15/09/23 Briefing

The S&P 500 futures are up 2 points and are trading 0.1% above fair value. The Nasdaq 100 futures are down 23 points and are trading 0.1% below fair value. The Dow Jones Industrial Average futures are up 68 points and are trading 0.2% above fair value.

Equity futures indicate a mixed open on this quarterly options expiration day. The underwhelming guidance from Adobe (ADBE) has contributed to the soft price action, along with the news that United Auto Workers launched targeted strikes at three manufacturing plants after failing to reach a deal with the Big Three automakers.

Rising oil prices ($90.52/bbl, +0.36, +0.4%) and Treasury yields are also keeping the market in check. The 2-yr note yield is up two basis points to 5.03% and the 10-yr note yield is up three basis points to 4.32%.

China reported better-than-expected August industrial production and retail sales data.

The U.S. August Industrial Production and Capacity Utilization report will be released at 9:15 a.m. ET. Other data releases today include:

• 8:30 ET: August Import Prices (prior 0.4%), Import Prices ex-oil (prior 0.0%), Export Prices (prior 0.7%), Export Prices ex-agriculture (prior 0.6%), and September Empire State Manufacturing survey (Briefing.comconsensus -10.0; prior -19.0)

• 10:00 ET: Preliminary September University of Michigan Consumer Sentiment (Briefing.comconsensus 69.4; prior 69.5)

In corporate news:

• Ford (F 12.50, -0.12, -1.0%), General Motors(GM 33.53, -0.13, -0.4%), Stellantis (STLA 19.00, +0.16, +0.9%): UAW confirmed thousands of UAW members at Ford, GM, and Stellantis walked out, marking the beginning of the Stand Up Strike

• Taiwan Semiconductor Manufacturing (TSM 91.25, -0.22, -0.2%): delaying chip equipment deliveries, according to Reuters

• Adobe (ADBE 533.23, -18.92, -3.4%): beats by $0.11, reports revs in-line; guides Q4 EPS above consensus, revs in-line

• Lennar (LEN 116.90, -0.80, -0.7%): beats by $0.39, beats on revs, deliveries increased 8% to 18,559, exceeding guidance, guides for Q4 deliveries of 21,500-22,500

• Nucor (NUE 162.01, -3.52, -2.1%): guides Q3 EPS below consensus

• Oracle (ORCL 114.47, +0.81, +0.7%) and Microsoft (MSFT 338.79, +0.09, +0.03%): announce Oracle Database@Azure, giving customers direct access to Oracle database services running on Oracle Cloud Infrastructure and deployed in Microsoft Azure datacenters

• Walt Disney (DIS 85.22, +0.74, +0.9%): Bloomberg reports that company expects to fall "tens of millions" of subscribers short of the FY24 Disney+ subscriber goal of 215-245 mln set in August of 2022; speculation swirling about potential sale of ABC, but company says no decision has been made with respect to the divestiture of ABC or any other property

• Keysight (KEYS 135.92, +2.80, +2.1%): upgraded to Overweight from Equal Weight at Morgan Stanley 

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended the week on a mostly higher note. Japan's Nikkei: +1.1% (+2.8% for the week), Hong Kong's Hang Seng: +0.8% (-0.1% for the week), China's Shanghai Composite: +0.1% (UNCH for the week), India's Sensex: +0.5% (+1.9% for the week), South Korea's Kospi: +1.1% (+2.1% for the week), Australia's ASX All Ordinaries: +1.4% (+1.7% for the week).

• In economic data:

• China's August House Prices -0.1% yr/yr (last -0.1%). August Fixed Asset Investment 3.2% yr/yr (expected 3.3%; last 3.4%), August Industrial Production 4.5% yr/yr (expected 4.0%; last 3.7%), August Retail Sales 4.6% yr/yr (expected 3.0%; last 2.5%), and August Unemployment Rate 5.2% (expected 5.3%; last 5.3%). August FDI -5.1% YTD (last -4.0%)

• South Korea's August trade surplus $880 mln (expected surplus of $870 mln; last surplus of $1.65 bln). August Imports -22.8% yr/yr, as expected (last -25.4%) and Exports -8.3% yr/yr (expected -8.4%; last -16.4%)

• India's August trade deficit $24.2 bln (expected deficit of $21.0 bln; last deficit of $20.7 bln)

• New Zealand's August Business PMI 46.1 (last 46.3)

• In news:

• China reported better than expected growth figures for August, though home prices continued decreasing.

