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Writer's pictureSimon Charles Hooper

27/09/23 Briefing


The S&P 500 futures are up 16 points and are trading 0.3% above fair value. The Nasdaq 100 futures are up 51 points and are trading 0.3% above fair value. The Dow Jones Industrial Average futures are up 103 points and are trading 0.3% above fair value.

This morning's positive bias in the equity futures market is rooted in an expectation for some rebound action following large losses yesterday and this month. Gains in mega cap stocks have been supportive of the futures trade, along with a drop in market rates. The 2-yr note yield is down seven basis points to 5.07% and the 10-yr note yield is down four basis points to 4.51%.

Another factor contributing to the positive bias this morning is news that the People's Bank of China injected liquidity and pledged to step up policy coordination.

In other news, the Senate unveiled a stopgap funding bill that would avert a government shutdown until November 17. Also, the writers' strike against Hollywood studios has now ended after both sides reached an agreement on a deal.

The MBA Mortgage Applications Index declined 1.3% with purchase applications falling 1% and refinance applications dropping 2%.

Other economic data this morning includes:

  • 8:30 ET: August Durable Orders (Briefing.com consensus -0.2%; prior -5.2%) and Durable Orders ex-transportation (Briefing.com consensus 0.3%; prior 0.5%)

  • 10:30 ET: Weekly crude oil inventories (prior -2.14 mln)

In corporate news:

  • Costco (COST 544.51, -8.45, -1.5%): beats by $0.07, beats on revs, total adjusted comparable sales of +3.8%

  • Hayward Holdings (HAYW 14.61, +1.20, +9.0%): will replace Civitas Resources in the S&P SmallCap 600, effective prior to the opening of trading on Friday, September 29.

  • MillerKnoll (MLKN 22.37, +3.22, +16.8%): beats by $0.16, beats on revs; guides NovQ EPS above consensus, revs in-line; guides FY24 EPS above consensus

  • Jabil (JBL 105.50, +0.50, +0.5%): sells its Mobility Business for $2.2 bln

  • ChargePoint (CHPT 5.03, +0.18, +3.7%): UBS initiated coverage with a Buy rating

  • Mattel (MAT 21.73, +0.51, +2.4%): Morgan Stanley initiated coverage with an Overweight rating

  • Adobe (ADBE 508.00, +1.70, +0.3%): EU regulators request more information about Adobe's planned acqusition of Figma, according to Reuters

  • AAR Corp (AIR 60.57, +1.35, +2.3%) beats by $0.08, beats on revs

  • Progress Software (PRGS 53.92, -1.45, -2.6%): beats by $0.08, beats on revs; guides NovQ EPS below consensus, revs in-line

  • Ginkgo Bioworks (DNA 1.95, +0.22, +12.7%): announces a collaboration with Pfizer (PFE) focused on the discovery of RNA-based drug candidates

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended the midweek session on a mostly higher note. Japan's Nikkei: +0.2%, Hong Kong's Hang Seng: +0.8%, China's Shanghai Composite: +0.2%, India's Sensex: +0.3%, South Korea's Kospi: +0.1%, Australia's ASX All Ordinaries: -0.1%.

    • In economic data:

      • China's August Industrial Profit -11.7% YTD (last -15.5%)

      • Japan's July Leading Index -0.6% m/m (expected -1.2%; last -0.2%) and Coincident Indicator -1.4% m/m (expected -1.1%; last 0.8%)

      • South Korea's October Manufacturing BSI Index 68 (last 67)

      • Australia's August Weighted Mean CPI 5.2% yr/yr, as expected (last 4.9%)


  • In news:

    • The People's Bank of China injected liquidity and pledged to step up policy coordination in Q3.

    • There was continued focus on Evergrande as offshore creditors joined a petition to wind up the company if there is no restructuring plan by the end of October.

    • The Bank of Japan's Minutes from the July meeting showed an agreement to continue easing and watching for continued wage growth in the coming years.

    • Thailand's central bank unexpectedly raised its policy rate by 25 bps to 2.50%.



