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30/10/23 Briefing


The S&P 500 futures are up 25 points and are trading 0.7% above fair value. The Nasdaq 100 futures are up 102 points and are trading 0.8% above fair value. The Dow Jones Industrial Average futures are up 187 points and are trading 0.5% above fair value.

The stock market is poised for a higher open, attempting to bounce after the S&P 500 entered correction territory with Friday's close. This week's calendar features another heavy batch of earnings, including Apple's report after Thursday's close, the FOMC decision on Wednesday, policy meetings from the BOJ and BOE, the Treasury's quarterly refunding announcement, and the October ISM and employment reports.

Israeli forces entered the Gaza Strip, beginning "the second stage of the war." Prime Minister Benjamin Netanyahu warned Israelis to expect a "long and difficult" war, according to The New York Times.

Treasury yields are showing a little agitation ahead of the refunding estimates. The 2-yr note yield is up one basis point to 5.03% and the 10-yr note yield is up four basis points to 4.89%.

In corporate news:

  • McDonald's (MCD 263.00, +7.24, +2.8%): beats by $0.17, beats on revs

  • Realty Income (O 48.25, -0.75, -1.5%): to acquire Spirit Realty Capital (SRC) in $9.3 billion transaction

  • XPO, Inc. (XPO 72.02, +4.69, +7.0%): beats by $0.24, beats on revs

  • Stellantis (STLA 18.36, +0.32, +1.8%): and UAW reach tentative agreement

  • Apple (APPL 169.23, +1.01, +0.6%): There are growing indications that AAPL iPhone 15 might be falling behind in China, according to Bloomberg

  • SoFi Technologies (SOFI 7.24, +0.37, +5.4%): beats by $0.05, beats on revs; raises FY23 revs above consensus

  • Revvity (RVTY 87.90, -9.97, -10.2%): misses by $0.01, misses on revs; lowers FY23 guidance

  • ArcelorMittal (MT 21.27, -0.87, -3.9%): provides statement regarding tragic accident in Kazakhstan; MT says at this time 25 of our employees are confirmed dead with a further 21 still missing

  • Healthpeak (PEAK 16.20, -0.22, -1.3%): beats by $0.01, beats on revs; guides FY23 FFO in-line; Healthpeak and Physicians Realty Trust (DOC) to combine in an all-stock merger of equals valued at approximately $21 billion; call scheduled for 8:30 a.m. ET

  • Cisco (CSCO 51.39, -0.17, -0.3%): downgraded to Underperform from Market Perform at Raymond James

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region began the week on a mixed note. Japan's Nikkei: -1.0%, Hong Kong's Hang Seng: UNCH, China's Shanghai Composite: +0.1%, India's Sensex: +0.5%, South Korea's Kospi: +0.3%, Australia's ASX All Ordinaries: -0.8%.

  • In economic data:

  • Australia's September Retail Sales 0.9% m/m (expected 0.3%; last 0.3%)


  • In news:

  • There was some apprehension ahead of tonight's release of the latest policy announcement from the Bank of Japan, which could call for changes to the central bank's yield curve control policy. In addition, the central bank is expected to raise its CPI outlook for 2024 to 2.0%.

  • Japan's business lobby has been urging companies to increase the base pay of their workers.

  • Developer Evergrande reportedly held talks with holdout creditors ahead of a hearing that was scheduled for today.

  • The Reserve Bank of New Zealand's latest financial stability report noted that the resilience of the country's financial system compares well with other advanced economies.



  • Major European indices trade in positive territory with Spain's IBEX (+1.1%) showing relative strength thanks to leadership from financials. STOXX Europe 600: +0.7%, Germany's DAX: +0.6%, U.K.'s FTSE 100: +0.7%, France's CAC 40: +0.7%, Italy's FTSE MIB: +0.8%, Spain's IBEX 35: +1.1%.

