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06/09/23 Briefing


The S&P 500 futures are up 3 points and are trading 0.2% above fair value. The Nasdaq 100 futures are up 15 points and are trading 0.1% above fair value. The Dow Jones Industrial Average futures are up 39 points and are trading 0.1% above fair value.

Yesterday's afternoon bounce has carried over this morning. Stock futures have a positive disposition, keying off the notion that the market is still oversold in the short-term and due for a bounce. Things could shift, though, after the release of the September employment report at 8:30 a.m. ET.

Market participants will be closely watching the reaction of the Treasury market to this morning's data. The 2-yr note yield is up two basis points currently to 5.03% and the 10-yr note yield is up three basis points to 4.74%. The U.S. Dollar Index is down 0.1% to 106.28.

Separately, WTI crude oil futures are flattish this morning, up 0.1% to $82.35/bbl. Copper futures are up 1.4% to $3.60/lb.

In corporate news:

  • Exxon (XOM 106.52, -2.47, -2.3%): close to deal to purchase Pioneer Natural Resources (PXD) for $60 bln, according to the WSJ

  • Amazon (AMZN 126.27, +0.31, +0.3%): will offer free grocery delivery on orders above $100, accoridng to Bloomberg

  • Tesla (TSLA 256.29, -3.76, -1.5%): lowers prices on Model 3 and Y vehicles, according to Reuters

  • Levi Strauss (LEVI 13.098, -0.12, -0.9%): beats by $0.01, misses on revs; guides FY23 EPS to lower end of prior guidance; lowers FY23 revenue guidance; commences initiative to review operating model and cost structure

  • Disney (DIS 81.21, +0.40, +0.5%): Bernstein initiated coverage with an Outperform rating

  • Juniper Networks (JNPR 25.65, +0.09, +0.3%): discloses in SEC filing that it approved a restructuring plan, including headcount reduction of 440 employees; total estimated costs to be incurred by the plan are approximately $59 mln

  • MGM Resorts (MGM 35.00, +0.21, +0.6%): provides update on recent cybersecurity issue

  • HP Inc. (HPQ 26.08, -0.15, -0.6%): 10% owner Berkshire Hathaway (Warren Buffett) sold another 3,067,508 shares at $26.025 - $26.60 worth more than $80 mln (transaction date 10/3)

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended the week on a mostly positive note. Japan's Nikkei: -0.1% (-2.4% for the week), Hong Kong's Hang Seng: +1.6% (-1.8% for the week), China's Shanghai Composite: CLOSED, India's Sensex: +0.6% (+0.3% for the week), South Korea's Kospi: +0.2% (-2.3% for the week), Australia's ASX All Ordinaries: +0.4% (-1.5% for the week).

  • In economic data:

  • Japan's August Household Spending 3.9% m/m (expected 0.9%; last -2.7%) and -2.5% yr/yr (expected -4.3%; last -5.0%); August Leading Index 1.3% m/m (last -0.6%)

  • Australia's Retail Sales 0.2% m/m (expected 0.2%; last 0.5%)

  • In news:

  • China's stock market remained closed for holiday, as it has been all week, but will be open for trading again on Monday.

  • The Reserve Bank of India left its repurchase rate unchanged at 6.50%, as expected, but made note of inflation risks and said it might sell bonds, according to Bloomberg.

  • The Reserve Bank of Australia, meanwhile, indicated in its Financial Stability Assessment that global financial stability risks are elevated, reflecting challenging macroeconomic conditions.

  • Japan's Ministry of Finance continues to refrain from saying that it intervened in currency market to stem the yen's weakness.

  • The Washington Post reports that President Biden and President Xi are likely to meet next month at the APEC San Francisco summit.

  • Major European indices are attempting to close out a tough week on a winning note. STOXX Europe 600: +0.7% (-1.4% for the week), Germany's DAX: +0.9% (-1.2% for the week), U.K.'s FTSE 100: +0.4% (-1.7% for the week), France's CAC 40: +0.8% (-1.1% for the week), Italy's FTSE MIB: +1.1% (-1.6% for the week), Spain's IBEX 35: +0.6% (-2.3% for the week).

  • In economic data:

  • Germany's August Factory Orders 3.9% m/m (expected 1.8%; last -11.3%)

  • Italy's August Retail Sales -0.4% m/m (expected 0.0%; last 0.4%) and 2.4% yr/yr (last 2.8%)

  • UK's September Halifax House Price Index -0.4% m/m (expected -0.8%; last -1.8%) and -4.7% yr/yr (last -4.5%)

  • France's August Trade Balance -EUR8.2 bln (expected -EUR8.9 bln; last -EUR8.1 bln)

  • Switzerland's September Unemployment Rate 2.1% (expected 2.1%; last 2.1%)

  • In news:

  • Major bourses are trading higher in front of the U.S. employment report, bolstered by some buy-the-dip interest that was facilitated by a stronger-than-expected German factory orders report for August.

