The S&P 500 futures are up 29 points and are trading 0.7% above fair value. The Nasdaq 100 futures are up 120 points and are trading 0.9% above fair value. The Dow Jones Industrial Average futures are up 197 points and are trading 0.6% above fair value.
The equity futures market has a decidedly positive bias with carryover momentum from recent gains driving the upside.
Other support factors include softer-than-expected CPI and PPI readings out of China, a weakening dollar, better-than-expected results and guidance from DocuSign (DOCU), and bearish investor sentiment readings that are acting as a contrarian catalyst.
The US Dollar Index is down 0.7% to 108.94. EUR/USD is up 0.6% to 1.0054. USD/JPY is down 1.1% to 142.55 after BOJ Governor Kuroda said rapid moves in the yen are not desirable. At the same time, cryptocurrencies are in rally mode with the risk-on sentiment.
The 2-yr Treasury note yield is flat at 3.49% while the 10-yr note yield is down two basis points to 3.27%.
In corporate news:
RH (RH 265.00 +3.29 +1.26%): beats by $1.38, beats on revs; guides Q3 revs below consensus; guides FY23 revs in-line
DocuSign (DOCU 67.51 +9.56 +16.50%): beats by $0.02, beats on revs; guides Q3 revs in-line; reaffirms FY23 revs guidance
Zscaler (ZS 176.67 +22.42 ): beats by $0.04, beats on revs; guides Q1 EPS above consensus, revs above consensus; guides FY23 EPS above consensus, revs above consensus
T-Mobile US (TMUS 147.77 +2.40 +1.65%): authorizes a stock repurchase program for up to $14.0 bln of common stock through September 30, 2023- SEC Filing
Zumiez (ZUMZ 22.66 -3.88 -14.62%): misses by $0.31, misses on revs; guides Q3 EPS below consensus, revs below consensus
Caterpillar (CAT 186.00 +2.85 +1.56%): reaches a settlement with the IRS that resolves all issues for tax years 2007-2016, without any penalties
Reviewing overnight developments:
Equity indices in the Asia-Pacific region ended the week on a higher note while South Korea's KOSPI was closed for a holiday. Japan's Nikkei: +0.5% (+2.0% for the week), Hong Kong's Hang Seng: +2.7% (-0.5% for the week), China's Shanghai Composite: +0.8% (+2.4% for the week), India's Sensex: +0.2% (+1.7% for the week), South Korea's Kospi: CLOSED (-1.0% for the week), Australia's ASX All Ordinaries: +0.8% (+1.2% for the week).
In economic data:
China's August CPI -0.1% m/m (expected 0.2%; last 0.5%); 2.5% yr/yr (expected 2.8%; last 2.7%). August PPI 2.3% yr/yr (expected 3.1%; last 4.2%). August new loans CNY1.25 trln (expected CNY1.48 trln; last CNY679.00 bln) and total social financing CNY2.43 trln (expected CNY2.08 trln; last CNY756.10 bln)
New Zealand's August Electronic Card Sales 0.9% m/m (last -0.2%); 26.9% yr/yr (last -0.5%)
In news:
Japan's Prime Minister Kishida met with Bank of Japan Governor Kuroda, but reports indicate that the prime minister had no specific demands.
Separately, Prime Minister Kishida said that the government will support restarting nuclear reactors. Komatsu reported a 29% yr/yr drop in August excavator demand from China.
Major European indices are looking to end the week on a firmly higher note.STOXX Europe 600: +1.5% (+1.0% week-to-date), Germany's DAX: +1.4% (+0.3% week-to-date), U.K.'s FTSE 100: +1.5% (+1.3% week-to-date), France's CAC 40: +1.6% (+0.9% week-to-date), Italy's FTSE MIB: +2.0% (+0.8% week-to-date), Spain's IBEX 35: +1.5% (+1.3% week-to-date) .
Economic data was limited:
France's June Industrial Production -1.6% m/m (expected -0.5%; last 1.2%)
Spain's July Industrial Production 5.3% yr/yr (last 7.0%)
In news:
Several European Central Bank policymakers echoed yesterday's comments from President Lagarde, who said that uncertainty presented by high inflation means that the central bank will be dependent on incoming data when deciding policy.
The EU suspended its visa agreement with Russia, effective September 12.
