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30/08/23 Briefing


The S&P 500 futures are down 5 points and are trading 0.1% below fair value. The Nasdaq 100 futures are down 27 points and are trading 0.2% below fair value. The Dow Jones Industrial Average futures are down 19 points and are trading 0.1% below fair value.

Equity futures indicate a flattish open following three straight days of gains. 

Treasuries are mixed this morning. 2-yr note yield is down one basis point to 4.90% and the 10-yr note yield is up three basis points to 4.15%.

The weekly MBA Mortgage Applications Index showed a 2.3% rise in total applications following last week's 4.2% decline. 

The second estimate for Q2 GDP will be released at 8:30 a.m. ET. Other data today includes:

  • 8:15 ET: August ADP Employment Change (Briefing.comconsensus 195,000; prior 324,000)

  • 8:30 ET: July advance goods trade balance (prior -$87.8 bln), advance Retail Inventories (prior 0.3%), and advance Wholesale Inventories (prior -0.5%)

  • 10:00 ET: July Pending Home Sales (Briefing.comconsensus -1.3%; prior 0.3%)

  • 10:30 ET: Weekly crude oil inventories (prior -6.14 mln)

In corporate news:

  • Ambarella (AMBA 59.38, -16.40, -21.6%): beats by $0.06, reports revs in-line; guides Q3 revs well below consensus

  • Box (BOX 27.66, -3.14, -10.2%): beats by $0.01, reports revs in-line; guides Q3 EPS below consensus, revs below consensus; guides FY24 EPS in-line, revs below consensus; expands stock repurchase program by $100 mln

  • Hewlett Packard Enterprise (HPE 16.54, -0.30, -1.8%):beats by $0.02, reports revs in-line; guides Q4 EPS in-line, revs in-line; guides FY23 EPS in-line, expects FY23 revs of +4-6% in CC

  • HP Inc. (HPQ 28.75, -2.62, -8.4%): reports EPS in-line, misses on revs; guides Q4 EPS in-line

  • Texas Instruments (TXN 167.14, -3.55, -2.1%): downgraded to Underperform from Mkt Perform at Bernstein

  • PVH (PVH 83.30, +2.48, +3.1%): beats by $0.22, reports revs in-line; guides Q3 EPS below consensus; guides FY24 EPS above consensus, reaffirms revenue guidance; increases FY24 planned repurchases to $400 mln

  • Patterson Companies (PDCO 31.40, -1.93, -5.8%): reports EPS in-line, revs in-line; reaffirms FY24 EPS guidance

  • Sunrun (RUN 15.80, +0.64, +4.2%): upgraded to Buy from Neutral at Citigroup

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended the midweek session on a mostly higher note. Japan's Nikkei: +0.3%, Hong Kong's Hang Seng: UNCH, China's Shanghai Composite: UNCH, India's Sensex: UNCH, South Korea's Kospi: +0.4%, Australia's ASX All Ordinaries: +1.2%.

  • In economic data:

  • Japan's August Household Confidence 36.2 (expected 37.5; last 37.1)

  • Australia's July Building Approvals -8.1% m/m (expected -0.8%; last -7.9%); -6.4% yr/yr (last -7.3%). July Private House Approvals 0.1% m/m (last -1.0%). Q2 Construction Work Done 0.4% qtr/qtr (expected 1.0%; last 3.8%) and July Monthly CPI Indicator 4.9% yr/yr (expected 5.2%; last 5.4%)

  • New Zealand's July Building Consents -5.2% m/m (expected 0.2%; last 3.4%)

  • In news:

  • Some of the biggest state-owned banks in China are considering another cut to the deposit rate in an attempt to boost growth.

  • Troubled developer Country Garden issued more stock.

  • Toyota resumed work at 12 of its 14 plants in Japan after a daylong stoppage caused by a system malfunction.

  • Reserve Bank of Australia Deputy Governor Bullock said that the central bank may have to hike again due to persistently high inflation.

