| | | Market Snapshot
| Dow | 42515.09 | +317.30 | (0.75%) | | Nasdaq | 19701.22 | +294.39 | (1.52%) | | SP 500 | 6033.11 | +56.14 | (0.94%) | | 10-yr Note |
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| | NYSE | Adv 1818 | Dec 981 | Vol 1.15 bln | | Nasdaq | Adv 2929 | Dec 1541 | Vol 9.64 bln |
Industry Watch
| Strong: Technology, Financials, Communication Services, Consumer Discretionary |
| | Weak: Energy, Health Care, Utilities |
Moving the Market
-- Israel-Iran conflict continues without direct U.S. involvement
-- Potential for trade-related headlines from G7 meeting in Canada
-- Strength in semiconductor stocks
-- Mega-cap leadership
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Closing Stock Market Summary
16-Jun-25 16:15 ET
Dow +317.30 at 42515.09, Nasdaq +294.39 at 19701.22, S&P +56.14 at 6033.11
[BRIEFING.COM] The stock market regrouped today and reclaimed a portion of the losses it suffered Friday, comforted somewhat by an understanding that the Israel-Iran conflict remains relatively contained and has not led to any major disruption in oil supply lines.
In a related development, press reports suggested today that Iran is working diplomatic channels to try to negotiate a ceasefire agreement with Israel, although Israel has not expressed similar overtures.
The latter point notwithstanding, the stock market was imbued with a positive bias that was the strongest at today's open, which carried the S&P 500 as high as 6,050. Buyers, though, didn't maintain that early conviction. The major indices trended lower from those opening highs in a gradual manner over the remainder of the session but still ended the day comfortably above the unchanged line.
The gains were fortified by the outperformance of the mega-cap stocks, which registered in the leadership of the information technology (+1.5%), communication services (+1.5%), and consumer discretionary (+1.2%) sectors. The Vanguard Mega-Cap Growth ETF (MGK) was up 1.3% versus a 0.9% gain for the S&P 500.
Separately, the semiconductor stocks were the standout performers, particularly Advanced Micro Devices (AMD 126.40, +10.24, +8.82%), which rallied on a CNBC report that the company might have secured a GPU deal with Amazon (AMZN 216.17, +4.07, +1.92%). The Philadelphia Semiconductor Index surged 3.0%, leaving it up 23.3% for the quarter.
On the flip side, defense stocks and energy shares retreated from Friday's leadership positions as the market's angst about the Israel-Iran conflict eased.
The S&P 500 energy sector (-0.3%) traded lower in conjunction with WTI crude futures (71.83, -1.33, -1.8%). Relative weakness was also seen in the more defensive-oriented utilities (-0.5%), health care (-0.4%), and consumer staples (+0.02%) sectors.
Breadth figures favored advancers over decliners by a less than 2-to-1 margin at the NYSE and Nasdaq, with a narrowing in that edge as the session progressed.
- S&P 500: +2.6% YTD
- Nasdaq: +2.0% YTD
- DJIA: -0.1% YTD
- S&P 400: -2.7% YTD
- Russell 2000: -4.8% YTD
Reviewing today's economic data:
- The Empire State Manufacturing Survey for June was weaker than expected at -16.0 (Briefing.com consensus -6.6; prior -9.2), with the indexes for new orders and shipments both declining. This was the fourth consecutive decline in manufacturing activity in New York State; however, firms turned positive about conditions for the next six months.
Semis take charge
16-Jun-25 15:35 ET
Dow +251.68 at 42449.47, Nasdaq +278.54 at 19685.37, S&P +48.17 at 6025.14
[BRIEFING.COM] Heading into the final stages of trading, the major indices continue to drift lower (from higher levels). Fortunately, the information technology sector (+1.4%), which is the market's most heavily weighted sector, is outperforming and providing influential support that is underpinning today's gains.
Once again, the semiconductor stocks have a leading role in that showing. The Philadelphia Semiconductor Index is up 3.1%, drawing energy from big gains in Advanced Micro Devices (AMD 126.69, +10.53, +9.07%), onsemi (ON 53.75, +2.73, +5.35%), Monolithic Power (MPWR 707.24, +34.23, +5.09%), and Applied Materials (AMAT 176.08, +5.49, +3.22%).
NVIDIA (NVDA 144.63, +2.66, +1.87%) is putting together a nice gain in its own right but is trailing the group's performance.
