Mid-Morning Look: June 12, 2023

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Mid-Morning Look

Monday, June 12, 2023






DJ Industrials




S&P 500








Russell 2000






U.S. stocks open higher, building on last week gains as investors brace for a full week of potential market moving catalysts including inflation data (CPI, PPI), central bank meetings (FOMC, ECB, BOJ), and handful of key earnings results (ORCL, LEN, ADBE). Despite stocks jumping early, a little caution being shown as the CBOE Volatility Index (VIX) rises over 6% at 14.70 after hitting 2-year lows last week. Treasury yields and the US dollar bouncing to start the week ahead of the 2-day FOMC policy meeting (starts tomorrow, results 2:00 PM Wednesday and Fed Chair Powell press conference 2:30 PM). The 10-year yield bouncing to 3.78% from a low of 3.71% at 9:00 AM. Energy stocks a big drag as WTI crude falls over 4% below $68 per barrel, on track for near 3-month lows. Shares of tesla (TSLA) rising for a 12th straight day, helping lead the Nasdaq higher early. Coming into the day/week, the S&P is up 4-straight weeks and up more than 20% from its October 2022 low and the Nasdaq has risen 7-straight weeks. A benign CPI and PPI inflation reading tomorrow/Wednesday and “pause” by the Fed could provide further ammo for Bulls this week, but a sharp pop in inflation could raise fear for markets in the near-term. There were a few M&A headlines early this morning with Nasdaq making a $10B software purchase, a $3B tie-up in the biotech space announced (NVS/KDNY) and a deal in metals space. Usual suspects again leading markets as Technology, Consumer Discretionary, and Communications the only S&P sectors higher.







WTI Crude















10-Year Note





Sector Movers Today

·     In payments/services: Morgan Stanley downgraded shares of BILL (to EW from OW) and EXFY (to UW from EW) saying mid-market businesses are the most attractive opportunity set for AP automation platforms/B2B payments; virtual card penetration is central to revenue growth, but pricing may hurt long-term adoption. SOFI tgt raised to $11 from $8 at Truist as think investors are gaining confidence in SoFi’s growth model and accounting. The firm said SoFi positioned as leading beneficiary of bank deposit outflows given 4.3% APY savings and small size.

·     In Asset Managers: 1) APAM May prelim AUM data totaled $136.4 billion; 2) LAZ prelim May AUM totaled approximately $230.0 billion as forex depreciation of $2.9 billion, net outflows of $0.9 billion and market depreciation of $0.8 billion; 3) BEN preliminary month-end assets AUM $1,404.2B compared to of $1,420.7B at April 30, 2023; 4) TROW preliminary month-end assets under management of $1.35 trillion with net outflows for May 2023 were $9.6 billion

·     Cruise lines were active today, with shares rising as two brokers upgraded shares of Carnival. CCL upgraded Overweight from Neutral at JPMorgan and raised tgt to $16 from $11 after mgmt meetings saying sees a “bullish tone” on current trends and 1H24 bookings. Bank America also upgraded CCL to Buy with $20 tgt from $11 following positive management meetings in Miami and raised price tgts on RCL ($95 from $82) and NCLH ($19 from $17).



·     BIIB +2%; after an FDA Adcom panel voted 6-0 on Friday the backing of the company’s Alzheimer’s drug Leqembi by the U.S. regulator’s advisers eased concerns that a traditional approval for the treatment will not come with major new safety warnings.

·     CCL +8%; shares upgraded at both JPMorgan and Bank America to Buy ratings and tgt raised to $20 and $16 respectively after bullish tones with management on trends/bookings.

·     KDNY +56%; to be acquired by NVS for up to $3.5 bln in boost to late-stage pipeline Under the agreement, Chinook shareholders would receive $3.2 billion, or $40 per share in cash, which represents a premium of 66.7% to Friday’s closing price. https://tinyurl.com/bdfdwasj

·     ORCL +4%; reports earnings after the bell tonight, upgraded from Peer Perform to Outperform w/ $130 PT at Wolfe Research and The Information reported Friday Oracle is expected to address the Microsoft-Open AI team by building on its investment in Cohere.

·     S +9%; upgraded to Overweight at Morgan Stanley saying despite recent missteps, the firm believes the market is now mispricing the inherent value of SentinelOne.

·     XPEV +13%; after saying its new model G6 received more than 25,000 reservations in three days, the company said on its official Weibo.



·     BILL -3%; downgraded at Morgan Stanley saying industry-level analysis on virtual card adoption suggests limitations on Bill’s take-rate expansion opportunity.

·     COIN -3%; weakness in crypto space to start; Bitcoin prices dropped below $26,000 on crypto concerns; recall last week, the SEC charged both Binance and Coinbase (COIN) on Monday and Tuesday last week, respectively.

·     EVGO -4%; and CHPT, BLNK extend last week’s slide after TSLA news with GM last week.

·     NDAQ -10%; agreed to buy software company Adenza for $10.5 billion in cash and stock from Thoma Bravo. The terms of the deal include $5.75 billion in cash and 85.6 million shares of Nasdaq common stock. https://tinyurl.com/4sxy7wxy

·     SIG -2%; downgraded to Neutral from Buy at Northcoast, reducing operating income expectations and margin, reflecting company guidance and their own checks.

·     XOM -1%; as energy stocks tracking lower oil prices.


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.

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