After Hours Report

The market started this holiday shortened week with losses. Broad based selling was driven by a sense that the market was due for a pullback after a big run of late. The major indices were able to close off their session lows thanks to some mega caps recovering from early weakness.

Apple (AAPL 185.01, +0.09, +0.1%) and Amazon.com (AMZN 125.78, +0.29, +0.2%) were some of the mega caps that underperformed in the early going, down 0.3% and 0.8%, respectively, at this morning's lows before closing with modest gains. The Vanguard Mega Cap Growth ETF (MGK) had been down as much as 0.9%, but closed with a 0.1% decline.

The Invesco S&P 500 Equal Weight ETF (RSP), meanwhile, fell 0.9% and the market-cap weighted S&P 500, which was stuck below 4,400 today, closed with a 0.5% loss. 

The broad retreat saw 26 of the 30 Dow components register losses and ten of the 11 S&P 500 sectors decline. The energy sector (-2.3%) was the worst performer by a wide margin, falling alongside oil prices ($71.21/bbl, -0.71, -1.0%). 

The consumer discretionary sector (+0.8%) was the lone outperformer in positive territory today. Gains in Amazon and Tesla (TSLA 274.45, +13.91, +5.3%), which extended its rally after announcing a partnership with Rivian (RIVN 15.70, +0.82, +5.5%) regarding its Supercharger network, and strength in the homebuilder stocks were integral to sector performance. 

The iShares U.S. Home Construction ETF (ITB) rose 1.0% and the SPDR S&P Homebuilder ETF (XHB) rose 0.6%. D.R. Horton (DHI 118.32, +1.92, +1.7%), Lennar (LEN 121.58, +1.56, +1.3%), and PulteGroup (PHM 74.88, +1.37, +1.9%) were some of the top winners from the space. These moves were in response to this morning's better than expected housing starts data for May.

Total starts surged 21.7% month-over-month to a seasonally adjusted annual rate of 1.631 million units -- the highest since April 2022 -- while total building permits rose 5.2% month-over-month to a seasonally adjusted annual rate of 1.491 million, aided by a 4.8% increase in single-unit permits.

Treasuries initially saw some selling interest after the housing starts data, but settled the session with modest gains, reflecting some safe-haven trading. The 2-yr note yield fell one basis point to 4.70% and the 10-yr note yield fell four basis points to 3.73%.

• Nasdaq Composite: +30.6% YTD
• S&P 500: +14.3% YTD
• Russell 2000: +6.0% YTD
• S&P Midcap 400: +5.4% YTD
• Dow Jones Industrial Average: +2.7% YTD

Reviewing today's economic data:

• Total housing starts surged 21.7% month-over-month to a seasonally adjusted annual rate of 1.631 million (Briefing.com consensus 1.400 million) following a downwardly revised 1.340 million (from 1.401 million) in April. That is the strongest pace of starts since April 2022. Total building permits increased 5.2% month-over-month to a seasonally adjusted annual rate of 1.491 million (Briefing.com consensus 1.425 million) following a revision to 1.417 million (from 1.416 million) for April.
  • The key takeaway from the report is rooted in the monthly growth for single-unit permits (+4.8%) -- a leading indicator -- and single-unit starts (+18.5%), which is a good sign for a supply-challenged housing market overall and a seemingly good portent for homebuilders' sales and earnings prospects.

Market participants will receive the following economic data tomorrow:

• 7:00 ET: Weekly MBA Mortgage Index (prior 7.2%)
• 10:30 ET: Weekly crude oil inventories (prior +7.92 mln)

Also, Fed Chair Powell will deliver his semiannual monetary policy report to the House Financial Services Committee at 10:00 a.m. ET and will then appear before the Senate Banking Committee on Thursday at 10:00 a.m. ET. 

