Mid-Morning Look: June 04, 2024

Mid-Morning Look

Tuesday, June 04, 2024





DJ Industrials




S&P 500








Russell 2000






U.S. stocks are off to a weak start, showing weakness in most S&P sectors outside of defensive (Healthcare, REITs, Staples higher) as grumblings about the strength of the U.S. economy following recent weaker manufacturing, confidence and housing stats has renewed concerns about a possible recession and causing some weakness in stock markets in recent days. Treasury yields have tumbled recently on the weaker data, raising hopes the Fed could cut rates as soon as September to help the economy, as the benchmark 10-yr yield falls 5-bps to 4.35% after falling 10-bps the day prior (hit lows of 4.32%). Falling energy prices also helping ease inflation fears as WTI crude declines for a fifth consecutive session around lows $72.50 a barrel, extending losses from a four-month low in the previous session, as investors worried about supply rising later in the year. Smallcaps underperform the last two days, with the Russell 2000 testing its 50dma despite a recent pullback in Treasury yields (which has been a bullish catalyst in the past). This morning, the first of several jobs related data this week points out as job openings in U.S. fall to 3-year low as labor market cools off, falling to more than three-year low of 8.1 million in April. Bitcoin to highs +1.3% back above $70,000 and crypto names rallying in reaction.

Economic Data

  • U.S. job openings (JOLTs data) fell to 8.06M in April from 8.36M prior and vs. est. 8.35M.
  • April factory orders +0.7% vs. consensus +0.6% and March +0.7%; factory orders ex-transportation +0.7% vs March +0.4% (prev +0.5%); factory orders ex-defense +0.4% vs March +0.9%; computers/electronics products orders +0.6%, vs March +0.4%; nondurables orders +0.8% vs March +0.7%; April nondefense cap orders ex-aircraft revised to +0.2% from +0.3%; April shipments unrevised at +0.4%; inventories/shipments ratio 1.45 months’ worth vs March 1.47 months.






WTI Crude















10-Year Note




Sector Movers Today

  • Industrials: SWK downgraded to Equal Weight from Overweight at Barclays (cut tgt to $86 from $100) as thinks the company’s sales are likely to remain "sluggish" through 2025, given the need for further inventory reduction and a subdued consumer spend environment. The firm also downgraded ALLE to Underweight from Equal Weight with a price target of $116, down from $122 saying thinks the company’s high U.S. greenfield commercial construction exposure will weigh on its sales, and that stable trends in the institutional side will not be strong enough to offset this. UBS notes PRIM is the top pick in Machinery, Engineering and Construction as see upside from earnings growth and multiple expansion and says CGNX to pick in EEM sector as see oppty to own high-quality growth at a discount.
  • In Energy: MLPs/Pipelines: Wells Fargo upgraded shares of DTM, KMI, and WMB to Overweight from Equal Weight with price targets of $77, $22, and $46, respectively saying they see continued multiple expansion for natural gas midstream stocks driven by growing gas demand supported by AI, re-shoring, LNG, etc. Wells said they project the avg multiple for these stocks to increase to ~10.5x from ~9.5x. In Refiners: Mizuho upgrades SUN to Buy as it believes the current valuation fails to capture the strength of SUN’s outlook including strong EBITDA growth in distribution, synergy upside from NS, a potentially IG-worthy balance sheet, and a strong and growing yield.
  • In Semis: ARM CEO said last night that the Co aims to gain more than 50% of the Windows PC market in five years, as MSFT and its hardware partners prepare to launch a new batch of computers based on the firm’s technology – Reuters reported. AVGO positive mention at Bernstein as they name ‘Best Idea’ pitch deck saying the case for Broadcom includes a materially de-risked core business in the near term; one of the best AI stories in the industry bridging the gap; likely upside to current VMware expectations; best in class financial and operational performance; attractive valuation. INTC launches its next generation Xeon server processors in a bid to regain data center market share; reveals its Gaudi 3 AI accelerator chips will be priced much lower than its rivals’ products. NVDA tgt to $1,275 from $1,180 at Mizuho and raise ests as believe NVDA continues to see strong opportunities with its Hopper platform and Blackwell B100/200in Q324-Q125 and now 3nm/Rubin announced at Computex for 2026.



  • ANNX +23%; after results from pivotal phase 3 trial for first-in-class CQ1 blocking antibody ANX005 in Guillain-Barré Syndrome; said single infusion of ANX005 30 mg/kg met primary endpoint, delivering a highly statistically significant and clinically meaningful 2.4-fold improvement in GBS-ds vs. placebo at Week 8 and demonstrated early and sustained improvements in key secondary endpoints.
  • HQY +2%; posted Q1 results ahead of street with revenue of $288M vs. $278M est. and EBITDA of $117M vs. $103M est. with strong operating momentum with solid HSA account adds and enhanced yield product uptake; raised if FY25 rev outlook to $1.16B-$1.18B from $1.14B-$1.16B prior and EBITDA of $454M-$474M from $438M-$458M prior.
  • ODFL +7% following an analyst upgrade helping boost shares in truckers and transports.
  • RCL +2%; as the cruise liner making new all-time highs, while CCL, NCLH all outperform.
  • SRRK +6%; presented data as SRK-181 showed notable activity in combination with pembrolizumab in PD-1 resistant patients with melanoma and clear cell carcinoma, said BMO.



  • AX -8%; following negative short call by Hindenburg Research citing “glaring Commercial Real Estate loan problems and lax underwriting beneath this priced-for-perfection bank https://tinyurl.com/2appfpa5
  • BBWI -9%; after guiding FY EPS $3.05-$3.35 per share, below estimates of $3.31 per share and said expects FY sales to decline between 2% and flat, vs. est. for -1.4% decline; guided Q2 EPS $0.31-$0.36 below ests $0.39 after reported a top and bottom line Q1 beat.
  • DBI –19%; shares tumbled as Q1 EPS $0.08 missed the $0.12 estimate on revs $746.6M vs. est. $741.6M; reaffirms its full-year guidance of net sales growth in the low-single digits and adjusted diluted EPS of $0.70-$0.80 (est. $0.76).
  • FCX -5%; as copper prices tumble on the day, drags down SCCO, BHP, RIO, TECK as well; prices of the metal dip below the mark of $10,000 a metric ton for first time in three weeks.
  • INDA -6%; as India markets weak, reversing prior day advance of 3.38% on election news, as tallies show the ruling party was struggling to win a majority of seats in national elections; a surprising result after exit polls showed he was on pace for a landslide victory.
  • SWK -2%; downgraded to Equal Weight from Overweight at Barclays (cut tgt to $86 from $100) as thinks the company’s sales are likely to remain "sluggish" through 2025, given the need for further inventory reduction and a subdued consumer spend environment.
  • VKTX -10%; shares rose initially then reversed lower; reported 52-week data based on biopsy results from patients with non-alcoholic steatohepatitis (NASH) in a mid-stage study saying the drug candidate, VK2809.


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.