The S&P 500 futures are up 13 points and are trading 0.2% above fair value. The Nasdaq 100 futures are up 75 points and are trading 0.4% above fair value. The Dow Jones Industrial Average futures are up 53 points and are trading 0.1% above fair value.
Stock futures point to a higher open following yesterday's retreat. Elevated Treasury yields are top of mind for participants, along with the Fed's higher for longer messaging.
The 2-yr note yield is down two basis points to 5.11% and the 10-yr note yield is unchanged from yesterday at 4.48%.
The Bank of Japan made no changes to its policy stance, as expected; meanwhile, Bloomberg reports that China is looking at relaxing restrictions on foreign investment.
The UAW is set to expand its strike if no significant progress is made by noon today.
Eurozone's flash September Composite PMI improved from August, but remains below 50.0 (i.e. in contraction). At 9:45 a.m. ET, the preliminary September S&P Global US Manufacturing PMI and S&P Global US Services PMI reports will be released.
In corporate news:
Apple (AAPL 174.76, +0.83, +0.5%): new iPhone 15 goes on sale today
McDonald's (MCD 273.44, +2.22, +0.8%): plans to up franchise royalty fees across its U.S. restaurants from 4% to 5% for operators opening new locations, according to CNBC
Squarespace (SQSP 28.15, +0.65, +2.4%): UBS initiated coverage with a Buy rating
Activision Blizzard (ATVI 94.09, +1.73, +1.9%): UK CMA says it may approve updated Microsoft (MSFT) and Activision Blizzard (ATVI) deal
HighPeak Energy (HPK 16.93, +1.05, +6.6%): CEO bought 500000 shares at $16.55-16.59 worth ~$8.284 mln
Amazon (AMZN 130.75, +1.46, +1.1%): provides Prime Video update - starting in early 2024, Prime Video shows and movies will include limited advertisements
Reviewing overnight developments:
Equity indices in the Asia-Pacific region ended the week on a mostly higher note. Japan's Nikkei: -0.5% (-3.4% for the week), Hong Kong's Hang Seng: +2.3% (-0.7% for the week), China's Shanghai Composite: +1.6% (+0.5% for the week), India's Sensex: -0.3% (-2.7% for the week), South Korea's Kospi: -0.3% (-3.6% for the week), Australia's ASX All Ordinaries: +0.1% (-2.8% for the week).
In economic data:
Japan's National CPI 3.2% yr/yr (last 3.3%) and National Core CPI 3.1% yr/yr (expected 3.0%; last 3.1%). Flash September Manufacturing PMI 48.6 (expected 49.9; last 49.6) and flash Services PMI 53.3 (last 54.3)
Australia's flash September Manufacturing PMI 48.2 (last 49.6) and flash Services PMI 50.5 (last 47.8)
New Zealand's Q3 Westpac Consumer Sentiment 80.2 (last 83.1). August trade deficit NZD2.29 bln (last deficit of NZD1.18 bln)
In news:
Australia's Manufacturing PMI remained in contraction for the seventh consecutive month in the flash reading for September while Japan's Manufacturing PMI was in contractionary territory for the fourth month in a row.
The Bank of Japan made no changes to its policy stance. However, Bank of America expects negative interest rate and yield curve control policies to be ended early next year.
Chevron appears to be nearing a contract agreement with striking LNG workers.
Central banks in Philippines and Indonesia made no changes to their policy rates.
Major European indices trade on a mostly lower note while the U.K.'s FTSE (+0.6%) outperforms with financials contributing to the strength. STOXX Europe 600: -0.2% (-1.8% week-to-date), Germany's DAX: -0.1% (-2.1% week-to-date), U.K.'s FTSE 100: +0.6% (+0.2% week-to-date), France's CAC 40: -0.5% (-2.7% week-to-date), Italy's FTSE MIB: -0.4% (+0.1% week-to-date), Spain's IBEX 35: -0.2% (+0.5% week-to-date).
In economic data:
Eurozone's flash September Manufacturing PMI 43.4 (expected 44.0; last 43.5) and flash Services PMI 48.4 (expected 47.7; last 47.9)
Germany's flash September Manufacturing PMI 39.8 (expected 39.5; last 39.1) and flash Services PMI 49.8 (expected 47.2; last 47.3)
U.K.'s flash September Manufacturing PMI 44.2 (expected 43.0; last 43.0) and flash Services PMI 47.2 (expected 49.2; last 49.5). September CBI Industrial Trends Orders -18 (expected -18; last -15). August Retail Sales 0.4% m/m (expected 0.5%; last -1.1%); -1.4% yr/yr (expected -1.2%; last -3.1%). August Core Retail Sales 0.6% m/m, as expected (last -1.4%); -1.4% yr/yr (expected -1.3%; last -3.3%)
France's flash September Manufacturing PMI 43.6 (expected 46.0; last 46.0) and flash Services PMI 43.9 (expected 46.0; last 46.0)
Spain's Q2 GDP 0.5% qtr/qtr (expected 0.4%; last 0.6%); 2.2% yr/yr (expected 1.8%; last 4.2%)
In news:
Barclays lowered its terminal rate forecast for the Bank of England to 5.25% from 5.50%, expecting the BoE to remain at the peak rate until the middle of next year.
