13/11/23 Briefing

The S&P 500 futures are down 8 points and are trading 0.2% below fair value. The Nasdaq 100 futures are down 37 points and are trading 0.2% below fair value. The Dow Jones Industrial Average futures are down 38 points and are trading 0.1% below fair value.

Stock futures indicate a lower open after the cash market's higher finish last week. Notable strength in Boeing (BA) following a slew of new orders at the Dubai Airshow and a Bloomberg report that China may soon announce the purchase of the 737 Max has offered some offsetting support this morning. 

Market participants are looking ahead to some market-moving events this week, including earnings from Walmart (WMT), Target (TGT), and other retailers. The economic calendar features the October Consumer Price Index report on Tuesday and the October retail sales report on Thursday.

The 2-yr note yield is unchanged from Fridayat 5.05% and the 10-yr note yield is up one basis point at 4.64%. Notably, after Friday'sclose Moody's changed its outlook on US ratings to negative from stable, but affirmed Aaa ratings.

In corporate news:

• Boeing (BA 203.21, +6.56, +3.3%): Emirates orders nearly 100 more Boeing Widebody Airplanes; announces flydubai Ordered 30 Boeing 787 Dreamliners; announces agreement with SunExpress to buy up 90 Boeing 737 MAX Jets; China considers ending freeze on Boeing (BA) with new 737 Max deal, according to Bloomberg

• HP Inc. (HPQ 28.15, +0.53, +1.9%): upgraded to Buy from Neutral at Citi

• Tower Semi (TSEM 23.23, -1.30, -5.3%): reports Q3 (Sep) results, revs in-line; guides Q4 revs below consensus

• Novo Nordisk (NVO 100.18, -1.01, -1.0%): reports Semaglutide 2.4 mg (Wegovy) cardiovascular outcomes data presented at American Heart Association Scientific Sessions and simultaneously published in New England Journal of Medicine

• Tyson Foods (TSN 45.35, -1.60, -3.4%): beats by $0.08, misses on revs; guides FY23 revs below consensus

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region had a mixed showing to begin the week. Japan's Nikkei: flat, Hong Kong's Hang Seng: +1.6%, China's Shanghai Composite: +0.3%, India's Sensex: -0.5%, South Korea's Kospi: -0.2%, Australia's All Ordinaries: -0.4%.

• In economic data:

• Japan's October PPI -0.4% month-over-month (expected 0.0%; last -0.2%) and 0.8% yr/yr (expected 0.9%; last 2.2%); October Machine Tool Orders -20.6% yr/yr (last -11.2%)

• China's October New Loans CNY738.4B (expected CNY665.0B; last CNY2310.0B)

• In news:

• Hong Kong's Hang Seng (+1.6%) outperformed on the back of strength in its tech components.

• Saturday was Singles Day (11/11) in China.

• Reports suggest sales gains were seen across major e-commerce platforms with deep discounts helping to spur spending.

• China's President Xi will be at the APEC Summit in San Francisco this week. He is confirmed to meet with President Biden on Wednesday with a reported aim for the two leaders to ease diplomatic tension between the two governments.

• On a related note, Bloomberg reports that China may soon make a purchase announcement for Boeing's 737 Max, which would be the first purchase since 2018.

• USD/JPY reached its highest level since October 2022 as Japan reported a month-over-month decline in October PPI. USD/JPY +0.2% to 151.72.

• Major European indices are trading with a modestly positive bias to begin the week. STOXX Europe 600: +0.5%, Germany's DAX: +0.1%, U.K.'s FTSE 100: +0.6%, France's CAC 40: +0.2%, Italy's FTSE MIB: +0.9%, Spain's IBEX 35: +0.6%.

• In economic data:

• Germany's September Current Account Balance EUR28.1B (last EUR22.8B)

• UK's November Rightmove House Price Index -1.3% yr/yr (last -0.8%)

• In news:

• UK Prime Minister Sunak fired home secretary Braverman and, in a major surprise, announced former prime minister David Cameron will be foreign secretary.

