The S&P 500 futures are flat and are trading in line with fair value. The Nasdaq 100 futures are down 2 point and are trading roughly in line with fair value. The Dow Jones Industrial Average futures are up 29 points and are trading 0.1% above fair value.
The stock market is poised for a higher open following yesterday's afternoon rally. A drop in market rates has contributed to the positive bias despite ongoing geopolitical uncertainty around the situation in Israel and Gaza.
The 2-yr note yield is down six basis points to 5.00% and the 10-yr note yield is down eight basis points to 4.70%.
WTI crude oil futures are down 0.6% to $85.95/bbl after climbing 4.0% yesterday.
In other news, the IMF lowered its 2024 global growth outlook to 2.9% from 3.0%.
China's troubled property developer Country Garden missed another bond payment and warned of liquidity pressures, stoking concerns that it may end up announcing a restructuring of its offshore debt, according to Reuters.
Today's economic data is limited to the September NFIB Small Business Optimism at 6:00 a.m. ETand the August Wholesale Inventories report at 10:00 a.m. ET.
In corporate news:
Unity Software (U 31.50, +1.80, +6.1%): Chairman and CEO John Riccitiello to retire; James M. Whitehurst appointed Interim CEO, effective immediately; Roelof Botha, Lead Independent Director, appointed Chairman; reiterates Q3 guidance
PepsiCo (PEP 162.68, +1.32, +0.8%): beats by $0.10, reports revs in-line; raises FY23 EPS above consensus
PG&E (PCG 12.42, -0.16, -1.0%) will pay $45 mln penalty for California wildfire, according to Bloomberg
Rivian (RIVN 19.38, +0.60, +3.2%): upgraded to Buy from Neutral at UBS
General Motors (GM 31.08, +0.09, +0.3%): Unifor members begin strike at GM
Electronic Arts (EA 126.81, +2.22, +1.8%): upgraded to Buy from Neutral at BofA Securities
Honeywell (HON 188.81, +2.29, +1.2%): realigns portfolio; sees Q3 revs in-line with expectations; EPS within or above prior guidance
Reviewing overnight developments:
Equity indices in the Asia-Pacific region ended Tuesday's session mostly higher, with China and South Korea the underperforming exceptions. Japan's Nikkei: +2.5%, Hong Kong's Hang Seng: +0.8%, China's Shanghai Composite: -0.7%, India's Sensex: +0.9%, South Korea's Kospi: -0.3%, Australia's All Ordinaries: +1.0%.
In economic data:
Japan's August Current Account JPY2.280 trln (expected JPY3.091 trln; last JPY2.772 trln); September Economy Watchers Current Index 49.9 (expected 53.2; last 53.6)
Australia's September NAB Business Confidence 1.0 (last 1.0)
In news:
China's challenges had links to property developer Country Garden, which didn't make a scheduled debt payment and warned of liquidity pressures, fomenting concerns that it may end up announcing a restructuring of its offshore debt, according to Reuters.
That news seemingly trumped a Bloomberg report that said China is considering increasing its budget deficit for 2023 as part of a plan to introduce more stimulus.
Japan's Nikkei looked stimulated on the return from a three-day weekend, rising 2.5% to score its largest jump in nine months.
Major European indices are trading with a decidedly positive disposition, taking their cue it seems from the U.S. market, which traded higher on Monday despite the uncertainty surrounding the Israel-Hamas War. STOXX Europe 600: +1.6%, Germany's DAX: +1.7%, U.K.'s FTSE 100: +1.7%, France's CAC 40: +1.6%, Italy's FTSE MIB: +1.8%, Spain's IBEX 35: +1.9%.
In economic data:
Italy's August Industrial Production +0.2% m/m (expected 0.0%; last -0.9%) and -4.2% yr/yr (expected -5.0%; last -2.3%)
In news:
Thus far, there has been no indication of a broadening out of that two-party war, so today's rally effort is a bit of a relief trade that worst-case scenarios have not unfolded.
That view has tempered the move in oil and natural gas prices, which is a plus for Europe.
Separately, Bank of England member Mann in a speech to the NABE maintained a tough line about the need to be more aggressive with monetary policy to prevent a drift in inflation expectations and inflation staying above target.
