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18/09/23 Briefing


The S&P 500 futures are down 7 points and are trading 0.2% below fair value. The Nasdaq 100 futures are down 49 points and are trading 0.3% below fair value. The Dow Jones Industrial Average futures are down 29 points and are trading 0.1% below fair value.

Equity futures point to a lower open to start the week. Participants are waiting to see how the market responds to Friday's sell off and are hesitant in front of Wednesday's FOMC policy decision. The market is not expecting a rate hike and will be more focused on the updated Summary of Economic Projections and the tone that Fed Chair Powell takes at his press conference.

Separately, the UAW strike persists with Bloomberg reporting that a Stellantis (STLA) offer to increase pay by nearly 21% over four years, with a 10% immediate increase, has been turned down by the UAW.

Also, House Republicans presented a short-term bill that would avoid government shutdown until Oct. 31, according to Reuters.

Treasury yields and oil prices are moving higher this morning. The 2-yr note yield is up one basis point to 5.05% and the 10-yr note yield is up one basis point to 4.34%. WTI crude oil futures are up 0.5% to $91.26/bbl.

In corporate news:

  • DoorDash (DASH 82.19, +1.26, +1.6%): upgraded to Buy from Neutral at Mizuho Securities

  • Micron (MU 71.05, +1.17, +1.7%): upgraded to Buy from Hold at Deutsche Bank

  • Walt Disney (DIS 85.89, +0.31, +0.4%): Raymond James initiated coverage with an Outperform rating; Chief Information Officer leaves company, according to WSJ

  • Clorox (CLX 143.30, -2.90, -2.0%): identified unauthorized activity on some of its Information Technology systems; believes the impact will be material on Q1 financial results

  • Stellantis (STLA 18.91, -0.34, -1.8%), Ford (F 12.57, -0.04, -0.3%), General Motors (GM 33.92, -0.03, -0.1%): UAW rejects offer from Stellantis, according to Bloomberg

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific began the week on a mostly lower note while markets in Japan were closed for a holiday. Japan's Nikkei: CLOSED, Hong Kong's Hang Seng: -1.4%, China's Shanghai Composite: +0.3%, India's Sensex: -0.4%, South Korea's Kospi: -1.0%, Australia's ASX All Ordinaries: -0.7%.

  • In economic data:

  • Singapore's August trade surplus SGD3.584 bln (expected surplus of SGD5.787 bln; last surplus of SGD6.509 bln). August non-oil exports -3.8% m/m (expected 5.5%; last -3.5%); -20.1% yr/yr (expected -15.8%; last -20.3%)


  • In news:

  • Taiwan Semiconductor Manufacturing (TSM) ordered suppliers to slow deliveries of high-end chipmaking equipment, suggesting slowing demand.

  • China's Evergrande saw continued volatility amid speculation about a new investigation into the company's practices.

  • Michelle Bullock is now the new Governor of the Reserve Bank of Australia.

  • NZIER lowered New Zealand's 2023/24 growth forecast to 0.4% from 0.6% while inflation in Q1 is expected to reach 4.3%.



  • Major European indices trade in the red. STOXX Europe 600: -0.6%, Germany's DAX: -0.6%, U.K.'s FTSE 100: -0.3%, France's CAC 40: -1.0%, Italy's FTSE MIB: -0.8%, Spain's IBEX 35: -0.3%.

  • In economic data:

  • U.K.'s September Rightmove House Prices 0.4% m/m (last -1.9%); -0.4% yr/yr (last -0.1%)


  • In news:

  • European Central Bank policymaker Holzmann said that there is a risk that more tightening will be needed, though he described the likelihood another hike as not big, while policymaker Kazimir said that he hopes that the September hike was the final one.

  • Moody's raised Greece's rating to Ba1 from Ba3 and revised the outlook to Stable from Positive, Fitch affirmed Germany's AAA rating with a Stable Outlook, and Standard & Poor's affirmed Spain's A rating with a Stable outlook.



