Early Look

Monday, June 17, 2024

U.S. markets are picking up where they left last week, as S&P futures are down modestly, along with the Dow, while tech heavy Nasdaq futures are pointing to a slightly higher open. For last week, the S&P 500 gained 1.58%, the Nasdaq climbed 3.24% (posted 5th straight record closing high on Friday), and the Dow fell -0.54%. It is a light day of economic data and Fed speakers and only homebuilder Lennar (LEN) earnings after the bell tonight. In Asian markets, The Nikkei Index dropped -712 points to 38,102 (a new monthly low), the Shanghai Index fell -0.55% or 14 points to 3,015, and the Hang Seng Index slipped -5 points to 17,936. In Europe, the German DAX is up 12 points to 18,014, while the FTSE 100 is down -14 points to 8,132. In Fed speakers, Neel Kashkari said the central bank is in a good position to take its time and watch incoming data before starting to cut interest rates. Note: S&P futures (Spuz – /ES) is rolling from June front month (ESM2024) to September front month (ESU2024). These levels are now all September going forward to reflect this fact. Rollover is ongoing this week and volume will gradually migrate from June to Sept, until June expires in 1 week. A fairly quiet weekend, with no major news items impacting markets this morning. Bitcoin prices are quiet, up slightly just below $66,000, while the dollar and yields are steady.

• The Dow Jones Industrial Average fell -57.94 points, or 0.15%, to 38,589.16.
• The Nasdaq Composite gained 21.32 points, or 0.12%, to 17,688.88.
• The Russell 2000 Index declined -32.75 points, or 1.61% to 2,006.16.

• 1:00 PM ET                   Fed’s Harker Speaks on Economic Outlook

• Earnings After the Close: LEN LZB QMCO

• Best Buy (BBY) upgraded to Buy from Neutral at UBS and raised tgt to $106 from $85.
• Starbucks Corp. (SBUX) mentioned positively in Barron’s saying shares looks oversold after soft demand and increased competition in China contributed to a 6% international decline in same-store sales in the second quarter. The company is still growing rapidly, improving efficiency and offering diverse products to attract new customers.
• Zillow Group Inc. (ZG) reached an antitrust settlement with a set of multiple listing services that it accused of conspiring to block Zillow’s tour booking software platform, ShowingTime, from their databases.

• Louisiana-Pacific (LPX) downgraded to Sell from Neutral at Goldman Sachs.
• Primo Water (PRMW) and an affiliate of beverage company BlueTriton Brands have agreed to merge in an all-stock transaction to bring together a diversified portfolio of water brands and introduce synergies across the business; the c combined companies would create a water giant with $6.5 billion in annual revenue.
• Lithium miners Albemarle (ALB) and Arcadium Lithium (ALTM) mentioned positively by Keybanc saying with destocking largely having played out, now sees potential recovery in lithium prices likely pushed out to 2025. While lithium prices are likely to improve later than we initially expected, we remain upbeat on the outlook for both ALB and ALTM shares. We believe strong downstream demand and pullback in new capacity growth should translate to healthy sales volumes and price recovery to $20,000-$25,000/ton range.
• British prosecutors investigating former Glencore Plc (GLNCY) employees over bribery allegations said they plan to bring long-awaited criminal charges. More than 18 months after first revealing that as many as 11 ex-staffers were under investigation – Bloomberg.

• Capital One Financial (COF) said the May domestic credit card net charge-offs rate 6.13% vs 6.07% in April and the 30+ day performing delinquencies rate for domestic credit card 4.13% at May end vs 4.23% at April end. The 30+ day performing delinquencies rate for auto 5.40% at May end vs 5.24% at April end.
• Discover Financial Services (DFS) credit card delinquency rate 1.64% at May end vs 1.68% at April end and credit card charge-off rate 2.40% at May end vs 2.35% at April end.
• JP Morgan (JPM) credit card delinquency rate 0.82% at May end vs 0.81% at April end and the net charge-off rate 1.53% in May vs 1.48% in April.

• Grifols SA (GRFS) said the FDA has approved its drug Yimmugo to treat primary immunodeficiency disorder (PID). The drug is a ready-to-use solution of the antibody immunoglobulin G for intravenous administration.
• Takeda Pharmaceuticals (TAK) announces phase 3 topline results for Soticlestat (tak-935) in patients with Dravet syndrome and Lennox-Gastaut syndrome.

• Meta Platforms Inc. (META) will delay its launch of the Meta AI chatbot in Europe after regulators on the continent requested the company pause its plan to train its large language models with posts from users there.
• The Securities and Exchange Commission has been investigating Elon Musk’s late disclosure of purchases of Twitter stock prior to taking over the company, the WSJ reported.