Market Review: June 26, 2024

Auto PostDaily Market Report

Closing Recap

Wednesday, June 26, 2024





DJ Industrials




S&P 500








Russell 2000













U.S. stocks were mixed, but underlying market fundamentals were weak as 10 of 11 S&P sectors were down on the day and breadth was roughly 1.3:1 margin decliners leading advancers as a few large cap/heavy index weighted stocks again gave the stronger appearance. Shares of Amazon (AMZN) hit a record high boosting the Consumer Discretionary (XLY) space along with big gains in Tesla (TSLA), while Apple (AAPL) was a bright spot for major indices. Dow Transports a standout to the upside, rising as much as 2% or 300 points to 15,415 this afternoon (above 200dma 15,315 and below 100dma 15,500) before paring gains, boosted by FDX 14.5% post earnings overnight. Next on agenda this week, earnings in semiconductor space with Micron (MU) results after the close and the Fed bank stress tests (saw financials weaken into results this afternoon). Then tomorrow morning at 8:30, GDP data for Q1 final and then the Presidential debate Thursday night. Lastly, the May PCE and core PCE inflation data coming up Friday morning. Interesting to note that inflation readings over the last week in Canada and Australia (overnight) are a tad concerning into this Friday’s reading in the U.S. New Home Sales fell to 6-month lows in lone economic data showed this morning. European stock markets turned lower as the market braced for a French election this weekend.

Economic Data

  • Sales of new U.S. single-family homes dropped to a six-month low in May, falling (-11.3%) to a seasonally adjusted annual rate of 619,000 units last month (vs. est. 640K), the lowest level since November while April was revised higher to 698,000 units from a previously reported 634,000 units. May home sales in the Northeast tumbled -43.8%, Midwest -8.6%, the South -12.0%, and West -4.5%; median sale price $417,400, -0.9% from May 2023 ($421,200).
  • U.S. weekly mortgage applications index rose +0.8% according to the Mortgage Brokers Association, while the purchase index climbs 1.2%, and refinance index falls 0.1% as the average 30-year mortgage rate falls 1 bp to 6.93%.
  • Australia’s monthly CPI rose a much stronger than expected 4.0% YoY (consensus 3.8%) up from 3.6% the month before. The annual core mean inflation was 4.4% in May, up from 4.1% in April.

Commodities, Currencies and Treasuries

  • Gold prices fell to their lowest in nearly two weeks on Wednesday as the dollar firmed after Treasury yields rose to best levels in over a week (10-yr 4.315%), while investors awaited a report on the Federal Reserve’s preferred inflation gauge due later this week for the latest clues on the central bank’s rate cut prospects. August gold prices ended falling -$17.60 or -0.76% to settle at $2,313.20 an ounce.
  • Treasury yields were higher all morning, before easing following the 5-yr auction, as the U.S. sells $70B 5-year notes at high yield 4.331% (vs. 4.335% when issued prior) with a bid-to-cover ratio (demand) 2.35 as Primary dealers take 13.38% of U.S. 5-year notes sale, direct 17.7% and indirect 68.92%. The ten-year yield rose over 6ps topping 4.3%.
  • The Japanese yen fell to 160.62 per dollar, its weakest level since 1986, sparking speculation that Japanese authorities could intervene to strengthen the currency. Later, Japan’s top currency diplomat Masato Kanda said that authorities are "seriously concerned and on high alert" about the yen’s rapid decline, escalating warnings.
  • Oil prices managed small gains as Brent Crude futures settle at $85.25/bbl, up 24 cents, 0.28% and U.S. WTI crude oil futures settle at $80.90/bbl, up 7 cents, 0.09%. Natural gas futures settled lower as July natural gas expires at $2.628/mmBtu, down -4.6%, and the more actively traded August contract falls -4.1% to $2.745/mmBtu.
  • In Weekly oil inventory data, U.S. crude stocks and gasoline inventories rose while distillate inventories fell in the week ending June 21, according to the EIA. Crude inventories rose by an unexpected 3.6 million barrels to 460.7 million barrels, vs. expectations for a -2.9-million-barrel draw. Crude stocks at the Cushing, Oklahoma, delivery hub fell by 226,000 barrels in the week. U.S. gasoline stocks rose by 2.7 million barrels in the week to 233.9 million barrels. The latest API report showed that crude oil inventories rose by 914,000 barrels, analysts were looking for a 3-million-barrel draw; Gasoline inventories rose by 3.843 million barrels; Distillate inventories fell by 1.178 million barrels.





