Mid-Morning Look: June 15, 2021

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Mid-Morning Look

Tuesday, June 15, 2021






DJ Industrials




S&P 500








Russell 2000






U.S. stocks are lower, giving back the late day push yesterday as the Federal Reserve starts its two-day monetary policy meeting (results tomorrow) and as wholesale inflation (PPI) comes in hot MoM on headline and core prices, but not having an impact on Treasury yields yet. The S&P 500 and Nasdaq Composite come into the day with all-time closing highs with all eyes on the Fed. Despite recent comments by several Fed members about the need to talk about tapering asset purchases due to an improving economy, no changes are expected tomorrow. Back to the PPI data, headline and core PPI came in ahead of expectations, with the year-over-year headline number at 6.6%, the largest rise since 2010. In corporate news, not much going on early with no earnings results, though there are several sell-side conferences taking place again today (recall JPM comments at MS conference on Monday sunk shares in the banking space on lower trading rev comments). Momentum related stocks (Reddit/WSB) such as the so called “meme” stocks among most volatile early, while energy stocks among leaders in the S&P as oil prices extend gains.


Economic Data

·     Producer Price Index (PPI) MoM for May reported at 0.8% vs. est. 0.5% and prior 0.6% while Producer Price Index (PPI) YoY for May was 6.6% vs. est. 6.3%; core prices also hotter than expected as PPI Ex: Food & Energy (core) MoM for May rose 0.7% vs. est. 0.5% and on a YoY basis, rose 4.8% which was in-line with ests (and vs. 4.1% prior)

·     Advance Retail Sales MoM for May fell (-1.3%) vs. est. (-0.8%) vs. April +0.9% (from prior view of unchanged); Retail Sales Less Autos MoM for May fell (-0.7%) vs. est. 0.5% – April was unchanged, up from prior decline of (-0.8%); U.S. May gasoline sales +0.7% vs. April -1.1%

·     NY Fed Empire state current business conditions index 17.4 in June missing the consensus 22.6 reading and was down from 24.3 in May; the new orders index 16.3 in June vs 28.9 in May; prices paid index 79.8 in June vs 83.5 in May; the employment index at 12.3 in June vs. 13.6 in May

·     Industrial Production rose 0.8% vs. est. 0.6% while April was revised to 0.1% from 0.5%; capacity utilization reported at 75.2% vs. est. 75.1% (prior month remains 74.65); U.S. May motor vehicle assembly rate rose to 9.85 mln units/yr from April 8.83 mln units/yr

·     April business inventories -0.2% (vs. est. -0.1%) vs. March +0.2% vs. prior 0.3%; business sales +0.6% vs. March +5.8%; inventory/sales ratio 1.25 months’ worth vs march 1.26 months







WTI Crude















10-Year Note





Sector Movers Today

·     Consumer Finance; DFS credit card delinquency rate 1.01% at may end vs 1.12% at April end; credit card charge-off rate 1.78% at may end vs 1.54% at April end; COF May domestic credit card net charge-offs rate 2.33 % vs 2.40% in April; delinquencies rate for auto 3.14% at May end vs 2.74% at April end; JPM Credit card charge-off rate 1.77% in May vs 1.97% in April; credit card delinquency rate 0.69% at may end vs 0.78% at April end; ADS delinquency rate of 3.2% as of May 31, 2021 compared to 4.8% in the same period a year ago; the net charge-off rate of 5.2% rises from 5.1% for the five months ended May 31, 2021.

·     REITs; ARE sees FY adj FFO/shr $7.70-7.80, in-line with est. $7.75, and prices upsized 6.5M share offering at $184; ABR 6M share Spot Secondary priced at $18.65; JPMorgan upgraded WPC to OW with an $88 pt from $77 and downgraded BNL to N with a $25 pt from $23 as they say the gap in YTD performance between the two (BNL +34%, WPC +12% vs REITs +26%, S&P +14%) is too wide and expect it to close; Raymond James said they are going all-in on seniors housing, issuing a double-upgrade on WELL to Strong Buy from Market Perform with a $92 target and raised their target on OP-rated VTR to $65 from $61 as prior concerns over the recovery trajectory appear to have been overly cautious;

·     Pharma movers; AMPE receives approval to expand enrollment of its ap-019 phase ii study to India; phase ii study will utilize inhaled Ampion to treat those suffering from respiratory distress due to covid-19; AZN announces that its antibody cocktail, AZD7442, didn’t achieve a statistically significant reduction in the risk of symptomatic COVID-19 after exposure to the virus, failing to meet primary endpoint of the STORM CHASER trial; CLSD announced positive safety results from an ongoing Phase 1/2a trial for CLS-AX in six patients with neovascular age-related macular degeneration (wet AMD); NVAX filed prospectus supplement with SEC which contemplates sale of up to $500M of shares

·     Auto sector; LAD generated $2.1B in May sales (+89% vs pre-pandemic May 2019 with same-store sales +26% vs 2019), and bought 5 locations in Texas that are expected to add $350M in annualized revenue; KeyBank reiterated their OW rating and $23 pt on GT as their tracker shows sustained sales above 2019 levels (May +15%, YTD +17% vs 2019) after March’s all-time high and April’s near-record strength, and they raised their 2021 tire producer sell-in forecast to +12% from +7%; VRM announced intention to offer $500M of convertible senior notes due 2026



·     FUSN +12%; as early-stage data showed its lead alpha therapy candidate, FPI-1434, for targeted tumor cells shows favorable safety profile with no drug-related serious adverse at three different dose levels.

·     MU +2%; outperforms in semiconductor space, while most of group slipping

·     OCGN +11%; after saying it picked Jubilant HollisterStier, a privately held pharmaceutical contract manufacturer, to produce its still-investigational COVID-19 vaccine for the U.S. and Canada (though vaccine is not yet approved).

·     OXY +2%; among early leaders in the S&P along with other energy names (FANG, NOV)



·     DKNG -6%; shares tumble in the online betting space after Hindenburg Research out with a negative short call as it warns that the company’s merger with SBTech brings it exposure to extensive dealings in black-market gaming, money laundering and organized crime https://hindenburgresearch.com/draftkings/

·     FAST -2%; downgraded to underweight at Morgan Stanley, saying it faces a challenging medium- term catalyst path while valuation is near all-time highs

·     FCX -6%; top decliner in the S&P 500 as copper miners slip as the metal slides to a seven-week low amid concerns about possible tightening of monetary policy in the U.S. and pullback in Chinese demand

·     NVAX -8%; filed prospectus supplement with SEC which contemplates sale of up to $500M of shares

·     PDSB -26%; as 5.29M share Spot Secondary priced at $8.50

·     SAGE -16%; and BIIB announce positive pivotal phase 3 results for zuranolone, an investigational two-week, once-daily therapeutic being evaluated for major depressive disorder (shares tumbled as antidepressant achieves goals of large study, but questions about benefit linger)


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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