Meanwhile, Citigroup sees only a 35% chance of another rate hike. Flash September Manufacturing and Services PMI readings from France showed an accelerating contraction, stoking fears about the strength of near-term growth.
U.S. equity futures:
S&P 500 Futures +10 @ 4,340
DJIA Futures: +32 @ 34,102
Nasdaq 100 Futures: +61 @ 14,755
Overseas:
Europe: DAX -0.1%, FTSE +0.6%, CAC -0.5%
Asia: Nikkei -0.5%, Hang Seng +2.3%, Shanghai Composite +1.6%
Commodities:
Crude Oil +0.91 @ 90.54
Nat Gas +0.007 @ 2.6917
Gold +6.70 @ 1946.30
Silver +0.330 @ 24.017
Copper +0.0297 @ 3.7257
Earnings/Guidance:
Pebblebrook Hotel Trust (PEB) says Q3 operating and financial results remain in line with expectations
Scholastic Corp (SCHL) reports Q1 (Aug) results, misses on revs (single est); reaffirms FY24 guidance
W.P. Carey (WPC) releases updated presentation that corrects a typographical error of the 2023 AFFO guidance to range of $5.18-5.26
News:
Commerce Department finalizing rules to prevent China from accessing semiconductor subsidies, according to Reuters
Striking autoworkers seeking 32-hour work week, according to the Wall Street Journal
3D Systems (DDD) appoints Andrew Johnson as interim CFO, effective October 16
Amazon (AMZN) provides Prime Video update - starting in early 2024, Prime Video shows and movies will include limited advertisements
Anterix's (ATEX) Board authorized new $250 mln share repurchase program
ASLAN Pharmaceuticals (ASLN) Announces Acceptance of Late Breaker Abstract on Eblasakimab Phase 2b Results as Oral Presentation and Three Additional Abstracts at 32nd European Academy of Dermatology and Venereology Congress
AstraZeneca (AZN) reports first Phase III results for datopotamab deruxtecan; Plans for global regulatory submissions underway
Avinger (AVGR) determined again to increase the amount available for sale under the ATM Agreement, up to an additional aggregate offering price of $320,507
BeiGene (BGNE): European Commission approves TEVIMBRA as therapy for the treatment of patients with metastatic esophageal squamous cell carcinoma
BorgWarner (BWA) during its Q2 earnings call: impact of the initial UAW strikes on sales is currently expected to be relatively modest
Bristol Myers Squibb (BMY) announces perioperative regimen of Neoadjuvant Opdivo (nivolumab) and Chemotherapy followed by adjuvant Opdivo significantly improves event-free survival in patients with resectable non-small cell lung cancer
eBay (EBAY) issues statement regarding Adevinta comments
Faraday Future (FFIE) Announces Management Stock Purchase Plan
General Motors (GM): CNBC's Phil LeBeau saying UAW President Fain may announce new strikes this morning, strikes would start at noonET
INNOVATE Corp (VATE) COO Suzi Herbst to resign, effective October 20
Jazz Pharma (JAZZ) receives European Commission approval for Enrylaze
Lovesac (LOVE) confirms notification from Nasdaq related to delayed form 10-Q Filing; has 60 calendar days (until November 17, 2023) to submit a plan to regain compliance
LPL Financial (LPLA) reports monthly activity report for August 2023; total advisory and brokerage assets decreased 0.6% from the end of July to $1.27 trillion
Masco (MAS) announces election of Richard Westenberg as Vice President, CFO, effective October 16, 2023
McDonald's (MCD) plans to up franchise royalty fees across its U.S. restaurants from 4% to 5% for operators opening new locations, according to CNBC
Merck (MRK) reports Phase 3 KEYNOTE-A39/EV-302 trial met dual primary endpoints of Overall Survival and Progression-Free Survival in certain patients with previously untreated locally advanced or metastatic urothelial cancer
Merck (MRK) and Eisai provide update on two Phase 3 trials evaluating KEYTRUDA Plus LENVIMA in patients with certain types of metastatic non-small cell lung cancer
MGM Resorts (MGM) recovers from cyberattack, according to AP
Mission Produce (AVO) COO Timothy A. Bulow to depart, effective September 30; CEO Stephen J. Barnard, will assume Mr. Bulow's duties
Mondee Holdings (MOND) announces inaugural share repurchase program of up to $30 mln
Navitas Semiconductor (NVTS) announces highlights of upcoming Investor Day scheduled for Tuesday December 12, 2023, including $1 bln customer pipeline
O-I Glass (OI) closing its Waco, TX glass container plant on or after October 16; estimated associated costs of $60 mln in Q3
Orion Engineered Carbons (OEC) opens its Battery Innovation Center in Germany
PNM Resources (PNM) announces unanimous settlement agreement reached for San Juan credits
PROG Holdings (PRG) subsidiary Progressive Leasing experienced a cybersecurity incident affecting it systems; does not expect it to have a material effect on financials
Prudential (PUK) CFO resigned, according to the Wall Street Journal
