Market Snapshot
| Dow | 42215.80 | -299.29 | (-0.70%) | | Nasdaq | 19521.10 | -180.12 | (-0.91%) | | SP 500 | 5982.72 | -50.39 | (-0.84%) | | 10-yr Note |
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| | NYSE | Adv 874 | Dec 1879 | Vol 1.13 bln | | Nasdaq | Adv 1328 | Dec 3128 | Vol 8.56 bln |
Industry Watch
| Strong: Energy |
| | Weak: Health Care, Consumer Discretionary |
Moving the Market
-- Renewed geopolitical concerns after President Trump calls on residents of Tehran to evacuate the city
-- Disappointing retail sales for May
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Closing Stock Market Summary
17-Jun-25 16:20 ET
Dow -299.29 at 42215.80, Nasdaq -180.12 at 19521.10, S&P -50.39 at 5982.72
[BRIEFING.COM] The major indices shifted lower today, unable to build on yesterday's gains as geopolitical worries took over as a primary driver. Specifically, the day started on a cautious-minded note following the news that President Trump left the G-7 Summit abruptly to get back to Washington to attend to an evolving Israel-Iran conflict.
The president said in a Truth Social post that everyone should evacuate Tehran immediately. That set the tone for a soft start, along with the report that retail sales and industrial production were both weaker than expected in May. Selling efforts picked up in the afternoon, however, when the president took to Truth Social again to say that we (the U.S.) know where Iran's Supreme Leader is, that he is an easy target, but that we are not going to take him out (kill!) -- at least not for now. He added that "our patience is wearing thin."
These remarks were made as speculation swirled that the U.S. could possibly get involved in the conflict by dropping "bunker bombs" built by the U.S. and flown by the U.S. to destroy Iran's nuclear enrichment facilities that lie deep underground.
The president's comments quickly led to de-risking behavior that took the S&P 500 back below 6,000 and triggered additional safe-haven buying interest in Treasuries and the dollar. The 2-yr note yield settled the day down two basis points at 3.95%, while the 10-yr note yield dropped seven basis points to 4.39%. The U.S. Dollar Index was up 0.8% to 98.76.
Every S&P 500 sector was down today, with the exception of energy (+1.0%). It deviated from the pack, following WTI crude futures higher (73.27, +1.44, +2.0%), which did an about-face from Monday.
Health care (-1.6%) was the biggest sector laggard amid reports discussing the possibility of stricter disclosure rules and tighter regulations over pharmaceutical advertising and a Senate Finance Committee proposal for larger cuts to Medicaid spending than what was proposed by the House. Eli Lilly (LLY 791.27, -16.31, -2.02%) was caught up in the sector's weakness as it also announced an approximately $1.0-1.3 billion cash acquisition of Verve Therapeutics (VERV 11.38, +5.11, +81.50%).
There was some added attention on the underperformance of the consumer discretionary sector (-1.6%). Many components traded lower in a knee-jerk response to the retail sales report; however, the sector's homebuilding components were down on industry news that included an earnings miss and disappointing outlook from Lennar (LEN 104.61, -4.88, -4.46%) and a dour NAHB Housing Market Index for June, which dropped to 32 (Briefing.com consensus 36) from 34 in May.
Breadth figures reflected today's more risk-averse tone, as did the 12.7% increase in the CBOE Volatility Index to 21.54. Decliners led advancers by a better than 2-to-1 margin at the NYSE and Nasdaq.
- S&P 500: +1.7% YTD
- Nasdaq: +1.1% YTD
- DJIA: -0.8% YTD
- S&P 400: -3.4% YTD
- Russell 2000: -5.7% YTD
Reviewing today's economic data:
- Retail sales declined 0.9% month-over-month in May (Briefing.com consensus -0.6%) following a downwardly revised 0.1% decline (from 0.1%) in April. Excluding autos, retail sales fell 0.3% month-over-month (Briefing.com consensus 0.1%) following a downwardly revised unchanged reading (from 0.1%) in April.
- This was not a good report in terms of hard economic data. It reflected a more cautious-minded consumer, who, in general, pulled back spending on goods. Clothing and accessories store sales (+0.8%) were a surprising outlier, but otherwise, there was a retrenchment in spending in many discretionary categories, including electronics and appliance store sales (-0.6%) and food services and drinking places (-0.9%). This report will help support arguments that the Fed should be cutting rates soon.
- Industrial production fell 0.2% month-over-month in May (Briefing.com consensus 0.1%) following an upwardly revised 0.1% increase (from 0.0%) in April. The capacity utilization rate was 77.4% (Briefing.com consensus 77.7), down from an unrevised 77.7% in April. Total industrial production increased 0.6% yr/yr while the capacity utilization rate was 2.2 percentage points below its long-run average.
- The key takeaway from the report is that manufacturing output was little changed in May despite the announcement in early April that the reciprocal tariffs would be paused. The tepid activity is consistent with slower economic growth in its own right and likely also reflects the planning uncertainty that goes hand-in-hand with the tariff uncertainty.
