Closing Recap

Wednesday, June 11, 2025

US equity futures were slightly in the red early, while both gold and oil showed overnight gains as investors awaited CPI data. Spreading demonstrations across major US cities and a new curfew in Los Angeles did not seem to have a meaningful impact on the markets and there were no major overnight tariff headlines to serve as a market catalyst. Cooler Core CPI data, both mo/mo and yr/yr, immediately sent equity futures back to green as traders boosted expectations for September Fed rate cuts. Following an early dip to losses, equities moved back to modest gains with early breadth favoring advancers by a bit better than 2:1 as small caps outperformed with IWM (+0.54%) versus SPY (+0.26%) and QQQ (+0.36%). Today’s Fear & Greed Index remained in Greed territory at 66/100 compared to 63 (Greed) last week and 62 (Greed) last month. A year ago, the index was at 44/100 (Fear). FWIW, the sell-side upgrade/downgrade ratio is running at 47.5% month-to-date versus 38.7% for the month of May and the 20dma continues to hold a negative correlation to the S&P. By late morning, sector performance was strongly tilted in favor of gainers with Technology (+0.44%), Health Care (+0.43%) and Consumer Discretionary (+0.31%) outperforming among S&P sector ETFs, while Energy (+0.08%), Consumer Staples (-0.28%) and Materials (-0.52%) led the underperformers with nine sectors gaining versus only two declining.

In data of note today, @schaeffers noted when a V-bottom occurs in the SPX, momentum continues over the next 30 days with average return of 3% and longer-term returns (6 months, 12 months) typical for SPX. On inflation @KobeissiLetter noted while CPI was tame overall, inflation was much higher in many basic necessities including: utility gas, car insurance, meat and eggs, car repair, electricity and homeownership. Lastly, @unusual_whales pointed out NAR data indicating first-time home buyers have fallen to a record low.

Heading into the final hour of trading, stocks had faded to modest losses following headlines about potential evacuations of the US embassy in Iraq and military dependents in Bahrain and Kuwait. There was some speculation that such evacuations would be more a negotiation tactic than an indication of a pending attack, but it was enough to spook the market and drive oil and gold higher. Afternoon breadth shifted slightly in favor of decliners as both large and small caps slipped with IWM (-0.4%) versus SPY (-0.4%) and QQQ (-0.4%). On a sector basis, only Energy (+1.25%) held onto gains while Real Estate (-0.65%), Consumer Discretionary (-0.8%) and Materials (-1.05%) paced the underperformers among the 10 declining groups.

• The U.S. government posted a $316 billion budget deficit for May, down 9%, or $31 billion, from a year earlier, as customs receipts nearly quadrupled to a record $23 billion. Gross customs receipts jumped last month from $6 billion in May 2024 as Trump’s tariffs on goods from nearly all trading partners began showing up in significant volumes in port-of-entry collections, a Treasury official said. Fiscal year-to-date customs receipts were up nearly 60% to $86 billion.

• WTI July crude futures gained overnight and extended higher following a favorable CPI report and rising expectations for September Fed rate cuts. Afternoon reports of the US embassy in Iraq preparing for ordered evacuation and headlines indicating US military independents in Bahrain and Kuwait potentially preparing to depart pushed crude to highs. There were no confirmed comments on the catalyst behind the headlines, but speculation continues to swirl around Israel potential launching against Iranian nuclear assets. WTI crude Futures settled +$3.17/bbl, or +4.88%, at $68.15.
• Treasury yields fell following softer-than-expected CPI inflation in May, driving up demand for U.S. government debt. The impact of tariffs on consumer prices remains unclear, as annual CPI ticks up to 2.4% from 2.3%. The data keeps the Fed on track to hold rates steady next week –despite Trump’s calls for aggressive easing. Demand falls slightly in a 10-year Treasury auction, not enough to push yields higher. The 10-year note auction had a bid-to-cover ratio of 2.52, down from 2.60 in May and a 12-month average of 2.56, indicating just a small decline in demand. A U.S.-China trade deal shows little impact on bond markets. The 10-year falls for the third consecutive session, losing 5.9 bps to 4.413%.

• In Apparel Retailers: URBN was upgraded to Outperform and $90 tgt at Oppenheimer, having been positive on fundamentals and execution for several quarters, though sensitive to valuation in an uncertain macro backdrop. JILL shares tumbled early as Q1 sales fell -4.9% y/y to $153.6M, missing the $156.8M estimate while comp sales fell -5.7% y/y and said it would temporarily suspend its outlook.
• In Specialty Retail: VSCO reported Q1 adj EPS $0.09, topping the $0.04 ests as sales edged lower -0.5% y/y to $1.35B but topped the $1.33B est. Guided Q1 EPS and sales below consensus ($0.00-$0.15 vs. est. $0.30 and sales $1.38B-$1.41B vs. est. $1.42B) and lowered its adj operating income to $270M-$320M from $300M-$350M. GME shares slumped early after results as the video-game retailer posted a -17% drop in Q1 sales y/y. In pet retail, CHWY shares give back some recent gains (shares +110% over last year) as Q1 EPS/revs were slightly above estimates, but margins fell to 29.6% from 29.7% in the same period a year ago.

• In Cruise lines: CCL tgt was raised to $33 from $31 and Reiterate Buy ahead of earnings at Stifel saying expects Carnival will be able to raise their full-year guidance (once again) when they report their FQ225 results (expecting late-June) based on continued strong close-in demand/pricing.