• Staying in the UK, the Rightmove House Price Index saw its biggest decline (-1.3% yr/yr) in five years.

• ECB member de Guindos says inflation may pick up again temporarily, but that he won't pre-judge any future movement in interest rates before adding that talk about rate cuts is premature, according to Bloomberg.

U.S. equity futures:

• S&P 500 Futures -8 @ 4,407

• DJIA Futures: -30 @ 34,253

• Nasdaq 100 Futures: -36 @ 15,493

Overseas:

• Europe: DAX +0.1%, FTSE +0.6%, CAC +0.2%

• Asia: Nikkei Flat, Hang Seng +1.6%, Shanghai Composite +0.3%

Commodities:

• Crude Oil +0.14 @ 77.31

• Nat Gas +0.161 @ 3.194

• Gold +3.25 @ 1940.95

• Silver -0.133 @ 22.148

• Copper +0.0377 @ 3.6247

Earnings/Guidance:

• American Electric (AEP) reiterates FY23 earnings guidance; projects FY24 EPS in-line with consensus; reaffirms long-term growth of +6-7%

• Fortrea (FTRE) beats by $0.08, beats on revs; guides FY23 revs above consensus

• Henry Schein (HSIC) reports EPS in-line, misses on revs; guides FY23 EPS below consensus, revs below consensus

• HIVE Digital Technologies (HIVE) reports Q3 revs of $22.8 mln vs $23.8 mln FactSet consensus

• Tower Semi (TSEM) reports Q3 (Sep) results, revs in-line; guides Q4 revs below consensus

• Tyson Foods (TSN) beats by $0.08, misses on revs; guides FY23 revs below consensus

• StoneCo (STNE) beats by BRL 0.20, beats on revs

News:

• House Republicans unveiled plan to fund government in two steps through January 19& February 2.The bill will keep government funding at current levels. A Senate Democratic leadership aide signaled their openness to the plan, according to CNN

• Government funding bill does not include additional aid for Israel or Ukraine, according to CNN

• Israel Prime Minister Benjamin Netanyahu says the Israeli Army is the only entity that could take military responsibility for Gaza after the war, according to the New York Times

• US conducted airstrikes against Iran supported targets in Syria, according to the New York Times

• Moody's changes outlook on US ratings to negative from stable, affirms Aaa ratings

• Senator Tim Scott (R-SC) ends his campaign for president, according to the New York Times

• David Cameron was appointed UK foreign secretary

• China purchased 3 million tons of soybeans, according to Bloomberg

• The transition to green energy looks more expensive and complicated than previously thought, according to the Wall Street Journal

• 89bio (ETNB) Announces Additional Data from the ENLIVEN Phase 2b Trial of Pegozafermin in Patients with Compensated Cirrhotic (F4) Nonalcoholic Steatohepatitis (NASH) at AASLD The Liver Meeting 2023

• Aclaris Therapeutics (ACRS) Announces Top-line Results from 12-Week Phase 2b Trial of Oral Zunsemetinib (ATI-450) for Moderate to Severe Rheumatoid Arthritis and Provides Corporate Update

• Air Lease (AL) announces delivery of first of nine new Airbus A321-200neo Aircraft to ITA Airways

• Air Lease (AL) announces lease placement of 18 New Boeing (BA) 737-8 aircraft with EGYPTAIR

• Alnylam (ALNY) Presents Positive Results from the KARDIA-1 Phase 2 Dose-Ranging Study of Zilebesiran, an Investigational RNAi Therapeutic in Development for the Treatment of Hypertension in Patients at High Cardiovascular Risk

• Avient (AVT) Board of Directors has unanimously voted to elect Dr. Ashish K. Khandpur as President and Chief Executive Officer, effective December 1, 2023

