Mid-Morning Look: June 14, 2024

Mid-Morning Look

Friday, June 14, 2024





DJ Industrials




S&P 500








Russell 2000






U.S. stock futures were lower overnight amid concern/weakness in France/Europe, but quickly caught bids on the open, pushing the Nasdaq nearly 100-points off lows to turn “green” led by ADBE after earnings, as well as usual suspects (semis such as NVDA, AVGO, ARM) on AI excitement. While major averages pared losses on the open, underlying market internals remain weak with negative breadth and most S&P sectors in the “red” outside of tech/communications (big losses in industrials, energy, financials and consumer discretionary). Markets took a turn lower around 10:00 AM after University of Michigan sentiment dropped sharply in the latest reading (well below ests) while inflation expectations held higher pressuring sentiment. Surprisingly the dollar index (DXY) rises +0.5% around 105.70, its best levels since May 1st in a sharp rebound post Wednesday declines after the tamer CPI, as Fed outlook for rates of “higher for longer” bounces the buck (coupled with weakness in Europe given France election turmoil). In one of her last interviews on CNBC ahead of retiring, outgoing Cleveland Fed President Loretta Mester said “We’ve seen really good progress over the last couple of years on inflation. We’re not there yet, but you must look at the data and be happy that we’re starting to see inflation move back down again.” Choppy action early, but the S&P and Nasdaq remain on track for their 7th up week in a row in last 8, while the Dow Jones Industrial Average and Smallcap Russell 2000 slips on the week. French stocks slid -5% (down over 5% on week), its worst weekly loss since 2022 after President Emmanuel Macron’s called for Snap elections. Overall NYSE market breadth more than 4:1 decliners leading advancers.

Economic Data

  • May import prices declined -0.4% (vs. consensus +0.1%) and vs April +0.9% (prev +0.9%), while U.S. May export prices dropped -0.6% (vs. consensus unchanged) and vs April +0.6% (prev +0.5%). May petroleum import prices -1.7% vs April +4.6% and year-over-year import prices +1.1%, export prices +0.6%.
  • University of Michigan surveys of consumers 1-year inflation outlook prelim June 3.3% vs final May 3.3% while the 5-year inflation outlook prelim June 3.1% vs final May 3.0%.
  • University of Michigan surveys of consumers sentiment prelim June tumbles to 65.6 vs. consensus 72.0 and below the final May 69.1; current conditions index prelim June 62.5 (consensus 71.0) vs final May 69.6; consumers expectations index prelim June 67.6 (consensus 70.0) vs final May 68.8.






WTI Crude















10-Year Note




Sector Movers Today

  • In Refiners: price tgt changes at Piper and lower estimates as DINO ($58 from $65), DK ($25 from $30), MPC ($168 from $190), PARR ($37 from $43), PBF ($47 from $54), PSX ($151 from $170), VLO ($169 from $187) saying with refining margins continuing to struggle under the combination of robust supply (95% utilization) and underwhelming demand, Piper is revising its Q2 estimates lower, reducing EPS estimates ~43% vs prior, and it now sees 42% downside to Street estimates on average across the group. In news, PSX said it has agreed to sell its 25% non-operated common equity interest in Rockies Express Pipeline LLC to a subsidiary of Tallgrass Energy, LP for an enterprise value of approximately $1.275B as transaction generates pre-tax cash proceeds of $685M.
  • In Banks: The number of banks on the “problem bank” list increased from 52 in fourth quarter 2023 to 63 in first quarter 2024. Total assets held by problem banks increased $15.8 billion to $82.1 billion, per the FDIC. In Research, BAC upgraded from Market Perform to Outperform at KBW Inc and raised tgt to $46 from $37 based on strong capital, deposits and credit but says the main driver behind the upgrade is an expected inflection in Q424 NII of 5%. HBAN was downgraded from Neutral to Underweight at Piper and cut tgt to $11.50 from $13.50 as they refresh their thoughts & preferences on the large banks following a series of mid-Q updates.
  • In Software: ADBE shares jump after solid earnings/guidance as delivered net new ARR rev upside (posted Q2 digital media net new ARR $487M, vs. est. $433.2M) and raised the FY24 net new ARR guide; also raised the midpoint of its fiscal 2024 revenue forecast to $21.45M vs. prior midpoint of $21.40B, prompting several analyst price tgt hikes. DDOG was downgraded from Neutral to Sell at Monness saying in the face of further evidence of treacherous trends across the enterprise software complex, combined with a gen AI hype cycle that has revealed itself to be a revenue mirage this year, Monness believes the market will not support software stocks with excessive valuations. TWLO downgraded from Overweight to Equal Weight at Morgan Stanley and cut tgt to $60 from $70 citing lack of NTM top line catalyst and majority of near-term operating leverage having been achieved. ZS was upgraded from Neutral to Overweight at JP Morgan and raised tgt to $230 from $205 as views current levels as an opportunity to own a leading Zero Trust vendor with favorable market exposure, well positioned to inflect to better growth in 2H25, currently trading at a discount to high growth peers and historical valuation levels