  • Major European indices trade near their flat lines. STOXX Europe 600: -0.1%, Germany's DAX: UNCH, U.K.'s FTSE 100: -0.2%, France's CAC 40: +0.1%, Italy's FTSE MIB: -0.2%, Spain's IBEX 35: UNCH.

    • In economic data:

      • Eurozone's August M3 Money Supply -1.3% yr/yr (expected -1.0%; last -0.4%), August private sector loans 1.0% yr/yr (expected 1.2%; last 1.3%) and loans to nonfinancials 0.6% (last 2.2%)

      • Germany's October GfK Consumer Climate -26.5 (expected -26.0; last -25.6)

      • France's September Consumer Confidence 83 (expected 84; last 85)

      • Swiss September ZEW Expectations -27.6 (last -38.6)


  • In news:

    • Eurozone's M3 Money Supply decreased at its fastest pace on record in the August reading.

    • Norway's Equinor received approval from British regulators to develop an oil and gas project in the North Sea.

    • European Central Bank policymaker Elderson said that rates have not peaked yet and there is still a lot of uncertainty.



U.S. equity futures:

  • S&P 500 Futures +17 @ 4,291

  • DJIA Futures: +105 @ 33,724

  • Nasdaq 100 Futures: +56 @ 14,602

Overseas:

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

  • Asia: Nikkei +0.2%, Hang Seng +0.8%, Shanghai Composite +0.2%

Commodities:

  • Crude Oil +1.58 @ 91.97

  • Nat Gas +0.070 @ 2.915

  • Gold -8.35 @ 1911.45

  • Silver -0.149 @ 23.047

  • Copper -0.0135 @ 3.6355


Earnings/Guidance:

  • AAR Corp ( AIR â–´ 2.47% ) beats by $0.08, beats on revs

  • Amicus Therapeutics ( FOLD â–´ 5.23% ) in presentation slides reiterated expectations it will achieve non-GAAP profitability in 2H23

  • Chesapeake Utilities ( CPK â–¾ 4.36% ) provides long-term guidance update following transaction with NextEra Energy (NEE)

  • Costco ( COST â–´ 1.91% ) beats by $0.07, beats on revs, total adjusted comparable sales of +3.8%

  • Encompass Health ( EHC â–¾ 0.97% ) reaffirms guidane in presentation slides

  • Marriott ( MAR â–´ 1.11% ) provides three year growth plan at analyst meeting; reaffirms FY23 guidance

  • MillerKnoll ( MLKN â–´ 27.94% ) beats by $0.16, beats on revs; guides NovQ EPS above consensus, revs in-line; guides FY24 EPS above consensus

  • NextEra Energy Partners ( NEP â–¾ 20.13% ) revises limited partner distribution per unit growth expectations to 5-8% per year; Expects no growth equity until 2027

  • Progress Software ( PRGS â–¾ 4.91% ) beats by $0.08, beats on revs; guides NovQ EPS below consensus, revs in-line

  • Rocket Lab USA ( RKLB â–´ 1.30% ) lowers its Q3 guidance, reflecting the postponement of a scheduled Electron mission

News:

  • Senate reaches agreement on stopgap spending plan avoiding government shutdown, according to New York Times

  • China relaxing house pricing rules, according to the Wall Street Journal

  • UK government backs new oil and gas to safeguard UK and grow the economy

  • Advanced Battery Tech ( ABAT â–¾ 4.90% ) and the United States Department of Energy entered into an Assistance Agreement

  • Adverum Biotechnologies ( ADVM â–¾ 2.91% ) announces positive Aflibercept Protein level data from the LUNA Phase 2 Trial

  • Akamai ( AKAM â–´ 0.68% ) Expands World's Most Distributed Cloud Network with New Core Compute Regions Across Asia, Europe, North America, and Latin America

  • American Outdoor Brands ( AOUT â–´ 0.68% ) secures patent settlement agreement with The Allen Company

  • Amgen ( AMGN â–´ 0.01% ) looking to get into weight loss drug market, according to the Wall Street Journal

  • Apple ( AAPL â–¾ 0.90% ) and Alphabet (GOOG) agreed to defend search engine deal from regulatory scrutiny, according to Bloomberg

