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19/09/23 Briefing


The S&P 500 futures are up 4 points and are trading 0.1% above fair value. The Nasdaq 100 futures are up 12 points and are trading 0.1% above fair value. The Dow Jones Industrial Average futures are up 24 points and are trading 0.1% above fair value.

Stock futures indicate a higher open, but upside moves have been modest as participants await the FOMC policy decision, updated Summary of Economic Projections and dot plot, and Fed Chair Powell's press conference on Wednesday.

Separately, the OECD is projecting global growth of 3.0% in 2023 and 2.7% in 2024, noting there are significant downside risks. Its forecast for the US calls for 2.2% growth in 2023 and 1.3% in 2024.

Instacart will sell shares in its initial public offering today for $30, which is the high end of its $28-30 range.

The UAW threatened to extend its strike to more plants if there is not enough progress with automakers by noon on Friday.

The 2-yr note yield is up two basis points to 5.06% and the 10-yr note yield is unchanged from yesterday at 4.32%.

WTI crude oil futures are up 0.7% to $91.17/bbl.

In corporate news:

  • Starbucks (SBUX 95.53, -1.23, -1.3%): facing consumer lawsuit, according to Reuters; downgraded to Market Perform from Outperform at TD Cowen

  • CVS Health (CVS 71.35, +0.65, +0.9%): upgraded to Outperform from In-line at Evercore ISI

  • Dell (DELL 70.10, +0.95, +1.4%): upgraded to Outperform from Neutral at Daiwa Securities

  • AutoZone (AZO 2470.00, -52.10, -2.1%): beats by $1.18, beats on revs

  • Block (SQ 50.57, -0.68, -1.4%): CEO Alyssa Henry to depart, effective October 2; Jack Dorsey, the Company's Block Head and Chairperson, will also serve as the Square Head

  • U.S. Steel (X 31.02, +0.49, +1.6%): issues upside Q3 EPS guidance as each of company's segments are outperforming earlier estimates

  • Apogee Enterprises (APOG 52.50, +3.19, +6.5%): beats by $0.24, misses on revs; guides FY24 EPS above consensus, reaffirms FY24 revs guidance

  • Carnival (CCL 15.29, +0.25, +1.6%): upgraded to Hold from Sell at Truist

  • Deere (DE 402.76, -8.08, -2.0%): downgraded to In-line from Outperform at Evercore ISI

  • Intel (INTC 38.43, +0.44, +1.2%): indicated higher ahead of Intel Innovation event (Sept. 19-20)

Reviewing overnight developments:

  • Equity indices in the Asia-pacific region ended Tuesday on a mostly lower note while markets in India were closed for a holiday. Japan's Nikkei: -0.9%, Hong Kong's Hang Seng: +0.4%, China's Shanghai Composite: UNCH, India's Sensex: CLOSED, South Korea's Kospi: -0.6%, Australia's ASX All Ordinaries: -0.5%.

  • In economic data:

  • Hong Kong's August Unemployment Rate 2.8% (last 2.8%)


  • In news:

  • Japanese automakers have shown continued strength amid the ongoing contract dispute between United Auto Workers and Detroit's automakers.

  • Chinese press speculated that the People's Bank of China will not make changes to its loan prime rate this month but could announce additional cuts in Q4.

  • The Reserve Bank of Australia's latest policy minutes showed that policymakers believe that there is a strong case for pausing rate hikes.



  • Major European indices trade on a mostly flat note while Italy's MIB (+0.6%) outperforms with bank stocks showing strength. STOXX Europe 600: +0.1%, Germany's DAX: -0.1%, U.K.'s FTSE 100: +0.1%, France's CAC 40: +0.2%, Italy's FTSE MIB: +0.6%, Spain's IBEX 35: +0.4%.

  • In economic data:

  • Eurozone's July Current Account surplus EUR20.9 bln (expected surplus of EUR30.2 bln; last surplus of EUR35.8 bln). August CPI 0.5% m/m (expected 0.6%; last -0.1%); 5.2% yr/yr (expected 5.3%; last 5.3%). August Core CPI 0.3% m/m, as expected (last -0.1%); 5.3% yr/yr, as expected (last 5.5%)

  • Swiss August trade surplus CHF4.054 bln (expected surplus of CHF4.230 bln; last surplus of CHF3.132 bln)


  • In news:

  • Germany's Bundesbank expects the domestic economy to contract in Q3, noting that an "overhaul" is needed.

  • Meanwhile, the OECD's updated economic outlook showed that Germany is the only major economy that is expected to be in recession this year.

  • European Central Bank policymaker Villeroy de Galhau said that the ECB will maintain rates at 4.0%.



