Early Look

Wednesday, June 12, 2024

After bouncing all day Tuesday and ending at the highs/record levels for the S&P 500 and Nasdaq, U.S. futures are looking at modest gains early ahead of key upcoming macro data. Technology headlines dominated market action the last two days (AAPL, TSLA, ORCL), but attention turns back to macro, as the May consumer price index (CPI) data is to be released at 8:30 AM ET (PPI tomorrow) and then the FOMC policy meeting at 2:00 PM ET this afternoon (no changes expected). Stocks closed at record highs again for the S&P 500 and Nasdaq Comp in what continues to be a tale of two markets. @charliebilello tweeted last night, “Large v. Small, S&P 500 $SPY: +13.3% and S&P Small-Cap $IJR: -1.8%. Growth v. Value, Large Growth $IWF: +17.5% and Large Value $IWD: 6.2%. US v. International: S&P 500 $SPY: +13.3%, MSCI World ex-USA $ACWX: +5.4% and Semis v. Banks: Semiconductors $SMH: +46% vs. Banks $KBE: -3.6%”. The names that carry the most weight in major averages continue to outperform, namely tech, and drive the main indexes higher, such as Apple (AAPL) on Tuesday and Nvidia (NVDA) this year and last year in semis. In Asian markets, The Nikkei Index declined -258 points to 38,876, the Shanghai Index rose 9 points to 3,037, and the Hang Seng Index dropped -238 points to 17,937. In Europe, the German DAX is up 98 points to 18,468, while the FTSE 100 is up 50 points to 8,198. Euro zone yields dropped on Wednesday as investors’ focus shifted to key U.S. inflation data and a Federal Reserve policy decision later in the session. The Fed is expected to leave interest rates unchanged on Wednesday, with new economic projections from the U.S. central bank’s policymakers likely to show fewer rate cuts this year and a delayed start to monetary policy easing. Oracle (ORCL) shares jump 8% overnight after results and partnership announcements.

• The Dow Jones Industrial Average fell -120.62 points, or 0.31%, to 38,747.42.
• The Nasdaq Composite jumped 151.02 points, or 0.88%, to 17,343.55.
• The Russell 2000 Index declined -7.27 points, or 0.36% to 2,024.35.

• 8:30 AM ET                  Consumer Price Index (CPI) M/M headline for May…est. +0.1% (prior +0.3%)
• 8:30 AM ET                  Consumer Price Index (CPI) M/M headline for May…est. +3.4% (prior +3.4%)
• 8:30 AM ET CPI Core (Ex: Food & Energy) M/M for May…est. +0.3% (prior +0.3%)
• 8:30 AM ET CPI Core (Ex: Food & energy) Y/Y for May…est. +3.5% (prior +3.6%)
• 10:30 AM ET                Weekly DOE Inventory Data
• 11:00 AM ET                Cleveland Fed CPI for May…prior +0.3%
• 12:00 PM ET USDA WASDE June Crop Report
• 2:00 PM ET FOMC Policy Meeting results (no rate change expected)
• 2:00 PM ET                   Federal Budget for May…est. (-$250b)

• Earnings After the Close: AVGO CURV OXM PLAY

• Deutsche Bank Global Auto Industry Conference, 6/11-6/12, in New York
• Deutsche Bank 28th Annual European Leveraged Finance Conference, 6/12, in London
• Goldman Sachs Annual Global Healthcare Conference, 6/10-6/13, in Miami, FL
• Jefferies FinTech Conference, 6/12-6/13, in New York
• Mizuho Technology Conference 2024, 6/12 in New York
• Morgan Stanely Financials, Payments & CRE Conference, 6/10-6/12, in New York
• Oppenheimer 25th Annual Consumer Growth and E-Commerce Conference, 6/10-6/12
• Oppenheimer 2024 Software Bus Tour, 6/10-6/13, in San Francisco

• Chinese CPI Y/Y actual 0.3% vs. est. 0.4% and previous 0.3%.
• Cocoa futures on ICE hit their highest in nearly a month and a half, while sugar futures also headed higher. September London cocoa rose 1% to 7,512 pounds per ton, having earlier soared more than 7% to its highest since early May at 7,981.