  • Major European indices trade on a mostly lower note. STOXX Europe 600: -0.2%, Germany's DAX: -0.4%, U.K.'s FTSE 100: +0.2%, France's CAC 40: -0.4%, Italy's FTSE MIB: +0.1%, Spain's IBEX 35: -0.2%.

  • In economic data:

  • Eurozone's August Business and Consumer Survey 93.3 (expected 93.7; last 94.5)

  • Germany's July Import Price Index -0.6% m/m (expected 0.0%; last -1.6%); -13.2% yr/yr (expected -12.9%; last -11.4%)

  • U.K.'s July Mortgage Approvals 49,440 (expected 51,000; last 54,610), July Mortgage Lending GBP230 mln (expected -GBP460 mln; last GBP110 mln). July BoE Consumer Credit GBP1.191 bln (expected GBP1.300 bln; last GBP1.637 bln)

  • Italy's August Consumer Confidence 106.5 (expected 105.6; last 106.7) and Business Confidence 97.8 (expected 98.0; last 99.1). May Industrial Sales 0.4% m/m (expected -0.1%; last 1.6%); 1.3% yr/yr (expected 7.5%; last -0.5%)

  • Spain's August CPI 0.5% m/m (expected 0.4%; last 0.2%); 2.6% yr/yr, as expected (last 2.3%)

  • Swiss August KOF Leading Indicators 91.1 (expected 91.5; last 92.1) and August ZEW Expectations -38.6 (expected -31.3; last -32.6)

  • In news:

  • Spain's CPI accelerated to 2.6% yr/yr from 2.3% in the flash reading for August while some of Germany's regional CPI readings also showed an uptick ahead of the 8:00 ETrelease of Germany's full CPI report.

  • British Foreign Secretary Cleverly said during his trip to Beijing that the U.K. is looking for a pragmatic relationship with China.

  • The EU is on track to import a record amount of liquid natural gas from Russia this year.

 

U.S. equity futures:

  • S&P 500 Futures -3 @ 4,495

  • DJIA Futures: -36 @ 34,816

  • Nasdaq 100 Futures: -14 @ 15,363

Overseas:

  • Europe: DAX -0.4%, FTSE +0.2%, CAC -0.4%

  • Asia: Nikkei +0.3%, Hang Seng UNCH, Shanghai Composite UNCH

Commodities:

  • Crude Oil +0.52 @ 81.68

  • Nat Gas +0.045 @ 2.707

  • Gold +2.05 @ 1967.15

  • Silver -0.128 @ 24.66

  • Copper -0.014 @ 3.825


 

Earnings/Guidance:

  • Ambarella (AMBA) beats by $0.06, reports revs in-line; guides Q3 revs well below consensus

  • American Woodmark (AMWD) beats by $0.48, reports revs in-line, guides FY24 revs below consensus

  • ANI Pharma (ANIP) raises FY23 guidance in slide presentation

  • Box (BOX) beats by $0.01, reports revs in-line; guides Q3 EPS below consensus, revs below consensus; guides FY24 EPS in-line, revs below consensus; expands stock repurchase program by $100 mln

  • Conn's (CONN) beats by $0.14, reports revs in-line

  • Harmony Gold (HMY) beats by $0.04

  • Hewlett Packard Enterprise (HPE) beats by $0.02, reports revs in-line; guides Q4 EPS in-line, revs in-line; guides FY23 EPS in-line, expects FY23 revs of +4-6% in CC

  • HP Inc. (HPQ) reports EPS in-line, misses on revs; guides Q4 EPS in-line

  • Johnson & Johnson (JNJ) updates FY23 guidance following completion of the Kenvue (KVUE) separation

  • MasterCraft (MCFT) beats by $0.24, beats on revs; guides Q1 EPS below consensus, revs below two analyst estimate; guides FY24 EPS below consensus, revs below consensus

  • nCino (NCNO) beats by $0.02, beats on revs; guides Q3 EPS in-line, revs below consensus; guides FY24 EPS in-line, revs in-line