- Import prices were unchanged in May after increasing 0.1% in April, while import prices, excluding oil, increased 0.3% after increasing 0.4% in April. Export prices fell 0.9% after increasing 0.1% in April, while export prices, excluding agriculture, fell 1.0% after rising 0.1% in April.
- The NAHB Housing Market Index fell to 32 in June (Briefing.com consensus 36) from 34 in May.
- Business Inventories were unchanged in April (Briefing.com consensus 0.0%) after rising a revised 0.1% (from 0.0%) in March.
Consumer discretionary sector running weak
17-Jun-25 15:35 ET
Dow -304.30 at 42210.79, Nasdaq -159.73 at 19541.49, S&P -46.34 at 5986.77
[BRIEFING.COM] The major indices are off their lows but remain in negative territory with the closing bell on the near horizon.
The consumer discretionary sector (-1.5%) has been lower throughout today's session. It had been down as much as 1.8% at its worst level of the day.
Homebuilding stocks have played a part in today's weakness, reacting to the earnings miss and relatively disappointing outlook from Lennar (LEN 105.18, -4.31, -3.94%), as well as a dour NAHB Housing Market Index for June, which dropped to 32 (Briefing.com consensus 36) from 34 in May.
PulteGroup (PHM 98.66, -3.76, -3.67%) and NVR (NVR 6997.11, -224.14, -3.10%) are other homebuilding components within the sector that are weak; however, it is Tesla (TSLA 317.40, -11.73, -3.56%) and Amazon (AMZN 215.08, -1.02, -0.47%) that are the key drags on the sector.
Risk aversion in play
17-Jun-25 15:00 ET
Dow -335.03 at 42180.06, Nasdaq -169.20 at 19532.02, S&P -47.71 at 5985.40
[BRIEFING.COM] The major indices have slid to new lows for the day in the past half hour, driven by increased geopolitical angst. That angst has been precipitated by reports that the U.S. could get involved directly in striking Iran's nuclear facilities.
Those reports haven't been validated, yet the market has nonetheless adopted a more risk-averse mindset than it had just a day ago.
The risk aversion is apparent in the afternoon selling of stocks, gains in the Treasury market that have pushed yields lower across the curve, and the advance by the U.S. Dollar Index to its session high (+0.8% to 98.80). Separately, the CBOE Volatility Index is up 13.4% to 21.67.
S&P 500 drops as ENPH, UAL lag on solar, travel concerns
17-Jun-25 14:30 ET
Dow -325.23 at 42189.86, Nasdaq -189.91 at 19511.31, S&P -51.83 at 5981.28
[BRIEFING.COM] The S&P 500 (-0.86%) is in second place on Tuesday afternoon, down about 52 points.
Briefly, S&P 500 constituents Enphase Energy (ENPH 35.36, -10.57, -23.01%), United Airlines (UAL 74.30, -4.22, -5.37%), and Adobe (ADBE 383.85, -17.88, -4.45%) dot the bottom of the standings. ENPH sinks after the Senate Finance Committee proposed phasing out solar and wind tax credits by 2028, a move that threatens the long-term economics of residential solar adoption, while UAL slides after JetBlue (JBLU 4.28, -0.29, -6.35%) warned of persistently weak domestic travel demand; pressure also stems from United's earlier decision to cut summer capacity, ongoing Newark hub issues, and rising fuel cost volatility tied to geopolitical tensions.
Meanwhile, Valero Energy (VLO 142.43, +4.67, +3.39%) is one of today's top gain getters, helped along today by a rise in crude oil prices.
Gold slips ahead of Fed decision as dollar gains, geopolitical tensions remain in focus
17-Jun-25 14:00 ET
Dow -269.69 at 42245.40, Nasdaq -163.96 at 19537.26, S&P -44.77 at 5988.34
[BRIEFING.COM] With about two hours to go on Tuesday afternoon the tech-heavy Nasdaq Composite (-0.83%) remains the worst laggard among the major averages.
Gold futures settled $10.40 lower (-0.3%) at $3,406.90/oz, marking a modest pullback from heightened levels driven by a mixture of safe-haven demand and shifting investor sentiment. Prices have been buoyed by escalating tensions in the Middle East, particularly flare-ups between Israel and Iran, as well as geopolitical rhetoric from President Trump, which have reinforced gold's appeal amid global uncertainty. At the same time, markets are positioning ahead of tomorrow's Federal Reserve rate policy announcement, with traders anticipating that while rates will likely hold, forward guidance on potential cutting paths could shape near-term yields and, in turn, bullion demand.
Meanwhile, the U.S. Dollar Index is up about +0.6% to $98.76.
Surgery Partners heads lower after failing to reach a buyout deal with Bain Capital (SGRY)
- Surgery Partners (SGRY -12%) is under pressure today after announcing it had concluded buyout discussions with Bain Capital without a deal being agreed to.