Relative weakness in defensive sectors
16-Jun-25 15:00 ET
Dow +316.45 at 42514.24, Nasdaq +284.97 at 19691.80, S&P +55.00 at 6031.97
[BRIEFING.COM] The major indices have been unable to build on their opening gains and have trended lower in a gradual manner since those highs that took the S&P 500 to 6,050.
The pullback has not been associated with any strong pickup in selling interest. Rather, it has been more a case of fading buying interest. It would be remiss not to add that the major indices are all still comfortably above the unchanged mark in what has been a mostly risk-on tape.
Aside from the dip in the energy sector, the other pockets of relative weakness today can be spotted in the market's more defensive-oriented sectors, which include health care (-0.6%), utilities (-0.6%), and consumer staples (+0.1%).
Breadth figures have narrowed with the fading action, yet advancers still lead decliners by a roughly 2-to-1 margin at the NYSE and Nasdaq.
Oil prices and oil stocks take a turn lower
16-Jun-25 14:25 ET
Market is Closed
[BRIEFING.COM] Oil prices spiked Friday in response to Israel's airstrikes on Iran's nuclear facilities and a residual fear that the conflict will lead to oil supply disruptions.
The market's worst fears about the oil supply situation have not materialized following weekend bombings that, for the most part, left Iran's important oil facilities untouched. Accordingly, oil prices have turned lower in today's action.
WTI crude futures are down 1.4% to $71.92/bbl, while Brent crude futures are down 1.4% to $73.22/bbl.
The S&P 500 energy sector (-0.5%) is drifting lower in response, with Exxon Mobil (XOM 111.88, -0.24, -0.21%) and Chevron (CVX 145.57, -0.34, -0.23%) seeing modest losses.
Defense stocks on the defensive
16-Jun-25 14:00 ET
Dow +325.02 at 42522.81, Nasdaq +280.05 at 19686.88, S&P +53.91 at 6030.88
[BRIEFING.COM] There is broad-based participation in today's gains, although there are some pockets of weakness. While the S&P 500 industrial sector (+0.9%) is up, performing roughly in line with the market, the defense stocks within the sector are mostly lower.
Recall that the defense stocks were relative strength leaders on Friday when the Israel-Iran conflict started, but with a sense coming out of the weekend that the conflict is still contained and reports today suggesting Iran is hoping a ceasefire agreement can be reached soon, the defense stocks are seeing some selling interest.
Lockheed Martin (LMT 467.50, -18.95, -3.90%), Northrop Grumman (NOC 497.79, -18.93, -3.66%), L3Harris (LHX 249.07, -7.92, -3.08%), Huntington Ingalls (HII 228.70, -4.02, -1.73%) are among the notable laggards.
In related news, CNN is reporting that President Trump will not sign a G-7 statement calling for de-escalation between Israel and Iran, but there is some hope that he could eventually be persuaded.
Supernus Pharma bolsters neuropsychiatry pipeline with $795 mln Sage Therapeutics buyout (SUPN)
Following Supernus Pharma's (SUPN) $795 mln announced acquisition of Sage Therapeutics (SAGE), shares of SAGE are launching higher. The transaction includes a tender offer of $8.50 per share in cash, totaling approximately $561 mln, plus one non-tradable contingent value right (CVR) worth up to $3.50 per share, or $234 mln, contingent upon achieving specific net sales milestones for SAGE’s flagship product ZURZUVAE, ranging from $250 mln to $375 mln annually in the U.S. through 2030, and a commercial milestone tied to sales in Japan. This premium offer, significantly above SAGE’s closing price of $6.70 from last Friday, reflects strong investor optimism about the deal’s value and the potential for ZURZUVAE to meet these ambitious sales targets.
- Notably, SUPN is also trading higher, a rare occurrence for an acquiring company. This strength likely stems from SUPNs’ assertion that the acquisition will be significantly accretive to earnings in 2026, signaling confidence in its ability to integrate SAGE’s assets and realize substantial cost synergies, projected at up to $200 mln annually. The market’s positive response reflects investor belief that the acquisition will enhance its growth trajectory in the competitive central nervous system (CNS) market.