U.S. equity futures:
S&P 500 Futures: +31 @ 4,037
DJIA Futures: +212 @ 31,986
Nasdaq 100 Futures: +124 @ 12,445
Overseas:
Europe: DAX +1.4%, FTSE +1.5%, CAC +1.5%
Asia: Nikkei +0.5%, Hang Seng +2.7%, Shanghai Composite +0.8%
Commodities:
Crude Oil +1.55 @ 85.09
Nat Gas -0.007 @ 7.835
Gold +16.55 @ 1736.80
Silver +0.158 @ 18.600
Copper +0.0607 @ 3.5878
U.S. Summary:
Earnings/Guidance:
ABM Industries (ABM) beats by $0.04, beats on revs; guides FY22 EPS in-line
American Outdoor Brands (AOUT) misses by $0.07, misses on revs
DHI Group (DHX) reaffirms its Q3 sales outlook, raises FY22 sales forecast; expects bookings and revenue growth in FY23 near +20% yr/yr
Diamondrock Hospitality (DRH) provides investor update in presentation; August occupancy was 74.7% vs 74.9% in July and Q3 QTD revs growth is exceeding Q2 pace
DocuSign (DOCU) beats by $0.02, beats on revs; guides Q3 revs in-line; reaffirms FY23 revs guidance
Mission Produce (AVO) misses by $0.04, beats on revs; expects Q4 volumes to increase sequentially consistent with the prior year period
National Beverage (FIZZ) reports Q3 (Jul) earnings of $0.38 compared to the two analyst estimate of $0.55; revs grew to $318.1 mln compared to the two analyst estimate of $327.29 mln
RH (RH) beats by $1.38, beats on revs; guides Q3 revs below consensus; guides FY23 revs in-line
Smith & Wesson Brands (SWBI) misses by $0.10, misses on revs
Sprinklr (CXM) beats by $0.03, beats on revs; guides Q3 EPS above consensus, revs in-line; guides FY23 EPS above consensus, revs above consensus
Zscaler (ZS) beats by $0.04, beats on revs; guides Q1 EPS above consensus, revs above consensus; guides FY23 EPS above consensus, revs above consensus
Zumiez (ZUMZ) misses by $0.31, misses on revs; guides Q3 EPS below consensus, revs below consensus
General News:
Europe having emergency talks on energy situation, according to the Wall Street Journal
White House considering executive order to screen or restrict US investment in Chinese technology, according to the Wall Street Journal
3D Systems (DDD) announces formation of new, wholly-owned biotech company called Systemic Bio; company will provide initial $15 mln seed investment
Adaptimmune Therapeutics (ADAP) reports positive data in its SURPASS Trial; outlines plans for advanced clinical development in multiple MAGE-A4 positive solid tumors
Allakos (ALLK) Announces Topline Phase 3 Data from the EoDyssey Study in Patients with Eosinophilic Duodenitis
Amplify Energy (AMPY) reaches agreement with California to resolve all criminal matters from the October 2021 Southern California Pipelines Incident
Annaly Capital Mgmt (NLY) approves 1-for-4 reverse stock split, expected to take effect following the close of business on September 23
Apple (AAPL): Lawmakers warned Apple against using Yangtze chips in new iPhone, according toFinancial Times
Bausch Health (BHC) comments on FDA's approval of Norwich Pharmaceuticals rifaximin 200 mg product
Cantaloupe (CTLP) appoints Ravi Venkatesan CEO, effective October 1; will succeed Sean Feeney, who will retire on September 30
Caterpillar (CAT) reaches a settlement with the IRS that resolves all issues for tax years 2007-2016, without any penalties
Chevron (CVX) granted an interest in three greenhouse gas assessment permits offshore Australia
Cyxtera Technologies (CYTX) announced it has closed an accounts receivable securitization facility of $37.5 million with PNC Bank (PNC)
DHT (DHT) announces new dividend policy with 100% of net income being returned to shareholders in the form of quarterly cash dividends; to be implemented from Q3
Equity Commonwealth (EQC) declares a special, one-time cash distribution of $1.00 per share, paid on October 18to shareholders of record on September 29
Google (GOOG): DOJ attorney says Google is paying billions to maintain dominance, according to Bloomberg
KBR (KBR) awarded study to develop a carbon-neutral, green ammonia-based power system for a semi-submersible drilling unit owned by Odfjell