U.S. equity futures:

  • S&P 500 Futures -9 @ 4,441

  • DJIA Futures: -37 @ 34,581

  • Nasdaq 100 Futures: -54 @ 15,149

Overseas:

  • Europe: DAX -0.6%, FTSE -0.3%, CAC -1.0%

  • Asia: Nikkei CLOSED, Hang Seng -1.4%, Shanghai Composite +0.3%

Commodities:

  • Crude Oil +0.48 @ 90.50

  • Nat Gas -0.002 @ 2.642

  • Gold +1.65 @ 1947.85

  • Silver +0.029 @ 23.415

  • Copper -0.0148 @ 3.7862


Earnings/Guidance:

  • Berry Petroleum ( BRY 0.00% ) updates annual guidance

News:

  • UAW rejects offer from Stellantis, according to Bloomberg

  • House Republicans looking for stopgap spending deal to avoid shutdown, according to Reuters

  • UK CMA releases proposed principles to guide competitive AI markets and protect consumers

  • Aclaris Therapeutics ( ACRS 0.00% ) Announces Positive Results from Phase 1 Multiple Ascending Dose Trial of ATI-2138, an Investigational Oral Covalent ITK/JAK3 Inhibitor

  • Aehr Test Systems ( AEHR 0.00% ) receives order from new customer for FOX-NP multi-wafer test and burn-in system for silicon carbide MOSFETs

  • Amazon ( AMZN 0.02% ) Prime Big Deal Days begins October 10 at 3 a.m. EDT and running through October 11

  • Amazon ( AMZN 0.02% ) looking for new area of focus, according to the Wall Street Journal

  • B2Gold ( BTG 0.92% ) provides construction update for the Goose Project in Nunavut, Canada; construction on budget and on track to pour first gold in Q1 2025

  • BioCryst Pharma ( BCRX 0.00% ): INESSS has issued a positive recommendation for PrORLADEYO to be reimbursed for the prevention of hereditary angioedema attacks in adults and pediatric patients 12 years of age and older in Quebec

  • BioNTech ( BNTX 0.00% ) and CEPI announce partnership to advance mRNA Mpox vaccine development and support CEPI's 100 Days Mission

  • Black Diamond Therapeutics ( BDTX 0.00% ) announces CEO transition; appoints current Chairman of the Board Mark Velleca as CEO

  • Blink Charging ( BLNK 0.00% ) disclosed Friday that it was notified of the amicable departure of Mark Pastrone, the Company's Chief Operating Officer

  • BMO ( BMO 0.17% ) to halt auto lending, according to Reuters

  • CAE ( CAE 1.44% ) announced that they are building on their longstanding partnership with a long-term agreement to provide pilot and cabin crew training in Madrid, Spain

  • Centerra Gold ( CGAU 4.10% ) Announces Strategic Plan Including Thompson Creek Prefeasibility Study Highlights

  • CGI Group ( GIB 0.54% ) has been selected to deploy CGI All Payments, for Scotiabank (BNS)

  • Clarivate ( CLVT 0.27% ) Board of Directors unanimously approved the termination of the Company's tax benefits preservation plan

  • Clorox ( CLX 2.39% ) identified unauthorized activity on some of its Information Technology systems; believes the impact will be material on Q1 financial results

  • Disney's ( DIS 0.65% ) Chief Information Officer leaves company

  • DocGo ( DCGO 0.00% ) disclosed that Anthony Capone resigned as the Chief Executive Officer of DocGo and from all other positions with the Company due to personal reasons

  • ESSA Pharma ( EPIX 0.00% ) Announces Initiation of Phase 2 Study Evaluating Masofaniten (EPI-7386) in Combination with Enzalutamide in Patients with Metastatic Castration-Resistant Prostate Cancer

  • Ford Motor ( F 2.14% ) is laying off approx 600 workers in Michigan assembly plant, according to CNBC

  • Ford Motor ( F 2.14% ): Focus on Ford and General Motors (GM) dividends, according to Barron's