U.S. equity futures:

  • S&P 500 Futures +5 @ 4,459

  • DJIA Futures: +31 @ 34,655

  • Nasdaq 100 Futures: +16 @ 15,241

Overseas:

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

  • Asia: Nikkei -0.9%, Hang Seng +0.4%, Shanghai Composite UNCH

Commodities:

  • Crude Oil +0.68 @ 91.26

  • Nat Gas +0.012 @ 2.740

  • Gold +2.95 @ 1956.35

  • Silver +0.124 @ 23.622

  • Copper -0.0400 @ 3.7390


Earnings/Guidance:

  • Apogee Enterprises ( APOG 2.89% ) beats by $0.24, misses on revs; guides FY24 EPS above consensus, reaffirms FY24 revs guidance

  • AutoZone ( AZO 2.19% ) beats by $1.18, beats on revs

  • Endava ( DAVA 1.53% ) beats by GBP0.12, reports revs in-line; guides Q1 EPS below consensus, revs below consensus; guides FY24 EPS below consensus, revs below consensus

  • NCR Corp ( NCR 0.56% ) provides 2027 financial targets in investor presentation slides

  • Stitch Fix ( SFIX 3.44% ) misses by $0.03, beats on revs; guides Q1 revs below consensus; guides FY24 revs below consensus

  • Synovus ( SNV 0.47% ) expects an increase in third quarter charge-offs arising from a 10.75%

  • U.S. Steel ( X 2.78% ) issues upside Q3 EPS guidance as each of company's segments are outperforming earlier estimates

News:

  • UAW President Shawn Fain confirmed a new strike deadline of this Friday, Sept. 22 at noon

  • OECD released latest Interim Economic Outlook - global economy was stronger than expected in the first half of 2023, but the growth outlook is weak, inflation is proving persistent and there are significant downside risks

  • White House releases Partnership for Atlantic Cooperation fact sheet

  • Australia looking for tighter security standards for dating apps, according to AP

  • Agree Realty ( ADC 0.68% ) promotes Nicole Witteveen to COO, effective immediately

  • Airbnb ( ABNB 1.54% ) listings in New York pressured by new regulations, according to the New York Post

  • Air Lease ( AL 0.19% ) announces a long-term lease placement for one Airbus A330-200 aircraft with HiSky, which is scheduled for delivery in 2023

  • Altair Engineering ( ALTR 1.37% ) announces that the Ultra Librarian CAD model library is now available to Altair users in several Altair ECAD verification and multiphysics solutions, including Altair PollEx, Altair SimLab, and Altair One UDE

  • Arcutis ( ARQT 3.81% ) Announces Positive Results from INTEGUMENT-PED Pivotal Phase 3 Trial of Roflumilast Cream 0.05% for the Treatment of Atopic Dermatitis in Children Ages 2 to 5

  • AutoZone ( AZO 2.19% ) promotes new COO

  • Bausch Health ( BHC 7.41% ) confirmed yesterday that Tom Vadaketh will resign as the Executive Vice President, Chief Financial Officer of the Company

  • BeiGene ( BGNE 0.21% ) entered into an agreement with Novartis (NVS) to regain worldwide rights to develop, manufacture, and commercialize TEVIMBRA (tislelizumab)

  • Best Buy ( BBY 0.50% ) provides holiday updates including exclusive Samsung and Microsoft sale events

  • Block ( SQ 2.79% ) CEO Alyssa Henry to depart, effective October 2

  • BP ( BP 1.04% ) appoints Kate Thomson as CFO

  • Bright Health Group ( BHG 1.43% ) continues to make significant progress towards ACA Insurance Business wind-down

  • Enersys ( ENS 0.32% ) awarded $91.8 mln multi-year contract to supply its Thin Plate Pure Lead batteries to the U.S. Navy

  • Enviri Corporation ( NVRI 0.13% ) to appoint Tom Vadaketh CFO

  • EQT Corp. ( EQT 0.66% ) enters into tolling agreement with Commonwealth LNG to produce 1 mln tons per annum of LNG under 15-yr contract

  • Eversource Energy ( ES 0.16% ) elects Paul Chodak as Executive VP and COO, effective November 13

  • Ford ( F 0.12% ) of Canada confirmed last night that it has agreed to continue negotiations beyond the September 18, 11:59 p.m. ET deadline to achieve a tentative agreement

  • Fortis ( FTS 0.18% ) announces $25 bln five year capital outlook and 4.4% increase in Q4 dividend

  • GlaxoSmithKline ( GSK 0.16% ): European Commission authorizes ViiV Healthcare's Apretude (cabotegravir long-acting and tablets) for HIV prevention

  • Hawaiian Electric ( HE 0.23% ) appoints Paul Ito to subsidiary CFO position through approximately December 31, 2024 following planned retirement of Tayne Sekimura on September 30, 2023

  • Merck ( MRK 0.12% ) announced FDA has accepted and granted priority review for a supplemental new drug application (sNDA) seeking approval for WELIREG