  • ADBE +14%; shares jump after solid earnings/guidance as delivered net new ARR rev upside (posted Q2 digital media net new ARR $487M, vs. est. $433.2M) and raised the FY24 net new ARR guide; also raised the midpoint of its fiscal 2024 revenue forecast to $21.45M vs. prior midpoint of $21.40B, prompting several analyst price tgt hikes.
  • ARM +4%; to Join the Nasdaq-100 Index beginning June 24, 2024.
  • BOOM +7%; shares rose after Steel Connect, in a regulatory filing last night, disclosed a 9.8% stake and noted on May 31, 2024, Steel Connect delivered to the board of directors of DMC a non-binding proposal to acquire all the outstanding shares that the reporting persons do not already own at a price equal to $16.50 per share https://tinyurl.com/4x6kjha3
  • HAS +5%; was upgraded to Buy from Neutral at Bank America and raised tgt to $80 saying they do not believe consensus forecasts are fully accounting for the success of HAS’ digital gaming strategy with Monopoly Go! and expect the game to move off minimum royalty guarantees in Q2.
  • MSTR +2%; after tumbling 9% the day prior, helped after Bernstein initiated coverage at an Outperform on its strong bitcoin buying strategy with a Street high $2,890 price tgt (implying 95% upside to stock’s last close).
  • SHOP +3%; upgraded to Outperform at Evercore with a $75 PT saying the recent pullback in the stock (~30% off 52wk high) has created an attractive entry point to own a best-in-class ecommerce platform business.



  • APA -3%; amid weakness in energy stocks again and was downgraded from Outperform to In Line at Evercore.
  • BAND -12%; downgraded from Equal Weight to Underweight at Morgan Stanley and cut tgt to $15 from $18 as still expect headline rev upside in ’24 on election cycle, but majority of growth attributable to pass through surcharges is captured in 25%+ YTD run in shares and thinks this creates a challenging set up for ’25 ests.
  • CCL 7%; along with weakness in RCL, NCLH in cruise lines after Bank America said cruise pricing was `modestly softer’ in early June vs May.
  • MSM -9%; said its preliminary Q3 results were looking softer than expected, driving a full-year outlook cut; guided Q3 EPS $1.32-$1.34 a share on an adjusted basis below ests $1.50 and as a result, now expects average daily sales to be down (4.3%-4.7%) for FY vs. prior view flat to -5% (weighs on FAST, GWW, WCC).
  • NUE -2%; said its steel products segment is expected to have decreased earnings in Q2 of 2024 as compared to Q1 of 2024 as guides Q2 EPS $2.20-$2.30 vs. est. $3.06 (and down from $5.81 in the same period a year ago); said primary reason for weakness in steel mills earnings were lower average selling prices and lower volumes.
  • RH -17%; after reported Q1 results that missed and came in below consensus on the bottom line and its outlook for Q2 revenue (+3-4% y/y vs. consensus +7%) and operating margin (11-12% vs consensus 17.3%) was disappointing.


  • Avidity Biosciences (RNA) 10.55M share Secondary priced at $38.00.
  • Gain Therapeutics (GANX) 7.12M share Spot Secondary priced at $1.35.
  • Ultragenyx (RARE) 7.44M share Secondary priced at $39.00.


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.