- Strategically, the acquisition of SAGE aligns seamlessly with SUPNs’ focus on developing and commercializing treatments for CNS disorders, significantly enhancing its neuropsychiatry portfolio. SAGE brings ZURZUVAE, the first FDA-approved oral medication for postpartum depression (PPD), which generated $36.1 mln in collaboration revenue in 2024 and $13.8 mln in 1Q25 through a partnership with Biogen (BIIB). This represents 50% of the net revenue recorded by BIIB and was a 21% increase from 4Q24. SUPN will assume this collaboration, securing half of ZURZUVAE’s U.S. net revenue, providing a new and growing revenue stream.
- Additionally, SAGE’s portfolio includes ZULRESSO, an intravenous treatment for PPD, and a pipeline of novel compounds targeting GABA receptors, such as SAGE-324 for chronic oral dosing. These assets complement SUPN’s existing products, including Qelbree (for ADHD), GOCOVRI (for Parkinson’s disease), and treatments for epilepsy and migraine, creating a diversified portfolio that strengthens its position in high-growth neuropsychiatric and neurological markets.
- Financially, SUPN is funding the $561 mln cash portion of the deal with its existing balance sheet, leveraging its strong liquidity position without immediate reliance on debt or equity issuance, which mitigates dilution risks for shareholders. The acquisition is expected to drive significant revenue growth primarily driven by ZURZUVAE’s commercial ramp-up. The deal’s accretive nature in 2026, combined with $200 mln in annual cost synergies, suggests improved margins and profitability, particularly as SUPN integrates SAGE’s high-margin products into its commercial infrastructure.
- However, SAGE’s recent 1Q25 net loss of $62.2 mln and a history of clinical trial setbacks highlight execution risks, though SUPN’s operational expertise and established CNS market presence should help mitigate these challenges.
In conclusion, SUPN’s acquisition of SAGE appears to be an excelling fit, enhancing its CNS portfolio with ZURZUVAE and complementary pipeline assets while promising significant financial accretion and cost synergies. The deal positions SUPN to capitalize on the growing neuropsychiatry market, leveraging its commercial prowess to drive long-term value for shareholders.
EchoStar soars as Trump intervenes in FCC spectrum dispute (SATS)
EchoStar (SATS) is surging following a Bloomberg report indicating that President Donald Trump intervened to facilitate a resolution between the company and the Federal Communications Commission (FCC) regarding its valuable wireless spectrum licenses. The optimism surrounding a potential deal stems from a meeting on June 12, 2025, where SATS Chairman Charlie Ergen met with FCC Chairman Brendan Carr, followed by a subsequent meeting at the White House with President Trump and Carr. The president’s involvement, urging a deal to prevent the bankruptcy of a major American company, has sparked investor confidence that SATS may retain its spectrum assets and stabilize its financial position.
- The FCC’s scrutiny of SATS began in May 2025, when Chairman Brendan Carr directed agency staff to investigate the company’s compliance with its obligations to deploy a nationwide 5G network, as stipulated under its spectrum licenses. These licenses, covering significant bands such as AWS-4, 600 MHz, 700 MHz, and 2 GHz, were tied to commitments made during the 2020 T-Mobile/Sprint merger, where SATS agreed to build a fourth national 5G network by June 14, 2025, covering at least 70% of the population for certain bands and 75% for others.
- The FCC’s probe questioned whether SATS met these buildout requirements or improperly sought extensions, raising the specter of license revocation—a severe penalty that could dismantle SAT’s wireless business. SATS has vehemently defended its efforts, claiming to have invested tens of billions in deploying thousands of 5G cell sites, covering 268 mln Americans, and argued that the FCC’s inquiry has created a “dark cloud of uncertainty” that hampers its ability to raise capital and continue network expansion. The company has been actively shielding its spectrum portfolio, which it acquired and developed at significant cost, from revocation threats, emphasizing its strategic importance to U.S. telecommunications and national security through its Open RAN 5G network, which excludes Chinese vendors.
- Adding to SAT’s challenges, U.S. satellite TV provider DirecTV terminated its agreement to acquire SAT’s satellite television business, including Dish TV, in 2024, due to a failed debt-exchange offer. This setback exacerbated SATS’s financial strain, as the company had already missed substantial interest payments, including a $326 ln payment due on May 30, 2025, citing uncertainty from the FCC’s ongoing review.
