The S&P 500 futures are down 6 points and are trading 0.7% below fair value. The Nasdaq 100 futures are down 23 points and are trading 0.8% below fair value. The Dow Jones Industrial Average futures are down 55 points and are trading 0.5% below fair value.
Equity futures are modestly weaker as participants weigh concerns over the Fed raising rates higher than expected for longer than expected and the potential for a hard landing. This comes ahead of another inflation reading out later this morning, the August PPI release.
Overseas, there was some speculation that the Bank of Japan is preparing to intervene in the currency market to slow the yen's depreciation against the dollar.
The MBA Mortgage Application Index fell 1.2% compared to last week. Purchase applications rose 0.2% while refinancing applications fell 4.0%.
Other economic data released today includes August PPI (Briefing.comconsensus -0.1%; prior -0.5%) and core PPI (Briefing.comconsensus +0.3%; prior +0.2%) at 8:30 a.m. ETand EIA Crude Oil Inventories (prior +8.84 million) at 10:30 a.m. ET.
Treasury yields are on the rise this morning with the 2-yr note yield up seven basis points to 3.83% and the 10-yr note yield up four basis points to 3.46%. The US Dollar Index is down 0.2% to 109.61.
In corporate news:
Warner Bros. Discovery (WBD 12.90, -0.05, -0.39%): lower on report it plans to layoff about 30% of its ad sales employees, according to Deadline
Johnson & Johnson (JNJ 161.83, +0.50, +0.31%): authorized the repurchase of up to $5 billion of the company's common stock; reaffirms its full-year 2022 guidance
Stellantis (STLA 13.61, +0.20, +1.49%): Company and General Motors (GM) to execute a share repurchase transaction
Starbucks (SBUX 89.25, +1.41, +1.61%): provides new growth targets in Reinvention Plan
Raytheon Technologies (RTX 84.30, +0.58, +0.69%): lowers its FY22 free cash flow outlook to account for the impact of certain legislation; reaffirms FY22 sales and EPS guidance
Flowserve (FLS 30.02, -0.77, -2.50%): provides an update on expected Q3 results, disclosing that two events are expected to negatively impact EPS by $0.18-$0.22
Alphabet (GOOG 105.53, +0.22, +0.21%): EU General Court largely confirms the Commission's decision that Google imposed unlawful restrictions on manufacturers of Android mobile devices and mobile network operators in order to consolidate the dominant position of its search engine
Akero Therapeutics (AKRO 28.70, -0.35, -1.20%): commences $175 mln common stock offering; upgraded to Outperform from In-line at Evercore ISI
Nucor (NUE 129.25, -6.85, -5.03%): sees Q3 earnings below consensus
Reviewing overnight developments:
Equity indices in the Asia-Pacific region ended the midweek session on a lower note after yesterday's sharp slide on Wall Street. Japan's Nikkei: -2.8%, Hong Kong's Hang Seng: -2.5%, China's Shanghai Composite: -0.8%, India's Sensex: -0.4%, South Korea's Kospi: -0.4%, Australia's ASX All Ordinaries: -2.5%.
In economic data:
Japan's July Core Machinery Orders 5.3% m/m (expected -0.8%; last 0.9%); 12.8% yr/yr (expected 6.6%; last 6.5%). September Reuters Tankan Index 10 (last 13). July Industrial Production 0.8% m/m (expected 1.0%; last 9.2%) and Capacity Utilization 2.4% m/m (last 9.6%)
India's August WPI Inflation 12.41% yr/yr (expected 13.00%; last 13.93%)
Singapore's Q2 Unemployment Rate 2.1% (last 2.1%)\
New Zealand's Q2 Current Account -7.7% of GDP (expected -7.4% of GDP; last -6.5% of GDP)
In news:
There was some speculation that the Bank of Japan is preparing to intervene in the currency market to slow the yen's depreciation against the dollar.
South Korea's Finance Ministry also reiterated that it will closely monitor currency and financial markets.
India's wholesale inflation slowed a bit in August.
Major European indices trade on a mostly lower note while Spain's IBEX (+0.2%) and Italy's MIB (+0.4%) outperform with financials contributing to the relative strength. STOXX Europe 600: -0.6%, Germany's DAX: -0.7%, U.K.'s FTSE 100: -1.1%, France's CAC 40: -0.5%, Italy's FTSE MIB: +0.4%, Spain's IBEX 35: +0.2%.