WTI Crude















10-Year Note




Sector News Breakdown

Retail, Consumer Staples & Restaurants:

  • In Food & Beverages: GIS shares slipped on quarterly results as Q4 organic net sales fell (-6%) vs. est. (-3.31%) and overall revs of $4.71B missed the $4.85B estimate (and down from $5.03B y/y) as consumers cut back on its higher-margin products and turned to cheaper alternatives; GIS forecasts 2025 organic net sales 0% to +1%, vs. est. +1.18%. CPB was upgraded to Overweight from Neutral at JP Morgan and raised tgt to $52 from $45, after meeting with management as believes consumer demand for Sovos’ products, mostly Rao’s, "remains excellent" and maybe better than expected while sees the potential for modestly greater Sovos synergies down the road than initially planned.
  • In Restaurants: CMG 50 for 1 stock split took effect today; Barron’s noted fast-food chains (MCD, WEN, QSR, YUM) are heading toward a price war this summer as America pulls back on dining out. While a race to the bottom could hurt all players, McDonald’s, with its rich profit margin and cash flow, seems best positioned to emerge as the winner. PZZA tgt cut to $45 from $55 at Stifel following consumer survey and channel checks for the major pizza chains, as the firm raised its domestic SRS projection for DPZ to 5.5% (from 5.0%) and lowered it for PZZA to -3.5% (from -1.0%).
  • In Home Improvement/Appliances: WHR shares jumped after Reuters reported German engineering group Robert Bosch GmbH is weighing a bid for the company citing people familiar with the matter. Bosch has been talking to potential advisers about the possibility of making an offer for Whirlpool, which has a market cap of about $4.8B . HD was upgraded to Buy from Neutral at DA Davidson, saying a return to positive comparable sales “is in sight” with industry trends no longer getting worse.
  • In Retail: AMZN shares hit new record highs, helped by a surge in RIVN shares following a joint venture with Volkswagen (AMZN holds 158,363,834 shares as of last filing per Bloomberg). VSTO shares jumped after MNC Capital raised the all-cash offer to acquire Vista to $42, or about $3.2B. PDD shares slipped this afternoon after a report in theinformation saying Amazon to launch Temu-like discount section with direct shipping from China. DLTR falls to lowest levels since October 2021 amid weakness in discount stocks.

Autos, Leisure, Gaming & Lodging:

  • In Autos: RIVN shares surged after Volkswagen (VWAGY) said it plans to make a $5B investment into the electric vehicle maker as they plan a joint venture for next-gen electric vehicles. The announced transaction could result in an unplanned cash outflow of up to 2B EUR in the current fiscal year they said and plan to invest an initial $1B, with up to $4B in planned additional investment. Auto supplier APTV was downgraded from Neutral to Underweight at Piper and cut tgt to $63 from $78 after Rivian announced the establishment of a joint venture with Volkswagen as the firm notes the rationale for the JV is a red flag for the APTV thesis. J.D. power: forecasts U.S. June total new-vehicle sales between 1.34M and 1.27M units, down 2.6% to 7.2%, forecasts June U.S. SAAR for total new-vehicle sales between 14.7M and 15.4M units and said U.S. buyers on track to spend nearly $44.6B on new vehicles in June, down 6.5%.
  • In the Leisure Sector: for theme parks, FUN and SIX satisfied the regulatory conditions required to complete their merger of equals, keeping the tie-up on track for a July 1 close. In boating sector (BC, MCFT, HZO, MBUU), Keybanc noted May Boat Retail Data Takeaways showed May’s -10.2% y/y was below normal seasonality (high-teens/low-20s% vs mid-20%s sequentially normal), and slightly softer than their recent checks.

Energy, Industrials and Materials

  • In Transports: package delivery giant FDX a bright spot, as shares surged after results/buyback; said expects to buyback $2.5B of shares for fiscal 2025 and $1B in stocks in Q1; Q4 adj EPS $5.41 vs est. $5.35 on revs $22.1B vs est. $22.069B; guides FY25 revs +low-mid-single vs est. +3.12%, adj EPS $20.00-22.00 vs est. $20.92, CAPEX $5.2B. In airlines, LUV shares sunk after forecasts Q2 RASM y/y down 4.0% to 4.5% (down from prior guidance of down 1.5% to 3.5%) saying the cut in revs were driven primarily by complexities in adapting its revenue mgmt to current booking patterns in this dynamic environment. Today’s announcement marks the eighth guidance reduction in the last 18 months for RASM.
  • In Materials: in lithium sector, ALB said it plans to hold more lithium auctions to boost price transparency; ALB will provide auction data to Fastmarkets and other pricing agencies to formulate into publicly available prices. ALTM was initiated at Outperform and $4 tgt at RBC Capital saying Arcadium was formed via the recent merger of Allkem and Livent, and offers investors the most vertically integrated, and diversified lithium and chemical exposure. Citigroup noted lithium prices remain in freefall/very bearish near-term as front-month China lithium carbonate future (GFEX) fell 5% to $12k/t (ex-VAT $10.5k/t) on Monday and is down 15% over the past month.
  • In Metals: steel names active as U.S. Steel (X) was upgraded to Outperform from Market Perform at BMO Capital citing compelling valuation, though notes the Nippon/ US Steel transaction remains in limbo; WOR shares weak after Q4 results disappoint as adj EPS $0.74 misses est. $0.95 and revs -74% y/y to $318.8M vs. est. $359.4M; in gold miners, BMO Capital upgraded GFI to Market Perform from Underperform and slightly increasing its tgt to $14.00 primarily driven by its updated gold price forecasts published today and upgraded ERO to Outperform and raise PT to $41 from $37 in copper space saying it will not experience the same downside risk of falling copper prices.
  • In Industrial: Commercial HVAC related industry active (TT, JCI, OTIS, ALLE, IR, ETN) as the May U.S. Architecture Billings Index (ABI) declines to 42.4 vs 48.3 in April. TGLS shares rose after disclosing its board is conducting a review of the company’s strategic alternatives.


