Closing Recap

Friday, June 13, 2025

U.S. stocks sunk to session lows late Friday after explosions were heard over Tel Aviv and Jerusalem across Israel following the firing of missiles from Iran. Iran’s state news agency IRNA said hundreds of ballistic missiles had been launched in multiple waves in retaliation for Israel’s biggest ever attacks on Iran overnight, blasting Iran’s huge underground nuclear site at Natanz and wiping out its top military commanders. This came a day after the International Atomic Energy Agency declared Iran in breach of its non-proliferation obligations for the first time in almost 20 years. The U.S. said they had no hand in the attacks while President Trump said nuclear talks between Tehran and the United States, scheduled for Sunday, were still on the agenda though he was not sure if they would take place (Iran later said they did not plan on speaking). Earlier, he posted on Truth Social: “Iran must make a deal, before there is nothing left.” Stocks had pared losses this morning, but the ramped up attacks this afternoon pushed the S&P and major U.S. averages in general to the lows.

The assaults between Iran and Israel dominated headlines overnight and throughout the day, the main driver of global stock market action with big bounces in oil, the dollar and gold prices while Treasury prices fell. In sector news, energy stocks, shipping, and defense stocks rallied on the macro tensions, while airlines, travel, leisure, lodging saw hefty declines. Dividend paying sectors slipped late day as well as Treasury yields popped (telco, utilities, REITs, and towers fell). Major averages finished off overnight futures lows, though they slid in afternoon trade after the S&P 500 (SPX) held above the 6,000 level most of the early afternoon.

Outside of tariffs/geopolitical, a key issue for the Trump Administration and Treasury markets…is the maturing of upcoming debt. The June 30, 2025, maturity of $147 billion and the mid-July debt ceiling deadline are pivotal. Quarterly borrowing needs hit $514 billion in Q2 and $554 billion in Q3, assuming an end-of-June cash balance of $850 billion. Overall, the U.S. confronts a daunting refinancing wall in 2025, with $8.3 trillion in federal debt maturing—roughly 32% of its publicly held marketable debt. This includes rolling over existing securities and borrowing an additional $1.9 trillion to fund the projected fiscal deficit. The weighted average interest rate on maturing debt is 2.8%, but with 10-year Treasury yields at 4.2%, refinancing could hike annual interest costs by $98 billion per $7 trillion rolled over. Elevated rates could squeeze federal budgets, amplifying fiscal strain.

• University of Michigan surveys of consumers 1-year inflation outlook prelim June 5.1% vs final May 6.6% and the University of Michigan surveys of consumers 5-year inflation outlook prelim June 4.1% vs final May 4.2%

• WTI crude oil prices rose $4.94 or 7.26% to settle at $72.98 per barrel while Brent crude surged $4.87 or 7.02% to settle at $74.23 per barrel. Front Month Nymex natural gas fell 5.36% this week to settle at $3.5810.
• Treasury yields rallied all day, with the 10-year yield hitting highs of 4.45%, off lows of 4.31% as investors sold bonds; the short and long end of curve yields also advanced.

• In Home Improvement/Retail/Furnishing: RH shares surged following mixed results, with revenues below (impacted by the shorter Outdoor selling season) but EPS above consensus, while the co reiterated all key FY25 guidance items including store opening plans though the planned 2H25 brand extension was pushed to FY26. WHR was upgraded to Neutral from Underperform at Bank America (tgt to $94 from $68) after raising the firm’s 2025 and 2026 EPS by 3% and 10%, respectively, to reflect a stronger North America margin outlook. Bank America also raised Wayfair (W) price tgt to $49 (stays Neutral rated) saying its aggregated credit and debit card data indicates that online furniture spends declined 4.4% y/y in May and modestly underperformed brick and mortar furniture spend. NWL was upgraded to Overweight at JP Morgan, coming away from mgmt meetings more confident that NWL is finally on the right track to deliver on the turnaround.
• In Autos, Lodging, leisure and Online Travel: Shares of airlines (AAL, UAL), cruise lines (CCL, RCL, NCLH), lodging and online travel names (EXPE, BKNG, MAR, HLT, ABNB) are pressured following Israel’s attack on Iran. In auto dealers, CVNA shares were weaker, as JP Morgan said in a note, they believe shares are due for a pause after materially outperforming peers YTD across consumer, industrial/auto and internet/e-commerce. The firm lowered its Q2 estimates after recent prime deal disclosures suggest a slightly larger than expected GoS margin compression q/q.