U.S. equity futures:
S&P 500 Futures -1 @ 4,335
DJIA Futures: +23 @ 33,627
Nasdaq 100 Futures: -1 @ 15,046
Overseas:
Europe: DAX +1.7% FTSE +1.7%, CAC +1.6%
Asia: Nikkei +2.5%, Hang Seng +0.8%, Shanghai Composite -0.7%
Commodities:
Crude Oil -0.30 @ 86.08
Nat Gas +0.052 @ 3.428
Gold +5.50 @ 1869.80
Silver -0.107 @ 21.817
Copper -0.0435 @ 3.6025
Earnings/Guidance:
BMW Group (BMWYY) reports third-quarter sales up +5.8%; BEV deliveries climb +79.6% in Q3
Honeywell (HON) realigns portfolio; sees Q3 revs in-line with expectations; EPS within or above prior guidance
NASDAQ (NDAQ) releases September and Q3 metrics
Neogen (NEOG) beats by $0.08, reports revs in-line; reaffirms FY24 revs guidance
PepsiCo (PEP) beats by $0.10, reports revs in-line; raises FY23 EPS above consensus
Public Service (PEG) sees +5-7% long-term earnings growth rate for 2023-2027
Terreno Realty (TRNO) reports Q3 operating data
News:
Israel regained control over towns near Gaza and prepares for next phase of the war, according to the New York Times
White House confirms at least 11 American citizens were among those killed in Israel
China property company Country Garden failed to make debt payment, according to the Wall Street Journal
China considers stimulus and additional deficit spending, according to Bloomberg
IMF says global recovery remains slow, with growing regional divergences and little margin for policy error
EU planning investigation of Chinese steel makers, according to Financial Times
Gartner says worldwide PC shipments fell 9% in Q3, but are expected to expand in Q4
WGA ratifies 2023 tentative agreement with AMPTP
Office vacancies in US and London reach 20 year highs, according to Financial Times
Air Lease (AL) announced an update on aircraft investments and sales activities occurring in the third quarter of 2023
Akero Therapeutics (AKRO) reports encouraging 36-week analysis of 96-week phase 2b symmetry study, with a trend on fibrosis improvement and statistically significant results for nash resolution, markers of liver injury and fibrosis, insulin sensitization and lipoproteins
Annexon (ANNX) announces clinical and regulatory progress for ANX005 pivotal program in guillain-barr syndrome
Associated Capital Group (AC) reports preliminary September 30 book value of $41.35 to $41.55 per share
BridgeBio Pharma (BBIO) announces New England Journal of Medicine publication of positive encaleret proof-of-concept phase 2b results in patients with autosomal dominant hypocalcemia type 1
Brookdale Senior Living (BKD) reports September 2023 occupancy; increased 60 bps from August to 78.2%
Carpenter Tech (CRS) to increase base prices on specialty alloy portfolio
Cohen & Steers (CNS) reports preliminary assets under management of $75.2 bln as of September 30, 2023, a decrease of $4.9 billion from assets under management at August 31, 2023
Coherent (COHR) announced that Denso (DNZOY) and Mitsubishi Electric (MIELY) have agreed to invest $1 billion in its silicon carbide business; COHR narrows Q1 revs guidance
Cryoport (CYRX) and Be The Match BioTherapies form new strategic partnership to expand the capabilities of IntegriCell for the global cell therapy market
Enerflex (EFXT) appoints Preet Dhindsa as interim Chief Financial Officer
Equinor (EQNR) says world's largest offshore wind farm Dogger Bank produces power for the first time
Fluor (FLR) receives five-year contract extension for US Naval nuclear propulsion program
Fortuna Silver Mines (FSM) pays down $40 mln of debt from increased cash flow
General Motors (GM): Unifor members begin strike at GM
Hut 8 Mining (HUT) reports Sept metrics
Kamada (KMDA) continues to conduct its business operations in Israel with no effect on business continuity, and its global supply of products is not expected to be interrupted
Lexicon Pharmaceuticals (LXRX): INPEFA (Sotagliflozin) Receives Preferred Formulary Status With Express Scripts For Medicare Patients
Merck (MRK) announces pivotal KEYNOTE-671 trial meets dual primary endpoint of overall survival in resectable stage II, IIIA or IIIB non-small cell lung cancer
Merck (MRK) highlights innovative oncology portfolio and pipeline at ESMO Congress 2023 underscoring commitment to advancing cancer research and improving patient outcomes across multiple stages of disease
Mistras Group (MG) announces leadership changes; CEO departs
Mobilicom Ltd. (MOB) announces extension to voluntarily delisting date
Oceaneering Intl (OII) subsidiary secures five-year contract from Petrobras (PBR) for the operation of three existing drill pipe riser systems; valued up to $75 mln during the five-year period