• Sino Ocean was pressured after announcing a halt to offshore debt payments.

• The People's Bank of China rolled over CNY591 bln worth of medium-term loans, keeping the rate steady at 2.50%.

• The Bank of Japan reportedly sees an upside risk to its price outlook.

• South Korea's Finance Minister Choo said that inflation is expected to stabilize after October.

• Major European indices are looking for a higher finish to the week amid growing speculation that the European Central Bank has reached the peak rate in its hiking cycle. STOXX Europe 600: +0.8% (+2.2% week-to-date), Germany's DAX: +1.1% (+1.5% week-to-date), U.K.'s FTSE 100: +0.8% (+3.5% week-to-date), France's CAC 40: +1.7% (+2.6% week-to-date), Italy's FTSE MIB: +0.8% (+3.1% week-to-date), Spain's IBEX 35: +0.5% (+2.5% week-to-date).

• In economic data:

• Eurozone's July trade surplus EUR6.5 bln (last surplus of EUR18.5 bln). Q2 Wages 4.6% yr/yr (last 4.9%) and Q2 Labor Cost Index 4.5% yr/yr (last 5.2%)

• France's August CPI 1.0% m/m, as expected (last 0.1%); 4.9% yr/yr (expected 4.8%; last 4.3%)

• Italy's August CPI 0.3% m/m (expected 0.4%; last 0.0%); 5.4% yr/yr (expected 5.5%; last 5.9%). July trade surplus EUR6.38 bln (expected surplus of EUR6.50 bln; last surplus of EUR3.46 bln)

• In news:

• European Central Bank policymaker de Guindos said that headline and core CPI will continue to ease.

• France's Finance Ministry lowered its domestic growth forecast for 2024 to 1.4% from 1.6% due to an expected recession in Germany, sluggish growth in China, and high interest rates.

U.S. equity futures:

• S&P 500 Futures +3 @ 4,508

• DJIA Futures: +75 @ 34,982

• Nasdaq 100 Futures: -18 @ 15,456

Overseas:

• Europe:  DAX +1.1%, FTSE +0.8%, CAC +1.7%

• Asia: Nikkei +1.1%, Hang Seng +0.8%, Shanghai Composite +0.1%

Commodities:

• Crude Oil +0.37 @ 90.53

• Nat Gas +0.00 @ 2.708

• Gold +8.15 @ 1940.95

• Silver +0.451 @ 23.445

• Copper -0.0043 @ 3.8172

Earnings/Guidance:

• Adobe (ADBE) beats by $0.11, reports revs in-line; guides Q4 EPS above consensus, revs in-line

• Copart (CPRT) beats by $0.02, beats on revs

• Lennar (LEN) beats by $0.39, beats on revs, deliveries increased 8% to 18,559, exceeding guidance, guides for Q4 deliveries of 21,500-22,500

• Mitek Systems (MITK) reports Q2 results, revenue increased 35%, reaffirms FY23 guidance

• Nucor (NUE) guides Q3 EPS below consensus

News:

• UAW confirmed thousands of UAW members at Ford, GM, and Stellantis walked out, marking the beginning of the Stand Up Strike

• 3D Systems (DDD) insourcing manufacturing of two more strategic printer platforms; reduces manufacturing cycle times; to reduce total inventories by over 20% in 2024

• 10x Genomics (TXG) Expands Gene Expression Flex Offering with New High-Throughput Multiomic Profiling Kit

• Abcam plc (ABCM) statement on Dr. Jonathan Milner's Announcement

• argenx (ARGX) receives Positive CHMP Opinion for subcutaneous Efgartigimod for generalized myasthenia gravis

• Caesar's Entertainment (CZR) pays ransom to hackers, according to CNBC

• Capital One (COF) reports August card metrics

• CGI Group (GIB) announces a 10-year strategic partnership with Alimentation Couche-Tard (ANCTF)

• Coherent (COHR) and CFO Mary Jane Raymond mutually agreed that she would conclude her services as the CFO as of September 29, 2023