  • In economic data:

  • Eurozone's October Business and Consumer Survey 93.3 (expected 93.0; last 93.4)

  • Germany's Q3 GDP -0.1% qtr/qtr (expected -0.3%; last 0.1%); -0.3% yr/yr (expected -0.7%; last 0.0%)

  • U.K.'s September Mortgage Approvals 43,330 (expected 45,000; last 45,450) and September BoE Consumer Credit GBP1.391 bln (expected GBP1.400 bln; last GBP1.681 bln). September net lending to individuals GBP500 mln (expected GBP2.4 bln; last GBP2.8 bln)

  • Italy's August non-EU trade surplus EUR2.78 bln (last surplus of EUR3.08 bln)

  • Spain's October CPI 0.3% m/m (expected 0.6%; last 0.2%); 3.5% yr/yr (expected 3.8%; last 3.5%)

  • Swiss October KOF Leading Indicators 95.8 (expected 95.0; last 95.9)


  • In news:

  • Sovereign yields have dipped after Spain reported cooler than expected CPI for October while Germany's full CPI report will be released at 8:00 ET.

  • European Central Bank policymakers Simkus and Vasle pushed back against speculation that the central bank could cut rates as early as the first half of next year.

  • Fitch affirmed France's AA rating with a Stable outlook while DBRS affirmed Italy's BBB rating with a Stable trend.



U.S. equity futures:

  • S&P 500 Futures +32 @ 4,149

  • DJIA Futures: +219 @ 32,637

  • Nasdaq 100 Futures: 124 @ 14,304

Overseas:

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

  • Asia: Nikkei -1.0%, Hang Seng UNCH, Shanghai Composite +0.1%

Commodities:

  • Crude Oil -1.10 @ 84.44

  • Nat Gas -0.148 @ 3.335

  • Gold +5.80 @ 2004.30

  • Silver +0.436 @ 23.323

  • Copper +0.0583 @ 3.7043

Earnings/Guidance:

  • BGC Group ( BGC 3.83% ) beats by $0.01; provides Q4 outlook

  • Braskem SA ( BAK 2.19% ) reported Q3 operational updates

  • Check Point Software ( CHKP 2.90% ) beats by $0.05, reports revs in-line

  • CNA Financial ( CNA 2.37% ) beats by $0.07

  • Healthpeak ( PEAK 2.88% ) beats by $0.01, beats on revs; guides FY23 FFO in-line

  • HSBC Holdings ( HSBC 0.33% ) reports Q3 results; misses on revs

  • JinkoSolar ( JKS 9.00% ) misses by RMB 4.09, beats on revs; achieved a major technical breakthrough for its 182 mm high-efficiency N-type monocrystalline silicon solar cell

  • Loews Corp ( L 1.05% ) reports Q3 results

  • McDonald's ( MCD 0.05% ) beats by $0.17, beats on revs

  • Pearson Plc ( PSO 0.00% ) reports nine-month trading update; raises outlook

  • Physicians Realty Trust ( DOC 2.68% ) reports FFO in-line, beats on revs

  • Revvity ( RVTY 1.11% ) misses by $0.01, misses on revs; lowers FY23 guidance

  • SJW ( SJW 1.45% ) beats by $0.17, beats on revs; raises FY23 EPS above consensus

  • SoFi Technologies ( SOFI 5.91% ) beats by $0.05, beats on revs; raises FY23 revs above consensus

  • Toyota Motor ( TM 1.95% ) reports September worldwide sales -11.6% yr/yr to 921,308 units

  • XPO, Inc. ( XPO 1.26% ) beats by $0.24, beats on revs

News:

  • Israeli forces enter the Gaza Strip, beginning "the second stage of the war." Prime Minister Benjamin Netanyahu warned Israelis to expect a "long and difficult" war, according to the New York Times

  • Iranian President Ebrahim Raisi says Israel had "crossed the red lines, which may force everyone to take action", according to NBC News

  • Mike Pence ends his campaign for president, according to the New York Times

  • House Speaker Mike Johnson says his "first priority" is to reach deal on government funding ahead of November 17 deadline, according to Axios

  • House Speaker Mike Johnson expects House to pass Israel aid bill this week. Ukraine aid will be removed from the bill, according to Bloomberg

  • President Biden issues executive order on safe, secure, and trustworthy artificial intelligence

  • Insurance companies concerned about Biden administration's mental health coverage requirements, according to the Wall Street Journal

  • Minnesota Rep. Dean Phillips will challenge President Biden for the Democratic nomination, according to CNN