Overseas:

• Europe: DAX -0.6%, FTSE -0.3%, CAC -0.3%
• Asia: Nikkei +0.1%, Hang Seng -1.5%, Shanghai -0.5%

Commodities: 

• Crude Oil -0.71 @ 71.21
• Nat Gas -0.13 @ 2.51
• Gold -22.60 @ 1948.70
• Silver -0.92 @ 23.25
• Copper -0.01 @ 3.88

After-Hours Spotlight:

• Electronic Arts (EA) aligning its studios into two organizations: EA Entertainment and EA SPORTS; appoints Stuart Canfield CFO, effective immediately; succeeds Chris Suh, who is leaving for Visa... no indication for EA
• FedEx (FDX) beats by $0.09, misses on revs; guides FY24 EPS in-line, revs in-line; announces that CFO and EVP Michael Lenz will retire effective July 31, 2023... FDX down 3.4%
• La-Z-Boy (LZB) beats by $0.27, beats on revs; guides JulQ revs below two analyst estimate; expects FY24 growth ahead of industry with 2H24 stronger than 1H24... LZB down 4.0%
• MiMedx Group (MDXG) announces strategic realignment; raises expectations to deliver mid-teens percentage sales growth in 2023... MDXG up 2.7%
• Ross Stores' (ROST) Board of Directors approves new employment agreement with Barbara Rentler, Vice Chair and CEO, extending her contract through March 31, 2027... ROST down 0.7%
• Visa (V) appoints Chris Suh as CFO; succeeds Vasant Prabhu, who will serve as CFO Designate from July 10 until August 1, departing on September 30... V up 0.3%
• Walt Disney (DIS): "Dahmer" producer Ryan Murphy to leave Netflix (NFLX) for Disney, according to Bloomberg... DIS up 0.2%

Fair Value for Wednesday, June 21:

• S&P 500: 4,432
• Nasdaq 100: 15,245
• DJIA: 34,339

For a full rundown of today's market and after hours developments, see Live In Play