  • ECB member Schnabel said she is not ruling out additional rate hikes, noting that she still sees upside risks to inflation, according to Reuters.

  • Bloomberg reports the US and the EU are working on a potential deal to avoid a restart of Trump-era tariffs on steel and aluminum trade next year. EUR/USD +0.1% to 1.0552.

 

U.S. equity futures:

  • S&P 500 Futures +4 @ 4,262

  • DJIA Futures: +39 @ 33,159

  • Nasdaq 100 Futures: +20 @ 14,788

Overseas:

  • Europe: DAX +0.9%, FTSE +0.4%, CAC +0.8%

  • Asia: Nikkei -0.1%, Hang Seng +1.6%, Shanghai Composite CLOSED

Commodities:

  • Crude Oil -0.03 @ 82.28

  • Nat Gas +0.047 @ 3.213

  • Gold +3.75 @ 1835.55

  • Silver +0.258 @ 21.275

  • Copper +0.0510 @ 3.6030


 

Earnings/Guidance:

  • Aehr Test Systems (AEHR) beats two analyst estimate by $0.02, beats on revs, reaffirms FY24 revenue guidance

  • APA Corporation (APA) Provides Third-Quarter 2023 Supplemental Information

  • ChipMOS TECHNOLOGIES (IMOS) reports Sep revs increased 20.2% yr/yr; Q3 revs below consensus

  • Levi Strauss (LEVI) beats by $0.01, misses on revs; guides FY23 EPS to lower end of prior guidance; lowers FY23 revenue guidance; commences initiative to review operating model and cost structure

  • Regeneron Pharma (REGN) expects approximately $0.78 adverse impact to Q3 non-GAAP EPS due to an IPR&D charge of $100 mln on a pre-tax basis

  • Sandstorm Gold (SAND) announces Q3 sales; sold approximately 21,100 attributable gold equivalent ounces and realized preliminary revenue of $41.2 mln, below the two estimate consensus of $43.62 mln

  • Taiwan Semiconductor Manufacturing (TSM) reports September revenue -13.4% yr/yr to NT 180.43 bln

  • United Micro (UMC) reports September revs declined 24.5% yr/yr to NT$19.05 bln

News:

  • Former President Trump endorsed Rep. Jim Jordan for Speaker of the House. Mr. Trump also said he would accept the House Speaker job on an interim basis if Republicans need additional time to elect Rep. Jim Jordan, according to Politico

  • Speaker nominee Rep. Jim Jordan says he is against Ukraine funding, according to the New York Times

  • The Biden administration is expected to soon tighten chip tool restrictions against China, according to Reuters

  • Russia removes ban on diesel exports, according to Reuters

  • Alphabet (GOOG) said to prevent Samsung (SSNLF) from installing Branch Metrics' software to its Android phones, according to Reuters

  • Amazon (AMZN) will offer free grocery delivery on orders above $100, according to Bloomberg

  • AMC Entertainment (AMC) announced that as of Oct 4, the Taylor Swift concert film has sold over $100 mln in advance tickets globally

  • Amylyx Pharmaceuticals (AMLX) Provides Update on Accs Compassionnel for AMX0035 in France

  • Apogee Enterprises (APOG) increased the existing share repurchase authorization by 2 mln shares, bringing the total available to approximately 2.97 mln

  • Artivion (AORT) announces presentation of late-breaking interim data from AMDS PERSEVERE Trial at the 37th European Aassociation for Cardio-Thoracic Surgery annual meeting

  • Artivion (AORT) announces presentation of real world data from post market study of on-X Aortic heart valve replacement patients treated with low dose warfarin

  • Bitdeer (BTDR) announces September 2023 operations updates

  • Cisco (CSCO) simplifies product category and customer market reporting

  • Fluor (FLR) awarded a contract by Cormorant Clean Energy, LLC for the construction of a low-carbon blue ammonia production facility; to be recognized in 3Q23

  • Goldman Sachs (GS) will begin construction on new Dallas, Texas campus on Tuesday, according to Bloomberg

  • Granite Constr (GVA) awarded a contract valued at approximately $45 mln by the Utah Department of Transportation

  • Grupo Aeroportuario Del Sureste (ASR) announces that passenger traffic for September 2023 reached a total of 4.9 mln passengers, 0.8% above the levels reported in September 2022

  • Hawaii Electric (HE) wildfire safety plan was only recently shared with regulators, according to the Wall Street Journal

  • HIVE Digital Technologies (HIVE) provides September production update and purchase of 1,000 S19k Pro ASICs

