Mid-Morning Look: July 11, 2024

Mid-Morning Look

Thursday, July 11, 2024





DJ Industrials




S&P 500








Russell 2000






Following a “cooler” inflation report for June this morning, it appeared the party was going to continue for Wall Street as US CPI June inflation came in lower than consensus forecasts across the board. The monthly headline inflation for June was (-0.1%) vs. est. rise +0.1%, bringing the annual measure down to 3.0% (3.1%). Meanwhile core CPI (excluding food & energy) came in at +0.1% vs. est. and prior +0.2% and +3.3% Y/Y vs. +3.4% prior. The data boosted market expectations of a September rate cut by the Federal Reserve and really boosted interest rate sensitive sectors as the dollar and Treasury yields fell (home builders, solar and small cap stocks). The Russell 2000, which has broadly underperformed large caps all year (+1.2% YTD coming into the day vs. SPX +18.12% YTD, Nasdaq +24.2%), was a big leader this morning, rising nearly 3%, while investors sold shares in the biggest tech winners of 2024 with the Nasdaq falling 1%. The 10-year Treasury yield drops 11 bps to 4.17% and 2-yr yield -13 bps to 4.50% on CPI data. The dollar dropped sharply as well after data, down 0.68% to 104.318, lowest since 6/12as the euro reached $1.0893, the highest since June 7 and the dollar/yen extends slide by as much as 2.5%, now on course for largest daily drop since December 2022 at 157.71. In stock news, airlines fell after Delta (DAL) earnings miss and lower guidance, while in beverages Pepsi (PEP) also disappointed on revs and guidance. The S&P 500 and Nasdaq came into day with 7-day win streaks and record highs as well as SOX record highs – seeing some profit taking early.

Economic Data

  • June Consumer Price Index (CPI) data favorable as U.S CPI M/M fell (-0.1%) vs estimate +0.1% and 0.0% previous while on a Y.Y basis rose +3.0% vs. est. +3.1% and prior +3.3%. Core CPI (ex: food & energy) also shows deceleration pf prices as core CPI M/M rises +0.1% vs. est. and prior reading of +0.2% and Y/Y core rises +3.3% vs. est. /prior +3.4%.
  • @charliebilello noted “Shelter CPI has now moved down on a YoY basis for 15 straight months, from a peak of 8.2% in March 2023 (highest since 1982) to 5.2% today. Given its long lag vs. real-time rent data, a continued move lower is expected which should lead to a continued decline in core inflation.”
  • Weekly Jobless Claims fell to 222,000 in latest week from 239,000 prior week and vs. consensus 236,000; the 4-week moving average fell to 233,500 from 238,750 prior; continued claims fell to 1.852M from 1.856M prior week and the US insured unemployment rate unchanged at 1.2%.






WTI Crude















10-Year Note




Sector Movers Today

  • In Restaurants: Barron’s positive on shares of DPZ noting shares of restaurant and casual diner names have been battered (WEN, MCD, BLMN, DIN, CMG) as customers stay home thanks to inflation-fueled higher prices. Barron’s said the drop might have created a buying opportunity. Jefferies downgraded shares of DRI (to Underperform) as it sees risk to NT fundamentals and CHUY (to Hold from Buy) predicated on its view that SSS/traffic through ’25 will materially lag peer’s w/ a lack of meaningful traffic-driving initiatives.
  • In Metals: AA prelim Q2 adj EPS $0.08-0.19 vs est. $0.06, adj EBITDA $310-330Mm vs est. $298.83Mm on revs $2.85-2.925B vs est. $2.802B. RBC downgrades Anglo American (NGLOY) from Outperform to Sector Perform as it sees the outlook more balanced given the failed BHP bid and the likely delay in the met coal portfolio sale. RBC expects improved base metal prices and a normalization of cost inflation to leave H1 24 margins broadly flat YoY. AZZ Q1 adj EPS $1.46 vs. est. $1.30; Q1 revs $413.2 vs. est. $402.05M; said both segments performed well, delivering organic sales expansion of 4.7% for Metal Coatings and 6.5% for Precoat Metals. raises Fy25 adjusted EPS to $4.50-$5.00, from $4.25-$4.75.
  • In Video game preview: TD Cowen said TTWO remains top pick, PLTK, SONY, EA Buy rated and a sell on RBLX in Video Game Earnings Preview saying they expect few surprises this quarter and overall remains bullish on the video game space. TDCowen expects Q2 industry trends to be slow on console due to very tough comps but expects strong DD% y/y growth in mobile. Meanwhile Jefferies assumed EA with a Buy rating ($165 tgt), TTWO a Buy ($185 tgt) and remains the firm’s top pick in interactive entertainment, while downgraded RBLX to Hold from Buy and cut tgt to $42 from $51 saying the stock’s premium valuation warrants caution.



  • DHI +5%; seeing strength early in interest rate sensitive sectors such as homebuilders (LEN, TOL, KBH) following the cooler CPI inflation reading, and boosting bets for sooner/more rate cuts this year by the Fed.
  • ENPH +7%; as solar stocks another sector benefitting from lower rate outlook for economy following CPI data as SEDG, FSLR, CSIQ, NOVA, ARRY among names jumping.
  • MSTR +6%; after announces 10-for-1 stock split.
  • PFE +1%; shares rose after saying it will conduct studies in 2H’24 on a reworked, once-daily version of its experimental obesity pill, danuglipron. PFE said it is testing the once-daily modified release dosing as well as a twice-daily form of danuglipron.
  • QS +39%; after Volkswagen will ramp up production of solid-state batteries developed with QS, the companies said. Volkswagen is the largest shareholder in QS with a 15.3% stake.
  • TSLA +1%; looking to make it a 12th straight day of gains.



  • CAG -3%; EPS beat ($0.61 vs. $0.57) and sales miss (falling -2.3% y/y to $2.91B vs. $2.93B) as grocery and snacks sales fell 2.1% and refrigerated and frozen sales decreased 3.8% and guided 2025 adj EPS $2.60 to $2.65, below est. $2.69.
  • DAL -5%; Q2 EPS $2.01 misses’ consensus $2.37 on revs of $15.41B vs. est. $15.43B while forecasts Q3 adj. revs $14.8B-$15.1B, below consensus est. $15.32B; also guides Q3 adj EPS $1.70-$2.00 vs. est. $2.06 (the results/guidance weighed on AAL, JBLU, UAL, LUV, ALK shares).
  • PEP -1%; mixed Q2 as core EPS $2.28 beat est. $2.16 but revs $22.5B below est. $22.6B citing weakness in North America convenient foods and the impacts of product recalls at Quaker Foods; Q2 organic volume declined 3% while effective net pricing of increased 5%. In North America, Frito Lays sales slipped 0.5%.
  • SLRX -29%; after noting the FDA placed a partial clinical hold on its early-stage trial studying its experimental drug Seclidemstat in combination with chemotherapy drug azacitidine in adult patients with type of blood cancer.


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.