• Boeing (BA): China considers ending freeze on Boeing with new 737 Max deal, according to Bloomberg

• Boeing (BA) announces flydubai Ordered 30 Boeing 787 Dreamliners

• Boeing (BA): Emirates orders nearly 100 more Boeing Widebody Airplanes

• Boeing (BA) announces agreement with SunExpress to buy up 90 Boeing 737 MAX Jets

• Bragg Gaming Group (BRAG) COO Lara Falzon to resign

• BRF SA (BRFS) management has decided to maintain its pet food business, having therefore ended the competitive sale process announced on February 28, 2023

• BridgeBio Pharma (BBIO) presents additional clinical outcomes data from the Phase 3 ATTRibute-CM Study of Acoramidis in Patients with Transthyretin Amyloidosis Cardiomyopathy

• Dana Inc (DAN) appoints Steven Miller to Board of Directors

• Digital World Acquisition Corp (DWAC) discloses that factors raise substantial doubt about the Company's ability to continue as a going concern

• Exxon (XOM) planning to begin lithium production by 2026, according to Reuters

• Ford (F) Kentucky workers vote against labor deal, according to Reuters

• GlaxoSmithKline (GSK) receives positive CHMP opinion recommending momelotinib for myelofibrosis patients with anaemia

• Google (GOOG) aiming to invest in startup Character.AI, according to Reuters

• Guidewire Software (GWRE) announces that E.design has selected Guidewire Cloud

• Havertys (HVT) authorizes special cash dividend of $1.00/share on common stock and $0.95/share on Class A common stock

• Hawaiian Electric (HE) amends late 10-Q filing

• Illumina (ILMN) provides update related to reduction in its real estate footprint; continues to evaluate its options with respect to its campus in Foster City, California

• Intl Game Tech. PLC (IGT) PlayDigital unit will expand its content in Italy by partnering with Microgame, the number one online gaming service provider in the Italian iGaming market

• Ionis (IONS) shares positive clinical update from ongoing trial of ION582 for Angelman syndrome

• James River Group (JRVR) files to delay its 10-Q; requires additional time to complete its procedures relating to its quarter-end financial reporting processes

• KalVista Pharmaceuticals (KALV) announces phase 3 konfident trial milestone achieved

• Lexicon Pharma (LXRX) reports INPEFA Use Associated With Early Clinical Benefit in Heart Failure and Atherosclerotic Events in Analysis of Clinical Data

• MediWound (MDWD) receives Positive CHMP Opinion recommending approval for NexoBrid

• Milestone Pharmaceuticals (MIST) Presents Results from ReVeRA Phase 2 Study of Etripamil in AFib-RVR at the American Heart Association Scientific Sessions 2023

• Neurocrine Biosciences (NBIX) announces settlement of INGREZZA ANDA litigation

• Novo Nordisk (NVO) reports Semaglutide 2.4 mg (Wegovy) cardiovascular outcomes data presented at American Heart Association Scientific Sessions and simultaneously published in New England Journal of Medicine

• Nurix Therapeutics (NRIX) provides additional detail about the Company's Phase 1 clinical trial evaluating NX-2127 for the treatment of various B-cell malignancies in presentation

• NVIDIA (NVDA) ticks higher on report it's working on a new lineup of AI chips customized for China, according to the Wall Street Journal

• Petrobras (PBR) gets favorable ruling in labor case before STF

• R1 RCM (RCM) to restate certain previously issued financial statements due to errors in accounting for expenses associated with historical acquisitions

• Sasol (SSL) Chairman steps down

• SNDL Inc. (SNDL) has approved the renewal of its share repurchase program upon the expiry of its current share repurchase program on November 20, 2023

• Southwest Air (LUV) exec says Boeing 737 MAX 7 plane to get FAA certification by April, according to Reuters

• Spire Global (SPIR) successfully launched 11 satellites on SpaceX's Transporter-9 Mission

