Mid-Morning Look: June 17, 2024

Mid-Morning Look

Monday, June 17, 2024





DJ Industrials




S&P 500








Russell 2000






U.S. stocks kicking off the week the same way they ended, with modest gains in technology, but weakness in the Dow, Smallcaps and the S&P flattish as the same names continue to exhibit strength and keep major averages afloat (AAPL, AVGO, NFLXNVDA high before fading) while underlying fundamentals remain weak (NYSE breadth shows decliners leading advancers again). Early weakness in defensive sectors/dividend paying stocks such as utilities, REITs, and Healthcare, along with Materials and Communications as Treasury yields bounce off last week declines (10-yr yield highs around 4.295 after lows 4.2% late last week). A quiet day of data with only Empire State current business conditions index improving to -6.0 in June (consensus -9.0) vs -15.6 in May. There are a few Fed speakers later today, but the market outlook remains for one rate cut this year, but higher for longer on rates until then. Treasuries are extending overnight losses with the long end underperforming marginally. Supply is a catalyst for the losses after the recent rally that has seen yields fall to multi-month lows. China’s May economic data releases were mixed w/ softness in housing & industrial production while retail sales came in a bit better-than-expected. Trade tensions between Europe & China continue to ratchet higher after China announced an anti-dumping probe into European pork imports. This follows the recent increase in EV tariffs from Europe. Overall, a quiet start to the week.

Economic Data

  • NY Fed’s Empire State current business conditions index -6.0 in June (consensus -9.0) vs -15.6 in May; empire state new orders index improved to -1.0 in June vs -16.5 in May, prices paid index +24.5 in June vs +28.3 in May, employment index at -8.7 in June vs -6.4 in May and the six-month business conditions index +30.1 in June vs +14.5 in May.
  • Overseas, China’s industrial production for May falls short of expectations (+5.6% vs. the Street +6.2%) and property investment exhibits softness too while retail sales were a bright spot (+3.7% vs. the Street +3%).






WTI Crude















10-Year Note




Sector Movers Today

  • In Homebuilders: LEN is expected to report earnings after the close tonight while KBH reports tomorrow. In research, luxury homebuilder TOL was upgraded to Neutral from Sell at Goldman Sachs and raised tgt to $124 from $112 saying they are increasingly confident Toll’s revenues, profitability, and returns will hold ahead of historical norms, supporting its more optimistic outlook given their view New Home Sales will continue to outperform.
  • In Food & Beverages: KDP upgraded from Sell to Hold at Truist and raise tgt to $34 from $27 as believes its concerns, including overoptimistic expectations for a rebound in the coffee segment, have played out (coffee segment down ~2% YoY) and are reflected in the current valuation. SBUX mentioned positively in Barron’s saying shares looks oversold after soft demand and increased competition in China contributed to a 6% international decline in same-store sales in Q2.
  • In monthly credit card Master Trust data: COF May domestic credit card net charge-offs rate 6.13% vs 6.07% in April and the 30+ day performing delinquencies rate for domestic credit card 4.13% at May end vs 4.23% at April end. The 30+ day performing delinquencies rate for auto 5.40% at May end vs 5.24% at April end. DFS credit card delinquency rate 1.64% at May end vs 1.68% at April end and credit card charge-off rate 2.40% at May end vs 2.35% at April end. JPM credit card delinquency rate 0.82% at May end vs 0.81% at April end and the net charge-off rate 1.53% in May vs 1.48% in April. BAC credit card delinquency rate was 1.38% at May end vs 1.39% at April end and credit card charge-off rate was 2.46% in May vs 2.49% in April.



  • AAN +31%; agreed to be acquired by fintech organization IQVentures for an enterprise value of about $504 million.
  • ADSK +4%; shares jumped after activist investor Starboard Value disclosed a more than $500 million stake in the company and said it was suing the design software maker to delay its annual meeting after a recent accounting probe that tanked the company’s share price.
  • AVGO +3%; new all-time highs, extending last week’s gains after better earnings/guidance.
  • BBY +2%; was upgraded to Buy from Neutral at UBS and raised tgt to $106 from $85 as believe the shares offer a compelling risk reward to invest behind several potential paths to outperformance.
  • OLLI +3%; upgraded from Neutral to Overweight at JP Morgan with $105 tgt saying it is trading at a 13.8x turn discount relative to its pre-pandemic multiple and sees lateral competitive disruption opportunity as potential catalyst for OLLI to accelerate pace of same-store-sales growth & unit growth.
  • PRMW +6%; Primo Water and BlueTriton Brands Inc., the parent of Poland Spring and Deer Park water brands, announced an agreement to merge, which would create a water giant with $6.5 billion in annual revenue.
  • XPOF +25%; as appointed Mark King as chief executive officer, effective June 17.



  • AAP -1%; said late Friday that it identified unauthorized activity within a third-party cloud database environment containing its data on May 23, and a criminal threat actor offered what it alleged to be company data for sale on June 4.
  • AMCX -27%; after saying it intends to offer $125 million in convertible senior notes due 2029 in a private offering.
  • AVTE -90%; announces 24-week topline results from the phase 2b portion of IMPAHCT evaluating AV-101 for the treatment of pulmonary arterial hypertension; said AV-101 did not meet the primary endpoint of change in pulmonary vascular resistance (PVR) for any of the studied doses.
  • LPX -6%; was downgraded to Sell from Neutral at Goldman Sachs and cut tgt to $81 as a more cautious view reflects its expectations R&R spend is likely to stay lower for longer along with industry-specific dynamics.
  • OVID -66%; as TAK said its experimental drug Soticlestat to treat epileptic disorders failed to meet the main goal in two late-stage studies; the data tanked shares of OVID (in 2021, Takeda secured the global rights to the drug from OVID by making an upfront payment of $196M while Ovid was also eligible to get up to an additional $660M in milestones)


Market commentary provided by Hammerstone Markets, Inc, a firm separate from and not affiliated with Regal Securities. Regal Securities has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.