Purple Innovation (PRPL) appoints Tod Vogensen as CFO, effective October 16
QuidelOrtho (QDEL) announces that it has been granted CLIA Waiver from the U.S. FDA for Sofia 2 SARS Antigen+ FIA
Renalytix (RNLX) signed a contract with BlueCross and BlueShield of Texas to expand insurance coverage of KidneyIntelX in the state of Texas
Seagen (SGEN) and Merck (MRK) report PADCEV and KEYTRUDA significantly improve Overall Survival and Progression-Free Survival in patients with previously untreated advanced bladder cancer in Pivotal Phase 3 EV-302Trial
Sempra Energy (SRE): Port Arthur LNG Phase 2 Project receives Federal Energy Regulatory Commission authorization
Snapchat (SNAP) seeing premium user growth, according to Bloomberg
Star Bulk Carriers (SBLK) entered into a Repurchase Agreement with OCM XL Holdings pursuant to which the Company agreed to purchase 10 mln of its common shares
Texas Instruments (TXN) increases quarterly cash dividend 5% to $1.30/share from $1.24/share
United Airlines (UAL) promotes Michael Leskinen to CFO
Walt Disney (DIS): Uncertainty about Disney's ability to sell ABC, according to the
Xinyuan Real Estate (XIN) announces progress of property delivery to its customers
Zymeworks (ZYME) and BeiGene terminate collaboration agreement relating to R&D and commercialization of zanidatamab zovodotin
M&A:
Activision Blizzard (ATVI): UK CMA provides update on approval Microsoft (MSFT)/ Activision Blizzard
ATS Corp (ATS) to acquire Avidity Science for $195 mln
Salesforce (CRM) to acquire Airkit.ai, a creator of AI powered customer service applications; financial details not disclosed; to close in second-half of FY24
U.S. Steel (X): Canada's Stelco Holdings weighs bid for the company, according to Bloomberg
West Fraser (WFG) to sell Quesnel River Pulp mill in Quesnel, British Columbia and its Slave Lake Pulp mill in Slave Lake, Alberta to Atlas
Syndicate:
Compass Minerals (CMP) files for 7,034,609 shares of common stock by selling shareholder
First Busey Corp (BUSE) files mixed shelf securities offering
Fulton Fincl (FULT) files mixed shelf securities offering
Intuitive Machines (LUNR) files for 9,411,766 shares of common stock issuable upon exercise of warrants; also files for 14,117,649 shares of common stock, relates to warrants
One Liberty Properties (OLP) enters into Equity Distribution Agreement with B. Riley Securities to sell shares of common stock up to $50 mln
IPOs:
Priced to Trade:
No IPOs expected.
Gapping Up/Down
Gapping up:
FFIE +5.7%, HPK +5.4%, SGEN +3.2%, ZYME+2.8%, LUNR +2.7%, AZN +2.6%, DDD +2.4%, NVTS +2.2%, PRPL +1.9%, EBAY +1.9%, ATVI+1.8%, X +1.5%, TXN +0.7%
Gapping down:
SCHL -19.4%, AVGR -6.9%, VATE -1.3%, FULT -0.7%, CMP -0.5%
Analyst Research (see Upgrades/Downgradescalendarfor full list):
Upgrades
Coeur Mining (CDE) upgraded to Outperform from Sector Perform at RBC Capital Mkts; tgt $4
Wayfair (W) upgraded to Mkt Perform from Underperform at Bernstein; tgt raised to $65
Yum China (YUMC) upgraded to Buy from Hold at Jefferies; tgt raised to $71.30
Downgrades:
Community Healthcare Trust (CHCT) downgraded to Neutral from Outperform at Robert W. Baird; tgt lowered to $33
Others:
Alector (ALEC) initiated with an Overweight at Cantor Fitzgerald; tgt $13
CCC Intelligent Solutions (CCCS) initiated with a Buy at Stifel; tgt $14
Hesai Group (HSAI) initiated with a Buy at BofA Securities; tgt $14.80
Ikena Oncology (IKNA) initiated with an Outperform at Wedbush; tgt $11
Instacart (CART) initiated with a Neutral at BTIG Research
Kinsale Capital (KNSL) initiated with an Outperform at Wolfe Research; tgt $521
Nextracker (NXT) initiated with an Outperform at Wolfe Research; tgt $52
ORIC Pharmaceuticals (ORIC) initiated with an Outperform at Wedbush; tgt $8
Ralph Lauren (RL) initiated with an Outperform at Raymond James; tgt $135
Ryan Specialty Group (RYAN) initiated with an Outperform at Wolfe Research; tgt $59
Econ Data:
09:45 ET: S&P Global US Manufacturing PMI - Prelim for Sep (Briefing.comConsensus NA; Prior 47.9)
09:45 ET: S&P Global US Services PMI - Prelim for Sep (Briefing.comConsensus NA; Prior 50.5)
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 -0.5%, Hang Seng +2.3%, Shanghai Composite +1.6%
Equity indices in the Asia-Pacific region ended the week on a mostly higher note. Australia's Manufacturing PMI remained in contraction for the seventh consecutive month in the flash reading for September while Japan's Manufacturing PMI was in contractionary territory for the fourth month in a row. The Bank of Japan made no changes to its policy stance. However, Bank of America expects negative interest rate and yield curve control policies to be ended early next year. Chevron appears to be nearing a contract agreement with striking LNG workers. Central banks in Philippines and Indonesia made no changes to their policy rates.