  • Patterson Companies (PDCO) reports EPS in-line, revs in-line; reaffirms FY24 EPS guidance

  • Prudential Plc (PUK) reports H1 results

  • PVH (PVH) beats by $0.22, reports revs in-line; guides Q3 EPS below consensus; guides FY24 EPS above consensus, reaffirms revenue guidance; increases FY24 planned repurchases to $400 mln

  • ZTO Express (ZTO) beats by RMB0.27, misses on revs

News:

  • China rejects U.S. comment that it is "uninvestable", according to Reuters

  • Hurricane Idalia is expected to make landfall on Florida coast shortly as a category 4 storm

  • TSA expects to screen more than 14 million passengers during the Labor Day holiday weekend from Sept. 1, 2023 through Sept. 6, 2023

  • 10x Genomics (TXG) ships over 100 Xenium Analyzer instruments in the eight months since the platform's launch

  • AAR Corp (AIR) signs two multi-year commercial agreements with Moog Inc.

  • Abeona Therapeutics (ABEO) announces "positive" Pre-BLA meeting with FDA for EB-101 and plans for BLA submission

  • Alkermes (ALKS) settles VIVITROL patent litigation with Teva (TEVA)

  • Alphabet (GOOG) expands the Duet AI in Google Cloud preview with new capabilities, including providing AI assistance

  • Alphabet (GOOG) expands Duet AI, an AI-powered collaborator, across Google Cloud

  • Amazon (AMZN) made the decision to end the Amazon Honeycode beta service, effective February 29, 2024

  • Amazon (AMZN): US watchdog wrote to Amazon regarding use of unapproved drugs, according to Financial Times

  • Amneal Pharmaceuticals (AMRX): HHS and FDA officials visited AMRX's manufacturing facility in Matoda, India

  • ARMOUR Residential REIT (ARR) approves 1-for-5 reverse stock split

  • Banco de Chile (BCH) and Citigroup (C) agreed to extend the term of the Cooperation Agreement, Global Connectivity Agreement and the Amended and Restated Trademark License Agreement

  • Biogen (BIIB) Alzheimer's drug Leqembi ramp up has been slow amid workforce and capacity issues, according to Stat News

  • Brookfield Real Assets Income Fund (RA) will reset its monthly distribution from $0.1990 per share to $0.1180 per share

  • Cencora (COR) announced the completion of its name and stock ticker change from AmerisourceBergen Corporation (ABC)

  • Choice Hotels (CHH) announced key executive appointments that position the company for continued future growth

  • Citigroup (C): SEC charging Citigroup Global Markets for violating recordkeeping requirements

  • Cleveland-Cliffs (CLF) and United Steelworkers reach tentative labor agreement for Northshore Mining Operations

  • Contango ORE (CTGO) announces commencement of mining operations at Manh Choh Mine and re-start of drilling at Lucky Shot Mine

  • Douglas Emmett (DEI) Chairman Dan A. Emmett announced his retirement as an executive officer of the Company effective August 24, 2023

  • Exact Sciences (EXAS) announced that the National Cancer Institute (NCI) has selected the company's testing laboratory in Phoenix, AZ to participate in the ComboMATCH clinical trials

  • FibroGen (FGEN) Announces Topline Results from LELANTOS-2, a Phase 3 Clinical Study of Pamrevlumab in Ambulatory Duchenne Muscular Dystrophy

  • Goldman (GS) purchased UK and US companies with Chinese state funds, according to Financial Times

  • Huntington Ingalls (HII) receives DDG 1000 modernization contract

  • InflaRx (IFRX) marketing authorization application for vilobelimab for treatment of critically ill COVID-19 patients under review by European Medicines Agency

  • Kamada (KMDA) announces shareholder approval and planned closing of $60 million private placement with FIMI Opportunity Funds

  • Mosaic (MOS) CEO James O'Rourke to resign, effective December 31; appoints Bruce Bodine, current Senior VP North America, as successor

