Mid-Morning Look: June 12, 2020

Auto PostDaily Market Report

Mid-Morning Look

Friday, June 12, 2020






DJ Industrials




S&P 500








Russell 2000






U.S. equities open solidly higher, regaining nearly half the losses from yesterday’s steep losses amid a rebound in travel and leisure, transports, energy, financials as well as SmallCaps, as the trading whipsaw this week continues. Economic data positive as U.S. consumer sentiment climbed in early June by the most since 2016 as more states began to reopen their economies and employers restored jobs. Stocks are recovering after yesterday’s market beat down after Fed Chairman Powell painted a grim picture of the domestic economic outlook on Wednesday and as cases of COVID-19 were resurging in several states in the U.S., raising fears of second wave of the deadly infection. Gold prices rising despite the bounce in stocks as safe haven names not pulling back to far after yesterday surge, while Treasury prices down only slightly. Stocks fell the most since the March swoon, and from the looks of it, investors are stepping in once again to buy beaten down stocks amid economic recovery hopes. JPMorgan noted that yesterday was the 4th time this year the S&P 500 index fell 5% or more – in the other 3 cases the SPX was higher retracing on average 71% of its previous day’s losses and then going lower in the following trading session. If that pattern holds, that would imply an approximate 4% up move today. Oil prices edge higher, the dollar is mixed and stocks remain higher but have been fading off the best levels.


Economic Data

·     Import prices for May rose +1.0% MoM vs. est. 0.6% and vs. April -2.6%, while May export prices rose +0.5%, vs. est. up 0.6% and vs. April -3.3%. U.S. May non-petroleum import prices +0.1% and YoY rose 0.6% and U.S. may petroleum import prices +21.7% vs. April -32.6%

·     University of Michigan surveys of consumers sentiment prelim June 78.9 (consensus 75.0) vs. final May 72.3 while the current conditions index prelim June 87.8 (consensus 85.0) vs. final May 82.3 and consumers expectations index prelim June 73.1 (consensus 70.0) vs. final May 65.9







WTI Crude















10-Year Note





Sector Movers Today

·     Auto movers; HTZ said it wants to sell up to $1B in shares while the market cap Hertz is currently around $359M/company is asking a bankruptcy judge to approve a deal with Jefferies to allow the potential sale of 246.8M unissued shares; GM was upgraded to Buy from Neutral at Goldman Sachs and raise tgt to $36 from $25 saying the company is exposed to the solid position and improvement in U.S. and China, with opportunities to expand margins while the firm downgraded TSLA to Neutral from Buy saying the recent outperformance in the stock is due to Tesla’s strong Q1 margins and increased investor awareness of the favorable long-term outlook for EVs, and the bar for Tesla’s fundamentals is higher than for other stocks; Morgan Stanley also downgraded TSLA – to underweight at $650 tgt

·     Bank movers; in online brokers, ETFC with strong monthly May metrics as Daily Average Revenue Trades (DARTs) for May were a record 982,000, and derivative DARTs were a record 252,000 while noting trading volume has continued to increase in June, with DARTs of 1,195,000 and derivative DARTs of 277,000 through June 10, 2020; SCHW reported net new client assets for May of $97.5 billion vs. $17.3 billion YoY as May total client assets $4.01 trillion, +14% YoY and May new brokerage accounts 1.25 million vs. 123,000 YoY; Sandy Weill on CNBC noted the financial industry is in very good shape at this time and financials are selling well below book value – noted names like SCHW, MS are really good buys for the long term; BHLB was upgraded to overweight at Piper as feel credit picture was bit brighter along with underperformance

·     Industrial & Machinery; CAT reported total retail machines sales were down 23% on a three month rolling basis in May vs. retail sales of machines were down 22% in the period ending in April and down 17% in the period ending in March; CAT was also downgraded to Market Perform at BMO saying they believe any near-term recovery for its end markets will be somewhat challenged by customers’ budgetary constraints and government finances stretched; in other research Oppenheimer downgraded AME to perform saying the decline in organic growth in the first quarter reflects a broad softening across automation, power, and other industrial end markets; ROP also downgraded to perform from outperform at Oppenheimer

·     Transports; a bounce for transports after sharp roll the last few sessions (Dow Transports touched highs around 10,100 on Monday and below 9,000 yesterday); AAL forecasts Q2 revenue will be down around 90% on a 75% reduction in capacity while noting since the middle of May, it has seen positive net bookings in each of the seven advanced purchase windows that it regularly monitors as believes the trends are an indication of improving passenger demand/also said is targeting a zero cash burn rate by the end of 2020; in research, Credit Suisse downgraded shares of UAL and SAVE while upgrade shares of LUV on its strong balance sheet



·     ADBE +4%; reported mixed results, with its Digital Media business largely outperforming but offset by the Digital Experience business coming up short due to an Advertising Cloud transactional shortfall. While DX growth of 5% fell short of the expectation for 12% growth, it is notable that Digital Media ARR grew by 23% y/y, adding $443M in ARR vs. its $385M estimate

·     APLS +13%; as released detailed results for its Phase 3 PEGASUS study of pegcetacoplan in PNH (against ALXN’s Soliris), with new data showing pegcetacoplan’s effect was seen consistently across the study population; APLS plans to submit a NDA to the FDA in 2H20.

·     BITA +10%; agreed to be taken private by an investor group backed by Tencent Holdings Ltd for $16.00 per share or for $1.1 billion in cash

·     CNC +4%; raised its full-year earnings guidance to reflect its current expectations for membership, revenue and medical utilization trends during the coronavirus pandemic

·     NCLH +15%; cruise lines (CCL, RCL), airlines (AAL, DAL), and energy names (APA, NBL) among early gainers in the market after yesterday’s slide



·     CAT ; downgraded to market perform at BMO Capital while also reported total retail machines sales were down 23% on a three month rolling basis in May (vs. -22% April, -17% in March)

·     ESS -2%; downgraded at Raymond James while REITs overall lower

·     OKE -7%; as 26M share Secondary priced at $32.00

·     PVH -5%; Q1 rev in-line but materially below the Street on EPS as overall sales were down -43% Y/Y and the company reported a loss-per share of $3.03 as gross margin was down -560 bps Y/Y and SG&A delevered

·     VIE -4%%; said the FDA approved Uplizna (inebilizumab) to treat neuromyelitis optica spectrum disorder in adults who are anti-aquaporin-4 (AQP4) antibody positive (Morgan Stanley notes the approval was largely expected, and the label was fairly clean without a black box warning)


·     Avidity Biosciences (RNA) 14.4M share IPO priced at $18.00

·     The AZEK Company (AZEK) 33.25M share IPO priced at $23.00

·     Burning Rock Biotech (BNR) 13.5M share IPO priced at $16.50

·     Generation Bio (GBIO) 10.5M share IPO priced at $19.00

·     Oneok (OKE) 26M share Secondary priced at $32.00

·     SiTime (SITM) 3.5M share Secondary priced at $32.00

·     Vaxcyte (PCVX) 15.6M share IPO priced at $16.00


Market commentary provided by Catena Media Financials US, LLC, 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