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26/09/23 Briefing


The S&P 500 futures are down 16 points and are trading 0.3% below fair value. The Nasdaq 100 futures are down 57 points and are trading 0.5% below fair value. The Dow Jones Industrial Average futures are down 112 points and are trading 0.3% below fair value.

Stock futures point to losses right out of the gate following yesterday's modest gains. Relatively soft mega-cap stocks, a missed interest payment by Evergrande, and the specter of rates staying higher for longer are hanging over the broader market.

The 2-yr note yield is unchanged at 5.12% and the 10-yr note yield is down four basis points to 4.50%. Notably, JPMorgan Chase CEO Dimon said that the world may not be ready for interest rates to reach 7%, according to the Times of India.

In other developments, bipartisan negotiators are looking to shorten the duration of the near-imminent government shutdown, according to Bloomberg.

This morning's economic calendar features:

  • 9:00 ET: July FHFA Housing Price Index (prior 0.3%) and July S&P Case-Shiller Home Price Index (Briefing.com consensus 0.5%; prior -1.2%)

  • 10:00 ET: August New Home Sales (Briefing.com consensus 695,000; prior 714,000) and September Consumer Confidence (Briefing.com consensus 105.0; prior 106.1)

In corporate news:

  • United Natural Foods (UNFI 15.63, -3.29, -17.4%): beats by $0.14, reports revs in-line; guides FY24 EPS below consensus, revs in-line; announces acceleration and expansion of customer and supplier focused multi-year Transformation Plan; enters cooperation agreement with JCP Investment Management

  • Thor Industries (THO 92.00, -2.82, -3.0%): beats by $0.73, beats on revs; guides FY24 EPS in-line, revs in-line; very optimistic about long-term RV industry growth; Co noted that it plans to make significant investment in its future in fiscal 2024, resulting in incremental research and development spend. That investment impacts diluted earnings per share in fiscal 2024, but creates significant upside in the longer term.

  • Coty (COTY 11.44, -0.35, -3.0%): files mixed shelf securities offering

  • Sirius XM (SIRI 3.6100, -0.40, -10.0%): Liberty Media filed amended 13D; outlines proposed combination of the Liberty SiriusXM to form a new, consolidated public company on Sept 22

  • Pinterest (PINS 26.18, +0.12, +0.5%): HSBC initiated coverage with a Buy rating

  • DraftKings (DKNG 28.22, +0.86, +3.1%): upgraded to Overweight from Neutral

  • Apple (AAPL 175.29, -0.79, -0.5%): EU wants AAPL to to open up ecosystem to rivals, according to Reuters

  • Alibaba (BABA 86.79, -0.43, -0.5%): confirmed it intends to spin-off Cainiao by way of a separate listing of the Cainiao Shares on the Main Board of the Hong Kong Stock Exchange

  • Immunovant (IMVT 33.90, +13.47, +66.5%): and Roivant (ROIV) announces positive initial IMVT-1402 Phase 1 SAD and 300 mg Subcutaneous MAD Results

  • Ford Motor (F 12.54, -0.04, -0.3%): UAW President Shawn Fain lambasts Ford for its plan to halt construction on EV battery plant in Michigan

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Tuesday on a lower note. Japan's Nikkei: -1.1%, Hong Kong's Hang Seng: -1.5%, China's Shanghai Composite: -0.4%, India's Sensex: -0.1%, South Korea's Kospi: -1.3%, Australia's ASX All Ordinaries: -0.6%.

    • In economic data:

      • Japan's July Corporate Services Price Index 2.1% yr/yr (expected 1.8%; last 1.7%). August BoJ Core CPI 3.3% yr/yr (expected 3.2%; last 3.3%)

      • South Korea's September Consumer Confidence 99.7 (last 103.1)

      • Singapore's August Industrial Production -10.5% m/m (expected -1.7%; last 3.7%); -12.1% yr/yr (expected -3.1%; last -1.1%)

      • Hong Kong's August trade deficit $25.6 bln (last deficit of $30.0 bln). August Imports -0.3% m/m (last -7.9%) and Exports -3.7% m/m (last -9.1%)


  • In news:

    • There was growing speculation about new stimulus in Japan aimed at reducing the impact of cost-push inflation.

    • Evergrande missed an interest payment on a CNY4 bln bond and two of its former executives were arrested.