  • NASDAQ (NDAQ) appoints Sarah Youngwood as CFO, effective December 1; succeeds Ann Dennison

  • Netflix (NFLX) announces all the new mobile games joining Netflix in August

  • Novocure (NVCR) announces The Lancet Oncology publishes primary data from Phase 3 LUNAR Clinical Trial in patients with metastatic non-small cell lung cancer after platinum-based therapies

  • Origin Materials (ORGN) announces appointment of Pam Haley as interim CFO

  • Outlook Therapeutics (OTLK): FDA issues Complete Response Letter (CRL) for ONS-5010 BLA based on CMC and need for further confirmatory clinical evidence

  • PotlatchDeltic (PCH) appoints Wayne Wasechek as CFO, effective immediately; previously served as interim CFO

  • REGENXBIO (RGNX) announced that initial interim data from a first-in-human single-patient, investigator-initiated trial of RGX-181 for the treatment of late-infantile neuronal ceroid lipofuscinosis type 2 (CLN2) disease, a form of Batten disease, were present

  • Science Applications (SAIC) awarded $575 mln U.S. Air Force contract

  • Sempra Energy (SRE) to participate in the evaluation of a proposed project to produce e-natural gas, a form of carbon recycling, in the U.S. Gulf Coast

  • Southern (SO) provides Georgia PSC and Vogtle updates

  • Sysco (SYY) appoints Greg Bertrand as COO, effective September 1

  • Toyota (TM) resumes Japan production after system issue, according to CNN

  • Transocean (RIG) announced that Oil and Natural Gas Corporation Ltd awarded the Dhirubhai Deepwater KG1 a binding Notification of Award for work offshore India

  • Vitesse (VTS) appoints James Henderson as the Company's Chief Financial Officer

  • Woodside Energy Group (WDS) reported that Trion field development plan has been approved by the Mexican regulator, Comision Nacional de Hidrocarburos

M&A:

  • Brookfield Infrastructure (BIP): Pacific National is interested in BIP Linx unit, according to Australian

  • Cognex (CGNX) to acquire Moritex from Trustar Capital for approximately $275 mln in cash; to be accretive to GAAP EPS in 2025

  • Gaming and Leisure Properties (GLPI) acquires land under the Hard Rock Casino in Rockford, IL for $100 million, enters into 99-year ground lease with tenant

  • Hut 8 Mining (HUT): Independent Proxy Advisory Firm Glass Lewis Recommends Hut 8 Shareholders Vote for Merger of Equals with US Bitcoin Corp

  • Inotiv (NOTV) divests its Israeli Businesses to Harlan Holdings

  • Modine Manufacturing (MOD) announces sale of coatings aftermarket application facilities in Florida and California; terms of deal not disclosed

  • Novo Nordisk A/S (NVO) acquires Embark Biotech, including its lead asset targeting obesity and other cardiometabolic diseases

Syndicate:

  • MicroVision (MVIS) enters into an at-the-market issuance sales agreement to sell up to $35 mln shares of common stock

IPOs:

  • Expected to Price:

  • No IPOs expected.

Gapping Up/Down

  • Gapping up:

  • PODD +3.5%, PUK +3.3%, SIRI +3%, MVIS+2.7%, NOTV +2.6%, PVH +1.5%, LYFT+1.1%, CGNX +1%, CLF +1%, CONN +0.9%, AVT +0.7%

  • Gapping down:

  • OTLK -75.1%, FGEN -22.3%, AMBA -20.8%, BOX -9.2%, HPQ -8.5%, NCNO -6.4%, ZTO-5%, ARR -4.1%, HUT -3%, SAIC -2.1%, AMWD -2%, HPE -2%, MOD -1.1%, GLPI -1%

 

Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

  • Hercules Capital (HTGC) upgraded to Buy from Neutral at Compass Point; tgt $17.50

  • Sunrun (RUN) upgraded to Buy from Neutral at Citigroup; tgt lowered to $21

  • UDR (UDR) upgraded to Sector Outperform from Sector Perform at Scotiabank; tgt raised to $45

