The S&P 500 futures are down 2 point and are trading in-line with fair value. The Nasdaq 100 futures are down 18 points and are trading 0.2% below fair value. The Dow Jones Industrial Average futures are up 4 points and are trading slightly above fair value.
Equity futures are not doing much this morning. It's a bit of a wait-and-see trade with market participants looking to see if the market can build on yesterday's gain. Participants also await the ECB decision and Fed Chair Powell's discussion at the Cato Institute's 40th Annual Monetary Conference later this morning.
In overseas news, British Prime Minister Truss announced that a fracking ban will be lifted and that household energy bills will be limited to GBP2,500 per annum for the next two years.
Japan's Q2 GDP was better-than-expected at 3.5% year-over-year from the last reading of 2.2% year-over-year. Japan's deputy chief cabinet secretary said that the yen's movement is being watched with a strong sense of urgency. USD/JPY -0.2% to 143.46.
Energy complex futures are mixed after yesterday's sell-off. WTI crude oil futures are up 0.2% to $82.06/bbl. Natural gas futures are down 0.2% to $7.82/mmbtu.
Treasury yields are lower this morning. The 2-yr note yield is down four basis points to 3.41% while the 10-yr note yield is down five basis points to 3.22%.
In corporate news:
McCormick (MKC 79.46, -5.54, -6.52%): guides Q3 (Aug) EPS and revs below consensus and trims its FY22 outlook due to inflationary pressures resulting in higher price elasticity than expected as well as ongoing supply chain disruptions
American Eagle (AEO 10.06, -1.53, -13.20%): misses by $0.10, reports revs in-line; will pause dividend; plans to cut expenses and cap-ex
GameStop (GME 25.60, +1.56, +6.49%): beats by $0.07, misses on revs; enters into partnership with FTX, making company FTX's preferred retail partner in the U.S.
Casey's General (CASY 217.90, -3.50, -1.58%): beats by $0.41, reports revs in-line, inside comps +6.3%, fuel gallons comps -2.3%; reaffirms FY23 outlook of +4-6% inside comps and fuel gallons comps of flat to +2%
Asana (ASAN 23.54, +4.50, +23.63%): beats by $0.05, beats on revs; guides Q3 EPS in-line, revs above consensus; guides FY23 revs above consensus; expects to reach free cash flow positive before the end of CY24
Advanced Micro (AMD 80.44, +0.83, +1.04%): initiated with a Buy at Stifel
First Solar (FSLR 139.24, +4.44, +3.29%): upgraded to Buy from Sell at Goldman Sachs
Reviewing overnight developments:
Equity indices in the Asia-Pacific region ended Thursday on a mostly higher note. Japan's Nikkei: +2.3%, Hong Kong's Hang Seng: -1.0%, China's Shanghai Composite: -0.3%, India's Sensex: +1.1%, South Korea's Kospi: +0.3%, Australia's ASX All Ordinaries: +1.8%.
In economic data:
China's August FX Reserves $3.055 trln (expected $3.079 trln; last $3.104 trln)
Japan's Q2 GDP 0.9% qtr/qtr (expected 0.7%; last 0.5%); 3.5% yr/yr (expected 2.9%; last 2.2%). Q2 Capital Expenditure 2.0% qtr/qtr (expected 1.8%; last 1.4%) and Q2 Private Consumption 1.2% qtr/qtr (expected 1.1%; last 0.1%). July Current Account surplus JPY229 bln (expected surplus of JPY714 bln; last deficit of JPY132 bln). August Economy Watchers Current Index 45.5 (last 43.8)
Australia's July trade surplus AUD8.733 bln (expected surplus of AUD14.50 bln; last surplus of AUD17.13 bln). July Imports 5.0% m/m (last 0.7%) and Exports -10.0% yr/yr (last 4.9%)
New Zealand's Q2 Manufacturing Sales Volume -4.9% qtr/qtr (last -3.5%)
In news:
Evergrande's headquarters in Hong Kong have reportedly been seized by a lender.
Chinese health authorities are encouraging people to avoid travel during next National Day holidays at the start of October.
Japan's deputy chief cabinet secretary said that the yen's movement is being watched with a strong sense of urgency.
Reserve Bank of Australia Governor Lowe said that the case for slower rate hikes becomes clearer as rates rise.
