Today in the Market (5/2/2022)

Good Evening. Following one of the worst monthly performances for the S&P 500 since the pandemic’s peak in 2020, stocks in the United States turned higher in the first session of May.

In the final hour of trading on Monday, the S&P 500 (0.57%), Dow (0.26%), and Nasdaq (1.63%) all turned positive. Crude oil prices in the United States have recovered to hover around $105 a barrel, while the benchmark 10-year Treasury yield has risen to 3.00%, the highest level since December 2018.

EARNINGS

Demand from automotive and industrial clients helped ON Semiconductor (ON) achieve record sales in the first quarter. Its financial projections were also impressive.

According to FactSet statistics, adjusted earnings were $1.22 per share in the first quarter, better than the $1.05 per share analysts had projected and beyond management’s earlier expectations.

Revenue surged by 31% year over year to a record $1.95 billion in the March quarter, beating the average estimate of $1.91 billion. This is thanks to revenue growth of 42% in the automotive and industrial core markets. In the first quarter, the company’s gross margin increased to a new high of 49.40%.

“Our focused strategy has delivered sustainable results in on semi’s margin and growth profile with the automotive and industrial end-markets now representing 65% of our revenue,” said CEO Hassane El-Khoury. Over the next five years, ON Semi expects revenue from the auto and industrial divisions to account for around 75% of total sales.

As of closing, ON finished up 6.74% to $55.62 per share.

ALWAYS A FIRST FOR EVERYTHING

Tropicana introduced Tropicana Crunch, a breakfast cereal designed to be drenched in orange juice rather than milk.

Tropicana stated, “It may not be for everyone,” and they are quite true.

Big picture: Tropicana Crunch will be released on Wednesday, which also happens to be National Orange Juice Day. For National Brush Day in November, the beverage firm pulled a similar trick, producing a toothpaste that reportedly doesn’t make orange juice taste terrible after usage.

THE WEEK AHEAD

Earnings: After last week’s tech fiesta, it’s a little quieter on the earnings front, but Starbucks, Lyft, Uber, and Airbnb are among the companies to keep an eye on.

Rate hike: On Wednesday, Fed Chair Jerome Powell is likely to announce the largest rate hike in two decades, a 50 basis-point increase in interest rates. However, inflation isn’t just a problem in the United States; at least 12 other central banks will issue policy updates this week, with many of them likely including rate hikes.

Jobs report: The employment report for April, will almost certainly reveal that the labor market remained strong last month. With the unemployment rate falling to 3.50% from 3.60%, employers are expected to have added 400,000 jobs.

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