Closing Recap

Tuesday, June 10, 2025

U.S. S&P futures (Spuz) managed to post an intraday high for an 8^th straight day, closing at its best levels since late February as commentary by Commerce Secretary Howard Lutnick that trade talks between the US and China were “going well” was enough to keep major averages pushing higher. Lutnick added that the teams are going to try to finish talks this evening, but that talks could go into tomorrow if needed. On trade talks, export controls are at the top of the agenda. Kevin Hassett, director of the National Economic Council, said Monday that the talks were likely to result in Beijing quickly releasing rare earths for export, and Washington easing China’s access to semiconductors. Outside of trade, there wasn’t much else on the macro front ahead of tomorrow’s CPI inflation report. Stock markets took a little dip midday after President Trump said in a Fox News comment that Iran is becoming ‘much more aggressive’ in nuclear talks, but the dip on the headline was again quicky bought. Ten of the eleven S&P sectors finished higher on good NYSE market breadth (1.7:1 advancers led decliners) with industrials the lone sector in the red, while Energy, Communications, Consumer Discretionary and Healthcare were all up over 1%.

• Treasury yields remained slightly lower on the day after a steady auction of 3-year notes. The U.S. US Treasury sold $58B in 3-year notes at high yield 3.972%, vs. 3.968% pre-sale when-issued yield at a bid-to-cover ratio 2.52 vs. 2.56% prior auction as primary dealers take 15.19% of U.S. 3-year notes sale, direct 18.03% and indirect 66.78%. Next up a $39 billion sale of 10-year Treasury notes slated for Wednesday and a $22 billion 30-year bond auction scheduled for Thursday.
• The World Bank on Tuesday slashed its global growth forecast for 2025 by 0.4% to 2.3%, saying that higher tariffs and heightened uncertainty posed a "significant headwind" for nearly all economies. The report forecasts that global trade would grow by 1.8% in 2025, down from 3.4% in 2024 and roughly a third of its 5.9% level in the 2000s. The forecast is based on tariffs in effect as of late May, including a 10% U.S. tariff on imports from most countries. It excludes increases announced by Trump in April and then postponed until July 9 to allow for negotiation.

• In Retailers: DBI shares tumbled after Q1 net sales decreased (-8%) to $686.9M on adj EPS loss of (-$0.26) while Q1 comparable sales fell (-7.8%) compared with a 2.5% drop a year ago and withdrew its full-year forecasts citing macroeconomic uncertainty stemming primarily from global-trade policies
• In Food Retail & Processing: SJM shares fell as reported Q4 adj EPS $2.31 above the consensus $2.25 while revs miss at $2.1B vs. est. $2.19B, but weaker guidance weighs on shares as sees FY26 adj EPS $8.50-$9.50, below consensus $10.27 and guides FY26 revenue growth 2%-4% y/y vs. consensus $8.93B. CASY reported strong Q4 results driven by strong fuel margins and market share gains, while inside sales comps were below consensus due to softer comp sales in prepared foods and dispensed beverage. UNFI as Q4 results beat ($0.44/$8.06B vs. est. $0.21/$7.78B) while they did not update its annual adj EPS and net sales forecasts due to the impact of unauthorized activity on its information technology systems on June 5. CVGW reported Q2 adjusted earnings of $0.40 a share, well below analysts’ estimates of $0.53 and net sales of $190.5 million, up 3.3% from a year earlier, also was below consensus of $192.8 million.

• In Autos: Wells Fargo cautious on TSLA, reiterating their Underweight rating and $120 price tgt saying global deliveries are trending meaningfully weaker, with May trending 23% lower y/y and Q2 QTD trending 21% lower y/ y. All three key regions are double-digit % lower, with the EU the worst. TM and Daimler Truck (DTRUY) to merge their truck units, Mitsubishi Fuso and Hino, into a new holding company by 2026. Both companies will own 25% of the new entity, which will be listed on the Tokyo Stock Exchange. ORLY trades on a 15 for 1 stock split effective today.

• Utility and Power: weakness in the nuclear/power stocks VST, CEG, TLN, OKLO, NRG as well as uranium names CCJ, UEC, UUUU after a strong run in the sector in recent weeks; seeing overall AI data center names also slipping today VRT, SMCI, ETN, NBIS and others. Power-hungry data centers that provide computing power for artificial intelligence and crypto currency will push U.S. electricity consumption to record highs in 2025 and 2026, the U.S. EIA said in its Short-Term Energy Outlook. The EIA projected power demand will rise to 4,193 billion kilowatt hours (kWh) in 2025 and 4,283 billion kWh in 2026 from a record 4,097 billion kWh in 2024.
• In Aerospace & Defense: ASTS announced it is set to join the U.S. large-cap Russell 1000(R) Index, effective after the U.S. market closes on June 27, as part of the 2025 Russell indexes reconstitution. VOYG outlined plans for an IPO that could give the defense and space technology company a market capitalization topping $1.6B. Voyager said it plans to sell 11 million shares at between $26 and $29 apiece in the IPO. BA booked 303 gross orders in blockbuster May, including the company’s biggest widebody order; said delivered 45 aircraft in May, including 31 737 Max and seven 787s and had 303 gross orders in May.
• In Transports: ARCB was upgraded to Neutral from Underperform at Bank America as they see momentum in share gains with core customers, mitigating core yield pressure and said is more constructive on the additive gains it is making in its core LTL ops. In rails, NSC shares slipped following its presentation at the Wells Fargo conference after saying they were starting to see some softness.
• In Papers & Packaging: Truist noted recently, several CPGs presented at various industry conferences noting that consumer demand remains challenged with volumes only improving in those brands and products targeted for promotion and other investment. Truist views this persistent weaker demand as negative for boxboard producers including SW, GPK and GEF.