• ConocoPhillips (COP) signs commercial agreement to secure additional regasification capacity in Europe at the Gate LNG terminal in the Netherlands

• Copa Holdings (CPA) reports August traffic increased 12.8% yr.yr

• DoorDash (DASH) to transfer its stock listing to the Nasdaq Stock Market from the New York Stock Exchange; to begin trading on September 27under the same symbol

• Embraer SA (ERJ): Air Peace orders five new E175s for fleet expansion and renewal

• General Motors (GM) released statement on on UAW Strike

• Iovance Biotherapeutics (IOVA) announces update for PDUFA Action Date for Lifileucel for the treatment of advanced melanoma

• JPMorgan Chase (JPM) reports August card metrics

• KBR (KBR) announces that its commercial cloud and mission service platform, KBR Vaault, has been prioritized for the Federal Risk and Authorization Management Program Joint authorization board authorization process

• Kemper (KMPR) appoints Bradley Camden as Interim CFO

• Lands' End (LE) appoints interim CFO Bernard McCracken as permanent CFO

• Lincoln Electric (LECO) receives initial order to supply four Velion 150kW DC fast chargers to DC-America

• LKQ (LKQ): UK CMA has accepted undertakings in lieu of reference to a Phase 2 investigation offered by LKQ Corporation / Uni-Select Inc

• Meta Platforms (META): WhatsApp executive denies FT report about ads on the app

• Miniso Group (MNSO) authorizes $200 mln share repurchase program

• Moderna (MRNA): UK MHRA approves Moderna's adapted COVID-19 vaccine (Spikevax) that targets Omicron XBB.1.5

• Novartis (NVS) shareholders approve the proposed 100% Spin-off of Sandoz

• Novonix Limited (NVX) achieves key milestones and establishes pathway to profitable anode material production in the U.S.

• Oil States (OIS) announces contract award for Merlin Deepsea Mineral Riser System

• Oracle (ORCL) and Microsoft (MSFT) announce Oracle Database@Azure, giving customers direct access to Oracle database services running on Oracle Cloud Infrastructure and deployed in Microsoft Azure datacenters

• Precision Drilling (PDS) authorized to acquire up to approximately 10% of its shares; to terminate no later than September 18, 2024

• Primerica (PRI) names Tracy Tan as successor to CFO

• PTC Therapeutics (PTCT) confirms CHMP delivers negative opinion on Translarna for conversion to full authorization

• Rivian (RIVN) looking for cost savings, according to TechCrunch

• Roblox (RBLX) appoints Jason Kilar to its board; recently served as CEO of Warner Media

• Rockwell Automation (ROK) announces exclusive agreement with Infinitum to develop new class of integrated low voltage drive and motor technology

• Taiwan Semiconductor Manufacturing (TSM) delaying chip equipment deliveries, according to Reuters

• T-Mobile US (TMUS) in discussions with Tillman Global to build a fiber-optic network, moving into the landline broadband industry, according to Bloomberg

• Treace Medical Concepts (TMCI) announces new patent covering instrumented bunion correction procedures and milestone 50th U.S. patent

• trivago (TRVG) resolved to issue a one-time extraordinary dividend, totaling EUR 184,380,959 (or approximately EUR 0.53 per share)

• Turkcell (TKC) appoints Blent Aksu as CEO; elects Senol Kazanci as Chairman

• Walt Disney (DIS) expects to fall "tens of millions" of subscribers short of the FY24 Disney+ subscriber goal of 215-245 mln set in August of 2022, according to Bloomberg

• Walt Disney (DIS) issued a statement after the close in response to media reports regarding linear businesses

• Xinyuan Real Estate (XIN) announces that the optimization of regulations in real estate sector has been put into effect in Zhengzhou

• Xunlei Limited (XNET) approved an extension of maturity date for the US$20 million term loan to Chizz (company controlled by Itui International Inc., largest shareholder)

M&A:

• J.B. Hunt Transport (JBHT) enters into definitive agreement to purchase the brokerage operations of BNSF Logistics

• Murphy Oil (MUR) closes on non-core Canadian asset sale

• Playtika (PLTK) acquires Innplay Labs

• Seagen (SGEN)/ Pfizer (PFE) deal being reviewed by EU; the EC provisional deadline to complete initial review is October 19