Major European indices trade near their flat lines with Germany's DAX (-0.5%) struggling to keep up. STOXX Europe 600: +0.2%, Germany's DAX: -0.5%, U.K.'s FTSE 100: +0.1%, France's CAC 40: +0.2%, Italy's FTSE MIB: -0.3%, Spain's IBEX 35: -0.4%.
In economic data:
France's Q2 nonfarm payrolls 0.4% qtr/qtr (expected 0.5%; last 0.3%). July trade deficit EUR14.50 bln (expected deficit of EUR13.60 bln; last deficit of EUR13.10 bln). July Current Account deficit EUR5.30 bln (last deficit of EUR1.50 bln)
Swiss August Unemployment Rate 2.1% (expected 2.2%; last 2.2%)
In news:
British Prime Minister Truss announced that a fracking ban will be lifted and that household energy bills will be limited to GBP2,500 per annum for the next two years.
Germany is also expected to announce energy subsidies for households and businesses, though Germany's economy minister said that subsidies can't continue forever.
Germany's Institute for Solid State Research forecast a recession for next year.
The European Central Bank is expected to announce a 75-bps rate hike at 8:15 ET, followed by ECB President Lagarde's press conference at 10:15 ET.
U.S. equity futures:
S&P 500 Futures: -1 @ 3,978
DJIA Futures: +9 @ 31,590
Nasdaq 100 Futures: -14 @ 12,246
Overseas:
Europe: DAX -0.5%, FTSE +0.1%, CAC +0.2%
Asia: Nikkei +2.3%, Hang Seng -1.0%, Shanghai Composite -0.3%
Commodities:
Crude Oil +0.22 @ 82.22
Nat Gas -0.007 @ 7.835
Gold +9.35 @ 1737.15
Silver +0.325 @ 18.585
Copper +0.0837 @ 3.5142
U.S. Summary:
Earnings/Guidance:
AeroVironment (AVAV) reports Q1 (Jul) results, beats on revs; reaffirms FY23 EPS guidance, revs guidance
Altice USA (ATUS) appoints Dennis Mathew to position of CEO, effective October 3, 2022
American Eagle (AEO) misses by $0.10, reports revs in-line; will pause dividend; plans to cut expenses and cap-ex
ArcBest (ARCB) reports August 2022 consolidated revenues grew approximately 32% on a per day basis compared to August 2021
Asana (ASAN) beats by $0.05, beats on revs; guides Q3 EPS in-line, revs above consensus; guides FY23 revs above consensus; expects to reach free cash flow positive before the end of CY24
Bilibili (BILI) misses by CNY0.53, reports revs in-line; guides Q3 revs below consensus
Casey's General (CASY) beats by $0.41, reports revs in-line, inside comps +6.3%, fuel gallons comps -2.3%; reaffirms FY23 outlook of +4-6% inside comps and fuel gallons comps of flat to +2%
Cedar Fair (FUN) reports record revenues through Labor Day 2022
ChipMOS TECHNOLOGIES (IMOS) reports August revs declined 28.5% yr/yr to ~NT$1.72 bln
Clear Channel Outdoor (CCO) reaffirms guidance ahead of Investor Day
Copart (CPRT) beats by $0.03, beats on revs
Couchbase (BASE) beats by $0.09, beats on revs; guides Q3 revs in-line; guides FY23 revs above consensus
Dave & Buster's (PLAY) reports Q2 (Jul) results, beats on revs; comparable sales at Dave & Buster's branded stores increased 9.6% compared with the same period in 2019
Descartes (DSGX) reports EPS in-line, beats on revs
FuelCell Energy (FCEL) misses by $0.02, beats on revs
GameStop (GME) beats by $0.07, misses on revs
Lovesac (LOVE) misses by $0.02, beats on revs
McCormick (MKC) guides Q3 (Aug) EPS and revs below consensus and trims its FY22 outlook due to inflationary pressures resulting in higher price elasticity than expected as well as ongoing supply chain disruptions
Phreesia (PHR) beats by $0.08, beats on revs; guides FY23 revs in-line
Reynolds Consumer Products (REYN) sees Q3 revs at low end of previous guidance; reaffirms EPS
Taiwan Semiconductor Manufacturing (TSM) reports August revs increased 58.7% to NT$218.1 bln
Torrid (CURV) misses by $0.02, reports revs in-line; guides Q3 revs below consensus; expects FY23 revs of $1.26-1.30 bln