• Earnings/Guidance (Full Earnings Calendar):
  • Adtalem Global Education (ATGE) reaffirms FY23 guidance; provides FY24 guidance
  • AT&T (T) provides FY23 guidance ahead of conference
  • Avanos Medical (AVNS) lowers FY23 EPS guidance at investor day
  • Baytex Energy Trust (BTE) provides production and exploration guidance in slide presentation
  • DocGo (DCGO) in slide presentation provides long term target: Co sees Q4 of 2025 revenues of $250 mln
  • General Electric (GE): GE Aerospace states its on track to meet FY23 guidance
  • IDT Corp (IDT) in slide presentation says that it sees 4 year CAGR of +32%
  • NJ Resources (NJR) reaffirms FY23 guidance in slide presentation
  • Raytheon Technologies (RTX) reaffirms FY23 outlook at Investor Day; reaffirms 2025 financial outlook and increases targeted capital return to shareowners
  • U.S. Steel (X) sees Q2 EPS above consensus
  • WEC Energy Group (WEC) provides 2025-2027 sales growth forecast in slide presentation: Electric and gas growth of +0.7-1.0%
• General News
  • Chinese banks lowered lending rates, Wall Street Journal
  • Secretary of State Antony Blinken met with Chinese President Xi to ensure that competitive relationship does not veer into a conflict. Mr. Xi praised both sides for making progress, according to the New York Times
  • China and Cuba are negotiating terms for joint military training facility in Cuba, according to the Wall Street Journal
  • Regulators are concerned about commercial real estate amid increasing vacancies, according to Bloomberg
  • Homeless numbers rising in several American cities, according to the Wall Street Journal
  • DOJ antitrust official Jonathan Kanter in speech says DOJ will update its policy regarding bank mergers; agency will bring competitive factor reports - CNBC
  • President Biden will meet Thursday with Indian Prime Minister Narendra Modi, according to Politico
  • 360 DigiTech (QFIN) announces $150 million share repurchase plan
  • Abcam (ABCM) highlights successful execution of strategic priorities to drive shareholder value
  • AerCap (AER) announces at the Paris Air Show it has signed lease agreements with EL AL for two new Boeing (BA) 787-9 Dreamliners
  • Aerojet Rocketdyne (AJRD) was awarded a two-year contract by Lockheed Martin (LMT), valued at $23.8 mln, to continue its role in providing propulsion units for the Javelin missile
  • Agnico-Eagle Mines (AEM) provides update on Canadian Malartic Complex
  • Air Lease (AL) announces long-term lease placements for two new Airbus A220-300 aircraft with Cyprus Airways
  • Airbus (EADSY): Air India firms up order for 250 Airbus aircraft, selects new services
  • Airbus (EADSY): Philippine Airlines finalises order for nine A350-1000s
  • Airbus (EADSY): India’s IndiGo places record order for 500 A320 Family aircraft
  • Airbus (EADSY): Qantas finalises incremental order for nine A220s
  • Albemarle (ALB) achieved an IRMA 50 level of performance in an independent third-party assessment of its lithium brine extraction and concentration site in the Salar de Atacama
  • Alibaba (BABA) announces Chairman and CEO succession plan
  • Alibaba (BABA) co founder Jack Ma made appearance at company event, according to Bloomberg
  • Allegheny Tech (ATI) secures estimated $1.2 billion in aerospace and defense sales commitments
  • Allego Holding B.V. (ALLG) enters into long-term agreement with Esso Deutschland GmbH to sell compliance credits
  • Altus Power (AMPS) secured an incremental $47 million in capital from Blackstone (BX)
  • Arcellx (ACLX) announces clinical hold for its iMMagine-1 Phase 2 Clinical Program
  • argenx (ARGX) Initiates Second Cohort of Phase 2 ARDA Study of Empasiprubart in Multifocal Motor Neuropathy
  • Ascendis Pharma (ASND) reports One-Year Data from Phase 3 Trial of TransCon PTH in Adults with Hypoparathyroidism Presented at ENDO 2023
  • AstraZeneca (AZN) planning to spin off China unit, according to Financial Times
  • AT&T (T) using OpenAI to streamline operations, according to Axios
  • Ball Corp (BALL) confirms it is considering options that could better position its aerospace business to provide value to shareholders and customers
  • Berkshire Hathaway (BRK.B) increases its passive stakes in each of five leading Japanese trading companies
  • BlueLinx (BXC) and Louisiana Pacific Corp (LPX) announce expansion of their distribution partnership
  • Boeing (BA) forecasts demand for 42,600 new commercial jets over next 20 years
  • Boeing (BA): Air Algérie orders eight Boeing 737 (BA) MAX jets, commits to two 737-800 Boeing converted freighters
  • Boeing (BA) and Avolon announced an order for 40 737 MAX airplanes at the Paris Air Show
  • Boeing (BA) and Air India announce they have finalized an order for up to 290 new Boeing jets and expanded services
  • BridgeBio Pharma (BBIO) presents updated six month results from its phase 2 cohort 5 trial of infigratinib in Achondroplasia at the Endocrine Society 2023 Annual Conference
  • Bristol Myers Squibb’s (BMY) Breyanzi (lisocabtagene maraleucel) Delivers Deep and Durable Responses in Relapsed or Refractory Follicular Lymphoma and Mantle Cell Lymphoma in TRANSCEND Clinical Trials Presented at ICML 2023