  • EU and UK want to ban subsidies for fossil fuel projects, according to Financial Times

  • SAG-AFTRA says "we have discussed all open proposals, including AI, with the AMPTP. Both parties will be working independently Monday and re-engage on scheduling at the end of the day"

  • US to freeze firearm exports for 90 days, according to Bloomberg

  • Australia and EU failed to agree to free trade deal, according to Financial Times

  • White House issues readout of President Biden's call with Prime Minister Netanyahu of Israel

  • Apple ( AAPL 0.19% ) excepted to introduce new Macs later tonight, according to Mac Rumors

  • Apple ( AAPL 0.19% ): There are growing indications that AAPL iPhone 15 might be falling behind in China, according to Bloomberg

  • ArcelorMittal ( MT 2.72% ) provides statement regarding tragic accident in Kazakhstan

  • Autoliv ( ALV 0.82% ) to reduce its headcount in France

  • Bristol-Myers ( BMY 0.95% ): European Medicines Agency validates BMY's application for Opdivo (nivolumab) in combination with cisplatin-based chemotherapy for the first-line treatment of adult patients with unresectable or metastatic urothelial carcinoma

  • Cassava Sciences ( SAVA 4.57% ): Adam Feuerstein, a senior writer at STAT, tweets new data from SAVA's CTAD23 presentation shows simufilam likely does not work

  • Chevron ( CVX 0.84% ) Australia LNG workers support new labor agreements, according to Market Watch

  • Deciphera Pharmaceuticals ( DCPH 4.36% ) announces "positive" top-line results from the MOTION pivotal Phase 3 study of vimseltinib in patients with TGCT not amenable to surgery

  • DHI Group ( DHX 0.36% ) has hired Raime Leeby as its new Chief Financial Officer

  • Digital World Acquisition Corp ( DWAC 2.05% ) announced filing of amended annual report, marking an important milestone in preparation for the expected S-4 Filing

  • Eli Lilly ( LLY 2.42% ): Innovent announces robust weight loss efficacy, multiple metabolic benefits and favorable safety profile of higher dose 9 mg mazdutide (IBI362) after 48-week treatment in phase 2 study for obesity

  • Ero Copper ( ERO 1.26% ) agrees with Vale (VALE) Base Metals to enter into earn-in agreement for a 60% interest in the Furnas Copper Project

  • Ford Motor ( F 0.20% ): UAW posts more details on Ford agreement from last week

  • Fortuna Silver Mines ( FSM 0.35% ) receives positive decision from Mexican Court which reinstates the San Jose Mine environmental impact authorization

  • General Motors ( GM 2.34% ) announces "We are disappointed by the UAW's action in light of the progress we have made. We have continued to bargain in good faith with the UAW, and our goal remains to reach an agreement as quickly as possible."

  • GlaxoSmithKline ( GSK 0.17% ) reports Phase III RUBY trial of Jemperli plus chemotherapy met endpoint of overall survival in patients with primary advanced or recurrent endometrial cancer

  • Google (GOOG) was paid $26 bln to be default search engine in 2021, according to the New York Post

  • Johnson & Johnson ( JNJ 0.16% ) says Israel conflict has not been material to its financials

  • Johnson & Johnson ( JNJ 0.16% ) disclosed Friday night DOJ issued civil investigative demands in connection with a civil investigation under the False Claims Act relating to free or discounted intraocular lenses and equipment used in eye surgery

  • Korn/Ferry ( KFY 1.18% ) announces 8% workforce reduction

  • Magnachip ( MX 2.54% ) Introduces 6th-Generation 600V SJ MOSFET Developed with Cutting-Edge Microfabrication Technology

  • MeiraGTx ( MGTX 2.70% ) announces $30 million strategic investment from Sanofi (SNY); company pursuing multiple additional strategic opportunities

  • Novartis ( NVS 0.99% ) reports investigational atrasentan Phase III study demonstrates clinically meaningful and highly statistically significant proteinuria reduction in patients with IgA nephropathy

  • Sabre ( SABR 0.72% ) and Air India have signed an enhanced distribution deal that builds upon their partnership announced in April 2023

  • Stellantis ( STLA 3.28% ) and UAW reach tentative agreement

  • Trinseo ( TSE 1.58% ) approved additional actions to discontinue styrene production

