Mid-Morning Look

Friday, June 13, 2025

Geopolitics driving all the price action overnight and this morning so far, with crude oil posting significant gains (4-month highs) & equities under pressure globally after Israel conducted pre-emptive strikes on Iranian nuclear and military target last night, as PM Netanyahu said the military op would last as long as it takes. Iran has warned that Israel and the US will pay a heavy price. The U.S. said they didn’t help and were not involved in the strikes. President Trump urged Iran to “make a deal, before there is nothing left”. Oil prices, held low by a weak supply/demand picture, could move even higher if the European Union move ahead with its new round of sanctions on Russia, proposed Tuesday. Treasury yields surprisingly higher (10-yr 4.4%) as bonds selloff, but precious metal prices jump on haven demand. The U.S. dollar index (DXY) rises +0.3% after hitting lowest levels since May 2022 yesterday. In stock news, broader global stock markets down overnight, led by airline stocks, along with leisure like cruise, and lodging/hotels as Israel’s widescale strikes on Iran drove a more than 9% surge in oil prices. Oil stocks among market leaders, along with defense stocks (NOC, LMT, RTX) and shippers. Consumer finance stocks slide early (MA, V, AXP) after the WSJ reported large merchants such as AMZN, WMT are exploring how to issue or use their own stablecoins to bypass traditional fees of the card-based systems. The Lone piece of economic data showed positive sentiment data and lower inflation expectations, following cooler CPI and PPI data this week. Stocks attempted an early bounce off overnight lows, but still holding down over 1% thus far, will weakness hold for a change? Or will the “buy the dip” crowd return in full force again this afternoon?

• 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%

• In Credit Cards: Shares of MA, Visa (V), COF, AXP were under pressure after the WSJ reported large merchants such as AMZN, WMT are exploring how to issue or use their own stablecoins to bypass traditional fees of the card-based systems. Corporate coins could take payments activity away from banks and the traditional financial system, potentially shifting the high volumes of cash and card transactions that they handle outside the traditional financial system and saving them billions of dollars in fees.
• In Metals & Mining: Precious metal prices of gold, silver, platinum extend recent advances in flight to safe haven assets following the Middle East tensions between Israel/Iran and fears of escalation into the weekend. Prices of precious metals all jumped early as gold approached new all-time highs. Platinum prices hit their highest level in over 4 years and gold prices lifted miners (AU, AEM, GOLD, NEM, KGC). In Steel producers, US Steel (X) shares slipped after Nikkei reported that Nippon Steel’s planned takeover of the US company may not proceed if the Japanese company has insufficient freedom of management.
• 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.

• FANG +3%; majors such as CVX, XOM, COP, service names SLB, HAL, BKR, and E&P names EOG, APA, DVN saw outsized gains most of the day, along with the rest of the energy complex on oil price move higher.
• LMT +3%; as defense stocks GD, RTX, LHX, NOC advance following the escalation of tensions between Israel and Iran overnight after Israel attacked nuclear facilities of Iran.
• NMM +3%; along with other shipping co’s GOGL, INSW as geopolitical tensions between Iran/Israel raise the risk of oil supply disruptions, prompting increased demand for tankers to reroute shipments and maintain supply flow and drive-up shipping rates.
• RH +11%; shares surged following mixed results, with revenues below, 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.

• ADBE -6%; reported a solid quarter, full-year revenue guidance is going up from $23.425B to $23.550B at the midpoint but Digital Media ARR, the component that houses the Creative Cloud, guidance was just reiterated at 11.0% for the year, which several analysts cited as a potential “sticking point”.
• DAL -4%; as 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.
• OKLO -2%; as 6.67M share Secondary price at $60.00
• SNPS -3%; after China said to delay approval of $35B chip-merger with ANSS.
• V -6%; Shares of credit cards MA, COF, AXP were under pressure after the WSJ reported large merchants such as AMZN and WMT are exploring how to issue or use their own stablecoins to bypass traditional fees of the card-based systems.
• X -4%; after Nikkei reported that Nippon Steel’s planned takeover of the US company may not proceed if the Japanese company has insufficient freedom of management.