• In Crypto: Bitcoin (BTC) prices hit overnight highs around $110,400 before paring gains; CORZ price tgt was raised to $18 from $16 at Needham in Bitcoin miners saying they believe the market has growing comfort with CoreWeave as a counterparty and continue to believe there is a strong demand backdrop which should vastly outstrip supply over the next 5 yrs and be positive for its bitcoin mining/HPC universe.
• In Insurance: BRO agreed to acquire Accession Risk Management Group in a cash-and-stock deal worth $9.83B, expanding its footprint in insurance distribution and risk specialty. Brown said that it will pay $8.1B in cash and about $1.3B in stock priced at $110.57 a share. ACGL was downgraded to Hold from Buy at Jefferies and cut tgt to $100 from $106 as anticipates mid-year softening of catastrophe pricing to temper Arch’s growth and compress returns and the firm lowered growth estimates on intensifying competitive dynamics in catastrophe and specialty.
• In REITs: MAC was upgraded to Outperform at Mizuho with an $18 PT as believes the stock offers an attractive risk/reward profile and that its underperformance YTD (-1,800bps vs RMZ / -1,300bps vs peer SPG) offers an intriguing entry point for risk-tolerant investors to gain exposure to a highly productive mall portfolio with substantial long-term earnings upside, trading at a clear and sizable discount vs its history / peers.

• INSM shares jumped on data; announces positive topline results from phase 2b study of Treprostinil Palmitil Inhalation Powder (TPIP) as once-daily therapy in patients with pulmonary arterial hypertension (PAH) saying the study met primary and all secondary efficacy endpoints (shares of UTHR declined after rival Insmed’s drug for rare lung disease meets main goal in mid-stage).
• NVO shares were higher in the obesity sector; the Financial Times reported Activist hedge fund Parvus Asset Management is building a stake in Ozempic-maker Novo Nordisk as the drugmaker hunts for a new chief executive; note shares of other obesity drug names outperformed early today LLY, VKTX, ALT.
• RXRX said it was laying off 20% of its employees to reduce spending and extend its existing cash runway into the fourth quarter of 2027. Last month, Recursion shelved three drug prospects from its research pipeline.
• UNCY said the FDA has identified manufacturing issues with third-party vendor of its kidney disease drug, oxylanthanum carbonate; the company says FDA cannot discuss drug labeling with UNCY until these issues are resolved; final FDA decision is expected by June 28
• In the insulin sector, PODD’s Omnipod® 5 app for iphone with DXCM G7 integration now available to all U.S. users; TNDM announces agreement with ABT for integration of automated insulin delivery systems with future glucose-ketone sensor.
• Hospital operators UHS, THC, CYH, HCA fell for a second straight session of losses after a White House memo on June 6 directed health secretary to "eliminate waste, fraud and abuse in Medicaid" and mentioned State Directed Payments to ensure "Medicaid payment rates are not higher than Medicare." State Medicaid programs may pay hospitals with additional payments over low base rates to pursue their overall Medicaid program and quality goals.

• In Online Services: META is assembling a team of experts to achieve artificial general intelligence, recruiting from the brain trust of AI researchers and engineers who’ve met with Mark Zuckerberg in recent weeks at his homes in Lake Tahoe and Palo Alto, Bloomberg reported. TTGT was downgraded to Underweight from Neutral at JP Morgan noting shares have more than halved the first half of the year and after more than two months of delay, the company released its FY24 results this past Wednesday, which were worse than expected. Reuters reported OpenAI plans to add GOOGL cloud service to meet its growing needs for computing capacity, marking a surprising collaboration between two prominent competitors in the artificial intelligence sector. Shares of GOOGL however sunk late day following a report in The Information saying Google is offering voluntary buyouts to employees in the knowledge and information organization, which includes the company’s core search and much of the ads organization.

• In Quantum Computers: IBM said it plans to build what it called the world’s first large-scale, fault-tolerant quantum computer by 2029. The computer, dubbed IBM Quantum Starling, will be built in a new data center in Poughkeepsie, N.Y., and have 20,000 times more operations than current quantum computers.
• In Semiconductors: Another strong start for the sector as the Philadelphia semi-index (SOX) rises above the 5,200 level, up for the 6^th day in the last 7 and well above its April lows of 3,300 (when tariffs were announced); TSM reported May revenue surged 40% y/y as demand remained elevated for its AI chips. January-to-May revenue of NT$1.51 trillion was up nearly 43% over the same period last year.