  • Intel (INTC) appoints Sandra Rivera as CEO of Programmable Solutions Group, its standalone business, effective January 1, 2024

  • Iris Energy (IREN) increases mining capacity by 25%, expanding fleet to 7.0 EH/s. Acquisition of latest-generation Bitmain S21 miners

  • Juniper Networks (JNPR) discloses in SEC filing that it approved a restructuring plan, including headcount reduction of 440 employees; total estimated costs to be incurred by the plan are approximately $59 mln

  • MGM Resorts (MGM) provides update on previously announced cyberattack; operations at its domestic properties have returned to normal; expects $100 mln imapct to adjusted Property EBITDAR

  • Micron (MU) starting construction on memory fab in Idaho; expected to come online in phases starting in 2025, with DRAM production ramping over the second half of the decade

  • Northrop Grumman (NOC) awarded $235 mln U.S. Air Force contract modification

  • OpenAI considers making its own artificial intelligence chips, according to Reuters

  • PayPal (PYPL): Venmo gift cards feature is now available to eligible customers through a collaboration with InComm InCentives

  • Philips (PHG): FDA provides update on Philips June 2021 recall and maintains recommendations related to potential health risks of PE-PUR foam

  • Pfizer (PFE) presents new data at IDWeek 2023 highlighting advances in prevention and treatment of certain respiratory illnesses and other infectious diseases

  • Snap (SNAP): UK Information Commissioner issues preliminary enforcement notice against Snap

  • Tesla (TSLA) lowers prices on Model 3 and Y vehicles, according to Reuters

  • Worthington (WOR) announces expansion of its Tempel Steel facility in Apodaca, Mexico

M&A:

  • Accretion Acquisition Corp (ENER) and New Era Helium announce Letter of Intent for proposed business combination

  • Bunge (BG) shareholders approve the previously announced acquisition of Viterra Limited, including the issuance of 65,611,831 common shares

  • Exxon (XOM) close to deal to purchase Pioneer Natural Resources (PXD) for $60 bln, according to the Wall Street Journal

  • FAST Acquisition Corp. II (FZT) closes previously announced combination with Falcon's Beyond Global, LLC; will trade on Nasdaq on October 6 under the symbol "FBYD"

  • Flowserve (FLS) announces that the French Ministry of Economy has rejected its acquisition of Velan Inc

  • Microsoft (MSFT) could close deal to purchase Activision (ATVI) by next week, according to Verge

Syndicate:

  • Haleon plc (HLN): GSK completes sale of shares in Haleon

  • Rivian Automotive (RIVN) prices offering of $1.5 bln of 3.625% green convertible senior notes due 2030

IPOs:

  • Priced to Trade:

  • No IPOs expected.

Gapping Up/Down

  • Gapping up:

  • SAND +3.2%, AMC +2.9%, SHEL +1.3%, MGM+1%, TSM +0.9%, BG +0.8%, MU +0.8%, HIVE+0.7%, RIVN +0.7%, PYPL +0.6%

  • Gapping down:

  • AEHR -11.8%, PKE -8.5%, KTB -3.5%, AMLX-2%, FLR -1.9%, HLN -1.9%, LEVI -1.8%, REGN -0.6%

 

Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

  • Apellis Pharmaceuticals (APLS) upgraded to Overweight from Neutral at JP Morgan; tgt raised to $81

  • Eaton (ETN) upgraded to Overweight from Neutral at JP Morgan; tgt $230

  • Trane (TT) upgraded to Neutral from Underweight at JP Morgan; tgt $191

  • Wesco (WCC) upgraded to Overweight from Neutral at JP Morgan; tgt $180

  • Downgrades:

  • AutoZone (AZO) downgraded to Perform from Outperform at Oppenheimer; tgt lowered to $2600

  • Carrier Global (CARR) downgraded to Underweight from Neutral at JP Morgan; tgt $53

  • O'Reilly Auto (ORLY) downgraded to Perform from Outperform at Oppenheimer; tgt lowered to $930

  • Others:

  • AMC Networks (AMCX) initiated with a Buy at Seaport Research Partners; tgt $16

  • Comcast (CMCSA) initiated with a Buy at Seaport Research Partners; tgt $53

  • Fox Corporation (FOXA) initiated with a Neutral at Seaport Research Partners

  • fuboTV (FUBO) initiated with a Neutral at Seaport Research Partners

  • ImmunoGen (IMGN) initiated with a Perform at Oppenheimer; tgt $16

  • Netflix (NFLX) initiated with a Buy at Seaport Research Partners; tgt $482

  • Paramount Global (PARA) initiated with a Buy at Seaport Research Partners; tgt $17

  • Walt Disney (DIS) initiated with a Buy at Seaport Research Partners; tgt $93

  • Warner Bros. Discovery (WBD) initiated with a Buy at Seaport Research Partners; tgt $19