  • British American Tobacco (BTI) announces changes to Management Board structure and composition
  • C4 Therapeutics (CCCC) appoints Leonard Reyno, M.D., as Chief Medical Officer
  • Cano Health (CANO) CEO Dr. Marlow Hernandez has agreed to step down immediately
  • Carlyle Group (CG) announced that Curtis L. Buser, Chief Financial Officer, will retire from the Company, effective December 31, 2023
  • Catalyst Pharma (CPRX) to license North American rights to Vamorolone for Duchenne Muscular Dystrophy from Santhera Pharmaceuticals
  • Chindata Group (CD) announces appointment of independent financial advisor and legal counsel to the Special Committee
  • Chinook Therapeutics (KDNY) Presents Data from CHK-336 Phase 1 Trial in Healthy Volunteers and New Insights into the Role of Failed Repair in Chronic Kidney Disease at the 60th European Renal Association (ERA) Congress
  • Civitas Resources (CIVI) to enter Permian Basin through transformative transactions
  • Cleveland-Cliffs (CLF) announces price increase for flat-rolled steel products
  • Comcast (CMCSA): White House issues statement from President Joe Biden on proposed FCC all-in pricing rule
  • Corporación América Airports (CAAP) reports May 2023 passenger traffic
  • CureVac (CVAC) doses first patient in phase 1 study of cancer vaccine candidate for surgically resected glioblastom
  • Cytokinetics (CYTK) announces start of MAPLE-HCM, a phase 3 clinical trial of aficamten compared to metoprolol in patients with Symptomatic Obstructive Hypertrophic Cardiomyopathy
  • Denali Therapeutics (DNLI) Announces Robust Reduction in Neurofilament Light (NfL) with DNL310 (ETV:IDS) Treatment in MPS II (Hunter Syndrome)
  • Dragonfly Energy (DFLI) prices offering of 10 mln shares of common stock and investor warrants to purchase up to 10 mln shares of common stock at a combined offering price of $2.00
  • Ecopetrol (EC) requests disbursement of financing line with local bank as part of its 2023 refinancing strategy
  • Embraer SA (ERJ): American Airlines (AAL) orders seven Embraer E175s for Envoy Air
  • Embraer SA (ERJ): Binter has placed a firm order for six Embraer E195-E2 aircraft
  • Enanta Pharmaceuticals (ENTA) announces positive data from a phase 1 clinical study of EDP-323, an oral, l-protein inhibitor in development for the treatment of respiratory syncytial virus
  • Etsy (ETSY): Board approves repurchase of up to $1 bln in common stock
  • Gannett (GCI) files lawsuit against Google (GOOG/L) related to digital advertising practices
  • GE Aerospace (GE) CEO Larry Culp says all options on table regarding A220 engine, according to Reuters
  • Geron (GERN) announces submission of new drug application to FDA for first-in-class Telomerase Inhibitor Imetelstat
  • Google (GOOG) wants to move some Pixel production to India, according to Bloomberg
  • Grifols, S.A. (GRFS) retains Maxim Group to explore U.S. spinoff of its Graphex Technologies Business
  • Honeywell (HON) detected unauthorized access on a single MOVEit server; had no impact on company operations
  • Horizon Pharma (HZNP) reports Additional Data from Phase 4 TEPEZZA (teprotumumab-trbw) Clinical Trial Presented at the Endocrine Society Annual Meeting Reinforces Efficacy in People with Thyroid Eye Disease (TED) Regardless of Disease Activity or Duration
  • Horizon Pharma (HZNP) reports New Data from TEPEZZA (teprotumumab-trbw) Clinical Trials and Real-World Analyses Shed Light on Link Between Thyroid Autoimmunity and Hearing Risks
  • Kenon Holdings (KEN) announces the commencement by OPC’s subsidiary CPV Group of construction of a solar power project with a capacity of 170 MW in Maryland, United States, in the PJM market, also called the Backbone project
  • Lilly (LLY) to present new research in the treatment of diabetes and obesity at the American Diabetes Association's® 83rd Scientific Sessions
  • McEwen Copper (MUX) announces results of an updated Preliminary Economic Assessment (PEA) on a copper leaching phase of development at the Los Azules project in San Juan, Argentina
  • Merck (MRK) provides update on phase 3 KEYNOTE-585 trial in locally advanced resectable gastric and gastroesophageal junction adenocarcinoma
  • Micron (MU): India approves $2.7 bln MU chip plant, according to Reuters
  • Microvast (MVST) says it is disappointed that it didn’t receive the grant from the Department of Energy
  • Milestone Pharmaceuticals (MIST) announces the publication of results in The Lancet from the Phase 3 RAPID clinical trial evaluating etripamil nasal spray, the Company's investigational calcium channel blocker, in patients with paroxysmal supraventricular tachycardia
  • NaaS Technology (NAAS) has amended and restated its previously adopted New 2022 Share Incentive Plan to expand the number of Class A ordinary shares available for grant of awards
  • NASDAQ (NDAQ) Commodities & EEX announce intention to transfer Nasdaq’s European Power Business to EEX
  • New Found Gold Corp. (NFGC) Intercepts 49.5 g/t Au Over 2.30M & 20.2 g/t Au Over 3.35M at Knob, 2km South of Keats
  • Newmont Goldcorp (NEM) defers investment decision for Yanacocha sulfides project to advance portfolio optimization strategy