Verint Systems (VRNT) beats by $0.03, misses on revs; reaffirms FY23 EPS guidance, lowers FY23 revenue guidance
Yext (YEXT) beats by $0.02, beats on revs; guides Q3 EPS in-line, revs below consensus; guides FY23 EPS above consensus, revs below consensus
General News:
Iran nuclear deal talks hit another roadblock, according to CNN
Russian President Putin threatened to completely stop all energy supplies to Europe and "let them freeze", CNBC
Democrats are preparing to draft legislation that would ban former President Trump from running for office again, but efforts are unlikely to succeed, according to the New York Times
China extends Chengdu lockdown, according to Reuters
California avoids blackouts for another day, according to Bloomberg
UK Prime Minister Liz Truss removes ban on fracking and approves more oil drilling
UK Prime Minister Liz Truss temporarily suspends green levies; will limit household energy bills to GBP 2,500 a year for the next two years
FDA takes significant action to help expand access to monkeypox testing
22nd Century Group (XXII) eliminates the COO position; current COO Michael Zercher to leave company, effective September 30
AbbVie (ABBV) reports New MEASURE-AD Analyses Evaluate Clinical, Psychosocial and Economic Burdens in Atopic Dermatitis Patients
Air Lease (AL) announces lease placement of four new Airbus A321XLR aircraft with Air Transat
Alnylam (ALNY) Presents Positive Results from the APOLLO-B Phase 3 Study of Patisiran in Patients with ATTR Amyloidosis with Cardiomyopathy
Altria (MO): Jury Finds that Reynolds Vapor Company's Vuse Alto Infringes Altria Patents
Amazon (AMZN) will slow down hiring rate, according to the Wall Street Journal
AMC (AMC): Cineworld commences chapter 11 cases with approximately $1.94 billion in debtor-in-possession financing commitments to facilitate a significant de-leveraging transaction and position company for long-term growth
Amylyx Pharmaceuticals (AMLX) announces FDA Advisory Committee supports approval of AMX0035 for the treatment of ALS
Apple (AAPL): China Guiyang lockdown could have negative effects to Apple data center, according to Bloomberg
AT&T (T) provides updates at investment conference
Bed Bath & Beyond (BBBY) CFO Gustavo Arnal was overwhelmed before he took his life, according to the Wall Street Journal
Biogen (BIIB): The New England Journal of Medicine Publishes Second Manuscript Reporting Positive Phase 2 Results for Biogen's Litifilimab (BIIB059) in Lupus
BIO-TECHNE (TECH) PRESENTS INITIAL DATA ON SJGREN'S SYNDROME MONITORING ASSAY
Cardinal Health (CAH) announces pharmaceutical segment organizational changes
CareDx (CDNA) names Abhishek Jain as CFO, he had been interim CFO
Denison (DNN) Announces Expansion of High-Grade Uranium Mineralization at McClean Lake South
EMCOR Group (EME) companies awarded North American and European facilities portfolio contract with Siemens Energy
Endeavour Silver (EXK) Continues to Intersect Positive Drill Results at the Parral Project
Enthusiast Gaming Holdings (EGLX) announces strategic Web3 Collaboration with Coinbase (COIN)
Equinox Gold (EQX) reports an illegal blockade and suspension of operations at its Los Filos Mine
Erasca (ERAS) Presents Promising Preliminary Phase 1/1b Monotherapy Data for ERAS-007 ERK and ERAS-601 SHP2 Inhibitors Supporting Ongoing and Future Combination Trials
Exelixis (EXEL) Announces Detailed Results from Phase 3 COSMIC-313 Pivotal Trial in Patients with Previously Untreated Advanced Kidney Cancer at ESMO 2022
FREYR Battery (FREY) awarded an agreement to Italy-based NTE Process to supply a complete and integrated drying and powder handling system for FREYR's planned battery cell Gigafactory in Norway, known as Giga Arctic
GameStop (GME) enters into partnership with FTX, making company FTX's preferred retail partner in the U.S.