NextEra Energy (NEE): EC clears creation of joint venture between Daimler Truck (DTRUY), NextEra Energy (NEE) and BlackRock (BLK)
Novartis AG (NVS) reports Kisqali adds one more year of survival benefit for broadest set of patients, including those with aggressive HR+/HER2- advanced breast cancer
Pfizer (PFE) and EMA accept regulatory submission for Pfizer's ritlecitinib for individuals 12 years and older with alopecia areata
PowerSchool (PWSC) COO Maulik Datanwala resigns, effective September 30
Quanterix (QTRX) appoints Daniel Pikora COO
Simpson Manufacturing's (SSD) CEO to step down as part of succession plan, effective December 31, 2022; current President and COO named as next CEO
Sonoco Products (SON) and American Airlines Cargo (AAL) sign a global partnership lease agreement for the Pegasus ULD passive temperature-controlled bulk shipping container
Southwest Air (LUV) and the Aircraft Mechanics Fraternal Association (AMFA) reach a Tentative Agreement; details not disclosed
Teledyne Tech (TDY) subsidiary Teledyne Brown Engineering awarded $596.5 mln ISS support contract
Tesla (TSLA) sets new goals at Nevada Gigafactory, according to CNBC
Tesla (TSLA) considering building a lithium refinery in Texas, according to CNBC
The Children's Place (PLCE) terminates CFO Robert Helm following a transition period of up to 30 days
T-Mobile US (TMUS) authorizes a stock repurchase program for up to $14.0 bln of common stock through September 30, 2023
Valaris (VAL) authorizes up to $100 mln for share repurchases
VICI Properties (VICI) increases quarterly dividend by 8.3% to $0.39/share
Wish (WISH) appoints Joe Yan as interim CEO as current CEO departs the company; also reaffirms Q3 adjusted EBITDA guidance
M&A:
111, Inc. (YI) receives unsolicited preliminary non-binding proposal to be acquired for $3.66 per ADS
CleanSpark (CLSK) announces agreement with Mawson Infrastructure Group to acquire Turnkey Bitcoin mining facility
Digital World Acquisition Corp (DWAC): Trump Media & Technology Group Issues Statement on Proposed Merger with Digital World Acquisition Corp.
Driven Brands (DRVN) acquires Auto Glass Fitters; financial details not disclosed
Halliburton (HAL) completes sale of its Russia operations to a Russia-based management team made up of former Halliburton employees; HAL no longer conducts operations in Russia
Petrobras (PBR) provides update on the sale of exploration assets in the Potiguar Basin
Petrobras (PBR) Executive Board approved the end of the competitive process for the sale of the Albacora concession, which will be maintained in its entirety in Petrobras' portfolio
United Health (UNH): Judge was skeptical of DOJ's antitrust claim related to United Health acquisition of Change Healthcare (CHNG), according to the Wall Street Journal
Syndicate:
AST SpaceMobile (ASTS) entered into $150 mln equity distribution agreement through an 'at the market offering' program
Crescent Energy Company (CRGY) prices offering of 5 mln shares of common stock at $15.00 per share
R1 RCM (RCM) files for 179,754,055 share common stock offering by selling shareholder; announces commencement of 15 mln share offering by selling stockholder
Xos (XOS) files for 33,199,327 share common stock offering by selling shareholder, relates to convertible debentures
IPOs:
Expected to Price:
No IPOs expected.
Gapping Up/Down
Gapping up:
DOCU +17.7%, ZS +14.1%, YI +13.1%, DWAC +6.2%, DHX +6.2%, DHT +5.1%, TDY +5%, CTLP +3.1%, KR+2.5%, DDD +1.9%, ASTS +1.9%, NVS +1.8%, CXM+1.8%, TMUS +1.7%, LUV +1.4%, CAT +1.4%, VICI+1.3%, VAL +1.2%, CVX +1%, AMPY +1%, EQC +1%, RH +0.9%
Gapping down:
ZUMZ -16%, AOUT -8.6%, SWBI -8.6%, HMTV -7.7%, RCM -5.1%, SON -1.6%, FIZZ -1.5%, PLCE -1.4%, CRGY -0.9%, AVO -0.6%
Analyst Research (see Upgrades/Downgradescalendarfor full list):
Upgrades
American Water Works (AWK) upgraded to Neutral from Underweight at JP Morgan; tgt raised to $165