  • Full Truck Alliance Co. Ltd. ( YMM 1.42% ) entered into a binding term sheet that agrees in principle to settle certain putative shareholder class action lawsuits in connection with its initial public offering

  • Gannett ( GCI 4.14% ) announces additional debt reduction

  • General Dynamics ( GD 0.12% ) awarded a US Navy not-to-exceed $517.2 mln delivery order

  • General Motors ( GM 1.80% ) may have to idle production at Fairfax, KS plant as early as next week, 2000 workers could be laid off, according to CNBC

  • Gilead Sciences' ( GILD 0.09% ) Kite unit reports Car T-cell Therapy Yescarta demonstrates high response rate and durable remission in ALYCANTE study as initial treatment for transplant ineligible patients with relapsed/refractory Large B-cell lymphoma

  • Ginkgo Bioworks ( DNA 4.15% ) and Factorial Biotechnologies announce a new collaboration

  • GlaxoSmithKline's ( GSK 0.21% ) Ojjaara treatment for patients with myelofibrosis approved by the FDA, according to Reuters

  • Hecla Mining ( HL 0.71% ) provides Lucky Friday update

  • ImmunoGen ( IMGN 0.00% ) appoints Lauren White as CFO

  • Ionis Pharma ( IONS 0.00% ) treatment of Pelizaeus-Merzbacher disease granted FDA orphan designation on Friday

  • Korea Electric Power Corp ( KEP 0.15% ) shareholders elected Kim, Dong-Cheol as the President & CEO

  • Kymera Therapeutics ( KYMR 0.00% ): FDA grants Fast Track designation to KT-333 for the treatment of R/R Cutaneous T-cell Lymphoma (CTCL) and R/R Peripheral T-cell Lymphoma

  • Li-Cycle ( LICY 0.00% ) and Glencore (GLNCY) accelerate operational plans for European Recycling Hub

  • Lithia Motors ( LAD 2.38% ) and Driveway to form strategic partnership with Pinewood Technologies and acquire Pendragon PLC's Fleet Management and UK Motor Divisions

  • Lockheed Martin ( LMT 1.37% ) awarded a $196.5 mln US Navy contract

  • Nevro ( NVRO 0.84% ) announced the publication of new data validating the health economic benefits of 10 kHz Therapy, Nevro's proprietary high-frequency,10 kHz spinal cord stimulation therapy

  • Nexstar ( NXST 0.00% ) and DIRECTV agree to temporarily return TV stations and Cable News Network NewsNation to DIRECTV, DIRECTV STREAM, and U-verse

  • NIO ( NIO 1.15% ) confirms launch of its All-New EC6, a smart electric coupe SUV, in China

  • Novartis ( NVS 0.55% ) unit Sandoz receives positive CHMP opinion for breast and gastric cancer biosimilar trastuzumab

  • Nuvalent ( NUVL 0.00% ) will present preliminary dose-escalation data from its ongoing ALKOVE-1 Phase 1/2 clinical trial of NVL-655; plans to host a conference call on October 13, 2023

  • ODP Corporation ( ODP 0.00% ) announced that CEO Gerry P. Smith began a temporary medical leave of absence to undergo a medical procedure that requires several weeks of recovery

  • Orchard Therapeutics ( ORTX 0.00% ) announced the U.S. Food and Drug Administration (FDA) has accepted the filing of its Biologics License Application (BLA) for OTL-200 in metachromatic leukodystrophy (MLD) under Priority Review. The agency has set a Prescription Drug User Fee Act (PDUFA) goal date of March 18, 2024

  • Origin Materials ( ORGN 0.00% ) has been awarded funding from BioMADE, a Manufacturing Innovation Institute catalyzed by the U.S. Department of Defense

  • Softbank ( SFTBY ) looking to invest in OpenAI, according to Financial Times

  • Standard Lithium ( SLI 1.23% ) announces that the Preliminary Feasibility Study for the South West Arkansas Project