  • AssetMark ( AMK 0.00% ) charged by SEC for failing to disclose financial conflicts; to pay over $18 mln

  • Banco Santander ( SAN â–´ 1.40% ) announces dividend approval & buyback program implementation

  • BioMarin Pharmaceutical ( BMRN â–´ 2.65% ) received yesterday FDA orphan designation for HCM treatment

  • Bluebirdbio ( BLUE â–¾ 0.65% ) amended Master Manufacturing Services Agreement with Lonza (LZAGY)

  • Caribou Biosciences ( CRBU â–¾ 4.58% ) receives notice from AbbVie (ABBV) terminating Collaboration and License Agreement, effective October 25

  • Centene ( CNC â–¾ 0.36% ) plans a 3% workforce reduction, according to St Louis Business Journal

  • Cleveland-Cliffs ( CLF â–´ 3.27% ) is increasing current spot market base prices for all carbon hot rolled, cold rolled and coated steel products, effective immediately with all new orders

  • Denison Mines ( DNN â–´ 1.83% ) signs shared prosperity agreement with English River First Nation

  • Diversified Healthcare Trust ( DHC â–¾ 8.97% ) appoints Matthew Brown, effective October 1; announces actions to address near-term capital needs

  • Elbit Systems ( ESLT â–¾ 1.83% ) awarded a contract worth ~$115 mln to supply tank ammunition to a European country

  • Eli Lilly ( LLY â–¾ 0.05% ): Federal judge overturns $176.5 mln loss in Teva Pharmaceutical (TEVA) case finding Emgality infringed three patents, according to Reuters

  • Equinor ( EQNR â–´ 3.09% ) and Ithaca Energy have taken the final investment decision to progress Phase 1 of the Rosebank development on the UK Continental Shelf (UKCS), investing USD 3.8 billion

  • Faraday Future Intelligent Electric ( FFIE â–¾ 44.31% ) announces At-the-Market equity offering program

  • GlobalFoundries ( GFS â–´ 2.85% ) announced advancements to its industry-leading 22FDX (22nm FD-SOI) platform, introducing a suite of innovative features and enhancements

  • Gracell Biotechnologies ( GRCL â–´ 3.39% ) doses first patient in Phase 1b/2 clinical trial in U.S. evaluating GC012F for treatment of relapsed/refractory multiple Myeloma

  • HYZON Motors ( HYZN â–¾ 1.23% ) confirms agreement resolving SEC investigation

  • IDEAYA Biosciences ( IDYA â–¾ 0.28% ) receives Fast Track Designation for IDE161 in a second indication for the treatment of pretreated, advanced or metastatic HR+, Her2-, BRCA1/2 mutant breast cancer

  • IMAX ( IMAX â–´ 1.15% ): Leading Independent Proxy Advisory Firm ISS Recommends IMAX China Shareholders Vote "FOR" the Privatization Transaction with IMAX Corporation

  • Industrial Logistics Properties Trust ( ILPT â–¾ 2.75% ) appoints Tiffany Sy as CFO, effective October 1

  • Innovative Industrial Properties ( IIPR â–¾ 2.40% ) is in active discussions with other parties regarding the potential re-leasing of properties

  • Ionis Pharma ( IONS â–´ 1.79% ) enters agreement with Roche (RHHBY) for two novel RNA-targeted programs for Alzheimer's disease and Huntington's disease

  • Morphic's ( MORF â–´ 7.08% ) CEO to take a medical leave of absence and is expected to return to his role as CEO after he recovers

  • MRC Global ( MRC â–´ 3.20% ) extended its Enterprise Framework Agreement with Shell (SHEL) until 2028

  • Mueller Industries ( MLI â–´ 3.59% ) declares a two-for-one stock split to be effected in the form of a 100% stock dividend

  • New Found Gold Corp ( NFGC â–¾ 1.92% ) intercepts 3.29 g/t Au Over 42.4m, further defines 30m+ Thick Gold Zone at Keats West