• Tandem Diabetes Care (TNDM) COO will be stepping down from his current position effective December 31, 2023

• Tesla (TSLA): India is mulling cutting EV tariffs to get Tesla to setup plant in the country, according to Financial Times

• The Metals Company (TMC) and PAMCO sign binding MOU to complete feasibility study to process polymetallic nodules into battery metal feedstocks

• Valneva (VALN) reports positive pivotal Phase 3 Immunogenicity Data in adolescents for its single-shot Chikungunya Vaccine Candidate

• Verve Therapeutics (VERV) Announces Interim Data for VERVE-101 Demonstrating First Human Proof-of-Concept for In Vivo Base Editing with Dose-Dependent Reductions in LDL-C and Blood PCSK9 Protein in Patients with Heterozygous Familial Hypercholesterolemia

M&A:

• AGCO Corp (AGCO) acquires FarmFacts GmbH's Digital assets

• Arch Capital (ACGL) to acquire RMIC Companies, Inc.

• Bowman Consulting Group (BWMN) announces the acquisition of Davis, California based Blankinship & Associates

• Old Republic (ORI) to sell its mortgage insurance business to Arch Capital Group Ltd. (ACGL)

• PVH (PVH) and Basic Resources announce that Basic Resources will acquire PVH's Warners, Olga and True & Co. businesses

• TotalEnergies (TTE) acquires 1.5 GW Flexible Power Generation Capacity in Texas

Syndicate:

• Acumen Pharmaceuticals (ABOS) has entered into a senior secured loan and security agreement with K2 HealthVentures, a healthcare-focused specialty finance company

IPOs:

• No IPOs expected to price.

Gapping Up/Down

• Gapping up:

• FREY +21.3%, STNE +4.8%, LXRX +4%, BA+3.5%, EP +3.3%, MIST +3.1%, HE +2.1%, IONS +2%, SSL +1.6%, ALNY +1.6%, GNL+1.5%, HVT +1.1%, NVO +0.9%, GSK +0.9%, BBIO +0.6%

• Gapping down:

• VERV -27.2%, CREV -11.8%, VALN -4.1%, HSIC -3.9%, JRVR -3.4%, HIVE -2.2%, MLYS-2%, AL -1.8%

Analyst Research (see Upgrades/Downgradescalendarfor full list):

• Upgrades

• Enact Holdings (ACT) upgraded to Buy from Neutral at BofA Securities; tgt $30

• Guardant Health (GH) upgraded to Outperform from Mkt Perform at Raymond James; tgt $27

• Natera (NTRA) upgraded to Strong Buy from Outperform at Raymond James; tgt $68

• Downgrades:

• Barings BDC (BBDC) downgraded to Equal Weight from Overweight at Wells Fargo; tgt lowered to $8.50

• Crescent Capital BDC (CCAP) downgraded to Equal Weight from Overweight at Wells Fargo; tgt lowered to $16

• Highwoods Prop (HIW) downgraded to Neutral from Buy at BofA Securities; tgt lowered to $20

• Hudson Pacific Properties (HPP) downgraded to Underperform from Neutral at BofA Securities; tgt lowered to $4

• Paramount Group (PGRE) downgraded to Underperform from Neutral at BofA Securities; tgt lowered to $4

• Others:

• Brookfield Business Partners (BBU) resumed with an Outperform at RBC Capital Mkts; tgt $28

• Brookfield Renewable Partners (BEP) resumed with an Outperform at RBC Capital Mkts; tgt $29

• Cameco (CCJ) resumed with an Outperform at RBC Capital Mkts

• GitLab (GTLB) initiated with a Buy at BTIG Research; tgt $56

• V2X (VVX) initiated with a Mkt Outperform at JMP Securities; tgt $65

Econ Data:

• 14:00 ET: Treasury Budget for October (Briefing.comConsensus NA; Prior $171.0B)

Earnings:

• Monday (Nov 13)