  • Terran Orbital ( LLAP 2.74% ) announced that CFO Gary Hobart transitioned from his current role into the newly created senior executive position of Chief Transformation Officer

  • UBS ( UBS 0.19% ) looking to replace Credit Suisse AT1 debt, according to Financial Times

  • Valero Energy ( VLO 1.81% ) announces $2.5 bln share repurchase authorization

  • VIAVI ( VIAV 0.00% ) And Partners Awarded Funding for Three Projects In DSIT ONE Competition

  • VinFast Auto ( VFS 0.00% ) announced that it delivered 9,535 electric vehicles in 2Q23, more than five times the number of deliveries in 1Q23. VinFast delivered a total of 11,315 electric vehicles in the first half of 2023 globally

  • Walt Disney ( DIS 0.65% ) has held preliminary talks with India streaming suitors including Reliance Industries Ltd., according to Bloomberg

  • Zai Lab ( ZLAB 0.00% ) announces that the Center for Drug Evaluation of the National Medical Products Administration granted Breakthrough Therapy Designation for efgartigimod alfa injection for the treatment of patients with chronic inflammatory demyelinating polyneuropathy

M&A:

  • B2Gold ( BTG 0.92% ) consolidate Gramalote Project by acquiring AngloGold Ashanti's (AU) 50% Stake

  • Berry Petroleum ( BRY 0.00% ) completes acquisition of Macpherson Energy; updates annual guidance

  • Int'l Paper ( IP 0.23% ) completed the sale of its 50% interest in Ilim SA, the holding company for its Ilim joint venture to its JV partners for $484 mln in cash

  • Newmont Goldcorp ( NEM 0.35% ) receives clearances from Australia's Foreign Investment Review Board and Japan's Fair Trade Commission

  • Petrobras ( PBR 1.25% ) reaffirms that it is carrying out due diligence on Braskem (BAK)

Syndicate:

  • Agilysys ( AGYS 0.00% ) files for 1,735,457 share common stock offering by selling shareholder

  • Chewy ( CHWY 4.71% ) files mixed shelf securities offering

  • Madison Square Garden Entertainment ( MSGE 1.95% ) announces that Sphere Entertainment Group has commenced an underwritten secondary offering of 7,150,000 shares of MSG Entertainment's Class A common stock

IPOs:

  • Expected to Price:

  • Instacart (Nasdaq: CART): The provider of an online grocery shopping and delivery platform is expected to price its 22.0 M share IPO between $28-$30.

  • Klaviyo (NYSE: KVYO): The provider of a cloud-based business process outsourcing platform is expected to price its 19.2 M share IPO between $25-$27.


Gapping Up/Down

  • Gapping up:

  • SLI +3.1%, LICY +1.4%, CF +1.1%, GSK +1.1%, LMT +1%, NVS +0.6%, GILD +0.6%, DIS +0.5%, LAD +0.5%, GM +0.4%


  • Gapping down:

  • ENTA -2.7%, CLX -2.2%, AU -1.4%, CGAU -0.9%, CX -0.9%, NIO -0.4%


Analyst Research (see Upgrades/Downgrades calendar for full list):

  • Upgrades

  • Albany Intl (AIN) upgraded to Outperform from Market Perform at TD Cowen; tgt raised to $106

  • L3Harris (LHX) upgraded to Overweight from Equal Weight at Wells Fargo; tgt raised to $209

  • Lockheed Martin (LMT) upgraded to Equal Weight from Underweight at Wells Fargo; tgt $440

  • Simply Good Foods (SMPL) upgraded to Overweight from Equal-Weight at Morgan Stanley; tgt raised to $40

  • ZIM Integrated Shipping (ZIM) upgraded to Overweight from Neutral at JP Morgan; tgt $15.40


  • Downgrades:

  • Dropbox (DBX) downgraded to Mkt Perform from Outperform at William Blair

  • NetApp (NTAP) downgraded to Mkt Perform from Outperform at William Blair

  • Paymentus (PAY) downgraded to Neutral from Outperform at Robert W. Baird; tgt raised to $18


