Early Look

Tuesday, June 20, 2023

Futures	Up/Down	%	Last
Dow	-122.00	0.35%	34,482
S&P 500	-16.25	0.38%	4,437
Nasdaq	-66.50	0.44%	15,201

 

 

U.S. stocks are looking lower after completing another weekly advance last Friday, as the rally continues to get stretched. This week Fed Chairman Powell testifies before the Joint Economic Committee on Wednesday 6/21 and Thursday 6/22 at 10:00 AM ET, which could shake-up markets. This weekend, China and the U.S. agreed to stabilize their intense rivalry, so it does not veer into conflict, but failed to produce any significant breakthrough during a rare visit to Beijing by U.S. Secretary of State Antony Blinken. In Asian markets, The Nikkei Index rose 18 points to 33,388, the Shanghai Index fell -15 points to 3,240, and the Hang Seng Index declined -305 points to 19,607. In Europe, the German DAX is down -100 points to 16,100, while the FTSE 100 is flat at 7,587. Aerospace stocks in focus this morning as plane makers receive large orders at the Paris Air Show this weekend. In China, the PBoC cut its key lending benchmarks on Tuesday, but disappointed some that were looking for wider cuts.

 

Market Closing Prices Yesterday

·     The S&P 500 Index slipped -16.25 points, or 0.37%, to 4,409.59.

·     The Dow Jones Industrial Average fell -108.94 points, or 0.32%, to 34,299.12.

·     The Nasdaq Composite dropped -93.25 points, or 0.68%, to 13,689.57.

·     The Russell 2000 Index declined -13.81 points, or 0.73% to 1,875.47.

 

Economic Calendar for Today

·     6:30 AM ET            Fed’s Bullard Speaks at Barcelona School of Economics

·     7:45 AM ET            ICSC Weekly Retail Sales

·     8:30 AM ET            Housing Starts M/M for May

·     8:30 AM ET            Building Permits M/M for May

·     11:45 AM ET          Fed’s Williams Speaks on Leadership at NY Fed Event

 

Earnings Calendar:

·     Earnings Before the Open: None

·     Earnings After the Close: DLNG FDX LZB

 

Other Key Events:

·     Bank America EU Tech, Media, Telecom Conference, 6/20-6/21, in London

·     Goldman Sachs Business Services, Transport & Leisure Conference, 6/19-6/21, in London

·     Jefferies Nantucket Consumer Conference, 6/20-6/21, in Nantucket, MA

·     JP Morgan Energy, Power, & Renewables Conference, 6/20-6/22, in New York

·     Maxim Healthcare Conference (virtual), 6/20-6/21

 

 

Macro	Up/Down	Last
Nymex	0.31	72.09
Brent	0.65	76.74
Gold	-9.00	1,962.20
EUR/USD	0.0009	1.0931
JPY/USD	-0.43	141.54
10-Year Note	+0.014	3.783%

 

 

World News

·     China’s central bank cuts the banks’ 1-Y and 5-Y Loan Prime Rate: LPR by 10 bps for the first time since August; 1-year LPR at 3.55% from 3.65%; 5-year LPR at 4.20% from 4.30%.

·     Money-market funds are placing less cash in a Federal Reserve borrowing program, a sign that efforts to replenish government coffers after the debt-ceiling fight haven’t disrupted markets – WSJ reports.

 

Sector News Breakdown

Consumer

·     Hyundai Motor said at its investor day it will raise average annual investment in electrification by nearly two thirds to $28 billion in the next decade and further restructure its struggling China business as part of a broader strategy to boost electric vehicle (EV) sales.

·     Nikola (NKLA) reorganizing workforce around new areas of focus and eliminating non-essential spend; continuing to take actions geared toward optimizing and protecting ongoing operations; said Q3 launch of hydrogen fuel cell electric truck on schedule.

·     Philip Morris (PM) upgraded to Buy from neutral at Citigroup and opened a 3-month positive catalyst watch on the stock on expected acceleration in trading momentum following a “lackluster” first quarter.

 

Energy

·     Civitas (CIVI) has agreed to purchase a portion of Tap Rock’s Delaware Basin assets for $2.45B, which includes $1.5B in cash and approximately 13.5M shares of Civitas common stock valued at approximately $950M, subject to customary anti-dilution and purchase price adjustments.

·     NiSource (NI) said that asset manager Blackstone’s (BX) infrastructure unit has agreed to acquire a 19.9% equity interest in its unit NIPSCO for $2.15 billion.

 

Financials

·     EverQuote (EVER) announced plans to implement a structural reduction of over 15% in its non-marketing operating expenses, excluding non-cash items.

 

Healthcare

·     Arcellx (ACLX) shares fall -20% after saying regulators put a clinical hold on its investigational new drug for the treatment of relapsed or refractory multiple myeloma following a patient death; said it received a clinical hold for CART-ddBCMA from the U.S. FDA.

·     AstraZeneca (AZN) has drawn up plans to break out its China business and list it separately in Hong Kong to shelter the company against mounting geopolitical tensions – Financial Times.

·     Cano Health (CANO) announces leadership change to advance execution of value creation plan as Mark Kent appointed Interim Chief Executive Officer after Dr. Marlow Hernandez has agreed to step down immediately as Chief Executive Officer and remain on the Board of Directors.

·     Iovance Biotherapeutics (IOVA) files automatic mixed securities shelf.

 

Industrials & Materials

·     Airbus (EADSY) said India’s IndiGo airline is buying 500 passenger jets from the European plane maker at the Paris Air show in a record-setting order; IndiGo, India’s dominant carrier, is buying the narrow-body A320 aircraft.

·     Lockheed Martin (LMT) raised concerns with the U.S. Defense Department and FTC about L3Harris’s (LXH) purchase of Aerojet Rocketdyne (AJRD) Lockheed’s COO told Reuters.

·     Freeport-McMoRan (FCX) mentioned positively in Barron’s saying shares could soar 50%, as copper prices are getting ready to run-and Freeport-McMoRan stock is the way to play it. The company already has the strongest balance sheet of any copper miner, a strong management team, and the ability to return capital to shareholders.

·     Raytheon Technologies (RTX) said it will produce and deliver 571 AIM-9X Sidewinder missiles and parts for the U.S. Navy, U.S. Air Force, and foreign military sales customers as part of a $264 million modification to a contract it received at the end of last year.

 

Technology, Media & Telecom

·     Alibaba Group (BABA) said its CEO and chairman Daniel Zhang will step down from the roles to focus on its cloud division as the Chinese e-commerce giant moves ahead with a plan to split into six business units.

·     Oracle (ORCL) mentioned positively in Barron’s saying the story is now all about the cloud, as the market’s new enthusiasm for Oracle has pushed the 47-year-old company into the spotlight for the first time in many years, driving Oracle’s share price to record highs.

·     European antitrust regulators are preparing to launch a formal investigation into software giant Adobe’s (ADBE) $20B buyout deal for cloud-based designer platform Figma later this year, the Financial Times reported on Tuesday.