Mid-Morning Look: June 23, 2023

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Mid-Morning Look

Friday, June 23, 2023






DJ Industrials




S&P 500








Russell 2000






U.S. stocks under pressure early, as investors fled into the safety of bonds (yields fell) as an outlook of higher interest rates together with weak euro-area activity data raised anxiety about recession fears. The Russell rebalance at the close will also likely have volumes and volatility significantly elevated. Global stocks headed for their biggest weekly decline in more than three months just a day after four central banks raised interest rates on inflation fears (Swiss, Norway, Turkey, UK), following recent hikes from Australia and Canada, while Fed speakers this week (led by Powell) called for likelihood of two-more rate hikes this year (and no cuts). Recall just 2-months ago, Wall Street was calling for at least three rate cuts in 2023 (that has all but disappeared). Nasdaq leading declines early, on track to snap 8-week winning streak (worst week since April 6th), the S&P on track to snap 5-week winning streak, and the Dow set to snap 3-week losing streak – but all still on track for big monthly advances with one week to go. Commodity prices are also lower as WTI crude on track for worst weekly return since May 5th. Treasuries advancing, with yields at morning lows as the 10-yr dips below 3.7%, down about -10-bps and 2-yr down 9-bps to 4.70%. After hitting 3-year lows on Thursday (12.73), the CBOE Volatility Index (VIX) rose as much as 6% early, but quickly pared gains as stocks bounced off lows.


Economic Data

·     S&P Global June flash composite U.S. PMI reported at 53.0 vs 54.3 in May, while the U.S. S&P Global June flash services PMI at 54.1 vs 54.9 in May; U.S. S&P Global June flash manufacturing PMI at 46.3 vs. 48.4 in May.






WTI Crude















10-Year Note





Sector Movers Today

·     In banks: Bank stocks were down for a 5th straight day amid talk of higher interest rates and increased capital requirements by regulators to strengthen the banking system. Regional banks (KRE) were a drag on the Russell 2000 on Thursday, which carried over into Friday weakness while large cap banks (XLF, BKX) weighed in the S&P; GS said they are likely to take a large write-down for acquisition of fintech lender GreenSky, CNBC reported.

·     In REITs: Raymond James upgraded VTR to Strong Buy from Outperform and downgraded WELL to Outperform from Strong Buy as overall reiterates OW sector recommendation for Healthcare REITs and updating estimates for most of universe. Our healthcare real estate asset class preferences change slightly vs. our prior views: hospitals remain our top preference, followed by skilled nursing facilities (SNFs), then seniors housing, while we swap medical office buildings (MOBs) to #4 and life science to #5.



·     ABCM +9%; announces review of strategic alternatives saying they will evaluate a broad range of options including a potential sale of company; said has received strategic inquiries from multiple parties over past few weeks.

·     APLD +15%; said that its recently launched AI Cloud Service has secured its second AI customer with an agreement worth up to $460 million over 36-months.

·     CFMS +91%; shares surge after announced an agreement to be acquired by Restor3d for a 96% premium, paying $2.27 per share in cash.

·     GSK +4%; after agreed to settle a Californian lawsuit over allegations that its heartburn treatment Zantac causes cancer.

·     IONQ +3%; raised full-year bookings guidance, citing a recent pact with QuantumBasel to install two future quantum systems in Europe.

·     KMX +9%; as Q1 EPS $1.44 vs. est. $0.79; Q1 revs $7.7B vs. est. $7.53B; Q1 retail used unit sales declined 9.6%, and comparable store used unit sales declined 11.4%, each from the prior year’s first quarter; wholesale units declined 13.6% from the prior year’s first quarter.

·     MMM +2%; after saying it would pay $10.3 billion to settle claims it was responsible for so-called “forever chemicals” in drinking water; said it will take a charge for the amount in 2Q.

·     SWBI +18%; on earnings as 4Q adj EPS $0.32 vs est. $0.27 on revs $144.8Mm vs est. $138.38Mm, gr mgn 29%, adj EBITDA $30.3Mm vs est. $25.63Mm; raises quarterly dividend by 20%.

·     TRUP +9%; rebounds after two days of selling pressure after saying that California and New York approved double-digit rate increases; California approved a rate increase of more than 12%, while New York approved a requested 18% rate increase.



·     AMLX -3%; said the European Medicines Agency’s Committee for Medicinal Products for Human Use has adopted a negative opinion of its application for the conditional marketing authorization of its ALS treatment AMX0035 under the trade name Albrioza.

·     ICPT -2%; announces restructuring to strengthen focus on rare and serious liver diseases; said to discontinue all NASH-related investment; to reduce workforce by approximately one third; lowers 2023 Non-Gaap Adjusted Operating Expense Guidance To $350-$370M.

·     MSGE -3%; as 5.3M share secondary for holder priced at $31 per share.

·     SMNEY -26%; withdrew its FY profit guidance and said it could cost upward of 1B euros, equivalent to around $1.1B, to fix issues related to wind-turbine component failures.

·     SPCE -19%; after saying it would raise up to $400 million through the sale of common shares to fund development of its spaceship fleet.

·     SRPT -9%; analysts mixed after FDA approval of its DMD drug Elevidys yesterday, as Evercore/ISI downgraded to Hold from Buy, skeptical that Sarepta can expand the treatment’s narrow label.


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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