  • Newpark Res (NR) is exploring strategic alternatives for the long-term positioning of its Fluids Systems division
  • NIO (NIO) announces strategic equity investment from CYVN Holdings
  • Nouveau Monde Graphite (NMG) provides commercial update
  • Novo Nordisk A/S (NVO) takes actions to help protect US patients from unlawful sales of non-FDA approved medicines claiming to contain semaglutide
  • Omnicom (OMC) announces a strategic collaboration with Google Cloud (GOOG) that offers the group unique access to the Vertex AI platform
  • Ormat Tech (ORA) announces the signing of agreements with Eastland Generation Limited to build a 50MW power plant in New Zealand
  • Overseas Shipholding Group (OSG) announces that the Military Sealift Command has awarded the Overseas Mykonos, a vessel in OSG’s fleet, a time charter contract to assist with the removal of fuel from the Red Hill Bulk Fuel Storage Facility in Hawaii and to provide ongoing fuel transportation services to MSC in support of our nation's defense
  • Paramount Global (PARA): BET Media Group sale in doubt over price, according to NYPost
  • PayPal (PYPL) and KKR (KKR) announce an exclusive multi-year agreement for a €3 billion replenishing loan commitment
  • Perpetua Resources (PPTA) announces that the Company and the Nez Perce Tribe have an agreement in principle which outlines the provisions for a settlement of the Nez Perce Tribe's Clean Water Act lawsuit
  • Pinterest (PINS) and Aleph partner to serve advertisers in EMEA, LATAM and APAC
  • Precigen (PGEN) Receives Breakthrough Therapy Designation for PRGN-2012 AdenoVerse™ Immunotherapy for the Treatment of Recurrent Respiratory Papillomatosis
  • Quotient (QUOT) and Neptune Retail Solutions signed a definitive agreement to combine through Neptune’s all-cash acquisition of Quotient
  • Rhythm Pharmaceuticals (RYTM) Presents Data Demonstrating BMI Reduction in Patients with Hypothalamic Obesity Treated with Setmelanotide over Six Months at ENDO 2023
  • Rio Tinto (RIO) to invest in Kennecott operations near Salt Lake City to strengthen U.S. copper supply; $498 mln in funding approved
  • Rivian Automotive (RIVN) is selling trucks out of a factory lot, according to the Wall Street Journal
  • Sanofi (SNY) prevails in Zantac arbitration initiated by Boehringer Ingelheim
  • Seres Therapeutics (MCRB) and Nestlé Health Science Present Late-Breaking Data on VOWST, a Microbiota-Based Oral Therapeutic for Prevention of Recurrence of C. Difficile Infection in Adults, at ASM Microbe 2023
  • Silicon Valley Bank (SIVB) customers in Asia might be on hook for loans, according to the Wall Street Journal
  • Spectrum Brands (SPB) approved new $1 bln stock repurchase program (replaces prior program)
  • SSR Mining (SSRM) Announces Positive Exploration Results at Copper Hill
  • Stellantis (STLA) and Hon Hai Technology (HNHPF) announced the creation of SiliconAuto, a 50/50 joint venture dedicated to designing and selling a family of state-of-the-art semiconductors to supply the automotive industry
  • Stellantis (STLA) Archer move partnership from ‘concept phase’ to ‘execution phase’
  • Stellantis (STLA) limits gasoline powered car sales in 14 states amid emission rules, according to Bloomberg
  • STMicroelectronics (STM) and Airbus (EADSY) have signed an agreement to cooperate on power electronics Research & Development
  • Surmodics (SRDX) announced the receipt of FDA approval for the SurVeil drug-coated balloon; to receive $27 million milestone payment from Abbott (ABT)
  • Stratasys (SSYS) Board of Directors unanimously determines proposal from 3D Systems (DDD) does not constitute a superior proposal to its agreement with Desktop Metal (DM)
  • T-Mobile US (TMUS) on BofA TMT Conference mgmt says Q2 postpaid phone adds will be "at or above last year's Q2"
  • TC Energy (TRP) provides strategic alignment of 2023 priorities and energy transition
  • Tesla (TSLA) offers discounts on Model S and Model X, according to ElecTrek
  • Thomson Reuters (TRI) Receives Court Approval for Return of Capital Transaction
  • Triumph Group (TGI) selected to design and build main transmission prototype for piasecki aircraft PA-890 hydrogen-powered Evtol
  • UBS (UBS) will face hundreds of millions of dollars in penalties over Archegos Capital, according to Financial Times
  • United Airlines (UAL) provides United Next growth strategy update; Chief Growth Officer Gregory Hart will move into an advisory role providing guidance on near and long-term strategic issues
  • Vera Therapeutics (VERA) Announces Positive Week 36 Efficacy and Safety Results of Phase 2b ORIGIN Clinical Trial of Atacicept in IgAN in Late-Breaking Presentation at 60th European Renal Association (ERA) Congress
  • V.F. Corp (VFC) appoints Bracken Darrell as President and CEO
  • Volaris Aviation (VLRS) has disclosed 25 A321neo from a purchase agreement signed in October 2022
  • WISeKey (WKEY) and its subsidiary SEALSQ Corp. have commenced the implementation of an innovative solution for secure and seamless Electric Vehicle charging
  • Zynex (ZYXI) announces that the FDA has granted 510(k) market clearance for the company's CM-1600 blood and fluid volume monitoring device

