Indicators
Wake Up Call
- Hello ! Stock futures pared losses and bond yields fell after data signaling further labor-market weakness bolstered speculation the Federal Reserve will be able to cut rates this year.
- DATAS
* US Continued Jobless Claims w/e 1.839M vs. Exp. 1.824M (Prev. 1.828M, Rev. 1.821M)
* US Initial Jobless Claims w/e 233.0k vs. Exp. 236.0k (Prev. 238.0k, Rev. 239k)
* US GDP Final* (Q1) 1.4% vs. Exp. 1.3% (Prev. 1.3%)
* US GDP Deflator Final* (Q1) 3.1% vs. Exp. 3.1% (Prev. 3.1%)
* US Adv Goods Trade Balance * (May) -100.62B (Prev. -97.95B)
* US Core PCE Prices Final* (Q1) 3.7% (Prev. 3.6%)
* US Wholesale Inventories Adv * (May) 0.6% (Prev. 0.1%, Rev. 0.2%) - BANKS - The Fed’s announcement that major US banks could withstand a severe recession scenario had mixed effects on financial stocks. Goldman Sachs shares declined 1.6%, while JPM remained relatively stable. This divergence suggests that investors are differentiating between banks based on their individual strengths and vulnerabilities.
- BIDEN/TRUMP FIRST DEBATE (@ 2am UK on June 28th) - Going into the debate, a Fox News poll revealed Biden has overtaken Trump for the first time since October, with 50% of respondents indicating that they’d vote for him, while 48% showed a preference for Trump. Analysts said the polling may reflect Trump's recent felony charges of falsifying business documents. However, an Ipsos poll finds that Trump would beat Biden 37% to 35%overall in the seven swing states (Michigan, Pennsylvania, Wisconsin, Georgia, North Carolina, Arizona, Nevada). In terms of the market impact, analysts see the debate as focusing attention on the impact that higher tariffs could have on growth, inflation, and interest rates.
- NIKE EARNINGS TONIGHT - Ahead of its Q4 metrics, analysts note overall earnings estimates have been revised lower since its last earnings release. Add that investors are reportedly bearish going into earnings release, but 47.4% expecting a beat ; short interest is up by 43.7% since its prior earnings report. On the headline numbers, Nike is set to post its slowest revenue growth in two years, amid the lack of innovation among the growing competition from Hoka and On. Also, Barron’s gave the name a positive mention in this week's release ahead of the Olympics, as some believe Nike is pinning its hopes on the global event to win back some market share by spotlighting performance products such as the Alphafly 3 racer and the Pegasus running shoe.
Wall Street Movers
- ELANCO -6% said it now expects FDA approval for its Credelio Quattro drug in 4Q and a launch in 1Q of 2025. This represents a delay from previous guidance that pointed to approval in 3Q and a launch in H2'24.
- INTERNATIONAL PAPER -15% after SUZANO terminated its pursuit of the company. Analysts expect the shares to come under pressure, though Jefferies views it as a buying opportunity for investors. The decision removes a complication to Co.’s plan to acquire DS SMITH.
- JEFFERIES -3.30% earnings climbed as investment-banking rev surged and debt underwriting more than doubled, adding to signs of brightening prospects for the biggest US banks. Earnings totaled $145.7m, or 64c/shr.
- LEVI STRAUSS -12% sees FY adj EPS $1.17 to $1.27 (est $1.27) due to the new distribution and logistics strategy. Sees net rev +1% to 3%. 2Q adj EPS 0.16 (est 0.11) while rev $1.40b (est 1.45b). It boosts quarter div 8% to 13c/shr from 12c (est 14c).
- MCCORMICK +2% 2Q adj EPS 69c (est $0.59). Net sales $1.64b (est $1.63b).
- MICRON -5% 3Q rev $6.81b (est $6.67b) and swings to a profit in its latest quarter as AI-related demand boosted results. FCF from ops $2.48b (est $3.24b). However, it posted in-line guidance that overshadows the strong results. Sees 4Q EPS $1.08 +/- 8c (est $1.05). Expects continued price increases throughout 2024 despite only steady near-term demand in PCs and smartphones, says race for artificial general intelligence will drive significant growth for DRAM and NAMD, via conference call
- WALGREENS -15% cut FY adj EPS 4cst $2.80 to $2.95, saw $3.20 to $3.35 (est $3.20) reflecting challenging pharmacy industry trends and a worse-than-expected U.S. consumer environment. 3Q adj EPS 63c (est 68c). Sales $36.4b (est $35.81b). Walgreens plans to cut stake in VillageMD and to close underperforming US stores => CVS -2.9%
At A Glance
- ABBVIE US FDA grants second approval for AbbVie's Epkinly to treat patients with relapsed or refractory follicular lymphoma.
- BIRKENSTOCK prices secondary offering at $54/shr and raised a total of raised $756m yesterday.
- BLACKBERRY sees Q2 non-GAAP EPS (2c)-(4c), consensus (2c) on strong demand for cybersecurity services
- BOEING is resuming widebody deliveries to China, according to source cited by Reuters.
- CARLYLE and KKR won the auction for a $10b student-loan portfolio from Discover Financial Services.
- DATADOG analysts are positive on the software company in the wake of a user conference where it showcased new products and features. Firms wrote that the event underlined the company’s growth potential.
- MICROSOFT said it would continue to allow customers in Hong Kong to use OpenAI's AI models through its Azure cloud computing platform.
- RH said Chairman and CEO Gary Friedman purchased $10m of stock in the open market.
- SM ENERGY is in advanced talks to acquire XCL Resources. The deal would value XCL at about $3b, according to one of the people.
- SPACEX will sell insider shares at $112 a piece in a tender offer, a higher-than-exp price that boosts the value of Elon Musk’s space and satellite company closer tho $210b, according to people familiar with the matter.
- TESLA ordered to stop releasing toxic emissions from San Francisco Bay Area plant.
- TPG is nearing a deal to acquire Altimetrik in a transaction that could value the digital business services firm at about $1.5b.
Broker Moves
DOWNGRADES
- US BANCORP downgraded to neutral at JPMorgan; PT $43.50
INITIATIONS
- BLACKBERRY upgraded to Outperformer from Neutral at CIBC
- CARGO THERAPEUTICS rated new overweight at Piper Sandler; PT $37
- DISNEY rated new buy at Citic Securities; PT $115
- VERTEX PHARMACEUTICALS rated new Buy at Redburn; PT $554
Today's Key Events (UK Time)
3pm : US New Home Sales
4pm : Fed Kansas City Manuf.
Game Of Corporate Actions
DIV EX DATE
- Today : Invitation Homes ($0.28); Sempra ($0.62)
- Tomorrow : Alexandria Real ($1.3); AvalonBay ($1.7); Boston Properties ($0.98); Camden Property ($1.03); Danaher ($0.27); Deere ($1.47); Essex Property ($2.45); Fifth Third ($0.35); FMC ($0.58); Franklin Resources ($0.31); Host Hotels & Resorts ($0.2); Humana ($0.885); Illinois Tool Works ($1.4); Dr Pepper ($0.215); Medtronic ($0.7); Mondelez International ($0.425); Monolithic Power Systems ($1.25); Nucor ($0.54); PG&E ($0.01); Ralph Lauren ($0.825); Steel Dynamics ($0.46); Stryker ($0.8); US Ban($0.49); Veralto ($0.09); Willis Towers Watson ($0.88)
EARNINGS
- Today aft mkt : Nike