In economic data:
Eurozone's July Industrial Production -2.3% m/m (expected -1.0%; last 1.1%); -2.4% yr/yr (expected 0.4%; last 2.2%)
U.K.'s August CPI 0.5% m/m (expected 0.6%; last 0.6%); 9.9% yr/yr (expected 10.2%; last 10.1%). August Core CPI 0.8% m/m, as expected (last 0.3%); 6.3% yr/yr, as expected (last 6.2%). August Input PPI -1.2% m/m (expected 0.3%; last 0.0%) and Output PPI -0.1% m/m (expected 0.9%; last 1.6%)
In news:
The U.K. reported a slight unexpected deceleration in its yr/yr CPI growth rate.
European Commission President von der Leyen announced measures aimed at dealing with the region's energy crisis.
French Finance Ministry announced that its domestic growth forecast for 2023 was reduced to 1.0% from 1.4%.
U.S. equity futures:
S&P 500 Futures: -1 @ 3,932
DJIA Futures: -12 @ 31,093
Nasdaq 100 Futures: -4 @ 12,030
Overseas:
Europe: DAX -0.7%, FTSE -1.1%, CAC -0.5%
Asia: Nikkei -2.8%, Hang Seng -2.5%, Shanghai Composite -0.8%
Commodities:
Crude Oil -0.59 @ 86.72
Nat Gas +0.062 @ 8.346
Gold -5.70 @ 1711.70
Silver -0.036 @ 19.455
Copper -0.0450 @ 3.5105
U.S. Summary:
Earnings/Guidance:
Ashland (ASH) provides long term growth objectives in presentation with organic sales growth 5-6% and EBITDA margin expansion +100 bps per year; reaffirms 2022 confirmed - tracking to high-end of sales and EBITDA ranges
Broadridge Financial (BR) reaffirms FY23 outlook in investor presentation
BRP Inc. (DOOO) beats by CAD0.31, beats on revs; guides FY23 EPS above consensus, revs above consensus
Evolution Petroleum (EPM) beats on top and bottom lines
Flowserve (FLS) provides an update on expected Q3 results, disclosing that two events are expected to negatively impact EPS by $0.18-$0.22
Goosehead Insurance (GSHD) reaffirms FY22 outlook
Li-Cycle (LICY) misses by $0.03
Nucor (NUE) sees Q3 earnings below consensus
O-I Glass (OI) raises EPS guidance for Q3 and FY22, raises free cash flow guidance for FY22
Radiant Logistics (RLGT) beats single est by $0.18, beats single est on revs
Raytheon Technologies (RTN) lowers its FY22 free cash flow outlook to account for the impact of certain legislation; reaffirms FY22 sales and EPS guidance
General News:
EU Commission President announces plan for dealing with energy crisis, according to Reuters
Conflicting high-level opinions about appropriate rate-hike path, according to Bloomberg
IEA releases September Oil Market Report - growth in global oil demand continues to decelerate
Aditx (ADTX) announced 1-for-50 reverse stock split effective pre-market opening on September 14, 2022
Altimmune (ALT) Announces Significant Reductions in Liver Fat Content and Body Weight in 12-Week Phase 1b Clinical Trial of Pemvidutide in Subjects with NAFLD
Amazon (AMZN) workers in upstate NY to vote on unionization in October, according to the Wall Street Journal
Alphabet (GOOG): EU General Court largely confirms the Commission's decision that Google imposed unlawful restrictions on manufacturers of Android mobile devices and mobile network operators in order to consolidate the dominant position of its search engine
Apple (AAPL) planning ad placement changes in App store, according to CNBC
BankUnited (BKU) authorizes the repurchase of up to $150 mln of its stock
BWXT Medical (BWXT) Submits Tc-99m Generator New Drug Application to FDA
Canadian Solar's (CSIQ) subsidiary to launch SolBank, a manufactured energy storage battery solution for utility-scale applications
Centrus Energy (LEU) secures $320 mln in new sales contracts and commitments
Compass Minerals (CMP) announces $252 mln strategic equity investment partnership with Koch Minerals & Trading LLC
Denison (DNN) Announces Intersection of Additional High-Grade Uranium Mineralization at Waterfound