Syndicate:

• Alerus Financial (ALRS) files for $125 mln mixed securities shelf offering

• Core & Main (CNM) launches secondary offering of 18.0 mln shares of common stock by selling shareholders; also announces that it expects to repurchase and redeem 3.12 mln shares of common stock from selling shareholders and 1.87 mln partnership interests of subsidiary Core & Main Holdings, LP

• Day One Biopharmaceuticals (DAWN) files mixed shelf securities offering

• Heritage Global (HGBL) files $150 mln mixed shelf securities offering

• HighPeak Energy (HPK) closes $1.2 bln term loan financing

• NiSource (NI) to remarket up to 862,500 shares of its Series C Mandatory Convertible Preferred Stock

• Stifel Financial (SF) files mixed shelf securities offering; also files for common stock offering by selling shareholders

• Vital Energy (VTLE) prices offering of 2.75 shares of common stock for gross proceeds of $148.5 mln

IPOs:

• Instacart (CART) expected to raise IPO price target, according to the Wall Street Journal

• Priced to Trade:

• Neumora Therapeutics (Nasdaq: NMRA): The clinical biopharmaceutical company developing therapies that target brain diseases as well as major depression and other neuropsychiatric brain disorders priced its 14.7 M share IPO at $17, the midpoint of the $16-$18 expected range

• RayzeBio (Nasdaq: RYZB): The biopharmaceutical company focused on building a market-leading somatostatin receptor type 2 franchise priced its upsized 17.3 M share IPO at $18, the high end of the $16-$18 expected range

Gapping Up/Down

• Gapping up:

• NVX +15.6%, IOVA +11.1%, MITK +5.9%, PDS+2.4%, VLRS +2%, ORCL +1.8%, TKC +1.7%, JBHT +1.2%, HST +1.2%, WPC +1.1%, VTLE+0.9%, PTCT +0.9%, NVS +0.7%, MNSO+0.7%, DIS +0.6%, RBLX +0.5%

• Gapping down:

• PLTK -5%, HGBL -2.9%, NUE -2.8%, COF-2.7%, DAWN -2.3%, ADBE -2.1%, F -1.7%, GM -1.4%, CNM -1%, STLD -0.9%, X -0.7%

Analyst Research (see Upgrades/Downgradescalendarfor full list):

• Upgrades

• Cousins Prop (CUZ) upgraded to Buy from Hold at Truist; tgt raised to $28

• Unity Software (U) upgraded to Buy from Neutral at BofA Securities; tgt raised to $56

• Downgrades:

• Truist (TFC) downgraded to Neutral from Overweight at Piper Sandler; tgt lowered to $32

• Vornado Rlty Trust (VNO) downgraded to Hold from Buy at Truist; tgt raised to $27

• Others:

• Anheuser-Busch InBev (BUD) initiated with an Outperform at TD Cowen

• Axcelis Tech (ACLS) initiated with a Buy at BofA Securities; tgt $225

• Celsius (CELH) initiated with an Outperform at TD Cowen; tgt $250

• Cipher Mining (CIFR) initiated with a Buy at BTIG Research; tgt $6

• Diageo plc (DEO) initiated with a Market Perform at TD Cowen

Econ Data:

• 08:30 ET: Import Prices for Aug (Briefing.comConsensus NA; Prior 0.4%)

• 08:30 ET: Import Prices ex-oil for Aug (Briefing.comConsensus NA; Prior 0.0%)

• 08:30 ET: Export Prices for Aug (Briefing.comConsensus NA; Prior 0.7%)

• 08:30 ET: Export Prices ex-oil for for Aug (Briefing.comConsensus NA; Prior 0.6%)

• 08:30 ET: Empire State Manufacturing for Sep (Briefing.comConsensus -10.0; Prior -19.0)

• 09:15 ET: Industrial Production for Aug (Briefing.comConsensus 0.2%; Prior 1.0%)

• 09:15 ET: Capacity Utilization for Aug (Briefing.comConsensus 79.3%; Prior 79.3%)

• 10:00 ET: Univ. of Michigan Consumer Sentiment - Prelim for Sep (Briefing.comConsensus 69.4; Prior 69.5)