    • Separately, developer Seazen Holdings reduced its private share placement target while Guangdong Adway Construction filed for bankruptcy.

    • Eight economists surveyed by China Securities Journal expect China's economy to grow 5.2% in Q4.



  • Major European indices trade on a mostly lower note while the U.K.'s FTSE (+0.2%) outperforms with financials, homebuilders, and some consumer names contributing to the strength. STOXX Europe 600: -0.5%,, Germany's DAX: -0.6%, U.K.'s FTSE 100: +0.2%, France's CAC 40: -0.7%, Italy's FTSE MIB: -0.7%, Spain's IBEX 35: -0.1%.

    • No data today

    • In news:

      • EU Foreign Minister Borrell will visit China in October.

      • Germany's finance ministry announced that debt issuance in Q4 will be EUR31 bln below the original plan.

      • European Central Bank policymaker Simkus said that he would not rush to forecast the timing of the first rate cut while policymaker Muller said that he does not see the need for additional hikes at this time.



U.S. equity futures:

  • S&P 500 Futures -18 @ 4,320

  • DJIA Futures: -124 @ 33,883

  • Nasdaq 100 Futures: -65 @ 14,704

Overseas:

  • Europe: DAX -0.6%, FTSE +0.2%, CAC -0.7%

  • Asia: Nikkei -1.1%, Hang Seng -1.5%, Shanghai Composite -0.4%

Commodities:

  • Crude Oil -0.84 @ 88.84

  • Nat Gas -0.094 @ 2.812

  • Gold -5.65 @ 1930.95

  • Silver -0.123 @ 23.262

  • Copper -0.0103 @ 3.6597


Earnings/Guidance:

  • Catalyst Pharma ( CPRX 0.25% ) provides updates in presentation - reaffirms 2023 revs of $380-390 mln

  • Ferguson plc ( FERG 3.24% ) beats by $0.33, beats on revs; guides FY23 revs above consensus

  • Thor Industries ( THO 0.73% ) beats by $0.73, beats on revs; guides FY24 EPS in-line, revs in-line; very optimistic about long-term RV industry growth

  • United Natural Foods ( UNFI 6.99% ) beats by $0.14, reports revs in-line; guides FY24 EPS below consensus, revs in-line

News:

  • Bipartisan negotiators look to shorten duration of imminent government shutdown, according to Bloomberg

  • JPMorgan Chase CEO Dimon says world may not be ready for rates to reach 7%, according to Times of India

  • UAW PResident issues statement on Ford's announcement to pause construction on Marshall EV Battery Plant

  • UK Health Security Agency (UKHSA) has agreed a deal for millions of life-saving vaccines to be produced in the UK if a future influenza pandemic is ever declared

  • Video game voice actors and motion capture performers authorize strike action, according to Reuters

  • 908 Devices ( MASS 6.39% ) has entered the initial production phase of the Aerosol and Vapor Chemical Agent Detector program

  • Alibaba ( BABA 0.33% ) confirmed it intends to spin-off Cainiao by way of a separate listing of the Cainiao Shares on the Main Board of the Hong Kong Stock Exchange

  • AngloGold Ashanti ( AU 8.58% ) completes the primary listing of its ordinary shares on the NYSE and commences trading

  • Apple ( AAPL 0.90% ): EU wants AAPL to to open up ecosystem to rivals, according to Reuters

  • Babcock & Wilcox Enterprises ( BW 1.18% ) awarded environmental equipment contracts totaling more than $11 million to supply two replacement wet electrostatic precipitators (ESPs) at two U.S. industrial facilities

  • BAE Systems ( BAESY ) awarded $319 mln U.S. Defense Information Systems Agency contract

  • B. Riley Financial ( RILY 2.69% ) to purchase 3.7 mln shares of bebe stores, will increase stake to 76%

  • Envestnet ( ENV 1.93% ) appoints Joshua B. Warren as CFO, effective November 15; succeeds Peter H. D'Arrigo

  • Fisker ( FSR 3.61% ) to ramp deliveries to 300 vehicles per day; company has manufactured 5,000 Fisker Ocean All-electric SUVs

  • Ford ( F 0.32% ) stops work on battery plant in Michigan, according to the New York Times

