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29/09/23 Briefing


The S&P 500 futures are up 19 points and are trading 0.3% above fair value. The Nasdaq 100 futures are up 87 points and are trading 0.5% above fair value. The Dow Jones Industrial Average futures are up 139 points and are trading 0.4% above fair value.

Stocks are poised to continue rebounding at the open, supported by the belief that the market is oversold on a short-term basis and due for a bounce. The drop in market rates has also been supportive. The 10-yr note yield is down five basis points to 4.55% and the 2-yr note yield is down five basis points to 5.03%

The move in Treasuries follows a cooler than expected CPI reading for September from France while the eurozone reading slowed to 4.3% yr/yr from 5.2% in August and the core reading slowed to 4.5% from 5.3%.

Participants will receive the Fed's preferred inflation gauge at 8:30 a.m. ETin the form of the PCE and core-PCE price indices. 

In corporate news:

  • NIKE (NKE 98.30, +8.67, +9.7%): beats by $0.18, reports revs in-line, gross margin decreased 10 bps to 44.2%, inventories down 10% yr/yr to $8.7 bln

  • Microsoft (MSFT 316.04, +2.40, +0.8%) reportedly discussed selling its Bing search engine to Apple (AAPL) around 2020, according to Bloomberg

  • FedEx (FDX 268.10, +1.66, +0.6%): HSBC initiated coverage with a Buy rating

  • Anheuser-Busch InBev (BUD 55.57, +2.01, +3.8%): upgraded shares to Buy from Neutral

  • GameStop (GME 16.98, +0.14, +0.8%): higher on report that new CEO emailed employees saying that extreme frugality is required, according to CNBC

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended the week on a mixed note but overall volume was reduced due to holidays in China and South Korea. Japan's Nikkei: -0.1% (-1.7% for the week), Hong Kong's Hang Seng: +2.5% (-1.4% for the week), China's Shanghai Composite: CLOSED (-0.7% for the week), India's Sensex: +0.5% (-0.3% for the week), South Korea's Kospi: CLOSED (-1.7% for the week), Australia's ASX All Ordinaries: +0.4% (-0.3% for the week)

  • In economic data:

  • Japan's September Tokyo CPI 2.8% yr/yr (last 2.9%) and Tokyo Core CPI 2.5% yr/yr (expected 2.6%; last 2.8%). August Retail Sales 7.0% yr/yr (expected 6.6%; last 7.0%), August Industrial Production 0.0% m/m (expected -0.8%; last -1.8%), August Unemployment Rate 2.7% (expected 2.6%; last 2.7%), and August jobs/applications ratio 1.29, as expected (last 1.29). August Housing Starts -9.4% yr/yr (expected -8.9%; last -6.7%) and Construction Orders -4.3% yr/yr (last 8.7%). September Household Confidence 35.2 (expected 36.2; last 36.2)

  • Australia's August Housing Credit 0.3% m/m (last 0.3%) and Private Sector Credit 0.4% m/m (expected 0.3%; last 0.3%)

  • In news:

  • Technology stocks fueled relative strength in the Hang Seng, which climbed off its lowest level since late November.

  • Goldman Sachs pushed back its forecast for the first rate cut from the Reserve Bank of Australia to November 2024 from August 2024.

  • The Bank of Japan conducted an unscheduled buying operation while a former BoJ research head said that the market should expect the 10-yr JGB yield to reach 2.0% if the central bank's inflation target is met and negative interest rate policy ends.

  • Major European indices are looking for a higher finish to the week. STOXX Europe 600: +1.2% (+0.1% week-to-date), Germany's DAX: +1.0% (-0.5% week-to-date), U.K.'s FTSE 100: +0.9% (-0.2% week-to-date), France's CAC 40: +1.1% (+0.2% week-to-date), Italy's FTSE MIB: +1.1% (-0.3% week-to-date), Spain's IBEX 35: +0.7% (-0.1% week-to-date).

