Early Look

Tuesday, June 18, 2024

U.S. futures are looking slightly higher, with the S&P up, but just below yesterday intraday highs as markets await Retail Sales data for May at 8:30 AM and commentary from several Federal Reserve officials. There were broad gains for U.S. stock again on Monday as the Nasdaq posted its 6^th straight record closing high, the Dow Jones Industrial Average ended up nearly 200 points snapping a 4-day losing streak and the S&P 500 also record a new record (30^th this year) as momentum in technology stocks drove gains yet again. Stocks saw big gains last week amid tamer inflation readings (CPI and PPI for May) and incredible upside momentum in tech stocks after better results from AVGO, ORCL, and ADBE and as AAPL surged to record highs after the co unveiled a long-awaited AI strategy, integrating “Apple Intelligence” tech across its suite of apps. The moves, coupled with a massive surge in semis (NVDA, ARM, QCOM), as the SOX is up 34% YTD after a +40% jump in 2023. @MikeZaccardi tweets: “More near-record buybacks: BofA Corp. client buybacks last week were the third largest in our weekly history since ’10.” Stocks have been in full swing higher, massive momentum in some of the largest tech stocks in the world heading into the mid-year index rebalances and summer lull with no fear at all as the CBOE Volatility index (VIX) remains depressed. In Asian markets, The Nikkei Index jumped 397 points to 38,482, the Shanghai Index gained 14 points to 3,030, and the Hang Seng Index fell -20 points to 17,915. In Europe, the German DAX is up 73 points to 18,141, while the FTSE 100 rises 33 points to 8,175. Copper prices are down around -2% and now off about 15% from their May record highs. Reminder that U.S> stock markets are closed tomorrow for holiday.

• The Dow Jones Industrial Average rose 188.94 points, or 0.49%, to 38,778.10.
• The Nasdaq Composite surged 168.14 points, or 0.95%, to 17,857.02.
• The Russell 2000 Index advanced 15.85 points, or 0.79% to 2,022.01.

• 8:30 AM ET                  Retail Sales M/M for May…est. +0.2%
• 8:30 AM ET                  Retail Sales – Less Autos M/M for May…est. +0.2%
• 8:55 AM ET                  Johnson/Redbook Weekly Sales
• 9:15 AM ET                  Industrial Production M/M for May…est. +0.3%
• 9:15 AM ET                  Capacity Utilization for May…est. 78.6%
• 10:00 AM ET                Business Inventories M/M for April…est. +0.3%
• 10:00 AM ET                Fed’s Barkin Discusses US Economy, Fed
• 1:00 PM ET U.S. Treasury to sell $6B in 20-year notes.
• 1:00 PM ET                   Fed’s Logan Speaks in Q&A
• 1:00 PM ET                   Fed’s Kugler Speaks on Economy, Monetary Policy
• 2:00 PM ET                   Fed’s Goolsbee Speaks in Panel Discussion
• 4:00 PM ET                   Net Long-term TIC Flows for April
• 4:30 PM ET API Weekly Inventory Data

• Earnings After the Close: KBH

• Federal Reserve Bank of Philadelphia President Patrick Harker said he sees one interest-rate cut as appropriate for this year based on his current forecast, underscoring the message that high interest rates are likely to persist. Harker said a recent report showing consumer prices cooled in May was “very welcome.”

• Lennar (LEN) Q2 EPS $3.45 vs. est. $3.24; Q3 revs rose 9.6% y/y to $8.77B vs. est. $8.57B; Q2 New orders increased 19% to 21,293 homes, backlog of 17,873 homes with a dollar value of $8.2 billion, Q2 deliveries increased 15% to 19,690 homes, Q2 gross margin on home sales of 22.6% vs. 22.5% y/y; guides Q3 new orders 20,500-21,000, vs. est. 21,095.
• Chegg (CHGG) announces restructuring plan and new vision for growth; expects $40M-$50M savings in 2025; said restructuring includes departure of 441 employees, which represents 23% of Chegg’s global workforce.
• Fisker Group (FSRN), the operating subsidiary of Fisker, announced that it filed for Chapter 11 protection in the District of Delaware on June 17, 2024.
• Kroger (KR) upgraded to Outperform from Market Perform at BMO Capital.
• Philip Morris International Inc. (PM) stopped online sales of its popular nicotine pouch brand Zyn in the US after an affiliate received a subpoena in the District of Columbia.

• Cheniere Energy Inc (LNG) increasing share repurchase authorization by an additional $4B through 2027; plan to increase Q3 2024 dividend by about 15% to $2.00 per common share annualized.
• State-run Coal India Ltd is exploring lithium blocks in Argentina along with a U.S. company to secure supplies of the battery material, an Indian source with direct knowledge said on Tuesday – Reuters.
• XP Power (XPPLF) shares dropped as much as 24% in early trade on Tuesday after Advanced Energy Industries (AEIS), dropped a possible 468 million pound ($593.8 million) offer for the power converter solutions provider. https://tinyurl.com/muj4mxr7

• Wolfe Research LLC hired top—ranked oil and gas analyst Doug Leggate from Bank of America Corp. (BAC) as the privately-held company bulks out its sell-side energy research. Leggate, who led Bank of America’s global oil and gas coverage from Houston, will start in his new role in the third quarter of this year – Bloomberg.

• UroGen Pharma (URGN) 5M share Spot Secondary priced at $17.50.
• The U.S. state of Kansas sued Pfizer (PFE), accusing the company of misleading the public about its COVID-19 vaccine by hiding risks while making false claims on its effectiveness.

• Esports platform Brag House Holdings has filed for an initial public offering of 1.6 million shares at an expected price of $5 apiece; the company said it expects net proceeds of about $6.21 million – Reuters.