In economic data:
Japan's National CPI 3.2% yr/yr (last 3.3%) and National Core CPI 3.1% yr/yr (expected 3.0%; last 3.1%). Flash September Manufacturing PMI 48.6 (expected 49.9; last 49.6) and flash Services PMI 53.3 (last 54.3)
Australia's flash September Manufacturing PMI 48.2 (last 49.6) and flash Services PMI 50.5 (last 47.8)
New Zealand's Q3 Westpac Consumer Sentiment 80.2 (last 83.1). August trade deficit NZD2.29 bln (last deficit of NZD1.18 bln)
---Equity Markets---
Japan's Nikkei: -0.5% (-3.4% for the week)
Hong Kong's Hang Seng: +2.3% (-0.7% for the week)
China's Shanghai Composite: +1.6% (+0.5% for the week)
India's Sensex: -0.3% (-2.7% for the week)
South Korea's Kospi: -0.3% (-3.6% for the week)
Australia's ASX All Ordinaries: +0.1% (-2.8%for the week)
---FX---
USD/JPY: +0.5% to 148.26
USD/CNH: -0.1% to 7.3043
USD/INR: -0.2% to 82.94
Europe: DAX -0.1%, FTSE +0.6%, CAC -0.5%
Major European indices trade on a mostly lower note while the U.K.'s FTSE (+0.6%) outperforms with financials contributing to the strength. Barclays lowered its terminal rate forecast for the Bank of England to 5.25% from 5.50%, expecting the BoE to remain at the peak rate until the middle of next year. Meanwhile, Citigroup sees only a 35% chance of another rate hike. Flash September Manufacturing and Services PMI readings from France showed an accelerating contraction, stoking fears about the strength of near-term growth.
In economic data:
Eurozone's flash September Manufacturing PMI 43.4 (expected 44.0; last 43.5) and flash Services PMI 48.4 (expected 47.7; last 47.9)
Germany's flash September Manufacturing PMI 39.8 (expected 39.5; last 39.1) and flash Services PMI 49.8 (expected 47.2; last 47.3)
U.K.'s flash September Manufacturing PMI 44.2 (expected 43.0; last 43.0) and flash Services PMI 47.2 (expected 49.2; last 49.5). September CBI Industrial Trends Orders -18 (expected -18; last -15). August Retail Sales 0.4% m/m (expected 0.5%; last -1.1%); -1.4% yr/yr (expected -1.2%; last -3.1%). August Core Retail Sales 0.6% m/m, as expected (last -1.4%); -1.4% yr/yr (expected -1.3%; last -3.3%)
France's flash September Manufacturing PMI 43.6 (expected 46.0; last 46.0) and flash Services PMI 43.9 (expected 46.0; last 46.0)
Spain's Q2 GDP 0.5% qtr/qtr (expected 0.4%; last 0.6%); 2.2% yr/yr (expected 1.8%; last 4.2%)
---Equity Markets---
STOXX Europe 600: -0.2% (-1.8% week-to-date)
Germany's DAX: -0.1% (-2.1% week-to-date)
U.K.'s FTSE 100: +0.6% (+0.2% week-to-date)
France's CAC 40: -0.5% (-2.7% week-to-date)
Italy's FTSE MIB: -0.4% (+0.1% week-to-date)
Spain's IBEX 35: -0.2% (+0.5% week-to-date)
---FX---
EUR/USD: -0.2% to 1.0639
GBP/USD: -0.3% to 1.2251
USD/CHF: +0.3% to 0.9066
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