  • Mercury ( MRCY 0.71% ) introduces the first space-qualified FPGA processing board to use AMD's Xilinx Versal AI core

  • Microsoft ( MSFT 0.64% ): Internal sensitive data exposed at Microsoft, according to TechCrunch

  • Microsoft ( MSFT 0.64% ) to offer game streaming service, according to The Verge

  • Mobilicom Ltd. ( MOB 7.58% ) announced an initial purchase order for two of its products from a new customer, one of the largest defense contractors in Europe

  • New Pacific ( NEWP 0.43% ) announced yesterday the Filing of NI 43-101 Technical Report for the Carangas Project

  • Norfolk Southern ( NSC 1.28% ) announces interim Value Assurance Program to compensate any reduction in value of residential properties in East Palestine, OH following the February derailment

  • Orchestra BioMed ( OBIO 16.11% ) announces the U.S. FDA granted approval of an investigational device exemption to initiate the global pivotal BACKBEAT study evaluating the efficacy and safety of atrioventricular interval modulation therapy for treating hypertensive patients who are indicated for a dual-chamber cardiac pacemaker

  • Pfizer ( PFE 0.64% ) receives EC approval for LITFULO

  • Revolution Medicines ( RVMD 0.02% ) Doses First Patient in Phase 1/1b Clinical Trial of RMC-9805, an Oral, Covalent, Mutant-Selective KRASG12D(ON) Inhibitor

  • Rocket Lab USA ( RKLB 10.42% ) experiences issue on co's 41st mission

  • Starbucks ( SBUX 1.82% ) facing consumer lawsuit, according to Reuters

  • Stellantis ( STLA 1.90% ) resumes negotiations with UAW reps focused on common ground, according to Bloomberg

  • Target ( TGT 0.46% ) is making holiday shopping more affordable, introducing strategic partnerships

  • Telefonica Brasil ( VIV 1.53% ) provides ANATEL court updates

  • Ulta Beauty ( ULTA 0.07% ) COO Kecia Steelman also to become President of Ulta Beauty

  • Wabash Natl ( WNC 1.21% ) announces multi-year agreement with Rockland Flooring for laminated wood trailer flooring

M&A:

  • Hut 8 Mining ( HUT 3.49% ) provides update on business combination with USBTC

  • indie Semiconductor ( INDI 0.46% ) enters into definitive agreement to acquire EXALOS AG; company paid approximately $45 mln to EXALOS equity holders

  • Ligand Pharma ( LGND 1.20% ) spinning out and merging Pelican subsidiary with Primordial Genetics to form Primrose Bio; alters FY23 revenue outlook, raises earnings forecast

Syndicate:

  • Allurion Technologies ( ALUR 0.08% ) files for 55,005,366 shares of common stock by selling shareholders

  • Fortis ( FTS 0.18% ) established an at-the-market equity program that allows the Corporation to issue up to C$500,000,000 (or its U.S. dollar equivalent) of common shares

  • indie Semiconductor ( INDI 0.46% ) files for 10,070,008 shares of common stock by selling shareholders

  • Jones Lang LaSalle ( JLL 0.19% ) files mixed shelf securities offering

  • Terran Orbital ( LLAP 16.20% ) to offer shares in public offering, no amount provided

IPOs:

  • Expected to Price:

  • 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.


  • Priced to Trade:

  • Instacart (Nasdaq: CART): The provider of an online grocery shopping and delivery platform priced its 22.0 M share IPO at $30, the high end of the $28-$30 expected range.


Gapping Up/Down

  • Gapping up:

  • INDI +7%, MRCY +2.9%, STLA +2.1%, SNV +1.7%, X +1.4%, APOG +1.4%, BP +1.1%, HUT +0.9%, CLF +0.6%


  • Gapping down:

  • LLAP -17.6%, RKLB -16.3%, SFIX -6.2%, NIO -4.9%, ALUR -3.2%, WNC -2%, JLL -2%, AL -1.8%, SQ -0.7%, ES -0.5%


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

  • Upgrades

  • Carnival (CCL) upgraded to Hold from Sell at Truist; tgt raised to $17

  • CVS Health (CVS) upgraded to Outperform from In-line at Evercore ISI; tgt raised to $83

  • Dell (DELL) upgraded to Outperform from Neutral at Daiwa Securities; tgt raised to $80

  • Globus Medical (GMED) upgraded to Buy from Hold at Stifel; tgt $61

  • Rackspace Technology (RXT) upgraded to Outperform from Mkt Perform at Raymond James; tgt $3.50

  • Rexford Industrial Realty (REXR) upgraded to Outperform from Peer Perform at Wolfe Research; tgt $70


  • Downgrades:

  • CNH Industrial (CNHI) downgraded to In-line from Outperform at Evercore ISI; tgt lowered to $14