Emerald Holding (EEX) receives final proceeds relating to insurance litigation settlement
General Motors (GM) to use own chip in self-driving cars, according to Reuters
Granite Constr (GVA) awarded approximately $20 mln construction contract by the Tucson Airport Authority to reconstruct on outboard taxiway
IBM (IBM) to transfer approximately $16 bln of defined benefit pension obligations
Johnson & Johnson (JNJ) authorized the repurchase of up to $5 billion of the company's common stock; reaffirms its full-year 2022 guidance
Laureate Education's (LAUR) Sumadi business joins Amazon Web Services Partner Network
Manning & Napier Advisors (MN) reports preliminary assets under management of $18.7 bln as of August 31, 2022, down 3.1% from July 31, 2022
NGM Bio (NGM) Presents Updated Preliminary Findings from the Ongoing Phase 1b Dose Escalation Trial of NGM120 in Combination with Gemcitabine and Nab-paclitaxel in Patients with Metastatic Pancreatic Cancer at AACR Special Conference: Pancreatic Cancer
Regional Mgmt (RM) expands operations into Louisiana with the opening of its first branch
Rio Tinto (RIO) and Baowu agree to form joint venture to develop Western Range
SilverCrest Metals (SILV) provides update on commissioning activities at Las Chispas Mine; Processing plant metallurgical recovery and daily throughput are trending ahead of Feasibility Study ramp-up projections
Starbucks (SBUX) provides new growth targets in Reinvention Plan
Starbucks (SBUX): Controversy surrounding unionization effort at Starbucks in NY, according to the New York Times
Stellantis (STLA) and General Motors (GM) to execute a share repurchase transaction
Taboola (TBLA) announces restructuring program, including global headcount reduction of approximately 6%, that will result in $50 mln in savings in 2023; also reaffirms guidance for Q3
Tencent (TCEHY) receives first game approval in over a year, according to the Wall Street Journal
Tesla (TSLA) hired a senior government official in Ontario to lead its mineral supply chain efforts in Canada, according to Electrek
Treace Medical Concepts (TMCI) provides updated ALIGN3D data at 2022 AOFAS annual meeting
Warner Bros. Discovery (WBD) plans to layoff about 30% of its ad sales employees, according to Deadline
M&A:
Alpha Star Acquisition Corporation (ALSA) signed letter of intent for a business combination with Cyclebit Group
Altair Engineering (ALTR) signs definitive agreement to acquire RapidMiner; terms of deal not disclosed
CatchMark Timber Trust (CTT) shareholders approve previously announced merger of CatchMark with and into a subsidiary of PotlatchDeltic (PCH)
Cross Country (CCRN) acquires assets of Mint Medical Physician Staffing and Lotus Medical Staffing
Primo Water (PRMW) unit has acquired Eureau Sources and Defeaus, two French companies specializing in the marketing and packaging of spring water; no financial terms disclosed
Twitter (TWTR) stockholders approve previously announced merger agreement for Twitter to be acquired by affiliates of Elon Musk for $54.20/share in cash
Syndicate:
Akero Therapeutics (AKRO) commences $175 mln common stock offering
CoStar Group (CSGP) announces public offering of common stock in conjunction with inclusion into the S&P 500 Index
Edgewise Therapeutics (EWTX) prices offering of 11,627,907 shares of its common stock at $10.32 per share
POINT Biopharma (PNT) prices offering of 13.9 mln shares of common stock at $9.00 per share
IPOs:
Expected to Price:
Corebridge Financial (NYSE: CRBG): The spin-off of AIG (AIG), which is one of the largest providers of retirement solutions and insurance products in the United States, is expected to price its 80.0 M share IPO between $21-$24.