Earnings:

• Monday (Sep 11)

• Morning:  FCEL

• Afternoon: CASY AVO ORCL

• Tuesday (Sep 12)

• Morning: CGNT

• Wednesday (Sep 13)

• Morning:  CBRL REVG

• Afternoon:  SMTC

• Thursday (Sep 14)

• Afternoon:  ADBE CPRT LEN

Asia & Europe detail:

Asia: Nikkei +1.1%, Hang Seng +0.8%, Shanghai Composite +0.1%

Equity indices in the Asia-Pacific region ended the week on a mostly higher note. China reported better than expected growth figures for August, though home prices continued decreasing. Sino Ocean was pressured after announcing a halt to offshore debt payments. The People's Bank of China rolled over CNY591 bln worth of medium-term loans, keeping the rate steady at 2.50%. The Bank of Japan reportedly sees an upside risk to its price outlook. South Korea's Finance Minister Choo said that inflation is expected to stabilize after October.

• In economic data:

• China's August House Prices -0.1% yr/yr (last -0.1%). August Fixed Asset Investment 3.2% yr/yr (expected 3.3%; last 3.4%), August Industrial Production 4.5% yr/yr (expected 4.0%; last 3.7%), August Retail Sales 4.6% yr/yr (expected 3.0%; last 2.5%), and August Unemployment Rate 5.2% (expected 5.3%; last 5.3%). August FDI -5.1% YTD (last -4.0%)

• South Korea's August trade surplus $880 mln (expected surplus of $870 mln; last surplus of $1.65 bln). August Imports -22.8% yr/yr, as expected (last -25.4%) and Exports -8.3% yr/yr (expected -8.4%; last -16.4%)

• India's August trade deficit $24.2 bln (expected deficit of $21.0 bln; last deficit of $20.7 bln)

• New Zealand's August Business PMI 46.1 (last 46.3)

---Equity Markets---

• Japan's Nikkei: +1.1% (+2.8% for the week)

• Hong Kong's Hang Seng: +0.8% (-0.1% for the week)

• China's Shanghai Composite: +0.1% (UNCH for the week)

• India's Sensex: +0.5% (+1.9% for the week)

• South Korea's Kospi: +1.1% (+2.1% for the week)

• Australia's ASX All Ordinaries: +1.4% (+1.7%for the week)

---FX---

• USD/JPY: +0.4% to 147.93

• USD/CNH: -0.1% to 7.2795

• USD/INR: +0.1% to 83.09

Europe: DAX +1.1%, FTSE +0.8%, CAC +1.7%

Major European indices are looking for a higher finish to the week amid growing speculation that the European Central Bank has reached the peak rate in its hiking cycle. European Central Bank policymaker de Guindos said that headline and core CPI will continue to ease. France's Finance Ministry lowered its domestic growth forecast for 2024 to 1.4% from 1.6% due to an expected recession in Germany, sluggish growth in China, and high interest rates.

• In economic data:

• Eurozone's July trade surplus EUR6.5 bln (last surplus of EUR18.5 bln). Q2 Wages 4.6% yr/yr (last 4.9%) and Q2 Labor Cost Index 4.5% yr/yr (last 5.2%)

• France's August CPI 1.0% m/m, as expected (last 0.1%); 4.9% yr/yr (expected 4.8%; last 4.3%)

• Italy's August CPI 0.3% m/m (expected 0.4%; last 0.0%); 5.4% yr/yr (expected 5.5%; last 5.9%). July trade surplus EUR6.38 bln (expected surplus of EUR6.50 bln; last surplus of EUR3.46 bln)

---Equity Markets---

• STOXX Europe 600: +0.8% (+2.2% week-to-date)

• Germany's DAX: +1.1% (+1.5% week-to-date)

• U.K.'s FTSE 100: +0.8% (+3.5% week-to-date)

• France's CAC 40: +1.7% (+2.6% week-to-date)

• Italy's FTSE MIB: +0.8% (+3.1% week-to-date)

• Spain's IBEX 35: +0.5% (+2.5% week-to-date)

---FX---

• EUR/USD: +0.1% to 1.0656

• GBP/USD: UNCH at 1.2410 

• USD/CHF: +0.1% to 0.8963