Mid-Morning Look

Thursday, June 12, 2025

Markets remain strong following another “buy the dip” moment since the open, as U.S. stocks are rallying off overnight weakness, taking out overnight highs. U.S. stocks slipped initially overnight after President Trump said he intended to send letters to trading partners in the next one to two weeks setting unilateral tariff rates, ahead of a July 9 deadline to reimpose higher duties on dozens of economies. “We’re going to be sending letters out in about a week and a half, two weeks, to countries, telling them what the deal is,” Trump told reporters. The tariff news weighed on sentiment briefly, but another “cooler” inflation reading this morning, this time on the wholesale front (PPI) following yesterday’s CPI report, helped boost major averages with the S&P 500 (SPX) moving back above the 6,000 level ahead of a 30-year bond auction this afternoon (which follows a strong 10-yr auction the day prior). The producer price index (PPI) for May came in cooler than expected, up 0.1% month over month versus the 0.2% estimate. While futures were down overnight, markets quickly bounced (again) as any/every pullback, shallow or deep, has remained a buying opportunity for the last 2 months. Stocks also overlooking more Middle East tensions with Iran. Shares of Dow component Boeing (BA) fell after a Boeing 787-8 Dreamliner Air India aircraft carrying more than 200 people crashed in India’s western city of Ahmedabad.

The tariff headlines hit the US dollar overnight as the euro rises more than 1% above $1.16, its highest level since late 2021, while the safe-haven Swiss franc and yen jump. The dollar index (DXY) extended its decline following the May PPI inflation data, down about -1% at 97.60, the lowest level since March 2022. While the PPI data hit the dollar and boosted bond prices (lowering yields), stocks pared losses as the combination of slower-than-expected inflation and concerning labor data underscores bets that the Fed may need to change its hawkish position. Traders see 80% chance of a Sept Fed rate cut, with a second rate cut as soon as Oct, vs Dec as seen before data. The 10-year Treasury yield fell to lows below 4.35%, down over 6bps while the two-year was at 3.88%, also down 6-bps. Oil prices pullback from 8-week highs, rising yesterday after the U.S. ordered some staff to leave its embassy in Baghdad, officials said, after Iran threatened to strike American assets in the Middle East in the event that it’s attacked over its nuclear program. Gold prices rose 1% to a one-week high back above $3,400 an ounce as tensions in the Middle East and trade uncertainties fueled demand for the safe-haven asset.

• Weekly Jobless Claims unchanged at 248,000, above the consensus 240,000; the 4-week moving average climbed to 240,250 from 235,250 prior week; continued claims climbed to 1.956M from 1.902M prior week and the U.S. insured unemployment rate climbed to 1.3% from 1.2% prior week.

• In Aerospace & Defense: BA shares fell after an Air India flight with 242 passengers crashed shortly after take-off from Ahmedabad, as the Boeing 787 aircraft was traveling to London’s Gatwick airport (parts makers GE, SPR fall in reaction); CACI gets 7-yr task order, including 1 base period, 6 option periods, with estimated ceiling of $437M for support to U.S. Africa Command’s Mission; JOBY was downgraded to Neutral from Overweight at Cantor; OSK received a contract modification worth $792.4 million for work it will do for the U.S. Army. The contract, for Oshkosh’s Family of Medium Tactical Vehicles A2, will be extended by three years.

• CVAC +31%; after BNTX agreed to acquire CVAC, a clinical-stage biotech company developing a novel class of transformative medicines in oncology and infectious diseases based on messenger ribonucleic acid. Under the terms of the agreement, each CureVac share will be exchanged for about $5.46 in a deal valued at $1.25B.
• CVGW +7%; after receiving an unsolicited takeover proposal to acquire all its outstanding shares for $32 each in a deal valued at about $570M last night. https://tinyurl.com/39jwntb7
• NEM +2%; seeing strength in gold miners again as gold prices top $3,400 to 1-week highs on dollar dip.
• ORCL +12%; (new all-time highs) after posting a better than expected 11% jump in sales and targeted even higher growth as guided a total cloud growth rate of 40% in FY26, up from 24% this year and said sees cloud infrastructure growth north of 70% next year, up from 50% this year

• CAG -2%; downgraded to Underperform from Neutral at Goldman Sachs and cut its tgt to $20 from $27 saying detailed cost of goods estimates for the next 12 months show protein inflation for chicken, beef and pork is set to be a meaningful headwind to earnings growth.
• COIN -2%; as the crypto/Bitcoin space showing early weakness; Bitcoin falls below $107,000.
• GME -16%; shares slide after saying it plans to offer $1.75 billion worth of convertible bonds.
• OKLO -3%; after announcing a $400M stock offering for general purposes, working capital, capex and potential future investments.
• OXM -9%; reported Q1 revenue and adj. EPS that were in line with the Company’s expectations, but FY25 guidance was revised due to updated tariff rates; said sees Q2 net sales $395-415Mm vs est. $409.43Mm and adj EPS $1.05-1.25 (incl $0.75 in additional tariff costs) vs est. $2.21.
• SLP -24%; after guided prelim Q3 revs $19M-$20M, more than 14% below the consensus of $22.8M at midpoint and lowered its FY25 revenue guidance by ~15% from $90M-$93M to $76M-$80M 
• TNXP -9%; after files for a mixed shelf of up to $500M.

Deals priced today

• CHYM (Chime) 32M share IPO, priced at $27.00 (range was $24-$26)
• INSM 7.812M share Spot Secondary, priced at $96.00
• HPP 71.8M share Spot Secondary, priced at $2.33
• KARO 1.5M share Spot Secondary, priced at $50.00
• VNTG (Vantage) 3.25M share IPO, priced at $4.00 (range was $4 – $5)