Econ Data:

  • 08:30 ET: Nonfarm Payrolls for Sep (Briefing.comConsensus 158K; Prior 187K)

  • 08:30 ET: Nonfarm Private Payrolls for Sep (Briefing.comConsensus 150K; Prior 179K)

  • 08:30 ET: Avg. Hourly Earnings for Sep (Briefing.comConsensus 0.3%; Prior 0.2%)

  • 08:30 ET: Unemployment Rate for Sep (Briefing.comConsensus 3.7%; Prior 3.8%)

  • 08:30 ET: Average Workweek for Sep (Briefing.comConsensus 34.4; Prior 34.4)

  • 15:00 ET: Consumer Credit for Aug (Briefing.comConsensus $12.0B; Prior $10.4B)

Earnings:

  • Tuesday (Oct 3)

  • Morning: MKC

  • Afternoon:  CALM

  • Wednesday (Oct 4)

  • Morning:  ANGO HELE RPM TLRY

  • Afternoon:  ACCD RGP

  • Thursday (Oct 5)

  • Morning: CAG STZ LW

  • Afternoon:  LEVI

 

Asia & Europe detail:

Asia: Nikkei -0.1%, Hang Seng +1.6%, Shanghai Composite CLOSED

Equity indices in the Asia-Pacific region ended the week on a mostly positive note. China's stock market remained closed for holiday, as it has been all week, but will be open for trading again on Monday. The Reserve Bank of India left its repurchase rate unchanged at 6.50%, as expected, but made note of inflation risks and said it might sell bonds, according to Bloomberg. The Reserve Bank of Australia, meanwhile, indicated in its Financial Stability Assessment that global financial stability risks are elevated, reflecting challenging macroeconomic conditions. Japan's Ministry of Finance continues to refrain from saying that it intervened in currency market to stem the yen's weakness. The Washington Postreports that President Biden and President Xi are likely to meet next month at the APEC San Francisco summit.

  • In economic data:

  • Japan's August Household Spending 3.9% m/m (expected 0.9%; last -2.7%) and -2.5% yr/yr (expected -4.3%; last -5.0%); August Leading Index 1.3% m/m (last -0.6%)

  • Australia's Retail Sales 0.2% m/m (expected 0.2%; last 0.5%)

---Equity Markets---

  • Japan's Nikkei: -0.1% (-2.4% for the week)

  • Hong Kong's Hang Seng: +1.6% (-1.8% for the week)

  • China's Shanghai Composite: CLOSED

  • India's Sensex: +0.6% (+0.3% for the week)

  • South Korea's Kospi: +0.2% (-2.3% for the week)

  • Australia's ASX All Ordinaries: +0.4% (-1.5% for the week)

---FX---

  • USD/JPY: +0.4% to 149.03

  • USD/CNH: UNCH at 7.3053

  • USD/INR: -0.2% to 83.183

 

Europe: DAX +0.9%, FTSE +0.4%, CAC +0.8%

Major European indices are attempting to close out a tough week on a winning note. Major bourses are trading higher in front of the U.S. employment report, bolstered by some buy-the-dip interest that was facilitated by a stronger-than-expected German factory orders report for August. ECB member Schnabel said she is not ruling out additional rate hikes, noting that she still sees upside risks to inflation, according to Reuters. Bloomberg reports the US and the EU are working on a potential deal to avoid a restart of Trump-era tariffs on steel and aluminum trade next year. EUR/USD +0.1% to 1.0552.

  • In economic data:

  • Germany's August Factory Orders 3.9% m/m (expected 1.8%; last -11.3%)

  • Italy's August Retail Sales -0.4% m/m (expected 0.0%; last 0.4%) and 2.4% yr/yr (last 2.8%)

  • UK's September Halifax House Price Index -0.4% m/m (expected -0.8%; last -1.8%) and -4.7% yr/yr (last -4.5%)

  • France's August Trade Balance -EUR8.2 bln (expected -EUR8.9 bln; last -EUR8.1 bln)

  • Switzerland's September Unemployment Rate 2.1% (expected 2.1%; last 2.1%)

---Equity Markets---

  • STOXX Europe 600: +0.7% (-1.4% for the week)

  • Germany's DAX: +0.9% (-1.2% for the week)

  • U.K.'s FTSE 100: +0.4% (-1.7% for the week)

  • France's CAC 40: +0.8% (-1.1% for the week)

  • Italy's FTSE MIB: +1.1% (-1.6% for the week)

  • Spain's IBEX 35: +0.6% (-2.3% for the week)

---FX---

  • EUR/USD: +0.1% to 1.0552

  • GBP/USD: +0.2% to 1.2208

  • USD/CHF: -0.1% to 0.9116

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