- Reports surfaced on June 6, 2025, that SATS was considering a Chapter 11 bankruptcy filing to protect its spectrum assets, a move that intensified market concerns and pressured the stock. These developments underscored the precarious financial position SATS faced prior to the reported White House intervention.
The potential resolution brokered by President Trump could be a pivotal turning point for SATS, significantly reducing the risk of bankruptcy and stabilizing its financial outlook. A deal preserving SAT’s spectrum licenses would not only safeguard its $7 bln investment in spectrum and network infrastructure but also restore investor confidence by alleviating regulatory uncertainty. The company’s ability to retain its licenses is critical, as they underpin its 5G network operations under the Boost Mobile brand and its broader telecommunications strategy. Furthermore, a favorable agreement could enhance SAT's access to capital markets, enabling it to address its debt obligations, including the missed interest payments within the 30-day grace period, and avoid a Chapter 11 filing.
Premier is dealing with rough conditions in healthcare, but has been repurchasing shares (PINC)
With it being a fairly slow news day, we wanted to profile a name that topped our YIELD Leaders rankings last Friday. Premier (PINC) is a healthcare improvement company. Basically, it partners with hospitals, health systems, physicians, employers, product suppliers to scale efficiencies, lower costs, improve supply chain processes etc.
- PINC concedes that it's operating in a challenging environment marked by rising costs, workforce shortages and reimbursement challenges. Its platform helps providers as they navigate the evolving landscape, from data and insights to AI-enabled decision support in the workflow. PINC has two operating segments, Supply Chain Services and Performance Services and they are each facing challenges.
- On the Supply Chain Services side, tariffs remain top of mind for its members and suppliers. Premier says it is the only healthcare company offering a fully integrated digital supply chain platform from sourcing to purchasing to payment. Its tech-first model is enabling faster, smarter, data-driven decisions that improve margins and support quality care delivery.
- In Performance Services, PINC is taking aggressive steps to reinvigorate the business amid short-term headwinds. PINC says it has recruited some of the industry's most seasoned operators, with track records of delivering enterprise-wide transformations with a focus on supply chain, labor reduction and quality improvement at large, complex health systems. PINC is rolling out more comprehensive offerings.
- PINC recently noted that a lot of people talk about nursing shortages, but it goes far beyond that to include radiation techs, pharm techs, core people that keep a hospital running. PINC says it clients are struggling quite a bit with labor shortages. Also, the possibility of Medicaid cuts are a concern with a potential $80 bln annual impact. As such, health care systems are going to have to think about how are they going to realign themselves so that they can absorb that kind of impact.
- Given the difficult conditions, Premier's recent earnings results have not been the greatest. The company has posted three consecutive quarters with yr/yr revenue declines. The silver lining is that revenue and profitability for Q3 (Mar) saw meaningful sequential growth and exceeded expectations, most notably in its Supply Chain Services segment.
The reason PINC tops our YIELD rankings is because management has been using the downturn to aggressively repurchase shares, which has resulted in a 22.3% share buyback yield. In addition, PINC pays a solid 3.7% dividend yield. The purpose of our YIELD report is to find companies that are returning cash to shareholders via buybacks and dividends. PINC's financial performance has struggled, but it is a god sign that it's buying back shares at a good clip.
PROS Holdings' plunge continues as debt restructuring sparks investor concerns (PRO)
PROS Holdings (PROS), a provider of AI-powered pricing, selling, and revenue management solutions, is selling off again today, continuing a dive that has seen shares plunge by 16% this week. A key driver of the weakness today is the company’s announcement of a debt restructuring agreement, exchanging approximately $186.9 mln of its 2027 Convertible Senior Notes for $185 mln in new 2030 Convertible Senior Notes, plus cash for accrued interest. This maneuver has amplified investor concerns about the company’s financial strength and growth prospects.
- Despite PROS also reaffirming its Q2 EPS and revenue guidance, this has done little to assuage market concerns. The debt restructuring extends the maturity of its convertible notes from 2027 to 2030, which could be interpreted as a proactive balance sheet management strategy to align with long-term growth plans. However, investors appear to view it as a signal of potential cash flow or liquidity challenges, particularly given the company’s modest cash generation relative to its debt obligations.
- Moreover, the convertible nature of these notes introduces the risk of future equity dilution, as they can be converted into shares, potentially reducing existing shareholders’ ownership. This dilution risk, combined with broader market volatility impacting small-cap technology stocks, has further eroded investor confidence, overshadowing the reaffirmed guidance.