Gapping Up/Down
Gapping up:
DWIN +18.5%, EPM +11%, NGM +6.1%, RLGT +5.3%, TBLA +4.5%, SBUX +2.6%, APEI +2.3%, STLA +2.3%, EWTX +2.1%, CCRN +1.9%, DOOO +1.4%, RTX +1.2%, RIO +1.1%, LICY +1.1%, O+0.8%, BWXT +0.8%
Gapping down:
PNT -8.5%, AKRO -2.5%, FLS -2.5%, GSHD -1.2%, CPA -1%, TWTR -0.8%, WBD -0.5%
Analyst Research (see Upgrades/Downgradescalendarfor full list):
Upgrades
Akero Therapeutics (AKRO) upgraded to Outperform from In-line at Evercore ISI; tgt raised to $50
SL Green Realty (SLG) upgraded to Buy from Hold at Truist; tgt $59
SoFi Technologies (SOFI) upgraded to Buy from Neutral at BofA Securities; tgt raised to $9
Downgrades:
Avantor (AVTR) downgraded to Market Perform from Outperform at Cowen; tgt lowered to $28
Block (SQ) downgraded to Underperform from Outperform at Evercore ISI; tgt lowered to $55
Union Pacific (UNP) downgraded to Mkt Perform from Outperform at Bernstein; tgt lowered to $230
Others:
ADTRAN (ADTN) initiated with a Hold at WestPark Capital
Calix Networks (CALX) initiated with a Buy at WestPark Capital; tgt $75
Clearfield (CLFD) initiated with a Hold at WestPark Capital
Extreme Networks (EXTR) initiated with a Buy at WestPark Capital; tgt $20
Ribbon Communications (RBBN) initiated with a Hold at WestPark Capital
Upcoming Events:
Econ Data:
07:00 ET: MBA Mortgage Applications Index for Sept. 10 (Briefing.comConsensus NA; Prior -0.8%)
08:30 ET: PPI for Aug (Briefing.comConsensus -0.1%; Prior -0.5%)
08:30 ET: Core PPI for Aug (Briefing.comConsensus 0.3%; Prior 0.2%)
10:30 ET: EIA Crude Oil Inventories for Sept 10 (Briefing.comConsensus NA; Prior +8.84M)
Asia & Europe detail:
Asia: Nikkei -2.8%, Hang Seng -2.5%, Shanghai Composite -0.8%
Equity indices in the Asia-Pacific region ended the midweek session on a lower note after yesterday's sharp slide on Wall Street. There was some speculation that the Bank of Japan is preparing to intervene in the currency market to slow the yen's depreciation against the dollar. South Korea's Finance Ministry also reiterated that it will closely monitor currency and financial markets. India's wholesale inflation slowed a bit in August.
In economic data:
Japan's July Core Machinery Orders 5.3% m/m (expected -0.8%; last 0.9%); 12.8% yr/yr (expected 6.6%; last 6.5%). September Reuters Tankan Index 10 (last 13). July Industrial Production 0.8% m/m (expected 1.0%; last 9.2%) and Capacity Utilization 2.4% m/m (last 9.6%)
India's August WPI Inflation 12.41% yr/yr (expected 13.00%; last 13.93%)
Singapore's Q2 Unemployment Rate 2.1% (last 2.1%)
New Zealand's Q2 Current Account -7.7% of GDP (expected -7.4% of GDP; last -6.5% of GDP)
---Equity Markets---
Japan's Nikkei: -2.8%
Hong Kong's Hang Seng: -2.5%
China's Shanghai Composite: -0.8%
India's Sensex: -0.4%
South Korea's Kospi: -0.4%
Australia's ASX All Ordinaries: -2.5%
---FX---
USD/JPY: -1.0% to 143.25
USD/CNH: -0.2% to 6.9702
USD/INR: -0.2% to 79.44
Europe: DAX -0.7%, FTSE -1.1%, CAC -0.5%
Major European indices trade on a mostly lower note while Spain's IBEX (+0.2%) and Italy's MIB (+0.4%) outperform with financials contributing to the relative strength. The U.K. reported a slight unexpected deceleration in its yr/yr CPI growth rate. European Commission President von der Leyen announced measures aimed at dealing with the region's energy crisis. French Finance Ministry announced that its domestic growth forecast for 2023 was reduced to 1.0% from 1.4%.
In economic data:
Eurozone's July Industrial Production -2.3% m/m (expected -1.0%; last 1.1%); -2.4% yr/yr (expected 0.4%; last 2.2%)
U.K.'s August CPI 0.5% m/m (expected 0.6%; last 0.6%); 9.9% yr/yr (expected 10.2%; last 10.1%). August Core CPI 0.8% m/m, as expected (last 0.3%); 6.3% yr/yr, as expected (last 6.2%). August Input PPI -1.2% m/m (expected 0.3%; last 0.0%) and Output PPI -0.1% m/m (expected 0.9%; last 1.6%)
---Equity Markets---
STOXX Europe 600: -0.6%
Germany's DAX: -0.7%
U.K.'s FTSE 100: -1.1%
France's CAC 40: -0.5%
Italy's FTSE MIB: +0.4%
Spain's IBEX 35: +0.2%
---FX---
EUR/USD: +0.3% to 0.9997
GBP/USD: +0.5% to 1.1545
USD/CHF: -0.1% to 0.9608