  • Ovintiv ( OVV â–´ 5.07% ) approved to renew share repurchase plan; to buy back up to 10% of its public float during the 12-month period starting October 3

  • Pacira BioSciences ( PCRX â–¾ 6.48% ) Chairman and CEO David Stack to retire, effective once the Board names a successor; will then continue in a consulting role through August 2025

  • Palantir Technologies ( PLTR â–´ 6.38% ) awarded $250 mln U.S. Army contract

  • Peloton ( PTON â–´ 1.08% ) appoints Nick Caldwell as Chief Product Officer, effective November 1; succeeds co-founder Tom Cortese

  • Pfizer ( PFE â–¾ 0.93% ) and Ginkgo Bioworks (DNA) sign drug development deal, according to Endpoint News

  • Phoenix New Media Limited ( FENG â–´ 12.50% ) announces up to $2 million share repurchase program?

  • PPG Industries ( PPG â–¾ 0.45% ) elects CEO Tim Knavish as chair of the board and CEO, effective Oct 1; Michael McGarry to retire as Executive Chairman

  • Qualcomm ( QCOM â–¾ 0.46% ) may offer its Snapdragon 8 Gen 3 on two platforms -- 4nm and 3nm, according to Digitimes

  • TrueCar ( TRUE â–¾ 1.79% ) appoints Oliver Foley as CFO, effective October 30; succeeds Teresa Luong

  • UBS AG ( UBS â–¾ 2.91% ) slides lower on reports of DOJ sanctions probe

  • Velo3D ( VLD â–¾ 19.15% ) announces that CFO William McCombe has resigned, effective September 29, 2023, to pursue other opportunities

  • Volkswagen AG ( VWAGY ) plans to lower EV production at two German plants owing to declining European demand and shrinking subsidies, according to Bloomberg

  • Waterstone Financial ( WSBF â–¾ 0.72% ) decreases quarterly cash dividend to $0.15/share from $0.20/share

  • Weave Communications Partners ( WEAV â–´ 1.74% ) with Affirm (AFRM) to expand payment options for patients

M&A:

  • Adobe ( ADBE â–¾ 0.65% ): EU has put Figma acquisition review on hold awaiting more info, according to Reuters

  • AES ( AES â–´ 0.44% ) agrees to minority sell-downs of its businesses in the Dominican Republic and Panama as an expansion of its existing strategic partnership with Grupo Linda an a new partnership with AFI Popular; provide collective proceeds of $190 mln

  • Jabil ( JBL â–´ 0.17% ) sells its Mobility Business for $2.2 bln

  • NextEra Energy ( NEE â–¾ 8.23% ) announces sale agreement for Florida City Gas to Chesapeake Utilities Corporation (CPK) ; reaffirms long-term outlook

  • Palo Alto Networks ( PANW â–´ 2.27% ) looking at a couple acquisitions, according to TechCrunch

  • ProQR Therapeutics ( PRQR â–¾ 4.14% ) provides an update that its previously announced agreement to divest the Company's late-stage ophthalmic assets to Laboratoires Tha S.A.S. has been terminated

Syndicate:

  • Elbit Systems ( ESLT â–¾ 1.83% ) filed a shelf prospectus with the Israel Securities Authority and the Tel Aviv Stock Exchange

  • Immunovant Sciences ( IMVT â–¾ 1.10% ) announces proposed offering of $300 million of common stock

  • Li Auto ( LI â–´ 0.43% ) announces termination of at-the-market offering of American Depositary Shares

IPOs:

  • Priced to Trade:

    • No IPOs expected.