• Morning:  FTRE GENI HSIC MNDY NABL ROIV SKIN TSEM TSN

• Afternoon: ACM AZTA FSR HROW SLF

• Tuesday (Nov 14)

• Morning: ARMK CAE CAMT CSIQ CLBT ENR HD HUYA IHS OCSL ONON PSFE SBH SE TME VIPS WKME

• Afternoon:  HRTX VERX

• Wednesday (Nov 15)

• Morning:  AAP CTLT DAVA GLBE GFF JD NTES RSKD TGT

• During Market Hours: TJX

• Afternoon:  CSCO CPA HI JJSF KLIC MAXN MMS PANW SQM SONO TTEK

• Thursday (Nov 16)

• Morning: BABA BBWI BERY BRC BV DOLE M NICE SCVL SR SSYS WMT WMG WSM

• Afternoon:  AMAT BZH DLB ESE GPS GLOB POST ROST UGI WWD ZTO

• Friday (Nov 17) 

• Morning:  BJ BKE SPB TWST

• Afternoon:  ATKR

Asia & Europe detail:

Asia: Nikkei Flat, Hang Seng +1.6%, Shanghai Composite +0.3%

Equity indices in the Asia-Pacific region had a mixed showing to begin the week. Hong Kong's Hang Seng (+1.6%) outperformed on the back of strength in its tech components. Saturday was Singles Day (11/11) in China. Reports suggest sales gains were seen across major e-commerce platforms with deep discounts helping to spur spending. China's President Xi will be at the APEC Summit in San Francisco this week. He is confirmed to meet with President Biden on Wednesday with a reported aim for the two leaders to ease diplomatic tension between the two governments. On a related note, Bloombergreports that China may soon make a purchase announcement for Boeing's 737 Max, which would be the first purchase since 2018. USD/JPY reached its highest level since October 2022 as Japan reported a month-over-month decline in October PPI. USD/JPY +0.2% to 151.72.

• In economic data:

• Japan's October PPI -0.4% month-over-month (expected 0.0%; last -0.2%) and 0.8% yr/yr (expected 0.9%; last 2.2%); October Machine Tool Orders -20.6% yr/yr (last -11.2%)

• China's October New Loans CNY738.4B (expected CNY665.0B; last CNY2310.0B)

---Equity Markets---

• Japan's Nikkei: flat

• Hong Kong's Hang Seng: +1.6%

• China's Shanghai Composite: +0.3%

• India's Sensex: -0.5%

• South Korea's Kospi: -0.2%

• Australia's All Ordinaries: -0.4%

---FX---

• USD/JPY: +0.2% to 151.72

• USD/CNH: -0.1% to 7.2984

• USD/INR: unch at 83.312

Europe: DAX +0.1%, FTSE +0.6%, CAC +0.2%

Major European indices are trading with a modestly positive bias to begin the week. UK Prime Minister Sunak fired home secretary Braverman and, in a major surprise, announced former prime minister David Cameron will be foreign secretary. Staying in the UK, the Rightmove House Price Index saw its biggest decline (-1.3% yr/yr) in five years. ECB member de Guindos says inflation may pick up again temporarily, but that he won't pre-judge any future movement in interest rates before adding that talk about rate cuts is premature, according to Bloomberg. 

• In economic data:

• Germany's September Current Account Balance EUR28.1B (last EUR22.8B)

• UK's November Rightmove House Price Index -1.3% yr/yr (last -0.8%)

---Equity Markets---

• STOXX Europe 600: +0.5%

• Germany's DAX: +0.1%

• U.K.'s FTSE 100: +0.6%

• France's CAC 40: +0.2%

• Italy's FTSE MIB: +0.9%

• Spain's IBEX 35: +0.6%

---FX---

• EUR/USD: flat at 1.0679

• GBP/USD: +0.2% to 1.2241

• USD/CHF: +0.1% to 0.9037