  • Walgreens ( WBA 0.28% ) and CVS (CVS) planning walkout, according to the New York Post

  • Wells Fargo ( WFC 0.05% ) Vice Chairman Thomas Nides to step down

  • XOMA ( XOMA 0.17% ) disclose that Organon (OGN) notfied XOMA of its intent to terminate for convenience that certain license agreement

M&A:

  • Broadcom ( AVGO 0.01% ) and VMware (VMW) provide update on pending transaction

  • Healthpeak ( PEAK 2.88% ) and Physicians Realty Trust (DOC) to combine in an all-stock merger of equals valued at approximately $21 billion

  • Intl Flavors ( IFF 3.95% ) divests its Cosmetic Ingredients Business Unit for $810 mln

  • Lumentum ( LITE 2.01% ) to acquire Cloud Light Technology Limited for transaction value of approx. $750 mln

  • Miromatrix Medical ( MIRO 0.15% ): United Therapeutics (UTHR) to acquire Miromatrix for $3.25 per share and an additional $1.75 per share in cash upon the achievement of a clinical development milestone

  • Nayax Ltd. ( NYAX 0.00% ) to acquire Retail Pro International

  • Omnicom ( OMC 0.10% ) acquires Flywheel Digital for $835 mln

  • Spirit Realty Capital ( SRC 2.82% ): Realty Income (O) to acquire Spirit Realty Capital in $9.3 billion transaction

  • Vodafone ( VOD 1.55% ) aiming to sell stake of at least 50% in its Spanish business to Zegona Communications, according to Bloomberg

Syndicate:

  • Equinix ( EQIX 1.28% ) files mixed shelf securities offering

  • Mama's Creations ( MAMA 1.41% ) files for 5,629,921 share common stock offering by selling shareholders

IPOs:

  • No IPOs expected to price.

Gapping Up/Down

  • Gapping up:

  • MIRO +226%, TRML +7.1%, MAMA +2.1%, VMW +2%, COIN +2%, AVGO +1.9%, GSK +1.7%, LLY +1.7%, MITT +1.4%, NVS +1.4%, FSM +1.4%, PSO +1.3%, F +1.2%, STLA +1.1%


  • Gapping down:

  • RVTY -4.5%, MT -4.2%, CHKP -2.2%, CNA -1.3%, XPO -1%, WFC -0.6%, IFF -0.6%


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

  • Upgrades

  • AbbVie (ABBV) upgraded to Overweight from Equal Weight at Barclays; tgt raised to $170

  • Acushnet (GOLF) upgraded to Buy from Neutral at Compass Point; tgt $60

  • NorthWestern (NWE) upgraded to Overweight from Equal Weight at Wells Fargo; tgt lowered to $51


  • Downgrades:

  • 2seventy bio (TSVT) downgraded to Market Perform from Outperform at Leerink Partners; tgt $6

  • Aon (AON) downgraded to Underweight from Equal Weight at Wells Fargo; tgt lowered to $304

  • Datadog (DDOG) downgraded to Underperform from Neutral at Robert W. Baird; tgt lowered to $84

  • Krispy Kreme, Inc. (DNUT) downgraded to Hold from Buy at Truist; tgt lowered to $13


  • Others:

  • Arcellx (ACLX) initiated with an Outperform at TD Cowen

  • NewAmsterdam Pharma (NAMS) initiated with an Outperform at RBC Capital Mkts; tgt $25

  • Verisk Analytics (VRSK) initiated with an Equal Weight at Wells Fargo; tgt $230


Econ Data:

  • No economic data of note.