  • In economic data:

  • Eurozone's September CPI 0.3% m/m (last 0.5%); 4.3% yr/yr (expected 4.5%; last 5.2%). September Core CPI 0.2% m/m (last 0.3%); 4.5% yr/yr (expected 4.8%; last 5.3%)

  • Germany's August Retail Sales -1.2% m/m (expected -0.7%; last -2.2%); -2.3% yr/yr (expected -0.7%; last -2.2%). August Import Price Index 0.4% m/m (expected 0.5%; last -0.6%); -16.4% yr/yr, as expected (last -13.2%). September Unemployment Change 10,000 (expected 15,000; last 20,000) and Unemployment Rate 5.7%, as expected (last 5.7%)

  • France's August PPI 0.6% m/m (last -0.3%); -1.3% yr/yr (last 0.9%). August Consumer Spending -0.5% m/m, as expected (last 0.4%). September CPI -0.5% m/m (expected -0.3%; last 1.0%); 4.9% yr/yr (expected 5.1%; last 4.9%)

  • U.K.'s August Mortgage Lending GBP1.22 bln (last GBP200 mln) and August BoE Consumer Credit GBP1.644 bln (expected GBP1.300 bln; last GBP1.271 bln). Q2 GDP 0.2% qtr/qtr, as expected (last 0.3%); 0.6% yr/yr (expected 0.4%; last 0.5%). Q2 Business Investment 4.1% qtr/qtr (expected 3.4%; last 4.0%); 9.2% yr/yr (expected 6.7%; last 7.0%). Q2 Current Account deficit GBP25.3 bln (expected deficit of GBP15.0 bln; last deficit of GBP15.2 bln)

  • Italy's September CPI 0.2% m/m (expected 0.1%; last 0.3%); 5.3% yr/yr, as expected (last 5.4%). July Industrial Sales -0.4% m/m (last 0.5%); -1.6% yr/yr (last -0.4%)

  • Spain's July Current Account surplus EUR4.27 bln (last surplus of EUR2.83 bln)

  • Swiss September KOF Leading Indicators 95.9 (expected 90.5; last 96.2)

  • In news:

  • France reported cooler than expected CPI for September while the eurozone reading slowed to 4.3% yr/yr from 5.2% in August and the core reading slowed to 4.5% from 5.3%.

  • Mortgage rates in the U.K. are being reduced.

  • Commerzbank announced that it will return more capital to shareholders.

  • European Central Bank policymaker Kazaks said that rates will likely have to stay on hold for a while. France is planning more corporate tax cuts.

 

U.S. equity futures:

  • S&P 500 Futures +17 @ 4,317

  • DJIA Futures: +134 @ 33,800

  • Nasdaq 100 Futures: +84 @ 14,787

Overseas:

  • Europe: DAX +1.0%, FTSE +0.9%, CAC +1.1%

  • Asia: Nikkei -0.1%, Hang Seng +2.5%, Shanghai Composite CLOSED

Commodities:

  • Crude Oil +1.15 @ 92.86

  • Nat Gas -0.024 @ 2.921

  • Gold +6.65 @ 1885.25

  • Silver +0.567 @ 23.308

  • Copper +0.0460 @ 3.7540


 

Earnings/Guidance:

  • Algoma Steel Group (ASTL) provides SepQ operating guidance

  • BlackBerry (BB) beats by $0.03, misses on revs; reiterates full-year Cyber revenue outlook

  • Instructure (INST) reaffirms guidance for Q3 and FY23 and also announces that Peter Walker has been named CFO, effective November 13, 2023

  • NIKE (NKE) beats by $0.18, reports revs in-line, gross margin decreased 10 bps to 44.2%, inventories down 10% yr/yr to $8.7 bln;  expects second quarter reported revenue growth to be up slightly vs. the prior year,

  • Stifel Financial (SF) reports operating results for August 31, 2023; total client assets increased 10% yr/yr to $424.9 bln

  • Vail Resorts (MTN) reports Q4 (Jul) results, misses on revs; pleased with season pass sales to date

News:

  • Partial government shutdown nears, according to Reuters

  • State Department emails stolen in Microsoft breach, according to Reuters

  • Federal Reserve Chair Powell hosts a town hall with educators

  • Fed's Thomas Barkin: too soon to know if another rate hike needed, according to Reuters citing Bloomberg TV

  • SAG-AFTRA and video game employers concluded scheduled negotiations yesterday for the Interactive Media Agreement - No deal was reached

  • AbbVie (ABBV) announces data from its Phase 3 CANOVA study evaluating the safety and efficacy of venetoclax plus dexamethasone for patients with t-positive relapsed or refractory) multiple myeloma who have received two or more prior treatments

  • AirSculpt Technologies (AIRS) made a voluntary partial debt pay down on its credit agreement with a syndicate of lenders

  • AZEK (AZEK) announces peter clifford to take on dual role as COO and CFO, effective October 1

  • Barrick Gold (GOLD) and the Tanzanian government's Twiga Partnership shows the transformative impact of mining; Both mines are well on track to achieve production guidance for 2023

  • Capricor Therapeutics (GPCR) announces positive Type-B meeting with the FDA to discuss pathway to BLA for CAP-1002 in Duchenne muscular dystrophy