General Motors (GM) aiming to introduce direct consumer sales channel in China, according to Reuters
Gilead Sciences (GILD) reports Trodelvy significantly improved overall survival in pre-treated HR+/HER2- metastatic breast cancer patients in TROPiCS-02 Study
Google (GOOG) News Showcase feature is behind schedule, according to the Wall Street Journal
HUTCHMED (HCM) Highlights Phase III FRESCO-2 MRCT Data Summary of Fruquintinib in Refractory Metastatic Colorectal Cancer from the Upcoming ESMO 2022 Presentation
InflaRx (IFRX) announces vilobelimab phase III results in critically Ill COVID-19 patients published in the Lancet respiratory medicine
Innoviz Technologies (INVZ): Asian-based OEM selected INVZ to serve as LiDAR supplier for production passenger vehicles
Iridium Communications (IRDM) announced that it has reached an agreement with SpaceX to launch up to five of the company's remaining ground spare satellites from the Iridium NEXT program, on its Falcon 9 rocket
JetBlue Airways (JBLU): Air Emirates announces that its partnership with JetBlue ends on October 30, 2022
Linde plc (LIN) to increase green hydrogen production in the United States
MindMed (MNMD) Announces Positive Results from Collaborators' Placebo-Controlled Investigator-Initiated Trial Published in Peer-Reviewed Journal
Mirati Therapeutics (MRTX) Presents Late-Breaking Adagrasib Monotherapy and Combination Results in Advanced Colorectal Cancer
Momentus (MNTS) provided its fifth Mission Update on its inaugural Vigoride mission that launched on May 25
Olo Inc. (OLO) authorizes share repurchase program for up to $100 mln of common stock
Pfizer (PFE) awarded $4.85 bln U.S. Army modification contract
Quest Diagnostics (DGX) receives Emergency Use Authorization for proprietary Monkeypox test
Restaurant Brands Int'l's (QSR) exclusive operator of Tim Horton's coffee shops in China launches two ready-to-drink coffee products with Sinopec's Easy Joy convenience stores
Revance Therapeutics (RVNC) announces FDA approval of DAXXIFY for injection, the first and only peptide-formulated neuromodulator with long-lasting results
Silence Therapeutics (SLN) announces FDA fast track designation for SLN124, a novel investigational sirna therapy for the treatment of polycythemia vera
Silk Road Medical (SILK) Announces First Patient Enrolled in ROADSTER 3 Post Approval Study Evaluating TCAR System in the Treatment of Standard Surgical Risk Patients
Stantec (STN) to develop framework to analyze impacts of PFAS on wastewater
Sun Communities (SUI) announces COO transition; Bruce Thelen, current Executive Vice President of Operations and Sales, will assume COO role effective December 31, 2022
Tesla (TSLA) delivered 76,965 China manufactured vehicles in August, according to Bloomberg
Teva Pharma (TEVA) reports Studies Show Effectiveness of AJOVY (fremanezumab) for Treatment of Migraine in Patients With Co-morbid Depression
The ONE Group (STKS) authorizes a share repurchase program for up to $10 mln; will expire in two years, unless further extended
Tilray (TLRY) announced that Breckenridge Distillery, a part of the Company's U.S. business, has renewed and expanded its distribution agreement with Republic National Distributing Company
Toll Brothers (TOL) and Equity Residential to develop three new luxury rental communities in Dallas-Forth Worth area
Twitter (TWTR): Elon Musk will be allowed to amend Twitter countersuit, according to the Wall Street Journal
U.S. Xpress (USX) announces realignment plan primarily focused on improving its over-the-road operations; total costs expected to be reduced by approximately $25 mln on an annualized basis beginning in 4Q22