(see Upgrades/Downgrades calendar for full list):

• Upgrades:
  • Avis Budget (CAR) upgraded to Overweight from Equal-Weight at Morgan Stanley; tgt raised to $230
  • Baidu (BIDU) upgraded to Overweight from Equal-Weight at Morgan Stanley; tgt raised to $190
  • Melco Resorts & Entertainment (MLCO) upgraded to Outperform from Neutral at Credit Suisse; tgt raised to $18.20
  • Studio City (MSC) upgraded to Outperform from Neutral at Credit Suisse; tgt raised to $11
• Downgrades:
  • Abcam (ABCM) downgraded to Sector Perform from Outperform at RBC Capital Mkts; tgt lowered to $22
  • Performance Food Group (PFGC) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt lowered to $66
• Others:
  • Arch Capital (ACGL) initiated with an Overweight at Morgan Stanley; tgt $92
  • Calliditas Therapeutics AB (CALT) initiated with a Buy at H.C. Wainwright; tgt $60
  • Element Solutions (ESI) initiated with an Outperform at BMO Capital Markets; tgt $23
  • Entegris (ENTG) initiated with an Outperform at BMO Capital Markets; tgt $129
  • Everest Re (RE) initiated with an Overweight at Morgan Stanley; tgt $429
  • Lemonade (LMND) initiated with an Underweight at Morgan Stanley; tgt $14
  • Manpower (MAN) initiated with a Buy at Redburn; tgt $94

• Econ Data (Tuesday):
  • 7:00 ET: Weekly MBA Mortgage Index (prior 7.2%)
  • 10:30 ET: Weekly crude oil inventories (prior +7.92 mln)
• Earnings:
  • Monday (June 19)
    • Pre-Market: None
    • After-Hours: None
  • Tuesday (June 20)
    • Pre-Market: None
    • After-Hours: FDX LZB
  • Wednesday (June 21)
    • Pre-Market: PDCO WGO
    • After-Hours: KBH SCS
  • Thursday (June 22)
    • Pre-Market: ACN CMC DRI FDS GMS
    • After-Hours:  SWBI
  • Friday (June 23)
    • Pre-Market: APOG KMX
    • After-Hours: None