24/11/13

The S&P 500 futures are up four points and are trading 0.1% above fair value, the Nasdaq 100 futures are down 13 points and are trading 0.1% below fair value, and the Dow Jones Industrial Average futures are up 80 points and are trading 0.2% above fair value.

The early indications point to a mixed start for the stock market, which will close early today at 1:00 p.m. ET.

Corporate news of note has been limited, but some added attention is being paid to a Reutersreport that indicates NVIDIA (NVDA) is going to delay its China AI chip. Otherwise, there is a lot of talk about retail on this Black Friday, which should produce some heavy volume in shopping locales across the country, but extremely light trading volume in the stock market.

The 2-yr note yield is up five basis points to 4.95% and the 10-yr note yield is up four basis points to 4.46%.

Today's economic lineup is limited to the preliminary November S&P Global US Manufacturing PMI and S&P Global US Services PMI reports at 9:45 a.m. ET.

In corporate news:

• NVIDIA (NVDA 479.25, -7.91, -1.6%): to delay China AI chip, according to Reuters

• Boeing (BA 220.70, +0.79, +0.4%): Virgin Australia increases Boeing 737 MAX-8 aircraft order

• Barclays (BCS 7.15, +0.08, +1.1%): working on $1.2 bln cost cut plan that could eliminate 2000 jobs, according to Reuters

• Tesla (TSLA 232.85, -1.36, -0.6%): strike in Sweden could disrupt Tesla car operations in Europe, according to FT

• Amazon.com(AMZN 146.84, +0.13, +0.1%): expected to secure EU approval for iRobot (IRBT) deal, according to Reuters

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended the week on a mostly lower note. Japan's Nikkei +0.5%, Hong Kong's Hang Seng -2.0%, China's Shanghai Composite -0.7%, India's Sensex -0.1%, South Korea's Kospi -0.7%, and Australia's ASX All Ordinaries +0.1%.

• In economic data:

• Japan's October CPI 0.9% m/m (last 0.3%); 3.3% yr/yr (expected 3.4%; last 3.0%). October Core CPI 2.9% yr/yr (expected 3.0%; last 2.8%). Flash November Manufacturing PMI 48.1 (expected 48.8; last 48.7) and flash Services PMI 48.1 (expected 48.8; last 48.7). September Leading Index 108.9 (expected 108.7; last 109.2) and Coincident Indicator 0.1% m/m (last 0.1%)

• Singapore's October Industrial Production 9.8% m/m (expected 0.1%; last 13.1%); 7.4% yr/yr (expected -2.1%; last -1.1%)

• New Zealand's Q3 Retail Sales 0.0% qtr/qtr (expected -0.8%; last -0.9%)

• In news:

• The World Health Organization has reportedly been in contact with Chinese authorities regarding the recent increase in respiratory illness in the northern part of the country.

• China's Premier Li met with France's foreign minister, highlighting an improved relationship between the two nations.

• New Zealand's National Party, New Zealand First, and Association of Consumers and Taxpayers signed a coalition agreement. Incoming Prime Minister Luxon indicated that rules governing the Reserve National Bank will be rewritten to focus on price stability.

• Major European indices trade on a modestly higher note. Germany's DAX +0.1%, UK's FTSE 100 -0.3%, France's CAC 40 +0.2%, Italy's FTSE MIB +0.3%, and Spain's IBEX 35 +0.3%.

• In economic data:

• Germany's final Q3 GDP -0.1% qtr/qtr, as expected (last 0.0%); -0.4% yr/yr (expected -0.3%; last 0.1%). November ifo Business Climate Index 87.3 (expected 87.5; last 86.9), November Current Assessment 89.4 (expected 89.5; last 89.2) and Business Expectations 85.2 (expected 85.7; last 84.8)

• Spain's October PPI -7.8% yr/yr (last -8.5%)

• In news:

• Bank of England Chief Economist Pill cautioned that the central bank can't ease monetary policy due to weakening economic activity because inflation remains high.

• ECB policymaker Villeroy de Galhau said that he doesn't expect another rate hike from the ECB unless an "unexpected event" takes place.

• Germany's Finance Minister Lindner said that the supplementary budget for 2023 will be submitted to the cabinet next week.