  • Clear Channel Outdoor (CCO) settles with SEC to resolve previously-disclosed investigation; co agrees to pay $26.1 mln

  • CureVac (CVAC) reported yesterday progress in intellectual property infringement case against BioNTech (BNTX) in Germany

  • Delta (DAL) modifying its frequent flyer program, according to AP

  • GameStop (GME) new CEO emailed employees saying that extreme frugality is required, according to CNBC

  • Goodyear Tire (GT) announces that on August 20, a fire significantly damaged a portion of the tire curing area and caused the temporary shutdown of our tire manufacturing facility in Poland

  • GrafTech International (EAF) CEO and President Marcel Kessler to step down due to family reasons; company appoints current CFO Timothy Flanagan to serve as interim CEO

  • HUTCHMED (HCM) and Takeda (TAK) submit NDA for Fruquintinib in Japan

  • Installed Building Products (IBP) announces retirement of COO Jay Elliot and appointment of Brad Wheeler as successor, effective January 1

  • JFrog (FROG) promotes Ed Grabscheid to CFO

  • Johnson Outdoors (JOUT) raises quarterly dividend to $0.33 per share from $0.30 per share

  • KAZIA Therapeutics (KZIA) announces acceptance of late-breaking abstract and oral presentation of PNOC022 clinical data at 2023 Society for Neuro-Oncology Annual Meeting

  • MGM Resorts (MGM): Workers at Detroit's MGM Grand Detroit, MotorCity Casino, and Hollywood at Greektown, will cast ballots on whether to authorize strikes as they negotiate new union contracts Detroit, MI

  • Microsoft (MSFT) reportedly discussed selling its Bing search engine to Apple around 2020, according to Bloomberg

  • ModeX Therapeutics (OPK), an Opko Health company, secures BARDA contract to develop novel multispecific antibodies against viral infectious disease threats

  • NaaS Technology (NAAS) and ZSY reach strategic cooperation to promote financial innovation and develop new energy industry

  • Nanobiotix (NBTX) announces presentation of first data from Phase 1 study evaluating NBTXR3 for Patients with locally advanced pancreatic cancer

  • Nikola Corporation (NKLA) achieves milestone today with the commercial launch of the Nikola hydrogen fuel cell electric vehicle at its manufacturing facility in Coolidge, AZ

  • Northrop Grumman (NOC) awarded a $513 mln modification to previously awarded US Navy contract

  • Penske Auto (PAG) reports that severe storms at its Genesis, Honda, Hyundai, and Toyota dealerships located in Round Rock, Texas, sustained significant hail damage; company estimates these vehicles represent over $27 million in inventory value

  • PTC Therapeutics (PTCT) announces workforce reduction impacting 25% of the company which is expected to result in an approximate 20% reduction in annualized operating expenses compared to 2023 OPEX guidance

  • QIAGEN (QGEN) extends AI capabilities of its NGS interpretation software QCI Interpret to enable clinical exome completeness

  • RTX (RTX) awarded a $305.6 mln US Navy contract

  • Softbank (SFTBY): Open AI seeking investment from Softbank, according to Financial Times

  • Sony (SONY) provides update on the progress and expected closing schedule of the merger of Sony Pictures Networks India and Zee Entertainment Enterprises

  • Sterling Check Corp. (STER) CFO Peter Walker to step down

  • Structure Therapeutics (GPCR) Announces Positive Results from Phase 1b Clinical Study of Oral GLP-1 Receptor Agonist GSBR-1290 and Provides Program Update

  • TechnipFMC (FTI) awarded a "significant" flexible pipe contract by Petrobras

M&A:

  • American Water Works (AWK) announces agreement to acquire Appalachian Utilities; terms of deal not disclosed

  • Blue Apron (APRN) to be acquired by Wonder Group for $13/share in cash

  • Cal-Maine Foods (CALM) announces definitive agreement to acquire egg production assets of Fassio Egg Farms; financial terms were not disclosed

  • CCC Intelligent Solutions (CCCS): Bain Capital weighing deal for CCCS, according to Bloomberg

  • Qualcomm (QCOM): UK CMA is investigating the anticipated acquisition by Qualcomm Incorporated of Autotalks Ltd.

  • UnitedHealth (UNH): UK CMA clears NHS healthcare tech deal

Syndicate:

  • Getty Images (GETY) files for 397,045,769 share common stock offering by selling shareholders

  • J.M. Smucker (SJM) files mixed securities shelf offering

  • Madrigal Pharmaceuticals (MDGL) prices $500 mln public offering

  • Opera (OPRA) prices secondary offering of 6,876,506 ADSs to be sold by a pre-IPO shareholder at $12.25 per ADS

IPOs:

  • Priced to Trade:

  • No IPOs expected.