  • Gray Television ( GTN 0.30% ): Peachtree Sports Network launches statewide

  • IDEAYA ( IDYA 0.28% ) Receives Fast Track Designation for Potential First-in-Class PARG Inhibitor, IDE161, for Treatment of Pretreated, Platinum-Resistant Advanced or Metastatic Ovarian Cancer Patients having tumors with BRCA1/2 Mutations

  • Immunovant ( IMVT 1.10% ) and Roivant (ROIV) announces positive initial IMVT-1402 Phase 1 SAD and 300 mg Subcutaneous MAD Results

  • Inozyme Pharma ( INZY 0.45% ) announces interim data from ongoing Phase 1/2 Trials of INZ-701 in adults with ENPP1 Deficiency and ABCC6 Deficiency

  • Ionis ( IONS 1.79% ) announces positive olezarsen topline results from Phase 3 study in people with familial chylomicronemia syndrome

  • KBR ( KBR 1.32% ) has been awarded a blue hydrogen process technology and front-end engineering design (FEED) contract by EET Hydrogen for its planned HPP2 low-carbon hydrogen facility at HyNet, the UK's leading industrial decarbonization project

  • Liquidia Corporation ( LQDA 1.43% ): FDA Accepts Submission to Add PH-ILD to YUTREPIA Label

  • MongoDB ( MDB 0.91% )\announced MongoDB Atlas for Manufacturing and Automotive, four new AI-powered capabilities, launches advanced data management capabilities to run applications anywhere

  • Nissan ( NSANY ) maintains plan for EV-only portfolio by 2030, according to Economic Times

  • Novartis ( NVS 1.14% ) unit Sandoz receives EC approval for Tyruko

  • Novo Nordisk A/S ( NVO 0.10% ) and Evotec SE (EVO) collaborate to launch translational drug discovery accelerator

  • Omega Therapeutics ( OMGA 2.82% ) announces promising preliminary clinical data for OTX-2002 from ongoing MYCHELANGELO I trial

  • Pliant Therapeutics ( PLRX 0.66% ) Announces Positive Safety and Exploratory Efficacy Data from Phase 2a INTEGRIS-PSC Clinical Trial of Bexotegrast in Patients with Primary Sclerosing Cholangitis and Suspected Liver Fibrosis

  • Profound Medical ( PRN 0.00% ) Receives U.S. FDA 510(k) Clearance for TULSA-PRO Thermal Boost

  • Sanofi ( SNY 2.23% ) and Regeneron Pharmaceuticals (REGN) reports FDA accepts Dupixent for Priority Review

  • Shoe Carnival ( SCVL 2.50% ) names Patrick Edwards as CFO, effective today

  • Stellantis ( STLA 0.16% ) issues statement on President Biden's visit

  • Ultragenyx ( RARE 1.28% ) Launches Evkeeza (evinacumab for injection) in Canada for the Treatment of Homozygous Familial Hypercholesterolemia

  • United Natural Foods ( UNFI 6.99% ) announces acceleration and expansion of customer and supplier focused multi-year Transformation Plan; enters cooperation agreement with JCP Investment Management

M&A:

  • Manchester United ( MANU 4.33% ): Jim Ratcliffe to restructure bid to attempt to break deadlock, according to Bloomberg

  • Repligen ( RGEN 1.46% ) to acquire privately-held Metenova AB for cash and equity

  • Sirius XM ( SIRI 5.03% ): Liberty Media filed amended 13D; outlines proposed combination of the Liberty SiriusXM to form a new, consolidated public company on Sept 22

Syndicate:

  • Coty ( COTY 4.84% ) files mixed shelf securities offering

IPOs:

  • Priced to Trade:

    • No IPOs expected.


Gapping Up/Down

  • Gapping up:

    • IMVT +40.5%, ROIV +12.6%, GTN +2%, SCVL +2%, LQDA +1.6%


  • Gapping down:

    • OGI -4.7%, COTY -4.1%, THO -2.2%, RILY -2%, RARE -2%, AU -1.5%, STLA -1.2%


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

  • Upgrades

    • Barclays PLC (BCS) upgraded to Overweight from Equal-Weight at Morgan Stanley

    • Edwards Lifesciences (EW) upgraded to Outperform from Perform at Oppenheimer; tgt $90

    • Flowserve (FLS) upgraded to Buy from Hold at Jefferies; tgt raised to $50

    • Hudson Pacific Properties (HPP) upgraded to Buy from Neutral at BTIG Research; tgt $11