Earnings:

  • Monday (Oct 30)

  • Morning: CHKP CNA JKS MCD ON RVTY SJW SOFI WDC XPO

  • Afternoon: ADUS AGNC AMKR ACGL ANET AXNX BCC BRX CSWC CHGG CRK CACC CWK DENN PLOW EQC FMC FWRD HLIT PEAK HTLF IRT INST KMPR KFRC LSCC LEG MATX MPWR OGS OTTR PDM PINS PCH PSMT PSA LUNG QGEN RMBS SPG THC RIG TREX VFC VRNS VNO WELL WOLF WK ZI


  • Tuesday (Oct 31)

  • Morning: AGCO ALLE AME AMGN BUD ARES TECH BP CCJ CAT CVLT DORM DEA ETN ECL NPO EPD ETRN BEN GEHC GPN GPK GPRE HRMY HAYW HNI HUBB INCY NSP IGT IPGP JBLU LDOS LGIH LXP MAC MBUU MPC MPLX MSCI NBIX PRFT PFE PJT PEG PACK RGEN ST SSTK SIRI SFM STVN SYY TNC COCO BLD UFPI WEC XYL ZBRA

  • Afternoon: AEIS AMD APAM AIZ BLKB CZR CHK CGNX DEI EQH EQR FSLR FRSH HUN LFUS LTHM LUMN MTCH MTH MTG NE OI OKE PAYC PECO PRO SAFE SKY SON TX UNM VOYA XHR YUMC


  • Wednesday (Nov 1)

  • Morning: ALIT APLS APO ASTE AVNS AVA AXTA BLCO BRY EAT BLDR GOOS CDW CERE CHEF CLH CMCO CNDT CVS DRH DBRG DIN DFIN DRVN DTM DTE DNB DD ETR ESAB EL EXTR FWRG FDP FTDR FYBR GRMN GNRC GSK HUM IDXX IQV JHG KMT KHC LIVN MLM MTRN NMRK NI NCLH PSN PERI PUMP RDWR SMG SITE SHC SPR SXC SUN SPWR TEL TKR TT TRMB TTMI UTHR VRSK W WING YUM

  • Afternoon: EGHT AFL ABNB ALB ALKT ALL ATUS AFG AIG AWK AMWL ANSS ACA ATRC CAR AVT ACLS AXS BALY BMRN BKH BXP BFAM BWXT CHRW CRC CPE CWH CWST CDAY CF CAKE CHRD CWAN CTSH CFLT CORT CLB CCRN CSGS CW DASH DXC ELF EIX EA ECPG ERII ET ETSY EXAS EXEL FARO FSLY FORM FCPT GKOS THG HLF HST HPP NARI INFA IR NGVT IIPR FROG JOBY KW LMAT LMND LNC MGY MTW MRO VAC MCK MLNK MET MSTR MIR MKSI MOD MDLZ MUSA NFG NSA NVRO NMIH NOG NUS NTR KAR PLMR PGRE PK PYPL PRCT PCOR PRU PTC QTWO QRVO QCOM QDEL QNST RDN RPD RYN RRX RELY RNR REZI RVLV RLJ ROKU RSI SRPT SDGR SIGI SCI SIMO SITM SEDG STAA SRI RGR SUM SMCI TNDM TENB TS TYL VSTO HCC WTS WERN WES WMB WSC ZETA ZG


  • Thursday (Nov 2)

  • Morning: FLWS ACIW GOLF ADT WMS AGIO ATI ALGT ALGM ALE ALNY AMR AEP APG APTV AHH ARW AUPH ATHM AVNT BALL BHC BAX BCE BDC BCRX BWA BR CARS COR LNG CWEN COP CROX CMI CYBR DLX XRAY LPG DUK DT LLY ENTG NVRI EPAM ESNT EXC FSS RACE FOXA GEL ROCK GIL HAE DINO HEP HWM HII H IDA INMD NSIT ICE IDCC ITCI IONS IRM ITRI ITT JLL KRTX K KTB KYMR LAMR LANC LNTH DRS MAR MDU MGPI MRNA TAP MUR NTCT DNOW NRG OGE OMCL OGN PCRX PZZA PARA PH PBF MD PTON PENN PGTI PNW PBI PTLO PPL PBH PRMW PWR RCM REGN ROK SPGI SABR SNDR SEE SHAK SHOP SITC SWI SO SRC SBUX SRCL STRA TFX TPX CI THRY TRN UNIT UPBD VIRT WEN WCC WLK ZTS


  • Thursday (Nov 2)