Gapping Up/Down

  • Gapping up:

  • OPK +8%, NKE +7.8%, NBTX +6.2%, NAAS+5.8%, CCO +4.9%, PTCT +4.8%, MDGL+3.4%, GT +3%, SPWH +2.7%, FTI +2.6%, QGEN +2.1%, KSS +1.2%, GOOG +1.1%, DXC+1%, MSFT +0.9%, AAPL +0.9%, CVAC+0.9%, GME +0.6%, BB +0.6%

  • Gapping down:

  • EBIX -7.1%, GETY -4.1%, HA -4.1%, JOUT-2.4%, OPRA -2.1%, ASTL -2%, AVD -1.9%, CALM -1.8%, IBP -1.7%, EAF -1.1%, TAK-0.7%, NKLA -0.6%

 

Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

  • Restaurant Brands Int'l (QSR) upgraded to Buy from Hold at Loop Capital; tgt raised to $81

  • Texas Roadhouse (TXRH) upgraded to Buy from Neutral at Northcoast; tgt $118

  • Trimble (TRMB) upgraded to Outperform from Mkt Perform at Raymond James; tgt $65

  • Downgrades:

  • ResMed (RMD) downgraded to Peer Perform from Outperform at Wolfe Research

  • Others:

  • AbbVie (ABBV) initiated with an Outperform at Raymond James; tgt $177

  • Alnylam Pharma (ALNY) initiated with an Outperform at Raymond James; tgt $208

  • Customers Bancorp (CUBI) initiated with a Strong Buy at Raymond James; tgt $60

  • Fusion Pharmaceuticals (FUSN) initiated with an Outperform at Oppenheimer; tgt $13

  • Ingredion (INGR) initiated with an Outperform at Oppenheimer; tgt $120

  • Ionis Pharma (IONS) initiated with a Strong Buy at Raymond James; tgt $63

  • Jazz Pharma (JAZZ) initiated with a Mkt Perform at Raymond James

  • Lantheus Holdings (LNTH) initiated with an Outperform at William Blair

  • Paragon 28 (FNA) initiated with an Outperform at William Blair

  • Petco Health and Wellness (WOOF) initiated with a Peer Perform at Wolfe Research

  • Telefonica Brasil (VIV) resumed with an Outperform at Itau BBA; tgt $11

  • Tractor Supply (TSCO) resumed with an Outperform at Wolfe Research; tgt $239

Econ Data:

  • 08:30 ET: Adv. Intl. Trade in Goods for Aug (Briefing.comConsensus NA; Prior -$91.2B)

  • 08:30 ET: Adv. Retail Inventories for Aug (Briefing.comConsensus NA; Prior 0.3%)

  • 08:30 ET: Adv. Wholesale Inventories for Aug (Briefing.comConsensus NA; Prior -0.1%)

  • 08:30 ET: Persona Income for Aug (Briefing.comConsensus 0.5%; Prior 0.2%)

  • 08:30 ET: Personal Spending for Aug (Briefing.comConsensus 0.5%; Prior 0.8%)

  • 08:30 ET: PCE Prices for Aug (Briefing.comConsensus 0.4%; Prior 0.2%)

  • 08:30 ET: PCE Prices - Core for Aug (Briefing.comConsensus 0.2%; Prior 0.2%)

  • 09:45 ET: Chicago PMI for Sep (Briefing.comConsensus 48.3; Prior 48.7)

  • 10:00 ET: Univ. of Michigan Consumer Sentiment - Final for Sep (Briefing.comConsensus 67.7; Prior 67.7)

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 -0.1%, Hang Seng +2.5%, Shanghai Composite CLOSED

Equity indices in the Asia-Pacific region ended the week on a mixed note but overall volume was reduced due to holidays in China and South Korea. Technology stocks fueled relative strength in the Hang Seng, which climbed off its lowest level since late November. Goldman Sachs pushed back its forecast for the first rate cut from the Reserve Bank of Australia to November 2024 from August 2024. The Bank of Japan conducted an unscheduled buying operation while a former BoJ research head said that the market should expect the 10-yr JGB yield to reach 2.0% if the central bank's inflation target is met and negative interest rate policy ends.