  • Downgrades:

  • Ambarella (AMBA) downgraded to Market Perform from Outperform at TD Cowen; tgt lowered to $65

  • Bancolombia S.A. (CIB) downgraded to Market Perform from Outperform at Itau BBA

  • Centene (CNC) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt lowered to $73

  • Greentree Hospitality (GHG) downgraded to Underweight from Equal-Weight at Morgan Stanley; tgt $4

  • Heineken (HEINY) downgraded to Underperform from Sector Perform at RBC Capital Mkts

  • Highwoods Prop (HIW) downgraded to Equal Weight from Overweight at Wells Fargo; tgt lowered to $22

  • Peloton (PTON) downgraded to Neutral from Outperform at Macquarie; tgt $7

  • Rockwell Automation (ROK) downgraded to Underweight from Equal Weight at Barclays; tgt lowered to $287

  • Sibanye-Stillwater (SBSW) downgraded to Neutral from Buy at BofA Securities

  • Texas Instruments (TXN) downgraded to Underperform from Mkt Perform at Bernstein; tgt $145

  • Others:

  • Airbus (EADSY) resumed with a Buy at Stifel

  • Align Tech (ALGN) initiated with a Buy at HSBC Securities; tgt $450

  • Atour Lifestyle Hldgs. Ltd. (ATAT) initiated with an Overweight at Morgan Stanley; tgt $36

  • AZZ (AZZ) initiated with a Buy at B. Riley Securities; tgt $64

  • BCB Bancorp (BCBP) initiated with a Buy at Janney

  • Cognex (CGNX) initiated with a Neutral at Citigroup; tgt $52

  • Fluence (FLNC) initiated with an Overweight at Barclays; tgt $31

  • Gulfport Energy (GPOR) initiated with an Outperform at Evercore ISI; tgt $135

  • Stem (STEM) initiated with an Equal Weight at Barclays; tgt $6

  • TotalEnergies SE (TTE) resumed with a Neutral at Citigroup

Econ Data:

  • 07:00 ET: MBA Mortgage Applications Index for Aug 26 (Briefing.comConsensus NA; Prior -4.2%)

  • 08:15 ET: ADP Employment Change for Aug (Briefing.comConsensus 195K; Prior 324K)

  • 08:30 ET: Adv. Intl. Trade in Goods for July (Briefing.comConsensus NA; Prior -$87.8B)

  • 08:30 ET: Adv. Retail Inventories for July (Briefing.comConsensus NA; Prior 0.7%)

  • 08:30 ET: Adv. Wholesale Inventories for July (Briefing.comConsensus NA; Prior -0.3%)

  • 08:30 ET: GDP - Second Estimate for Q2 (Briefing.comConsensus 2.4%; Prior 2.4%)

  • 08:30 ET: GDP Deflator - Second Estimate for Q2 (Briefing.comConsensus 2.2%; Prior 2.2%)

  • 10:00 ET: Pending Home Sales for July (Briefing.comConsensus -1.3%; Prior 0.3%)

  • 10:30 ET: EIA Crude Oil Inventories for Aug 26 (Briefing.comConsensus NA; Prior -6.14M)

Earnings:

  • Monday (Aug 28)

  • Morning:  BZUN

  • Afternoon: HEI

  • Tuesday (Aug 29)

  • Morning: AMWD BMO BNS BBY BIG CTLT DCI SJM MBUU NIO PDD

  • Afternoon:  AMBA BOX HPE HPQ NCNO PVH ZTO

  • Wednesday (Aug 30)

  • Morning:  BF.B CONN MCFT PDCO

  • Afternoon:  CHWY COO CRWD FIVE GEF OKTA CRM VEEV VSCO

  • Unspecified: PSTG

  • Thursday (Aug 31)