• In Solar: FSLR was upgraded from Hold to Buy at Jefferies and raised tgt to $192 from $157 saying its time to get constructive again, raising EPS ests with higher ASPs in ’28+ and sees upside to its ests. if new ‘market’ pricing rises to ~32-33c/W range for new contracts. The firm downgraded RUN to Underperform from Hold with a price target of $5, down from $6 saying the budget reconciliation has residential solar on the chopping block and while expecting some improvements on the Inflation Reduction Act from the Senate, it sees limited upside for residential, exposing Sunrun to both near and long-term headwinds.

• In Financial Technology: BILL was downgraded to EW from OW at Morgan Stanley citing an increasingly uncertain macro environment, FY26 estimates looking too high, and a lack of positive catalysts. Meanwhile Chyme (CHYM) 32M share IPO is expected to price tonight with range $24.00-$26.00 following a list of recent well bid IPOs lifting sentiment (CRCL, CRWV, VOYG all big jumps on IPO open).
• In Crypto: Bitcoin miner IREN announces pricing offering of $500M 3.50% convertible notes due Dec 2029 as offering size boosted from $450M; initial conversion price of $13.64 represents 30% premium to close.

• APAM preliminary assets under management as of May 31, 2025, totaled $170.9 billion. Artisan Funds and Artisan Global Funds accounted for $83.4 billion of total firm AUM, while separate accounts and other AUM accounted for $87.5 billion
• TROW preliminary month-end assets under management of $1.62 trillion as of May 31, 2025. Preliminary net outflows for May 2025 were $4.4 billion.
• VCTR reported Total Assets Under Management (AUM) of $289.4 billion, Other Assets of $3.7 billion, and Total Client Assets of $293.1 billion, as of May 31, 2025.
• VRTS preliminary assets under management (AUM) of $167.6B and other fee earning assets of $2.1B for total client assets of $169.7B as of May 31, 2025. The increase in AUM from April 30, 2025, primarily reflects market performance and positive net flows in exchange-traded funds.

• SMMT was Initiated at Underperform and $12 price tgt at Leerink saying consensus estimates for Ivonescimab assume an unrealistic share of the current anti-PD(L)1 total addressable market, given the intense and heterogenous competitive landscape, and compared to the PD-(L)1 era, higher threshold for clinical success, regulatory approval, and uptake.
• VXRT with positive clinical data demonstrating that its second-generation vaccine technology produces much stronger antibody responses than its first-generation technology; said vaccine candidates were safe and well-tolerated across all dose groups with no vaccine-related serious adverse events reported; vaccine candidates safe and well-tolerated with no serious adverse events and phase 3 trial could begin as early as 2026.
• In Hospital operators (ARDT, THC, UHS, HCA), Mizuho noted the hospital group is down -7.6% from June 6th versus the S&P 500 up +0.3% after the White House released a memorandum signaling President Trump’s administration’s plans to target waste, fraud, and abuse in Medicaid State Directed Payments (SDPs). This was followed by a preliminary regulation submission on SDP programs to the Office of Management and Budget (OMB) last night. The firm said the hospital selloff appears overdone on SDP fears. Separately, Short Seller “Fuzzy Panda” announced that it is short THC saying the firm’s analysis shows Tenet is "back at it again," appearing to be "doing the same things https://tinyurl.com/yyj42z2t

• In Metals: Steel stocks (CLF, NUE, STLD) trade lower after Bloomberg reported the US and Mexico are closing in on a deal that would remove 50% tariffs on steel imports up to a certain volume. GLNCY declared force majeure on some deliveries of cobalt from Democratic Republic of Congo days after the government suspended exports of the battery material, three sources familiar with the matter told Reuters. Gold miner AU was named for the first time as a preliminary addition to the Russell 1000(R) or Russell 2000(R), the Russell 3000(R), and the Russell Midcap(R) Indexes.
• In Transports: airline stocks (AAL, DAL, LUV, UAL, ALK) slumped, dragging down the broader Dow Jones Transport index following oil prices jumping to their highest levels in 8-weeks.

• Quantum Compute names are strong: Shares of RGTI, IONQ, QUBT, QBTS, QMCO were stronger after NVDA CEO Huang said during an appearance at Nvidia GTC Paris on Wednesday, that quantum was reaching a so-called inflection point. "We are within reach of being able to apply quantum computing in areas that can solve some interesting problems in the coming years," he added
• In Ai and Data Center sector: NBIS delivers first Nvidia Blackwell general availability in Europe; brings Nvidia AI Enterprise to Nebius AI Cloud
• In Communications & Networking: ANET was downgraded to hold from buy at BNP Exane on the backs of increased competition from both NVDA and white-box vendors such as CLS.
• In IT Services & Consulting: INGM was downgraded to EW from OW at Morgan Stanley saying their positive view on IT spending hasn’t changed but it now sees more upside in SNX (which they initiate at Overweight and $145 tgt) vs INGM and switches its preference amongst distributors.
• In Electric Equipment & Parts: OUST shares jumped after its OS1 digital lidar has been vetted and approved by the Department of Defense (DOD) for use in unmanned aerial systems (UAS).
• In Software: ORCL is expected to report earnings after the close tonight; GTLB shares fell after reporting their thinnest beat on record according to Needham, outperforming the high-end of revs guidance by 0.7% (compared to an average of 3.2% over the past 4 quarters) citing headwinds from greater SaaS mix and linearity, while mgmt reiterated its FY26 revenue guidance and raised EPS. SAIL shares rally on results as Q1 revenue of $230M beat by $5M, a slightly larger beat than last Q with the FY’26 revenue guide bumped by ~$9M at the midpoint and raises Fy26 ARR y/y growth to 25%-26% from 23%-24% prior. Citigroup opened an upside 90-day catalyst watch call on MSFT with view that Street Azure estimates are too low for FY26.

• NVDA said it will build its first artificial intelligence cloud platform for industrial applications in Germany, CEO Jensen Huang said on Wednesday at the VivaTech conference in Paris.