  • In economic data:

  • Japan's September Tokyo CPI 2.8% yr/yr (last 2.9%) and Tokyo Core CPI 2.5% yr/yr (expected 2.6%; last 2.8%). August Retail Sales 7.0% yr/yr (expected 6.6%; last 7.0%), August Industrial Production 0.0% m/m (expected -0.8%; last -1.8%), August Unemployment Rate 2.7% (expected 2.6%; last 2.7%), and August jobs/applications ratio 1.29, as expected (last 1.29). August Housing Starts -9.4% yr/yr (expected -8.9%; last -6.7%) and Construction Orders -4.3% yr/yr (last 8.7%). September Household Confidence 35.2 (expected 36.2; last 36.2)

  • Australia's August Housing Credit 0.3% m/m (last 0.3%) and Private Sector Credit 0.4% m/m (expected 0.3%; last 0.3%)

---Equity Markets---

  • Japan's Nikkei: -0.1% (-1.7% for the week)

  • Hong Kong's Hang Seng: +2.5% (-1.4% for the week)

  • China's Shanghai Composite: CLOSED (-0.7%for the week)

  • India's Sensex: +0.5% (-0.3% for the week)

  • South Korea's Kospi: CLOSED (-1.7% for the week)

  • Australia's ASX All Ordinaries: +0.4% (-0.3%for the week)

---FX---

  • USD/JPY: -0.1% to 149.07

  • USD/CNH: -0.1% to 7.2890

  • USD/INR: -0.1% to 82.99

 

Europe: DAX +1.0%, FTSE +0.9%, CAC +1.1%

Major European indices are looking for a higher finish to the week. France reported cooler than expected CPI for September while the eurozone reading slowed to 4.3% yr/yr from 5.2% in August and the core reading slowed to 4.5% from 5.3%. Mortgage rates in the U.K. are being reduced. Commerzbank announced that it will return more capital to shareholders. European Central Bank policymaker Kazaks said that rates will likely have to stay on hold for a while. France is planning more corporate tax cuts.

  • In economic data:

  • Eurozone's September CPI 0.3% m/m (last 0.5%); 4.3% yr/yr (expected 4.5%; last 5.2%). September Core CPI 0.2% m/m (last 0.3%); 4.5% yr/yr (expected 4.8%; last 5.3%)

  • Germany's August Retail Sales -1.2% m/m (expected -0.7%; last -2.2%); -2.3% yr/yr (expected -0.7%; last -2.2%). August Import Price Index 0.4% m/m (expected 0.5%; last -0.6%); -16.4% yr/yr, as expected (last -13.2%). September Unemployment Change 10,000 (expected 15,000; last 20,000) and Unemployment Rate 5.7%, as expected (last 5.7%)

  • France's August PPI 0.6% m/m (last -0.3%); -1.3% yr/yr (last 0.9%). August Consumer Spending -0.5% m/m, as expected (last 0.4%). September CPI -0.5% m/m (expected -0.3%; last 1.0%); 4.9% yr/yr (expected 5.1%; last 4.9%)

  • U.K.'s August Mortgage Lending GBP1.22 bln (last GBP200 mln) and August BoE Consumer Credit GBP1.644 bln (expected GBP1.300 bln; last GBP1.271 bln). Q2 GDP 0.2% qtr/qtr, as expected (last 0.3%); 0.6% yr/yr (expected 0.4%; last 0.5%). Q2 Business Investment 4.1% qtr/qtr (expected 3.4%; last 4.0%); 9.2% yr/yr (expected 6.7%; last 7.0%). Q2 Current Account deficit GBP25.3 bln (expected deficit of GBP15.0 bln; last deficit of GBP15.2 bln)

  • Italy's September CPI 0.2% m/m (expected 0.1%; last 0.3%); 5.3% yr/yr, as expected (last 5.4%). July Industrial Sales -0.4% m/m (last 0.5%); -1.6% yr/yr (last -0.4%)

  • Spain's July Current Account surplus EUR4.27 bln (last surplus of EUR2.83 bln)

  • Swiss September KOF Leading Indicators 95.9 (expected 90.5; last 96.2)

---Equity Markets---

  • STOXX Europe 600: +1.2% (+0.1% week-to-date)

  • Germany's DAX: +1.0% (-0.5% week-to-date)

  • U.K.'s FTSE 100: +0.9% (-0.2% week-to-date)

  • France's CAC 40: +1.1% (+0.2% week-to-date)

  • Italy's FTSE MIB: +1.1% (-0.3% week-to-date)

  • Spain's IBEX 35: +0.7% (-0.1% week-to-date)

---FX---

  • EUR/USD: +0.3% to 1.0596

  • GBP/USD: +0.5% to 1.2257

  • USD/CHF: -0.2% to 0.9126

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