  • Morning: FLWS ASO CAL CPB CM CIEN DG GCO GMS MOMO HRL BEKE OLLI SIG TITN UBS

  • Afternoon:  AVGO DELL ESTC HCP LULU MDB NTNX OXM PD S VMW

 

Asia & Europe detail:

Asia: Nikkei +0.3%, Hang Seng UNCH, Shanghai Composite UNCH

Equity indices in the Asia-Pacific region ended the midweek session on a mostly higher note. Some of the biggest state-owned banks in China are considering another cut to the deposit rate in an attempt to boost growth. Troubled developer Country Garden issued more stock. Toyota resumed work at 12 of its 14 plants in Japan after a daylong stoppage caused by a system malfunction. Reserve Bank of Australia Deputy Governor Bullock said that the central bank may have to hike again due to persistently high inflation.

  • In economic data:

  • Japan's August Household Confidence 36.2 (expected 37.5; last 37.1)

  • Australia's Building Approvals -8.1% m/m (expected -0.8%; last -7.9%); -6.4% yr/yr (last -7.3%). July Private House Approvals 0.1% m/m (last -1.0%). Q2 Construction Work Done 0.4% qtr/qtr (expected 1.0%; last 3.8%) and July Monthly CPI Indicator 4.9% yr/yr (expected 5.2%; last 5.4%)

  • New Zealand's July Building Consents -5.2% m/m (expected 0.2%; last 3.4%)

---Equity Markets---

  • Japan's Nikkei: +0.3%

  • Hong Kong's Hang Seng: UNCH

  • China's Shanghai Composite: UNCH

  • India's Sensex: UNCH 

  • South Korea's Kospi: +0.4%

  • Australia's ASX All Ordinaries: +1.2%

---FX---

  • USD/JPY: +0.3% to 146.34

  • USD/CNH: +0.3% to 7.2985

  • USD/INR: +0.2% to 82.68

 

Europe: DAX -0.4%, FTSE +0.2%, CAC -0.4%

Major European indices trade on a mostly lower note. Spain's CPI accelerated to 2.6% yr/yr from 2.3% in the flash reading for August while some of Germany's regional CPI readings also showed an uptick ahead of the 8:00 ETrelease of Germany's full CPI report. British Foreign Secretary Cleverly said during his trip to Beijing that the U.K. is looking for a pragmatic relationship with China. The EU is on track to import a record amount of liquid natural gas from Russia this year.

  • In economic data:

  • Eurozone's August Business and Consumer Survey 93.3 (expected 93.7; last 94.5)

  • Germany's July Import Price Index -0.6% m/m (expected 0.0%; last -1.6%); -13.2% yr/yr (expected -12.9%; last -11.4%)

  • U.K.'s July Mortgage Approvals 49,440 (expected 51,000; last 54,610), July Mortgage Lending GBP230 mln (expected -GBP460 mln; last GBP110 mln). July BoE Consumer Credit GBP1.191 bln (expected GBP1.300 bln; last GBP1.637 bln)

  • Italy's August Consumer Confidence 106.5 (expected 105.6; last 106.7) and Business Confidence 97.8 (expected 98.0; last 99.1). May Industrial Sales 0.4% m/m (expected -0.1%; last 1.6%); 1.3% yr/yr (expected 7.5%; last -0.5%)

  • Spain's August CPI 0.5% m/m (expected 0.4%; last 0.2%); 2.6% yr/yr, as expected (last 2.3%)

  • Swiss August KOF Leading Indicators 91.1 (expected 91.5; last 92.1) and August ZEW Expectations -38.6 (expected -31.3; last -32.6)

---Equity Markets---

  • STOXX Europe 600: -0.2%

  • Germany's DAX: -0.4%

  • U.K.'s FTSE 100: +0.2%

  • France's CAC 40: -0.4%

  • Italy's FTSE MIB: +0.1%

  • Spain's IBEX 35: -0.2%

---FX---

  • EUR/USD: +0.1% to 1.0889

  • GBP/USD: +0.1% to 1.2662

  • USD/CHF: +0.1% to 0.8793

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