  • Afternoon: TXG ABCL ACAD ACCO LNT ALTR AMH COLD AMN APPN AAPL TEAM BAND BILL BL SQ BKNG BOOT CABO IMOS CHUY CRUS NET COHU CODI ED BAP CUBE CYTK DH DOCN BOOM DKNG DBX LOCO EOG EVH EXPI EXPE FRT FIGS FIVN FND FTNT FOXF FNKO GDDY LOPE GDYN HLIO HTGC HMN HURN ICFI PODD IAS IRTC KN KTOS LYV MTZ MERC MCW MODV MC MNST MSI MP LASR OHI OPEN OEC OUT PLTR PCTY PEN PRDO PXD PLYA KWR QLYS RMAX RDFN REG RGA RPT RYAN SBAC SEM TSLX SWKS SM SWN SPT SPXC STEM SYK SG SNDX TMST TRUP UDMY OLED VTR VIAV VIR VTLE WW YELP


  • Friday (Nov 3)

  • Morning: AMCX AXL ATMU BLMN CAH CBOE CHD CNK CRBG D FLR FLGT IT GTES EAF HR TILE KOP MOG.A NWN OMI DOC PAA PRVA PRLB SSP SRE TDS SLCA USM WPC

  • Afternoon: MCHP


Asia & Europe detail:

Asia: Nikkei -1.0%, Hang Seng UNCH, Shanghai Composite +0.1%

Equity indices in the Asia-Pacific region began the week on a mixed note. There was some apprehension ahead of tonight's release of the latest policy announcement from the Bank of Japan, which could call for changes to the central bank's yield curve control policy. In addition, the central bank is expected to raise its CPI outlook for 2024 to 2.0%. Japan's business lobby has been urging companies to increase the base pay of their workers. Developer Evergrande reportedly held talks with holdout creditors ahead of a hearing that was scheduled for today. The Reserve Bank of New Zealand's latest financial stability report noted that the resilience of the country's financial system compares well with other advanced economies.

  • In economic data:

  • Australia's September Retail Sales 0.9% m/m (expected 0.3%; last 0.3%)


---Equity Markets---

  • Japan's Nikkei: -1.0%

  • Hong Kong's Hang Seng: UNCH

  • China's Shanghai Composite: +0.1%

  • India's Sensex: +0.5%

  • South Korea's Kospi: +0.3%

  • Australia's ASX All Ordinaries: -0.8%

---FX---

  • USD/JPY: +0.1% to 149.68

  • USD/CNH: UNCH at 7.3280

  • USD/INR: -0.1% to 83.20

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

Major European indices trade in positive territory with Spain's IBEX (+1.1%) showing relative strength thanks to leadership from financials. Sovereign yields have dipped after Spain reported cooler than expected CPI for October while Germany's full CPI report will be released at 8:00 ET. European Central Bank policymakers Simkus and Vasle pushed back against speculation that the central bank could cut rates as early as the first half of next year. Fitch affirmed France's AA rating with a Stable outlook while DBRS affirmed Italy's BBB rating with a Stable trend.

  • In economic data:

  • Eurozone's October Business and Consumer Survey 93.3 (expected 93.0; last 93.4)

  • Germany's Q3 GDP -0.1% qtr/qtr (expected -0.3%; last 0.1%); -0.3% yr/yr (expected -0.7%; last 0.0%)

  • U.K.'s September Mortgage Approvals 43,330 (expected 45,000; last 45,450) and September BoE Consumer Credit GBP1.391 bln (expected GBP1.400 bln; last GBP1.681 bln). September net lending to individuals GBP500 mln (expected GBP2.4 bln; last GBP2.8 bln)

  • Italy's August non-EU trade surplus EUR2.78 bln (last surplus of EUR3.08 bln)

  • Spain's October CPI 0.3% m/m (expected 0.6%; last 0.2%); 3.5% yr/yr (expected 3.8%; last 3.5%)

  • Swiss October KOF Leading Indicators 95.8 (expected 95.0; last 95.9)


---Equity Markets---

  • STOXX Europe 600: +0.7%

  • Germany's DAX: +0.6%

  • U.K.'s FTSE 100: +0.7%

  • France's CAC 40: +0.7%

  • Italy's FTSE MIB: +0.8%

  • Spain's IBEX 35: +1.1%

---FX---

  • EUR/USD: +0.2% to 1.0577

  • GBP/USD: UNCH at 1.2123

  • USD/CHF: +0.3% to 0.9045

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