- Recall that in January, Bain Capital approached SGRY with a proposal to buy the company for $25.75 per share. Bain Capital is already a major shareholder and sought to acquire the remaining shares in SGRY it does not already own, but the two sides could not reach a deal.
- This operator of surgery centers, where patients can go for procedures outside of a hospital setting, ultimately determined that its prospects were better as an independent publicly traded company. SGRY cited its strong Q1 performance and noted that it's benefitting from favorable surgical trends and a bullish outlook on the regulatory landscape.
- We had thought that possible cuts in Medicaid might spur SGRY to make a deal. However, on its Q1 call last month, SGRY downplayed concerns about possible funding changes in Medicaid and exchange-based reimbursement programs as part of the currently debated tax bill. SGRY noted that its exposure to these payer groups is less than 5% of revenue, and it does not consider prospective changes to either program as a risk to its short or long-term growth prospects.
- Overall, SGRY sounded pretty confident about its ability to continue on its own as it reaffirmed its FY25 guidance this morning.
- Also, the $25.75 price tag did not offer much of a premium, even from where it was trading in late January. We were a little surprised that Bain Capital did not counter with a higher bid. Perhaps the fact that Bain did not do that is adding to today's slide in the share price.
Humana showing notable strength given its high exposure to Medicare Advantage (HUM)
- Most healthcare stocks are right around unchanged today, but Humana is showing more strength than others following the release of the Senate tax bill plan last night.
- The Senate bill makes larger cuts to Medicaid spending by setting Medicaid provider tax at 3.5% (House version of the bill set it at above 6%). However, the bill omitted Medicare Advantage cuts.
- It's this last part that is likely pushing HUM higher today.
- Humana is considered the health insurer most exposed to Medicare Advantage.
- In its 10-K, HUM disclosed that, in 2024, 75.6% of its revs came from Individual Medicare Advantage. Then when you add 6.6% of revs coming from Group Medicare Advantage, that adds up to 82.2% of revs.
- As such, investors see the Senate not touching Medicare Advantage as great news for Humana.
- However, keep in mind the bill is far from being finalized and the House needs to weigh in. However, this was a positive sign for Humana.
Jabil up big today on robust beat-and-raise; really leaning into AI and Data Centers (JBL)
Jabil (JBL +12%) is trading sharply higher following its Q3 (May) report this morning. It reported its largest core EPS beat in four years while revenue grew a healthy 15.7% yr/yr to $7.83 bln, well ahead of analyst expectations, and ending a string of seven consecutive top line yr/yr declines. Also, the mid-point of Q4 (Aug) was above expectations. Jabil also announced it will invest $500 mln over the next several years to expand its footprint in the Southeast US to support cloud and AI data center infrastructure customers.
- The upside in Q3 was largely driven by cloud and data center infrastructure. Also, both its Capital Equipment & Connected Living end markets saw higher than expected demand in Q3. EMS companies are known for having thin margins, so it was good to see Jabil's core operating margin expand to 5.4% from 5.2% a year ago.
- Its strongest growth came from its Intelligent Infrastructure segment, where revenue jumped 51% yr/yr to $3.4 bln. Growth continues to be driven by strong demand in its AI-related cloud and data center infrastructure business, including power, cooling and server rack offerings. Capital equipment was also strong in Q3 as the need for testing gear remains robust. This growth was offset slightly by lower demand in networking and communications end market due to softer 5G.
- Regulated Industries segment revs were flat yr/yr at $3.1 bln and in-line with prior guidance. This reflects ongoing softness in the EV and Renewable end markets, partially offset by growth in healthcare. Connected Living & Digital Commerce segment revenue was $1.3 bln, slightly higher than prior guidance, but still down 7% yr/yr due to softness in consumer-driven products, offset by growth in warehouse and retail automation.
- In terms of guidance, Jabil expects RI segment revs will be $2.9 bln, down 5% yr/yr, as it maintains a prudent near-term outlook on the EV and renewable markets. II segment revs are expected to be $3.3 bln, up 42% yr/yr, driven by broad-based AI-related growth in cloud data center infrastructure and capital equipment. And finally, its CL & DC segment is expected to see a 21% yr/yr decline in revs to $1.3 bln.
- Regarding the $500 mln investment, Jabil is in the final stages of site selection and expects it to be operational by mid-calendar year 2026. Recall that Jabil recently acquired Mikros Technologies, a provider of liquid cooling and thermal management offerings, so this investment builds on that. Mikros Technologies serves a wide range of industries, including AI data center infrastructure, energy storage, and semiconductor testing.
Clearly, investors are impressed with Jabil's huge Q3 beat and robust guidance this morning and that was despite tariffs and heightened geopolitical uncertainty. Jabil is benefitting from high growth secular trends such as AI and industrial automation. There are clearly some weak spots in terms EVs and 5G, but Jabil is offsetting that by really leaning into AI and Data Centers. Its Intelligent Infrastructure segment is now its largest segment and it's seeing huge growth. And the $500 mln investment shows that Jabil will keep growing this segment.
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.
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