U.S. equity futures:

• S&P 500 Futures +4 @ 4,571

• DJIA Futures: +80 @ 35,398

• Nasdaq 100 Futures: -13 @ 16,036

Overseas:

• Europe: DAX +0.1%, FTSE -0.3%, CAC +0.2%

• Asia: Nikkei +0.5%, Hang Seng -2.0%, Shanghai Composite -0.7%

Commodities:

• Crude Oil -0.61 @ 76.63

• Nat Gas -0.056 @ 2.977

• Gold +3.60 @ 1996.40

• Silver +0.047 @ 23.735

• Copper +0.0110 @ 3.7740

Earnings/Guidance:

• No earnings news of note

News:

• WHO has made an official request to China for detailed information on an increase in respiratory illnesses and reported clusters of pneumonia in children

• Turkey Central Bank decided to raise the policy rate (the one-week repo auction rate) from 35 percent to 40 percent

• Toy sales have declined 8% YTD, according to The Wall Street Journal

• AerSale (ASLE) Vice Chairman Robert Nichols to retire

• Amazon (AMZN) expected to secure EU approval for iRobot (IRBT) deal, according toReuters

• Barclays (BCS) working on $1.2 bln cost cut plan that could eliminate 2000 jobs, according to Reuters

• Boeing (BA): Virgin Australia increases Boeing 737 MAX-8 aircraft order

• Emergent BioSolutions (EBS) discloses that NYSE notified the company that it is not in compliance with Section 802.01E

• Fisker (FSR) files 10-Q; has made a strategic shift to improve the pace of deliveries in the US and Europe

• General Motors (GM): Cruise plans to scale back future operations to one market, according to The Wall Street Journal

• Methanex (MEOH) methanol production facility impacted by an unplanned outage

• Nvidia (NVDA) to delay China AI chip, according to Reuters

• New Mountain Finance (NMFC) announces appointment of Kris Corbett as CFO, effective November 27, 2023

• Novo Nordisk A/S (NVO) invests more than 16 billion Danish kroner in expansion of production facilities in Chartres, France

• Petrobras (PBR) approves Strategic Plan 2024-2028+

• STMicroelectronics (STM) and ERG sign long-term agreement for the supply of electricity produced from renewable sources in Italy

• Tesla (TSLA): strike in Sweden could disrupt Tesla car operations in Europe, according to FT

• TransAlta (TAC) and BHP Group Limited (BHP) announce commercial operation of innovative hybrid renewables facility to power remote mining operations in Western Australia

• Vertex Pharma (VRTX): European Commission approves KAFTRIO in combination with ivacaftor for the treatment of children with cystic fibrosis ages 2 through 5

• Wynn Resorts (WYNN): Culinary Union members employed at Wynn Resorts have voted by 99% yes to ratify their new 5-year contract

M&A:

• Banc of California (BANC) and PacWest Bancorp (PACW) receive stockholder approval for proposed merger

• iClick Interactive Asia Group (ICLK) enters into a definitive merger agreement for going-private transaction

• NaaS Technology (NAAS) announces termination of proposed Charge Amps acquisition

• Silvercorp Metals (SVM) and OreCorp Enter into amending agreement

• Vista Outdoor (VSTO) announces receipt of unsolicited proposal from Colt CZ cash and stock transaction that Colt CZ states would attribute a value of $30 to each share of Vista Outdoor common stock.

Syndicate:

• Bitfarms (BITF) announces C$60 mln private placement with U.S. Institutional Investors

• Citizens Financial Serv. (CZFS) files mixed securities shelf offering

• Enanta Pharmaceuticals (ENTA) files for $150 mln mixed securities shelf offering

• Target (TGT) files mixed securities shelf offering

IPOs:

• No IPOs expected to price.

Gapping Up/Down

• Gapping up:

• FSR +9.9%, VSTO +2.1%, HOLI +2.1%, BCS+1.3%, SAN +1.0%

• Gapping down:

• NAAS -2.0%, NVDA -1.7%, EBS -1.4%, TSLA-1.0%

Analyst Research (see Upgrades/Downgradescalendarfor full list):

• Upgrades

• Continental AG (CTTAY) upgraded to Overweight from Equal Weight at Barclays

• Fresenius Medical (FMS) upgraded to Hold from Reduce at HSBC Securities

• HUTCHMED (HCM) upgraded to Buy from Hold at Deutsche Bank

• Downgrades:

• Gaotu Techedu (GOTU) downgraded to Hold from Buy at China Renaissance

• LexinFintech (LX) downgraded to Neutral from Buy at Citigroup

• Michelin (MGDDY) downgraded to Underweight from Equal Weight at Barclays

• Porsche (POAHY) downgraded to Equal Weight from Overweight at Barclays

• Telecom Argentina (TEO) downgraded to Sector Underperform from Sector Perform at Scotiabank

• Others:

• Auto Trader (ATDRY) resumed with a Sell at UBS

• Deliveroo plc (DROOF) initiated with a Buy at UBS

• Gaotu Techedu (GOTU) initiated with a Neutral at Goldman

• HelloFresh SE (HLFFF) initiated with a Sell at UBS

• New Oriental Education & Technology (EDU) initiated with a Buy at Goldman

• TAL Education (TAL) initiated with a Buy at Goldman

Econ Data:

• 09:45 ET: Preliminary November S&P Global US Manufacturing PMI (Prior 50.0)

• 09:45 ET: Preliminary November S&P Global US Services PMI (Prior 50.6)

Earnings: