Mid-Morning Look

Monday, June 09, 2025

U.S. stock markets are rising after a very quiet open, as the S&P 500 index (SPX) has held above the 6,000 level, not far from its ATH of 6,147 on February 19^th following a remarkable surge since the April lows (more than 20% move back into positive territory for the year). Sentiment remains positive amid high-level US/China trade meetings taking place in London today between Commerce Secretary Lutnick joining Treasury Secretary Bessent and USTR Greer. China’s Vice Premier He Lifeng, who led the first round of trade talks in May, is there as well. U.S. bond benchmarks are little changed from Friday, as trade and budget negotiations continue ahead of inflation data (CPI and PPI data this week) and Treasury auctions. The 10-year Treasury yield is at 4.5% and the two-year at 4.01%. Gold prices edged higher, supported by a weaker U.S. dollar, as market participants kept a close eye on the ongoing U.S.-China trade talks. In stock news, all eyes on Apple (AAPL) which kicks off its annual Worldwide Developers Conference this afternoon. Semiconductors (SOX) adding to recent gains as the SOX rises 2.4% to 5,160 as the rebound in the AI trade since April lows lifts the entire complex. In the lone piece of economic data today in the U.S., April wholesale inventories revised to +0.2% (consensus unchanged) from unchanged while U.S. April wholesale sales +0.1% vs March +0.8% (prev +0.6%); U.S. April stock/sales ratio 1.30 months’ worth vs March 1.30 months.

• In Banks & Brokers: Shares of HOOD declined after S&P Dow Jones Indices made no changes to the S&P 500 index on Friday. It’s the first quarterly rebalance without an S&P 500 stock change since March 2022 (HOOD was expected to be a top addition choice on any index change). IBKR was downgraded to neutral at Citigroup saying at current levels, Citi prefers to wait for a more attractive entry point. LPLA also downgraded to Neutral at Citigroup noting after recent strength, (up 19% QTD), LPLA is trading near historic highs. FITB was upgraded to Buy from Neutral at Davidson coming away from mgmt meetings with stronger conviction on stock.
• In Food & Beverages: Goldman Sachs downgraded GIS to Neutral from Buy (tgt to $58 from $68.) and cut CAG to Sell from Neutral (tgt to $21 from $26) saying center-of-store food companies continue to face a number of headwinds, including increasing cost pressures along with tepid volume demand amid ongoing consumption shifts toward fresh and increasing competition from private labels and smaller brands.

• CCJ +8%; after announcing an expected increase of about $170M for its 49% equity share of Westinghouse’s 2025 Q2 and annual adjusted EBITDA.
• CRCL +21%; as stablecoin firm continues to surge, now more than quadruple their IPO price last week of $31 last Thursday.
• IONQ +3%; after saying it reached a deal to acquire British quantum computing start-up Oxford Ionics in a deal valued at $1.075 billion.
• VFS +4%; said Q1 revenue more than doubled as deliveries of its electric vehicles jumped nearly four times in the three-month period; Q2 revenues grew 150% to $656.5 million in the January-March period compared with the analysts’ average estimate of $520 million.
• WBD +10%; is splitting itself into two stand-alone publicly traded entertainment companies, separating its HBO Max streaming service, movie studio and TV production business from its cable networks. One company will be home to CNN, TNT, TBS and Warner’s dozens of cable channels, as well as its international holdings.

• AXSM -2%; received a refusal-to-file letter from the FDA for its new drug application for its fibromyalgia drug AXS-14; said the FDA found Axsome’s application was not sufficiently complete to permit a substantive review.
• HOOD %; declined after S&P Dow Jones Indices made no changes to the S&P 500 index on Friday. It’s the first quarterly rebalance without an S&P 500 stock change since March 2022 (HOOD was expected to be a top addition choice on any index change).
• ISRG -8%; was downgraded to Sell from Hold at Deutsche Bank and cut tgt to $440 from $515.
• PLCE -28%; after reporting Q1 sales $242.1M, below $267.9M y/y and a larger adj EPS loss citing softer consumer sentiment and particularly unseasonable weather patterns for its weak results.
• SATS -8%; after the WSJ reported EchoStar is considering a Chapter 11 bankruptcy filing as the firm vies to shield its stockpile of wireless spectrum licenses from the threat of revocation by federal regulators.
• TSLA -2%; was downgraded by two Wall Street analysts saying the stock appears to be currently trading on non-fundamental events, specifically the worsening tiff between the U.S. President and Musk.
• UHS -9%; hospital operators weaker (THC, HCA); note UHS spoke at Goldman Sachs Healthcare conference.