Mid-Morning Look: June 27, 2023

Mid-Morning Look

Tuesday, June 27, 2023






DJ Industrials




S&P 500








Russell 2000






U.S. stocks quickly erase yesterday’s declines as ten of the eleven S&P sectors are trading higher, led by Monday’s weakest sectors (Discretionary, Technology) while Healthcare again weak after lower earnings and outlook from Dow component Walgreens (WBA). Treasury yields move to highs, and bets of a Fed rate hike in July rise to 75% now following stronger Housing Starts data, Consumer Confidence, and Durable Goods Orders (though Fed Richmond Manufacturing data still contracting). The Annual ECB Forum in Sintra Portugal runs from Monday through Wednesday. Fed Chair Powell, ECB President Lagarde, BOJ Governor Ueda and BOE Governor Bailey among those making key-note speeches the next few days. Dow Transports advance behind positive earnings, revs update from airline Delta (DAL). US listed China stocks rally after Chinese Premier Li Qiang said the country will take steps to boost demand, invigorate markets, promote development while accelerating the green transition and opening “high level” parts of its economy to the outside world. A strong start for US stocks on this final trading week of the quarter and as the 1H of 2023 wraps up with big gains on tap (Nasdaq +27% YTD, S&P 500 +12.75%, Russell 2000 +3.5% and the Dow +1.7% YTD).


Economic Data

·     Consumer Confidence index for June jumps to 109.7 vs. consensus 104.0 while May revised to 102.5 from 102.3; present situation index 155.3 in June vs May revised 148.9; consumer expectations index 79.3 in June vs May 71.5; 1-year consumer inflation rate expectations 6.0%.

·     New Home Sales for May were very strong rising +12.2% m/m to 763K (best since Feb ’22), well above the est. 675K and prior month of 680K; May new home supply 6.7 months’ worth at current pace vs April 7.6 months; median sale price $416,300, was -7.6% y/y. May home sales northeast +17.6%, Midwest +4.1%, South +11.3%, and West +17.4%.

·     Durables Goods Orders rose +1.7% above the consensus (-1.0%) and vs April +1.2%; Durables ex-transportation orders +0.6% v. est. (-0.1%) and vs April -0.6% and Durables ex-defense orders +3.0% vs April (-0.5%). Durables shipments +1.7% vs April -0.6%.

·     S&P CoreLogic Case-Shiller Home Price Index for April showed seasonally adjusted HPI Composite for 20 cities: +0.9% vs. +0.5% consensus and +0.4% in March (revised from +0.5%). HPI Composite for 20 cities, not seasonally adjusted: +1.7% vs. +1.0% expected and +1.6% prior.

·     April FHFA House Price Index: 0.7% vs. +0.3% expected and +0.5% in March (revised down from +0.6%). On a Y/Y basis, the index rose 3.1% compared with 3.7% in the prior month vs. 3.6%.

·     The Richmond Fed Index for June reported at (-7), better than expected (-12) and prior (-15).







WTI Crude















10-Year Note





Sector Movers Today

·     In Solar, Alternative Power: PLUG said it is part of a group of companies that received a $21.8M grant from the European Commission to build a hydrogen production plant off the coast of Belgium. BLDP was downgraded to Neutral from Buy at B Riley and cut tgt to $4 from $6 as continue to see challenges to gross margin into 2024. In solar, Oppenheimer said expect n-t rotation into US utility scale plays ARRY, FSLR, SHLS ahead of IRA related rule finalization and remain constructive on the group as see 3x+ growth for the industry through end of the decade.

·     Transports: In airlines, DAL provided upside guidance for Q2 as sees adj EPS $2.25-$2.50, above est. $2.21 and sees FY23 EPS at top end of $5-$6 range vs. consensus $5.81, sees FY23 operating margin at top end of 10%-12% range, with free cash flow $3B vs. prior view of greater than $2B. In rails/trucking: JBHT estimates lowered at Benchmark as continued negative import/export TEU growth has led to negative intermodal growth in 2Q for all the rails and its main rail partner; SAIA upgraded from In Line to Outperform at Evercore/ISI and raise tgt to $360 from $298 saying the multi -year growth oppty remains robust and improving on both an absolute and relative basis.



·     AEL +15%; as Brookfield Reinsurance has agreed to acquire all the outstanding shares of AEL not already owned for $55.00 per share in a $4.3B deal; shareholders will receive $38.85 in cash and several BAM shares having a value equal to $16.15. https://tinyurl.com/ybuuxp7u

·     ASTC +14%; shares jumped after Braden M Leonard said late yesterday it sent an acquisition proposal to the company to acquire 100% of equity for $17.25 per share in cash.

·     DAL +3%; upside guidance for Q2 as sees adj EPS $2.25-$2.50, above est. $2.21 and sees FY23 EPS at top end of $5-$6 range vs. consensus $5.81, sees FY23 operating margin at top end of 10%-12% range, with free cash flow $3B vs. prior view of greater than $2B.

·     LCID +2%; after Saudi Public Investment Fund buys more shares of Lucid for $1.8B and now owns about 65% of stock outstanding. https://tinyurl.com/3nfwx8hc

·     LEA +2%; boosted its FY free cash flow (FCF) view to $480M-$580M, from prior $375M-$525M, raised its FY23 revenue view to $22.35B-$23.05B from $21.2B-$22.2B, boosted 2023 core operating earnings view to $1.01B-$1.14B from $875M-$1.08B.

·     LLY +1%; said its experimental drug retatrutide in a mid-stage trial helped patients with obesity lose up to 24.2% of their body weight after 48 weeks.

·     SNOW +2% and NVDA announced at Snowflake Summit 2023 that they are partnering to provide businesses of all sizes with an accelerated path to create customized generative AI applications using their own proprietary data.

·     SSYS +8%; received a raised buyout bid from DDD, saying Stratasys shareholders will receive $7.50 in cash and $1.3223 new 3D shares for each Stratasys share they own valued at $19.53 each. https://tinyurl.com/35znmvn2 



·     ACET -50%; downgraded to market perform at JMP (tgt to $19) and tgt cut to $17 from $30 at Wedbush after reports positive data from ongoing adi-001 phase 1 trial in patients with relapsed or refractory aggressive b-cell Non-Hodgkin’s Lymphoma (NHL).

·     APLD -9%; estimate that Q4 revs will be approximately $22M (consensus at $26.9M), estimate that net loss overall will be approximately $6.8M.

·     FMS -4%; after Centers for Medicare & Medicaid Services (CMS) proposes an increase of 1.6% in dialysis payment rates for 2024 Medicare plans, lower than market projection of 3-4%.

·     RIDE -25%; filed for Chapter 11 bankruptcy protection and said it was putting itself up for sale/also said it filed litigation against Foxconn after a deal to provide the start-up with about $170 million in cash fell through.

·     SNX -7%; Q2 EPS and sales fell short of estimates ($2.43/$14.06B vs. est. $2.55/$14.42B) and guided Q3 EPS and revs below views with $2.20-$2.70 (est. $2.76) and sees Q3 revenue $13.5B-$14.5B, below consensus $14.96B.

·     WBA -8%; on Q3 miss and lower guidance; Q3 adj EPS $1.00 missed the consensus $1.07 on better revs $35.42B (est. $34.25B) and raised FY adj EPS to $4.00-$4.05, vs. prior $4.45-$4.65 citing lower demand for COVID-19 tests and vaccines (CVS, RAD fall in reaction).

·     XPOF -29%; after Short-seller Fuzzy Panda Research issued a short report on shares.


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.