DocuSign (DOCU) upgraded to Neutral from Underweight at JP Morgan; tgt $65
Elevance Health (ELV) upgraded to Buy from Neutral at BofA Securities; tgt raised to $575
Downgrades:
ADC Therapeutics (ADCT) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt lowered to $11
Alector (ALEC) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt lowered to $13
American Axle (AXL) downgraded to Neutral from Buy at BofA Securities; tgt lowered to $13
Enphase Energy (ENPH) downgraded to Neutral from Buy at Guggenheim
Galapagos NV (GLPG) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt lowered to $61
Others:
Academy Sports + Outdoors (ASO) initiated with a Buy at Loop Capital; tgt $60
Alnylam Pharma (ALNY) assumed with an Equal-Weight at Morgan Stanley; tgt $222
Arrowhead (ARWR) initiated with an Equal-Weight at Morgan Stanley; tgt $41
Arvinas (ARVN) initiated with an Overweight at Barclays; tgt $90
Brightcove (BCOV) initiated with a Neutral at Rosenblatt; tgt $8
CF Acquisition Corp. VI (CFVI) initiated with a Buy at DA Davidson; tgt $12
ImmunoGen (IMGN) initiated with an Overweight at Barclays; tgt $8
Inter Parfums (IPAR) initiated with an Overweight at Piper Sandler; tgt $102
Upcoming Events:
Econ Data:
10:00 ET: Wholesale Inventories for Jul (Briefing.comConsensus 0.8%; Prior 1.8%)
Earnings:
Tuesday (Sep 6)
Morning: KC
Afternoon: COUP GTLB GWRE PATH
Wednesday (Sep 7)
Morning: ASO GIII KFY NIO REVG
Afternoon: AVAV AEO ASAN CASY CPRT BASE PLAY DSGX GME PHR CURV VRNT YEXT
Thursday (Sep 8)
Morning: BILI FCEL LOVE
Afternoon: AOUT DOCU AVO RH SWBI CXM ZS ZUMZ
Friday (Sep 9)
Morning: ABM KR
Asia & Europe detail:
Asia: Nikkei +0.5%, Hang Seng +2.7%, Shanghai Composite +0.8%
Equity indices in the Asia-Pacific region ended the week on a higher note while South Korea's KOSPI was closed for a holiday. Japan's Prime Minister Kishida met with Bank of Japan Governor Kuroda, but reports indicate that the prime minister had no specific demands. Separately, Prime Minister Kishida said that the government will support restarting nuclear reactors. Komatsu reported a 29% yr/yr drop in August excavator demand from China.
In economic data:
China's August CPI -0.1% m/m (expected 0.2%; last 0.5%); 2.5% yr/yr (expected 2.8%; last 2.7%). August PPI 2.3% yr/yr (expected 3.1%; last 4.2%). August new loans CNY1.25 trln (expected CNY1.48 trln; last CNY679.00 bln) and total social financing CNY2.43 trln (expected CNY2.08 trln; last CNY756.10 bln)
New Zealand's August Electronic Card Sales 0.9% m/m (last -0.2%); 26.9% yr/yr (last -0.5%)
---Equity Markets---
Japan's Nikkei: +0.5% (+2.0% for the week)
Hong Kong's Hang Seng: +2.7% (-0.5% for the week)
China's Shanghai Composite: +0.8% (+2.4% for the week)
India's Sensex: +0.2% (+1.7% for the week)
South Korea's Kospi: CLOSED (-1.0% for the week)
Australia's ASX All Ordinaries: +0.8% (+1.2% for the week)
---FX---
USD/JPY: -1.7% to 141.63
USD/CNH: -0.5% to 6.9245
USD/INR: -0.2% to 79.53
Europe: DAX +1.4%, FTSE +1.5%, CAC +1.5%
Major European indices are looking to end the week on a firmly higher note. Several European Central Bank policymakers echoed yesterday's comments from President Lagarde, who said that uncertainty presented by high inflation means that the central bank will be dependent on incoming data when deciding policy. The EU suspended its visa agreement with Russia, effective September 12.
Economic data was limited:
France's June Industrial Production -1.6% m/m (expected -0.5%; last 1.2%)
Spain's July Industrial Production 5.3% yr/yr (last 7.0%)
---Equity Markets---
STOXX Europe 600: +1.5% (+1.0% week-to-date)
Germany's DAX: +1.4% (+0.3% week-to-date)
U.K.'s FTSE 100: +1.5% (+1.3% week-to-date)
France's CAC 40: +1.6% (+0.9% week-to-date)
Italy's FTSE MIB: +2.0% (+0.8% week-to-date)
Spain's IBEX 35: +1.5% (+1.3% week-to-date)
---FX---
EUR/USD: +0.7% to 1.0062
GBP/USD: +0.7% to 1.1582
USD/CHF: -1.1% to 0.9598
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