Vanda Pharma (VNDA) announced the notice of opportunity for an FDA hearing on Vanda's Supplemental New Drug Application for HETLIOZ
Veracyte (VCYT): New Data Suggest Veracyte's Envisia Genomic Classifier Can Help Predict Disease Progression in Interstitial Lung Disease Patients Treated with Combination Immunosuppressive Therapy
Verint Systems (VRNT) CFO Douglas Robinson to step down; Grant Highlander promoted to succeed Robinson during Q4 (Jan)
ViewRay (VRAY) announced that GenesisCare purchased two additional MRIdian MRI-guided radiation therapy systems for installation at new-build comprehensive cancer centres
Walmart Plus (WMT) members will now get a Paramount+ (PARA) Essential subscription at no extra cost
M&A:
Arcutis Biotherapeutics (ARQT) to acquire Ducentis BioTherapeutics for an upfront cash payment of approx. $16 mln and stock valued at approx. $14 mln, as well as future contingent payments
ManTech (MANT) shareholders approve previously proposed merger with Carlyle (CG)
MasterCraft (MCFT) announced that its NauticStar business was acquired by a subsidiary of Iconic Marine Group
Williams Cos (WMB) acquires NorTex Midstream from an affiliate of Tailwater Capital for $423 mln
Syndicate:
AGNC Investment (AGNC) prices 6 mln depositary share offering with a liquidation preference of $25 per share for gross proceeds of $150 mln
Ginkgo Bioworks (DNA) files for 3,178,887 share common stock offering by selling shareholders
Grid Dynamics (GDYN) files for $100 mln common stock offering
HighPeak Energy (HPK) files for 7,455,493 share common stock offering by selling shareholders
View (VIEW) files for 164,303,297 share common stock offering by selling shareholders, relates to warrants
Wayfair (W) to offer $600 mln in convertible notes in private offering
WPP plc (WPP) entered into a non-discretionary agreement with Citigroup in relation to the purchase by Citi of WPP's ordinary shares for an aggregate purchase price of up to 170 mln
IPOs:
Expected to Price:
No IPOs expected.
Gapping Up/Down
Gapping up:
ASAN +19.7%, BGXX +16.7%, GME +8.9%, INTA+8.8%, YEXT +7.4%, VRAY +3.4%, VNDA +2.2%, STKS+1.6%, HPK +1.5%, OLO +1.5%, MRTX +1.5%, ATUS+1%, QSR +1%, ABBV +1%, XXII +0.8%, VIEW +0.6%, ERAS +0.6%, TEVA +0.6%
Gapping down:
AEO -15%, SKIL -13.4%, CURV -13.2%, GDYN -9.3%, W -8.2%, DBVT -8%, BILI -6.3%, DSGX -6%, MKC-5.9%, VCYT -5.3%, VRNT -5.1%, AVAV -4.5%, CASY-3.8%, PHR -3.8%, FUN -3.6%, EXEL -2.7%, ARQT-2.5%, PLAY -2.4%, TSM -0.8%
Analyst Research (see Upgrades/Downgradescalendarfor full list):
Upgrades
Hexcel (HXL) upgraded to Equal-Weight from Underweight at Morgan Stanley; tgt raised to $68
Downgrades:
Church & Dwight (CHD) downgraded to Hold from Buy at Truist
Franklin Resources (BEN) downgraded to Underperform from Neutral at BofA Securities; tgt lowered to $25
Others:
Accolade (ACCD) assumed with an Overweight at Piper Sandler; tgt $12
Actinum Pharma (ATNM) initiated with an Overweight at Cantor Fitzgerald; tgt $20
Advanced Micro (AMD) initiated with a Buy at Stifel; tgt $122
Albireo Pharma (ALBO) initiated with a Buy at Guggenheim; tgt $55
Alignment Healthcare (ALHC) assumed with an Overweight at Piper Sandler; tgt $19
Alithya (ALYA) initiated with a Market Perform at BMO Capital Markets
Asensus Surgical (ASXC) initiated with an Overweight at Cantor Fitzgerald; tgt $1.50
Cadence Design (CDNS) initiated with a Hold at Stifel; tgt $200
Certara (CERT) initiated with a Buy at Berenberg; tgt $23
Chipotle Mexican Grill (CMG) initiated with an Outperform at Bernstein; tgt $2000
Intel (INTC) initiated with a Hold at Stifel; tgt $32
Lattice Semi (LSCC) initiated with a Hold at Stifel; tgt $60
NVIDIA (NVDA) initiated with a Hold at Stifel; tgt $165