• Birkenstock (BIRK) downgraded to Neutral from Buy at Goldman Sachs.
• Casey General Stores (CASY) Q4 EPS $2.34 vs est. $1.72, EBITDA $219Mm vs est. $189.57Mm on revs $3.6B vs est. $3.479B, inside comps +5.6%, fuel comp gallons +0.9%; guides FY25 EBITDA at least +8% vs est. +7.5%, inside cops +3-5%, inside margin flattish y/y, fuel comp gallons -1% to +1%, add at least 100 stores.
• GameStop (GME) announced that it has completed its previously disclosed “at-the-market” equity offering program.
• Fisker (FSRN) issues voluntary recalls to address software issues via over-the-air updates in North America and Europe; issuing a voluntary safety recall for a total of 11,201 Fisker oceans across U.S., Canada, and Europe.
• Li Auto (LI), Nio (NIO), Xpeng (XPEV): The European Commission said on Wednesday it would set provisional duties of up to 38.1% on imports of Chinese electric vehicles, a move likely to draw possible retaliation from China.
• McCormick (MKC) upgraded to Neutral from Sell at Citigroup.
• Target (TGT) raises the quarterly dividend by 1.8% to $1.12 a share.

• Artisan Partners (APAM) reported that its preliminary assets under management, or AUM, as of May 31 totaled $158.6B. Artisan Funds and Artisan Global Funds accounted for $77.5B of total firm AUM.
• Franklin Resources (BEN) reported preliminary month-end assets under management of $1.64 trillion at May 31, 2024, compared to $1.60 trillion at April 30, 2024; the month’s increase in AUM reflected the impact of positive markets, partially offset by modest long-term net outflows.
• Invesco (IVZ) reports preliminary AUM $1.69T as of May 31, an increase of 3.8% versus the previous month-end. The firm delivered net long-term inflows of $5.2B in the month. Non-management fee earning net inflows were $5.7B and money market net inflows were $7.7B.
• Robinhood Markets (HOOD) said May funded customers at month end was 24.1M; assets under custody, or AUC, at the end of May were $135B; net deposits were $3.6B, translating to a 35% annualized growth rate relative to April AUC. Equity notional trading volumes were $86.8B. Options contracts traded were 131.9M. Crypto notional trading volumes were $7.1B. Margin balances at the end of May were $4.5B.
• Victory Capital (VCTR) reported Total Assets Under Management of $168.5B, Other Assets of $4.9B, and Total Client Assets of $173.4B, as of May 31, 2024.
• Virtus Investment Partners (VRTS) reported preliminary assets under management of $173.3B as of May 31, 2024. In addition, the company provided services to $2.6 billion of other fee-earning assets.

• PetMed Express (PETS) Q4 adj EBITDA $0.5Mm vs est. $1.673Mm on revs $66.5Mm vs est. $65Mm.
• The United States Department of Health and Human Services (HHS) on May 31 agreed to allow UnitedHealth Group (UNH) to notify people whose data was exposed during a hack on its Change Healthcare unit in February, the Wall Street Journal reported.

• Ciena (CIEN) upgraded to Overweight from Equal Weight at Morgan Stanley and raise tgt to $55.
• Pure Storage (PSTG) downgraded to Equal Weight from Overweight at Morgan Stanley with $60 tgt.
• Rubrik (RBRK) Q1 adjusted EPS loss (-$1.58) vs. est. loss (-$1.84); Q1 revs $187.3M vs. est. $171.57M; sees Q2 adjusted EPS loss (50c)-(48c), vs. consensus (50c) and revs $195M-$197M vs. est. $194.89M.