Gapping Up/Down

  • Gapping up:

    • ABAT +18.4%, MLKN +17.9%, HAYW +8.2%, TVTX +2.9%, FFIE +2.6%, AIR +2.4%, SAN +2.2%, IDYA +2%, MLI +1.9%, NVX +1.4%, IMVT +1.3%, AFRM +0.9%, PCRX +0.7%, RKLB +0.7%, PLTR +0.6%, SEVN +0.6%, JBL +0.5%, NEE +0.5%


  • Gapping down:

    • MORF -5.3%, PRGS -4.2%, VLD -2.8%, CIVI -2%, COST -2%, ILPT -1.7%, CRBU -1%, ADVM -0.6%


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

  • Upgrades

    • Int'l Paper (IP) upgraded to Hold from Underperform at Jefferies; tgt raised to $33

    • Packaging Corp (PKG) upgraded to Hold from Underperform at Jefferies; tgt raised to $142


  • Downgrades:

    • TrueCar (TRUE) downgraded to Neutral from Buy at BTIG Research


  • Others:

    • Allakos (ALLK) initiated with a Mkt Outperform at JMP Securities; tgt $11

    • RELX (RELX) resumed with a Buy at Berenberg

    • SharkNinja (SN) initiated with an Outperform at William Blair

    • Twist Bioscience (TWST) initiated with a Buy at Berenberg; tgt $27


Econ Data:

  • 07:00 ET: MBA Mortgage Applications Index for September 23 (Briefing.com Consensus NA; Prior 5.4%)

  • 08:30 ET: Durable Orders for August (Briefing.com Consensus -0.2%; Prior -5.2%)

  • 08:30 ET: Durable Orders ex-transportation for August (Briefing.com Consensus 0.3%; Prior 0.5%)

  • 10:30 ET: EIA Crude Oil Inventories for September 23 (Briefing.com Consensus NA; Prior-2.14M)

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 +0.2%, Hang Seng +0.8%, Shanghai Composite +0.2%

Equity indices in the Asia-Pacific region ended the midweek session on a mostly higher note. The People's Bank of China injected liquidity and pledged to step up policy coordination in Q3. There was continued focus on Evergrande as offshore creditors joined a petition to wind up the company if there is no restructuring plan by the end of October. The Bank of Japan's Minutes from the July meeting showed an agreement to continue easing and watching for continued wage growth in the coming years. Thailand's central bank unexpectedly raised its policy rate by 25 bps to 2.50%.

  • In economic data:

    • China's August Industrial Profit -11.7% YTD (last -15.5%)

    • Japan's July Leading Index -0.6% m/m (expected -1.2%; last -0.2%) and Coincident Indicator -1.4% m/m (expected -1.1%; last 0.8%)

    • South Korea's October Manufacturing BSI Index 68 (last 67)

    • Australia's August Weighted Mean CPI 5.2% yr/yr, as expected (last 4.9%)


---Equity Markets---

  • Japan's Nikkei: +0.2%

  • Hong Kong's Hang Seng: +0.8%

  • China's Shanghai Composite: +0.2%

  • India's Sensex: +0.3%

  • South Korea's Kospi: +0.1%

  • Australia's ASX All Ordinaries: -0.1%

---FX---

  • USD/JPY: +0.2% to 149.21

  • USD/CNH: UNCH at 7.3125

  • USD/INR: -0.1% to 83.19

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

Major European indices trade near their flat lines. Eurozone's M3 Money Supply decreased at its fastest pace on record in the August reading. Norway's Equinor received approval from British regulators to develop an oil and gas project in the North Sea. European Central Bank policymaker Elderson said that rates have not peaked yet and there is still a lot of uncertainty.

  • In economic data:

    • Eurozone's August M3 Money Supply -1.3% yr/yr (expected -1.0%; last -0.4%), August private sector loans 1.0% yr/yr (expected 1.2%; last 1.3%) and loans to nonfinancials 0.6% (last 2.2%)

    • Germany's October GfK Consumer Climate -26.5 (expected -26.0; last -25.6)

    • France's September Consumer Confidence 83 (expected 84; last 85)

    • Swiss September ZEW Expectations -27.6 (last -38.6)


---Equity Markets---

  • STOXX Europe 600: -0.1%

  • Germany's DAX: UNCH

  • U.K.'s FTSE 100: -0.2%

  • France's CAC 40: +0.1%

  • Italy's FTSE MIB: -0.2%

  • Spain's IBEX 35: UNCH

---FX---

  • EUR/USD: -0.3% to 1.0544

  • GBP/USD: -0.1% to 1.2138

  • USD/CHF: +0.3% to 0.9186

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