friday but each turned into more than 5% gains for all of April. (CNBC)

The Wall Street adage, "sell in May, go away," does not appear to be materializing Monday, but it's a historic trend investors will be watching as May plays out. Stocks tied to the economic comeback from Covid were higher in the premarket, including Norwegian Cruise Line (NCLH) and Carnival (CCL) and the major U.S. airlines. (CNBC)

IN THE NEWS TODAY

Berkshire Hathaway's (BRK.a) Charlie Munger, 97, inadvertently revealed who would succeed Warren Buffett as CEO. CNBC confirms it would be Vice Chairman Greg Abel. "If, heaven forbid, anything happened to Greg tonight then it would be [Vice Chairman Ajit Jain]," Buffett, 90, told CNBC's Becky Quick after this weekend's annual Berkshire shareholders meeting.

Robinhood is promoting gambling-like behavior in the stock market, Buffett said at the Berkshire annual meeting. Robinhood has "become a very significant part of the casino aspect, the casino group, that has joined into the stock market in the last year or year and a half," Buffett said, adding he was unhappy, for example, to learn how much short-term option activity there was in Apple.

Munger's disdain for bitcoin has only intensified as the digital asset mounted a record run this year. "Of course I hate the bitcoin success," he said during a Q&A session at Berkshire's meeting. "I don't welcome a currency that's so useful to kidnappers and extortionists," Munger added, saying the "whole damn development is disgusting."

* Here’s a full recap of the best moments from Berkshire's meeting (CNBC)

Apple (AAPL) faces the start of one of its most serious legal threats in recent years. A federal court case, going to trial Monday, was brought by Epic Games, maker of Fortnite. Privately held Epic charges that the $2.2 trillion market cap Apple has transformed its App Store into an illegal monopoly. Apple denies Epic's claims. (AP)

Verizon (VZ) will sell its media group to private equity firm Apollo Global Management (APO) for $5 billion, the companies announced Monday. The sale allows Verizon to offload properties from the former internet empires of AOL and Yahoo. Verizon will keep a 10% stake in the assets, which will be rebranded to just Yahoo. (CNBC)

Palantir (PLTR) hired its first U.S. government chief medical officer from IBM (IBM) as the data analytics company doubles down on its life sciences business. In his new role, Dr. Bill Kassler wants to help put Palantir's technology in the hands of researchers who can use it to make smart decisions in the next pandemic. (CNBC)

Moderna (MRNA) shares jumped 2.9% in the premarket after the U.S. drug maker struck a deal to provide 500 million Covid-19 vaccine doses to low- and middle-income countries through a United Nations-backed program. (Reuters)

India's second wave of Covid infections shows no signs of slowing down. The World Health Organization estimates that one in every three new coronavirus cases globally is being reported in India, which began May by reporting more than 400,000 new cases. (CNBC)

* U.S. to discuss wider Covid vaccine licensing as India calls to waive patent protections (CNBC)

The White House wants to see counteroffers to President Joe Biden's $2.25 trillion infrastructure plan by the middle of this month, and if progress isn't being made by Memorial Day, officials will reassess their strategy of trying to build bipartisan support, according to a person familiar with the negotiations. (NBC News)

STOCKS TO WATCH

Estee Lauder (EL) reported quarterly earnings of $1.62 per share, 30 cents a share above estimates. Revenue came in slightly below forecasts, however, as sales of Estee Lauder's higher-end products were impacted by people continuing to work from home. The cosmetics maker's shares lost 3.5% in premarket trading.

Meredith Corp. (MDP) surged 11.5% in premarket action following a Bloomberg report that it is in advanced talks to sell its 17 local TV stations to Gray Television (GTN) for an estimated $2.5 billion. People familiar with the matter say a deal could be announced as soon as this week.

Canadian Pacific Railway (CP) filed an objection to a ruling which exempts rival Canadian National Railway (CNI) from tougher merger rules based on its smaller size. The objection stems from Canadian National's attempt to outbid Canadian Pacific in their quest to buy U.S. rail operator Kansas City Southern (KSU).

Dell (DELL) announced the sale of its Boomi cloud business to private equity firms TPG and Francisco Partners for $4 billion including debt.

Align Technology (ALGN) announced a $100 million accelerated share repurchase agreement with Goldman Sachs. The transaction will complete the $600 million repurchase program announced by the company behind the Invisalign dental braces in May 2018.

China-based electric vehicle makers Li Auto (LI), Nio (NIO) and XPeng (XPEV) announced their April delivery figures. Li Auto deliveries were up 111% compared to a year ago. Nio was up 125%. XPeng was up 285%. Li Auto shares rose 2.3% in the premarket, while XPeng gained 1.2%.

Novartis' (NVS) Sandoz division began enrollment in a late-stage trial of a biosimilar version of Regeneron's (REGN) Eylea, designed to treat age-related macular degeneration. Novartis gained 1% in the premarket.

Canada-based cannabis producer Tilray (TLRY) saw its shares rise 1% in premarket trading after it announced it has completed its merger with rival Aphria.

WATERCOOLER

The four astronauts aboard SpaceX's Crew Dragon capsule Resilience safely returned to Earth, splashing down in parachutes Sunday night in the Gulf of Mexico after a record-setting mission to the International Space Station. (CNBC)

* How Tesla worked with and got paid by SpaceX and The Boring Company (CNBC)