• Solar stocks saw activity this afternoon: Roth Capital said checks around the IRA text from the Senate Finance Committee saying sources indicate the language is moving back to the original house draft and believes details are likely Monday. Roth says checks indicate PIS language could be converted to construction start, a positive for FSLR, ARRY, NXT, SHLS, and RUN. Roth notes 25D still appears to be low probability which remains a meaningful negative for ENPH and a negative for SEDG. Residential leasing denial for 48E is likely removed which would be a meaningful positive for RUN.
• Biofuels (ADM, BG, DAR): Sector saw a bounce as The Trump administration is proposing oil refiners blend more biofuels into gasoline and diesel next year while seeking to discourage the use of imported supplies. Bloomberg noted the plan being unveiled by the EPA today would require refiners to mix a record 24.02B gallons of biofuels into traditional transport fuels, according to a news release from the EPA. That would be almost 8% higher than 2025, but short of what some oil companies and biofuel producers were seeking
• In Utility and Power Producers: OKLO 6.67M share Secondary priced at $60.00. VST was initiated at Strong Buy and $216 tgt at Raymond James saying Texas’ improving regulatory backdrop, with Senate Bill 6 passed, could unlock a data center PPA at Comanche Peak soon. TLN was initiated at Outperform and $314 tgt, the smallest of the four IPPs, offers a compelling mix of stability and upside with its 10,700 MW portfolio — centered on the revamped Susquehanna nuclear facility deal, now providing nuclear energy to AWS through 2042. NRG Initiated Strong Buy and $195 PT at Raymond James calling it a standout independent power producer, blending one of the largest retail electricity presences in the U.S. with the LS Power acquisition.

• In Crypto: Shares of APLD came under pressure after a filing showed CRWV sold out of its position. Bitcoin prices were pressured modestly most of the day (around $105,000) with broader stock markets amid uncertainty into the weekend given the heated tensions between Iran and Israel.
• In REITs: Prison REIT GEO shares declined after Homeland Security Department said four detainees escaped from a facility owned by the private-prison company in Newark, N.J. Newark Mayor Ras Baraka said his office received reports of an uprising at the Immigration and Customs Enforcement detention center Thursday night.

• In Shipping sector: shares of NMM, GOGL, TNK, INSW among companies rising after Israel launched strikes against Iran, saying it targeted nuclear facilities, ballistic missile factories and military commanders. Geopolitical tensions raise the risk of oil supply disruptions, prompting increased demand for tankers to reroute shipments and maintain supply flow, driving up shipping rates due to longer routes.
• In Tankers: The Baltic Dry Index rose 64 points, or 3.4%, at 1,968, its highest since October 2. The contract logged a weekly gain of 20% on rising rates across vessel segments. The Capesize index gained 167 points, or 4.7%, to 3,722, its highest level since July 2 and a weekly gain of 31%. The Panamax index rose 26 points, or 1.9%, to 1,401, a more than two-month high. It ended the week 12% higher. Supramax index was up 3 points at 936, a more than one-week high.

• In Chemicals: SHW was downgraded to Neutral from Buy at Citigroup on sluggish housing macro, while saying RPM was named new subsector top pick. SHW was cut to Neutral on its more bearish outlook on housing, given its view of a delayed recovery stemming from the elevated rates, sluggish Existing Home Sales, and a challenging homebuilder environment.
• Paper & Packaging: MYE was upgraded to Overweight from Sector Weight at Keybanc with $21 PT as they expect, at a minimum, meaningful cost restructuring and footprint rationalization in the NT, and potentially significant portfolio changes including exiting distribution.

• In Internet: Brookfield Infrastructure Partners has struck a deal for internet-service provider Hotwire Communications, making a multibillion-dollar bet on the growing industry for next-generation broadband infrastructure, according to people familiar with the matter, the WSJ reported. The deal is expected to value Hotwire at around $7B, including debt, the people said. An announcement is anticipated soon, they added.