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Todays Open Interest Change

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Prepper

It may not be cloud cars or desert skiffs, but the FAA has some pretty bold plans that could soon bring Star Wars to life. According to an updated operational blueprint released by the agency, changes to airspace procedures would be made to accommodate flying taxis and new innovative aircraft. Other considerations to take into account include vertiports, existing infrastructure, travel routes and air traffic communication, which will all help usher in the next era of aviation.

What will the industry look like in 10 years? "I expect that we have air taxis at scale, especially in all of our major cities," Acting FAA Administrator Billy Nolen said at The Wall Street Journal's Future of Everything Festival. "If we've gotten it right from the regulatory framework, from the level of safety that the public expects, and if all that comes together, then it's a world that we only thought about as science fiction before that becomes science fact in the moment."

Traditional planemakers, like Airbus (OTCPK:EADSY) and Boeing (BA), as well as commercial carriers like American Airlines (AAL), Delta (DAL) and United (UAL), are pouring millions into the flying taxis, eVTOL prototypes and transportation partnerships. They are betting that the sector will one day shuttle passengers between airports and city centers, and could even help the airlines reach carbon-neutral targets. Other air mobility firms with skin in the game include Archer Aviation (NYSE:ACHR), Eve Air Mobility (NYSE:EVEX), Joby Aviation (NYSE:JOBY), Lilium (NASDAQ:LILM), Vertical Aerospace (NYSE:EVTL).

In a galaxy far, far way? The FAA expects to grant approval to the first air taxis as soon as next year, but it won't be easy becoming the chosen one. Prototypes in development will have to pass safety approvals, operating guidelines and airspace integration, while the flying public will have to embrace them as a safe alternative. The industry might also have to scale to make the price point affordable, and may eventually turn to pilot automation, with humans on the ground monitoring operations. "One risk, I am seeing with coverage of Urban Air Mobility or eVTOL names is that the disruptive technology is often equated to value creation while this is not the case," writes SA Investing Group Leader Dhierin Bechai. (2 comments)

Meeting-by-meeting

The Federal Reserve hiked rates yesterday by a quarter of a percentage point in a move that surprised almost no one. It was a unanimous decision among policymakers, who seem to feel that the banking crisis is contained, inflation is too high, and labor demand is falling but is still strong. "People did talk about pausing, but not so much at this meeting," Powell said in his post-decision press conference. "We feel like we're getting closer or maybe even there, [but] are prepared to do more if greater monetary policy restraint is warranted." Mentions of tighter credit conditions also caught the attention of the market, with Wall Street having a new acronym to focus on: SLOOS. Elsewhere, SA contributor Elazar Advisors explores what the situation may mean ahead of next week's CPI print. (258 comments)

Biggest of the year

In fact, it's the biggest IPO since EV maker Rivian (RIVN) went public in November 2021. At bat today is Johnson & Johnson (NYSE:JNJ) spinout Kenvue, which just upsized its hotly anticipated listing. Shares, which are set to trade this morning under ticker symbol "KVUE," were priced on the upper end of their previously issued range, raising $3.8B and giving the healthcare carve-out a valuation of $41B. Previously known as J&J's consumer products division, Kenvue produces medicines and brands like Aveeno, Band-Aid, Tylenol and Listerine, as well as J&J baby powder which has been at the center of major lawsuits (see how the company is handling those claims). (12 comments)

Companies in motion

Nordstrom (NYSE:JWN) is shuttering both of its downtown San Francisco stores in the coming months, dealing another blow to an area that has struggled to recover from the pandemic and has been in the spotlight for crime. “Decisions like this are never easy, and this one has been especially difficult," read a memo by Chief Stores Officer Jamie Nordstrom. "As many of you know, the dynamics of the downtown San Francisco market have changed dramatically over the past several years, impacting customer foot traffic to our stores and our ability to operate successfully.” Other retail players recently closing down their San Fran outlets include Anthropologie (URBN), Banana Republic (GPS), Office Depot, Saks Off 5th and Whole Foods (AMZN). (4 comments)

Today's Markets

In Asia, Japan closed. Hong Kong +1.3%. China +0.8%. India +0.9%.
In Europe, at midday, London -0.8%. Paris -0.9%. Frankfurt -0.8%.
Futures at 6:30, Dow -0.3%. S&P -0.3%. Nasdaq +0.1%. Crude +0.3% to $68.77. Gold +0.6% to $2048.50. Bitcoin +2.3% to $29,236.
Ten-year Treasury Yield -6 bps to 3.35%

Today's Economic Calendar

7:30 Challenger Job-Cut Report
8:30 Goods and Services Trade
8:30 Initial Jobless Claims
8:30 Productivity and Costs
10:30 EIA Natural Gas Inventory
4:30 PM Fed Balance Sheet

Companies reporting earnings today »

What else is happening...

Wheat rallies as Kremlin drone attack casts doubt on grain deal.

PacWest Bancorp (PACW) confirms sale talks following stock plunge.

Apple (AAPL) likely to show solid iPhone results, update on capital return.

Anheuser-Busch Inbev (BUD) beats top and bottom line estimates.

U.K. regulator probes Adobe's (ADBE) $20B deal for Figma.

Qualcomm's (QCOM) outlook falls short amid 'challenging' phone market.

FTC moves to prohibit Meta (META) from monetizing youth data.

JPMorgan's (JPM) Dimon said to be deposed in Epstein suits in late May.

WeWork (WE) looks to Uber (UBER) for next step in office-leasing model.

CVS (CVS) sets guidance below consensus despite earnings beat.

FDA approves GSK's (GSK) RSV vaccine, world's first shot against virus.