  • Daqo New Energy (DQ) downgraded to Hold from Outperform at Daiwa Securities; tgt lowered to $32

  • Deere (DE) downgraded to In-line from Outperform at Evercore ISI; tgt lowered to $424

  • Lazard (LAZ) downgraded to Sell from Neutral at Goldman; tgt lowered to $32

  • NatWest Group plc (NWG) downgraded to Hold from Buy at HSBC Securities

  • Planet Fitness (PLNT) downgraded to Neutral from Overweight at JP Morgan; tgt lowered to $52

  • Starbucks (SBUX) downgraded to Market Perform from Outperform at TD Cowen; tgt lowered to $107


  • Others:

  • Akero Therapeutics (AKRO) initiated with an Overweight at Cantor Fitzgerald; tgt $69

  • Arm Holdings plc (ARM) initiated with a Neutral at Redburn Atlantic; tgt $50

  • Array Tech (ARRY) added to US 1 List at BofA Securities; tgt $30

  • Arrowhead (ARWR) initiated with a Neutral at Citigroup; tgt $33

  • Aurora Innovation (AUR) initiated with a Market Perform at TD Cowen; tgt $3

  • ExlService (EXLS) initiated with a Hold at Jefferies; tgt $33

  • GE HealthCare (GEHC) initiated with a Buy at Citigroup; tgt $82

  • Interactive Brokers (IBKR) initiated with a Neutral at Goldman; tgt $97

  • Intercontinental Hotels Group (IHG) resumed with a Buy at BofA Securities

  • Praxis Precision Medicines (PRAX) initiated with a Buy at Truist; tgt $10

  • Raymond James (RJF) initiated with a Neutral at JP Morgan; tgt $121

  • Ryan Specialty Group (RYAN) initiated with a Mkt Perform at JMP Securities

  • Super Micro Computer (SMCI) initiated with an Overweight at Barclays; tgt $327

  • The Vita Coco Company (COCO) initiated with an Equal-Weight at Morgan Stanley; tgt $29

  • WNS (WNS) initiated with a Buy at Jefferies; tgt $82


Econ Data:

  • 08:30 ET: Housing Starts for Aug (Briefing.com Consensus 1435K; Prior 1452K)

  • 08:30 ET: Building Permits for Aug (Briefing.com Consensus 1442K; Prior 1442K)

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 -0.9%, Hang Seng +0.4%, Shanghai Composite UNCH

Equity indices in the Asia-pacific region ended Tuesday on a mostly lower note while markets in India were closed for a holiday. Japanese automakers have shown continued strength amid the ongoing contract dispute between United Auto Workers and Detroit's automakers. Chinese press speculated that the People's Bank of China will not make changes to its loan prime rate this month but could announce additional cuts in Q4. The Reserve Bank of Australia's latest policy minutes showed that policymakers believe that there is a strong case for pausing rate hikes.

  • In economic data:

  • Hong Kong's August Unemployment Rate 2.8% (last 2.8%)


---Equity Markets---

  • Japan's Nikkei: -0.9%

  • Hong Kong's Hang Seng: +0.4%

  • China's Shanghai Composite: UNCH

  • India's Sensex: CLOSED

  • South Korea's Kospi: -0.6%

  • Australia's ASX All Ordinaries: -0.5%

---FX---

  • USD/JPY: +0.1% to 147.66

  • USD/CNH: +0.2% to 7.2987

  • USD/INR: +0.1% to 83.32

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

Major European indices trade on a mostly flat note while Italy's MIB (+0.6%) outperforms with bank stocks showing strength. Germany's Bundesbank expects the domestic economy to contract in Q3, noting that an "overhaul" is needed. Meanwhile, the OECD's updated economic outlook showed that Germany is the only major economy that is expected to be in recession this year. European Central Bank policymaker Villeroy de Galhau said that the ECB will maintain rates at 4.0%.

  • In economic data:

  • Eurozone's July Current Account surplus EUR20.9 bln (expected surplus of EUR30.2 bln; last surplus of EUR35.8 bln). August CPI 0.5% m/m (expected 0.6%; last -0.1%); 5.2% yr/yr (expected 5.3%; last 5.3%). August Core CPI 0.3% m/m, as expected (last -0.1%); 5.3% yr/yr, as expected (last 5.5%)

  • Swiss August trade surplus CHF4.054 bln (expected surplus of CHF4.230 bln; last surplus of CHF3.132 bln)


---Equity Markets---

  • STOXX Europe 600: +0.1%

  • Germany's DAX: -0.1%

  • U.K.'s FTSE 100: +0.1%

  • France's CAC 40: +0.2%

  • Italy's FTSE MIB: +0.6%

  • Spain's IBEX 35: +0.4%

---FX---

  • EUR/USD: +0.1% to 1.0703

  • GBP/USD: +0.1% to 1.2400

  • USD/CHF: -0.1% to 0.8962

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