Mid-Morning Look: June 21, 2023

Mid-Morning Look

Wednesday, June 21, 2023






DJ Industrials




S&P 500








Russell 2000






U.S. stocks are lower across the board, though there are a few pockets of strength as the S&P outperforms the Nasdaq following strength in commodity sectors. Energy, materials, and industrials paced market declines on Tuesday, but are leading markets higher today, along with consumer staples. Technology and Communications pacing declines early along with Consumer Discretionary (top 3 sector winners in 2023). Market focus on Fed Chairman Powell, currently testifying to US House Committee on monetary policy and the economy (speaks again tomorrow morning). Ahead of Powell comments, the Fed prepared statement showed Powell repeats officials see rates somewhat higher by year end, lowering inflation back to 2% has a long way to go and that the Fed strongly committed to getting inflation down to 2%. UK inflation spiked last month ahead of the Bank of England policy meeting tomorrow, where another rate hike is widely expected. Weaker earnings/guidance from FDX in transport sector failing to broadly impact stock. Fear is still nonexistent as the CBOE Volatility index (VIX) falls another 2% to 13.60. Treasury yields higher, though the dollar sinks while oil rebounds.







WTI Crude















10-Year Note





Sector Movers Today

·     Semis: AMD said it plans to invest $135M in Ireland over four years; projects in Ireland relate to next generation AI, data center, networking and 6G communications infrastructure. INTC said it would sell 20% of its stake in IMS Nanofabrication to private equity firm Bain Capital in a deal valuing the Austrian producer of chipmaking tools at about $4.3 billion. NVDA -3% (SOX below 3,600) – NVDA up 7 of last 8 into today, coming off an all-time high of $439.90 yesterday.

·     Large cap retail: AMZN said it will hold its Prime Day shopping event on July 11-12 (Jefferies raised its price tgt from $135 to $150, maintains Buy as believes upside to consensus, combined with positive sentiment from AI will help AMZN shares to re-rate. Separately, the FTC files a lawsuit against Amazon for enrolling consumers in Amazon Prime without consent. TGT said Target Circle week, the biggest sale of the season, is coming July 9-15 exclusively for members.

·     Biofuels (ADM, BG, DAR, GPRE, REGI): Shares slide late yesterday – Bloomberg notes weakness attributed to the Biden administration requiring oil refiners to blend less ethanol into their products for 2024 and 2025 than previous proposals. Grain handlers and ethanol producers retreated on the news, which will mean less industrial demand for corn – US EPA finalizes 2024 biofuel blending volumes at 21.54 bln gallons, versus 21.87 bln gallons in proposed rule.

·     In agriculture (DE, AGCO, MOS, NTR): The USDA released its crop progress data on Tuesday, June 20, at 4:00 p.m. ET. Corn and soybean conditions continued to deteriorate. Good and excellent corn conditions came in at 55% versus the 61% seen last week. Good and excellent soybean conditions came in at 54% versus 59% seen last week. Reuters reported India’s wheat harvest in 2023 is at least 10% lower than the government’s estimate, a leading trade body told Reuters on Wednesday, amid a sharp rise in local prices during the past two months.



·     ABR +7%; to replace Ranger Oil in S&P Small Cap 600 Index.

·     EXAS +2%; said Blue-C study met all endpoints, showing improved cancer sensitivity, specificity, & precancer sensitivity; plans to complete FDA submission for next-gen Cologuard by end of 2023.

·     LI +3%; China electric vehicle makes (LI, XPEV, NIO) rise after China unveiled a 520-billion-yuan ($72.3 billion) package of tax breaks over four years for electric vehicles and other green cars. 

·     PCT +19%; announced the first commercial production of UPR polypropylene resin from post-industrial recycled feedstock at its Ironton, OH flagship plant.

·     PDCO +14%; reported F4Q results, with revenue of $1.72B (vs. $1.66B est.) and EPS of $0.84 (vs. $0.70 est.), with Dental strength, Internal Sales strength and better margins while guided initial FY24 guidance of $2.45 to $2.55 (vs. $2.34 consensus).



·     ALDX -22%; said it received a Complete Response Letter (CRL) from the FDA citing a lack of evidence of effectiveness of its experimental treatment for primary vitreoretinal lymphoma.

·     AMZN -1%; as the FTC files a lawsuit against Amazon for enrolling consumers in Amazon Prime without consent.

·     COHR -10%; after being downgraded by two analysts: 1) Rosenblatt cut to Neutral from Buy and 2) Northland cut to MP from OP, citing the 80% run the last month on AI thesis.

·     FDX -1%; provided a 2024 profit outlook below analyst expectations (2024 adj EPS $16.50-$18.50 vs. est. $18.31) saying a drop in package demand offset the company’s $4 billion cost-cutting plan; Q4 revs $21.9B missed the $22.67B estimate.

·     LZB -2%; reported Q4 EPS and sales above Street expectations, with relatively flat delivered comps but retail segment written same-store sales sequentially decelerated to flat (from +3% in 3Q); guides Q4 revenue $470M-$490M vs est. $522.4M.

·     MTCH -3%; downgraded at Wolfe to Peer Perform from Outperform, saying the online dating sector’s secular growth slowing and execution of Match’s strategy not certain.

·     QURE -45%; after mixed data, as its gene therapy for Huntington’s disease reduced levels of a key protein linked to the disease by 8.1% at a lower dose, vs a 52.8% reduction reported by the company last year.

·     SKIN -8%; downgraded to Hold from Buy at Stifel and tgt cut to $10 from $17 saying sales growth in HydraFacial’s booster attachment product may soon see a slowdown.

·     TFX -4%; downgraded from Buy to Hold at Needham saying checks indicate that urologists are reducing their use of UroLift.

·     TRUP -12%; after California sent an objection letter on the pet insurance company’s proposed rate increase https://tinyurl.com/25btevt9

·     WGO -1% after results as Q3 EPS $2.13 tops est. $1.78 but revs of $900.8M miss consensus $977.1M; adjusted EBITDA $96.4M vs est. $92.3M.


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.