  • Others:

  • ASGN Incorporated (ASGN) initiated with an Overweight at Wells Fargo; tgt $102

  • Kinetik (KNTK) initiated with an Equal Weight at Wells Fargo; tgt $38

  • lululemon athletica (LULU) initiated with a Buy at HSBC Securities; tgt $500

  • Nextracker (NXT) initiated with an Equal Weight at Wells Fargo; tgt $44

  • Seabridge Gold (SA) initiated with an Outperform at RBC Capital Mkts; tgt $25

  • Tenable (TENB) initiated with an Outperform at TD Cowen; tgt $55

  • Vertex (VERX) resumed with an Overweight at Morgan Stanley; tgt $25


Econ Data:

  • 10:00 ET: NAHB Housing Market Index for Sep (Briefing.com Consensus 50; Prior 50)

  • 16:00 ET: Net Long-Term TIC Flows for July (Briefing.com Consensus NA; Prior $195.9B)

Earnings:

  • Monday (Sep 18)

  • Afternoon: SFIX


  • Tuesday (Sep 19)

  • Morning: APOG AZO DAVA

  • Afternoon: SCS


  • Wednesday (Sep 20)

  • Morning: GIS

  • Afternoon: FDX KBH


  • Thursday (Sep 21)

  • Morning: DRI FDS


Asia & Europe detail:

Asia: Nikkei CLOSED, Hang Seng -1.4%, Shanghai Composite +0.3%

Equity indices in the Asia-Pacific began the week on a mostly lower note while markets in Japan were closed for a holiday. Taiwan Semiconductor Manufacturing (TSM) ordered suppliers to slow deliveries of high-end chipmaking equipment, suggesting slowing demand. China's Evergrande saw continued volatility amid speculation about a new investigation into the company's practices. Michelle Bullock is now the new Governor of the Reserve Bank of Australia. NZIER lowered New Zealand's 2023/24 growth forecast to 0.4% from 0.6% while inflation in Q1 is expected to reach 4.3%.

  • In economic data:

  • Singapore's August trade surplus SGD3.584 bln (expected surplus of SGD5.787 bln; last surplus of SGD6.509 bln). August non-oil exports -3.8% m/m (expected 5.5%; last -3.5%); -20.1% yr/yr (expected -15.8%; last -20.3%)


---Equity Markets---

  • Japan's Nikkei: CLOSED

  • Hong Kong's Hang Seng: -1.4%

  • China's Shanghai Composite: +0.3%

  • India's Sensex: -0.4%

  • South Korea's Kospi: -1.0%

  • Australia's ASX All Ordinaries: -0.7%

---FX---

  • USD/JPY: -0.1% to 147.62

  • USD/CNH: +0.2% to 7.2964

  • USD/INR: +0.3% to 83.27

Europe: DAX -0.6%, FTSE -0.3%, CAC -1.0%

Major European indices trade in the red. European Central Bank policymaker Holzmann said that there is a risk that more tightening will be needed, though he described the likelihood another hike as not big, while policymaker Kazimir said that he hopes that the September hike was the final one. Moody's raised Greece's rating to Ba1 from Ba3 and revised the outlook to Stable from Positive, Fitch affirmed Germany's AAA rating with a Stable Outlook, and Standard & Poor's affirmed Spain's A rating with a Stable outlook.

  • In economic data:

  • U.K.'s September Rightmove House Prices 0.4% m/m (last -1.9%); -0.4% yr/yr (last -0.1%)


---Equity Markets---

  • STOXX Europe 600: -0.6%

  • Germany's DAX: -0.6%

  • U.K.'s FTSE 100: -0.3%

  • France's CAC 40: -1.0%

  • Italy's FTSE MIB: -0.8%

  • Spain's IBEX 35: -0.3%

---FX---

  • EUR/USD: +0.1% to 1.0669

  • GBP/USD: +0.1% to 1.2397

  • USD/CHF: -0.2% to 0.8959

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