Synopsys (SNPS) initiated with a Buy at Stifel; tgt $445
Upcoming Events:
Econ Data:
08:30 ET: Initial Claims for Sept 3 (Briefing.comConsensus 246K; Prior 232K)
08:30 ET: Continuing Claims for Aug 27 (Briefing.comConsensus NA; Prior 1438K)
10:30 ET: EIA Natural Gas Inventories for Sept 3 (Briefing.comConsensus NA; Prior +61 bcf)
11:00 ET: EIA Crude Oil Inventories for Sept 3 (Briefing.comConsensus NA; Prior -3.33 M)
15:00 ET: Consumer Credit for Jul (Briefing.comConsensus NA; Prior $40.1B)
Earnings:
Tuesday (Sep 6)
Morning: KC
Afternoon: COUP GTLB GWRE PATH
Wednesday (Sep 7)
Morning: ASO GIII KFY NIO REVG
Afternoon: AVAV AEO ASAN CASY CPRT BASE PLAY DSGX GME PHR CURV VRNT YEXT
Thursday (Sep 8)
Morning: BILI FCEL LOVE
Afternoon: AOUT DOCU AVO RH SWBI CXM ZS ZUMZ
Friday (Sep 9)
Morning: ABM KR
Asia & Europe detail:
Asia: Nikkei +2.3%, Hang Seng -1.0%, Shanghai Composite -0.3%
Equity indices in the Asia-Pacific region ended Thursday on a mostly higher note. Evergrande's headquarters in Hong Kong have reportedly been seized by a lender. Chinese health authorities are encouraging people to avoid travel during next National Day holidays at the start of October. Japan's deputy chief cabinet secretary said that the yen's movement is being watched with a strong sense of urgency. Reserve Bank of Australia Governor Lowe said that the case for slower rate hikes becomes clearer as rates rise.
In economic data:
China's August FX Reserves $3.055 trln (expected $3.079 trln; last $3.104 trln)
Japan's Q2 GDP 0.9% qtr/qtr (expected 0.7%; last 0.5%); 3.5% yr/yr (expected 2.9%; last 2.2%). Q2 Capital Expenditure 2.0% qtr/qtr (expected 1.8%; last 1.4%) and Q2 Private Consumption 1.2% qtr/qtr (expected 1.1%; last 0.1%). July Current Account surplus JPY229 bln (expected surplus of JPY714 bln; last deficit of JPY132 bln). August Economy Watchers Current Index 45.5 (last 43.8)
Australia's July trade surplus AUD8.733 bln (expected surplus of AUD14.50 bln; last surplus of AUD17.13 bln). July Imports 5.0% m/m (last 0.7%) and Exports -10.0% yr/yr (last 4.9%)
New Zealand's Q2 Manufacturing Sales Volume -4.9% qtr/qtr (last -3.5%)
---Equity Markets---
Japan's Nikkei: +2.3%
Hong Kong's Hang Seng: -1.0%
China's Shanghai Composite: -0.3%
India's Sensex: +1.1%
South Korea's Kospi: +0.3%
Australia's ASX All Ordinaries: +1.8%
---FX---
USD/JPY: -0.1% to 143.61
USD/CNH: UNCH at 6.9546
USD/INR: +0.1% to 79.67
Europe: DAX -0.5%, FTSE +0.1%, CAC +0.2%
Major European indices trade near their flat lines with Germany's DAX (-0.5%) struggling to keep up. British Prime Minister Truss announced that a fracking ban will be lifted and that household energy bills will be limited to GBP2,500 per annum for the next two years. Germany is also expected to announce energy subsidies for households and businesses, though Germany's economy minister said that subsidies can't continue forever. Germany's Institute for Solid State Research forecast a recession for next year. The European Central Bank is expected to announce a 75-bps rate hike at 8:15 ET, followed by ECB President Lagarde's press conference at 10:15 ET.
In economic data:
France's Q2 nonfarm payrolls 0.4% qtr/qtr (expected 0.5%; last 0.3%). July trade deficit EUR14.50 bln (expected deficit of EUR13.60 bln; last deficit of EUR13.10 bln). July Current Account deficit EUR5.30 bln (last deficit of EUR1.50 bln)
Swiss August Unemployment Rate 2.1% (expected 2.2%; last 2.2%)
---Equity Markets---
STOXX Europe 600: +0.2%
Germany's DAX: -0.5%
U.K.'s FTSE 100: +0.1%
France's CAC 40: +0.2%
Italy's FTSE MIB: -0.3%
Spain's IBEX 35: -0.4%
---FX---
EUR/USD: +0.1% to 1.0013
GBP/USD: UNCH at 1.1535
USD/CHF: -0.3% to 0.9729