- The company’s financial position provides additional context for the market’s reaction. In Q1, PROS generated only $1.2 mln in operating cash flow, while interest and amortization on its convertible debt totaled $1.1 mln for the quarter, leaving minimal headroom for capital expenditures or operational needs. This tight cash flow margin underscores the company’s constrained financial flexibility.
- Furthermore, PROS issued a disappointing Q1 earnings report on May 1 in which it issued downside guidance for Q2 as the company took a cautious approach in a complex selling environment amid rising macroeconomic uncertainty.
- Adding to the negative sentiment are recent executive shake-ups at PROS, which have raised concerns about leadership stability. On May 1, 2025, the company announced Jeff Cotten as its new CEO, signaling a shift in strategic direction but also introducing uncertainty about execution under new leadership. Before being named President and CEO, Cotten served as Chairman and previously as CEO of Alvaria, a company focused on customer experience and workforce engagement management solutions.
- Additionally, PROS disclosed that Chief Revenue Officer Todd McNabb and the company mutually agreed to part ways, further unsettling investors. These changes at the executive level, particularly in critical roles overseeing revenue generation and corporate strategy, suggest potential internal challenges or disagreements on growth priorities.
In summary, the weakness in PROS is driven by a confluence of factors: the debt restructuring agreement raising concerns about liquidity and dilution risk, reaffirmed Q2 guidance failing to inspire confidence, tight cash flow margins, disappointing Q1 results with soft Q2 guidance, and recent executive shake-ups signaling leadership instability. Investors will require tangible evidence of a clearer financial picture and operational improvements to restore confidence in the company’s long-term prospects.
RH surging today on better-than-feared Q1 report, a big turnaround from Q4 (RH)
RH (RH +12%) is surging following its Q1 (Apr) results after it reported a surprise profit when a loss was expected. What is surprising is that the stock for this luxury home furnishings company is sharply higher despite missing on Q1 revenue and guiding Q2 (Jul) revs below consensus. However, investors were thrilled that RH reaffirmed FY26 rev growth at +10-13% despite the tariff headwinds and despite RH calling this the worst housing market in almost 50 years.
- Our quick take is that these results were better than feared. Recall that the stock gapped 40% lower in early April following its Q4 (Jan) report, wherein RH offered some very ugly guidance. That report was just a day after President Trump announced his reciprocal tariffs on April 2. It's important to understand that nearly three-quarters of RH's products last year were sourced from Asia, including 35% from Vietnam, 23% from China, and the remainder from Indonesia and India. As such, investors were rightly alarmed when some of the highest reciprocal tariffs were on Vietnam, China, Indonesia, and India, charging 46%, 34%, 32%, and 26%, respectively.
- RH said last night, that due to the significant and unexpected Liberation Day Tariffs announced April 2, shipments and resourcing efforts were disrupted globally. In response, and in order to mitigate risk, RH announced last night that it would delay the launch of a new concept that was planned for the second half of 2025 to the Spring of 2026 when there should be more certainty regarding tariffs.
- In addition, RH has continued to shift sourcing out of China and expects receipts to decrease from 16% in Q1 to 2% in Q4 with a meaningful portion of the tariffs absorbed by vendor partners. RH has also resourced a significant portion of its upholstered furniture to its own North Carolina factory. RH is now projecting that 52% of its upholstered furniture will be produced in the US and 21% in Italy by the end of 2025.
- In terms of the Q1 results/Q2 guidance, the surprise profit looks to have been achieved by margins coming in at the high end of prior guidance. And while RH expects the tariff disruption will hurt Q2 revs by 6 points, RH expects that will be recovered in the second half. And that is why RH reaffirmed full year revenue guidance. Also, RH guided to full year free cash flow of $250-350 mln after not guiding for FCF last quarter. Furthermore, RH expects significant and growing cash flow from operations and lower cap-ex over the next several years as it cycles through this aggressive investment period.
Our overall take is that investors came into this Q1 report bracing for the worst after the stock got hit very hard last quarter. This report could not have gone much better. Not only did RH report a surprise profit, margins were good, the tariff impact on revs seems limited to Q2 with RH regaining those sales in 2H25. That was evident with RH reaffirming its full year outlook. Also, RH is making good progress on reducing sourcing from Asia. All in all, the report was much better than feared.
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