  • In Payments/FinTech: Jefferies said their monthly fintech update notes shakeups in the BNPL landscape (AFRM, UPST) and slower user data saying on average, fintech monthly active users increased by just 0.1% M/M in May, lower than the month’s seasonal average of 5% and flags that the group’s average Y/Y MAUs is the lowest since Jan ’23.
  • In Banks/Brokers: IBKR said it realized losses of about $48M, including on certain hedge transactions, after NYSE denied its claims for compensation related to the June 3 trading disruption; PB was upgraded from Equal Weight to Overweight at Stephens into earnings as expects easing pressure on deposit cost to drive a stable NIM and higher NII trends which is notable as it would represent an important inflection point. Fed bank stress tests expected tonight after the close.
  • In REITs: data center REIT DLR was upgraded to Outperform at BMO Capital and raised the PT to $170 from $144 saying with an improved balance sheet, strong demand, rising prices, and building Mark-to-market, BMO expects DLR to move past its stagnant FFO growth in recent years, with accelerating Core FFO growth of 1.5%/6%/8% in 2024/2025/2026. Other REIT ratings changes, COLD upgraded to Overweight from Neutral at JP Morgan as sees Americold as being on a considerably better earnings trajectory for 2024 and into 2025 and upgraded AKR to Neutral from Underweight as still expects external growth to be a focal point but thinks the more important n-t driver will be organic growth.

Biotech & Pharma:

  • ALLK announces results from its ongoing phase 1 trial of ak006 in healthy volunteers, with ak006 demonstrating high receptor occupancy on mast cells and a favorable safety profile; said ak006 was well-tolerated/favorable safety profile.
  • ALT shares dipped after CFO Richard Eisenstadt passed away unexpectedly.
  • ANNX gave additional data from a late-stage trial of its immunotherapy for Guillain-Barré Syndrome.
  • BEAM announces the first patient dosed in the phase 1/2 study of beam-302 in alpha-1 antitrypsin deficiency (AAD).
  • MRNA shares fell after saying its respiratory syncytial virus (RSV) shot mRESVIA showed 50% efficacy in preventing RSV after 18 months. In their clinical trials, GSK’s RSV vaccine Arexvy was 78% effective in preventing severe RSV over a second year and Pfizer’s was 78% effective midway through a second RSV season.
  • RGEN upgraded to Buy from Hold at Deutsche Bank following its visit to Marlborough site saying Repligen is the only bioprocessing player across its coverage universe operating at lower margins post-pandemic.
  • SVRA announced positive results from the pivotal, Phase 3 IMPALA-2 clinical trial, saying its experimental drug, molgramostim, met the main goal of a late-stage trial for a rare lung disease.
  • TSHA shares fell after prices a public offering of 14.4M shares at $2.25 per share.

Internet, Media & Telecom

  • AAPL was upgraded to Buy from Neutral at Rosenblatt and raised PT to $260 from $196 saying their recent US survey shows strong privacy is "by far the top feature consumers want in AI," so it contends that the unique privacy focus of Apple Intelligence "could resonate" and argues for market share lift potential for Apple in AI.
  • In IT Services/Consulting: ACN downgraded to EW from OW at Morgan Stanley saying contemplates decelerating cloud revenue; marginal near-term Gen AI revenue contribution; and accelerating M&A spend as a % of FCF. The firm notes YTD as of June 25, 2024, expectations for IT Services growth have moderated significantly: ACN has declined 11% YTD, which is not as bad as many other IT Services names (DAVA—down 63%, EPAM—down 38%, TIXT—down 32%, DXC—down 19%), with only CTSH—down 7%—and TASK—flat—faring better.
  • In Software: RPD shares jumped after the WSJ reported late morning that activist investor Jana Partners has a stake in Rapid7 and plans to push the cybersecurity company to sell itself, according to people familiar with the matter. Jana managing partner Scott Ostfeld unveiled the investment Wednesday at the Sohn Monaco Investment Conference . PRGS shares advanced after a solid Q and mixed guide that showed next Q revs light but the beat from 2Q flowed through.
  • In Online Services: SE’s Shopee agreed to make changes to its services in Indonesia after the country’s antitrust agency said the platform had admitted to violating anti-monopoly rules. MAX was downgraded from Buy to Hold at TD Cowen and lowered PT to $13 from $19 considering recent news regarding MAX’s ongoing investigation with the FTC. Firm notes, according to a short sellers’ unsubstantiated report, MAX engaged in "deceptive business practices" to obtain consumers’ personal information that it then sells to partners, some of whom it claims are misleading consumers.


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.

Live Trading

Open an Account

Paper Trading