  • Downgrades:

    • Carlisle Cos (CSL) downgraded to Hold from Buy at Jefferies; tgt lowered to $290

    • Nordson (NDSN) downgraded to Hold from Buy at Jefferies; tgt lowered to $240


  • Others:

    • Bumble Inc. (BMBL) initiated with a Buy at HSBC Securities; tgt $20.30

    • Pinterest (PINS) initiated with a Buy at Jefferies; tgt $32.10


Econ Data:

  • 09:00 ET: FHFA Housing Price Index for July (Briefing.com Consensus NA; Prior 0.3%)

  • 09:00 ET: S&P Case-Shiller Home Price Index for July (Briefing.com Consensus 0.5%; Prior -1.2%)

  • 10:00 ET: Consumer Confidence for September (Briefing.com Consensus 105.0; Prior 106.1)

  • 10:00 ET: New Home Sales for August (Briefing.com Consensus 695K; Prior 714K)

Earnings:

  • Monday (Sep 25)

    • Afternoon: THO


  • Tuesday (Sep 26)

    • Morning: CTAS FERG SNX UNFI

    • Afternoon: AIR COST MLKN PRGS


  • Wednesday (Sep 27)

    • Morning: PAYX

    • Afternoon: CNXC FUL JEF MU WOR


  • Thursday (Sep 28)

    • Morning: ACN KMX JBL

    • Afternoon: NKE MTN


  • Friday (Sep 29)

    • During Market Hours: CCL


Asia & Europe detail:

Asia: Nikkei -1.1%, Hang Seng -1.5%, Shanghai Composite -0.4%

Equity indices in the Asia-Pacific region ended Tuesday on a lower note. There was growing speculation about new stimulus in Japan aimed at reducing the impact of cost-push inflation. Evergrande missed an interest payment on a CNY4 bln bond and two of its former executives were arrested. Separately, developer Seazen Holdings reduced its private share placement target while Guangdong Adway Construction filed for bankruptcy. Eight economists surveyed by China Securities Journal expect China's economy to grow 5.2% in Q4.

  • In economic data:

    • Japan's July Corporate Services Price Index 2.1% yr/yr (expected 1.8%; last 1.7%). August BoJ Core CPI 3.3% yr/yr (expected 3.2%; last 3.3%)

    • South Korea's September Consumer Confidence 99.7 (last 103.1)

    • Singapore's August Industrial Production -10.5% m/m (expected -1.7%; last 3.7%); -12.1% yr/yr (expected -3.1%; last -1.1%)

    • Hong Kong's August trade deficit $25.6 bln (last deficit of $30.0 bln). August Imports -0.3% m/m (last -7.9%) and Exports -3.7% m/m (last -9.1%)


---Equity Markets---

  • Japan's Nikkei: -1.1%

  • Hong Kong's Hang Seng: -1.5%

  • China's Shanghai Composite: -0.4%

  • India's Sensex: -0.1%

  • South Korea's Kospi: -1.3%

  • Australia's ASX All Ordinaries: -0.6%

---FX---

  • USD/JPY: +0.1% to 148.94

  • USD/CNH: UNCH at 7.3121

  • USD/INR: +0.2% to 83.25

Europe: DAX -0.6%, FTSE +0.2%, CAC -0.7%

Major European indices trade on a mostly lower note while the U.K.'s FTSE (+0.2%) outperforms with financials, homebuilders, and some consumer names contributing to the strength. EU Foreign Minister Borrell will visit China in October. Germany's finance ministry announced that debt issuance in Q4 will be EUR31 bln below the original plan. European Central Bank policymaker Simkus said that he would not rush to forecast the timing of the first rate cut while policymaker Muller said that he does not see the need for additional hikes at this time.

  • No data today

---Equity Markets---

  • STOXX Europe 600: -0.5%

  • Germany's DAX: -0.6%

  • U.K.'s FTSE 100: +0.2%

  • France's CAC 40: -0.7%

  • Italy's FTSE MIB: -0.7%

  • Spain's IBEX 35: -0.1%

---FX---

  • EUR/USD: UNCH at 1.0596

  • GBP/USD: -0.2% to 1.2181

  • USD/CHF: +0.1% to 0.9127

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