Oculis Holding AG (OCS) reports "positive" phase 3 stage 1 DIAMOND trial results of OCS-01 in diabetic macular edema presented at 23rd EURETINA Congress
Olema Pharmaceuticals (OLMA) announces an amendment to our existing clinical collaboration and supply agreement with Novartis Institutes for BioMedical Research to increase the size of the ongoing Phase 1/2 clinical study testing palazestrant in combination with ribociclib to approximately 60 patients
Par Pacific (PARR), U.S. Oil & Refining Co., and McChord Pipeline entered into that certain Wind-Down and Termination Agreement
Poseida Therapeutics (PSTX) appoints Mark Gergen as Executive Chairman and Kristin Yarema as President and CEO, each expected to be effective January 1
Roche Hldg (RHHBY): Genentech's Vabysmo Maintained Vision Improvements With Extended Treatment Intervals Up to Four Months for People With Retinal Vein Occlusion (RVO) in Phase III Trials
Standard Lithium's (SLI) East Texas drilling program delivers new highest confirmed grade lithium brine in North America
Stellantis (STLA) announces due to UAW strike actions, Stellantis announces additional 570 employees on layoff
Supernus Pharma (SUPN) resubmits NDA for SPN-830 Apomorphine Infusion Device
Unity Software (U) Chairman and CEO John Riccitiello to retire; James M. Whitehurst appointed Interim CEO, effective immediately; Roelof Botha, Lead Independent Director, appointed Chairman; reiterates Q3 guidance
Ventyx Biosciences (VTYX) Announces Positive Results from the Phase 2 Trial of VTX002 in Patients with Moderate-to-Severely Active Ulcerative Colitis
Xenon Pharmaceuticals (XENE) announces publication of results from XEN1101 Phase 2b 'X-TOLE' clinical trial in Peer-Reviewed journal article in JAMA Neurology
Zevra Therapeutics (ZVRA) appoints Neil McFarlane as President and CEO
M&A:
Haemonetics (HAE) acquires OpSens for $253 mln
MiX Telematics (MIXT): PowerFleet (PWFL) and MIXT announce business combination
Truist (TFC) in talks to sell insurance unit for $10 bln, according to Semofor
Syndicate:
Burford Capital (BUR) issuance of new ordinary shares in connection with LTIP
PagerDuty (PD) announces proposed private placement of $350 million of convertible senior notes
Uranium Royalty (UROY) has entered into an agreement with a syndicate of underwriters, led by BMO Capital Markets as sole bookrunner, under which the underwriters have agreed to purchase, on a bought deal basis, 10,205,000 common shares, at a price of $2.94/share, for gross proceeds of approximately $30 mln
IPOs:
Expected to Price:
Birkenstock Holding (NYSE: BIRK): The Germany-based maker of sandals and footwear is expected to price its 32.3 M share IPO price between $44-$49.
Gapping Up/Down
Gapping up:
NSTG +20%, AKRO +14.1%, U +7.7%, LXRX+7%, H +5.3%, PSTX +4.4%, PEP +2.8%, STLA +2.7%, BKD +1.6%, AOS +1.5%, NDAQ+1%, INMD +0.8%, HON +0.8%, FLR +0.6%
Gapping down:
VTYX -17.5%, PD -6.2%, XENE -0.7%
Analyst Research (see Upgrades/Downgradescalendarfor full list):
Upgrades
ACADIA Pharmaceuticals (ACAD) upgraded to Overweight from Neutral at JP Morgan; tgt raised to $32
Ameris Bancorp (ABCB) upgraded to Buy from Neutral at DA Davidson; tgt $44
Electronic Arts (EA) upgraded to Buy from Neutral at BofA Securities; tgt raised to $150
Omega Health (OHI) upgraded to Buy from Neutral at BofA Securities; tgt $36
Pinnacle Finl (PNFP) upgraded to Hold from Underperform at Jefferies; tgt $71
Rivian Automotive (RIVN) upgraded to Buy from Neutral at UBS; tgt lowered to $24
Sabra Health Care REIT (SBRA) upgraded to Buy from Neutral at BofA Securities; tgt raised to $16
Downgrades:
Corning (GLW) downgraded to Neutral from Overweight at JP Morgan; tgt lowered to $36
Juniper Networks (JNPR) downgraded to Neutral from Overweight at JP Morgan; tgt lowered to $29
NETSTREIT (NTST) downgraded to Underperform from Neutral at BofA Securities; tgt lowered to $15
NextEra Energy Partners (NEP) downgraded to Neutral from Buy at UBS; tgt lowered to $20
Realty Income (O) downgraded to Neutral from Buy at BofA Securities; tgt lowered to $52
Spirit Realty Capital (SRC) downgraded to Underperform from Neutral at BofA Securities; tgt lowered to $33
Starwood Property Trust (STWD) downgraded to Mkt Perform from Outperform at Keefe Bruyette; tgt lowered to $20
Others:
Dollar General (DG) initiated with a Neutral at Exane BNP Paribas; tgt $116
Dollar Tree (DLTR) initiated with an Outperform at Exane BNP Paribas; tgt $139
Mannkind (MNKD) initiated with an Outperform at Wedbush; tgt $10
Northern Trust (NTRS) resumed with a Buy at BofA Securities; tgt $90
Popular (BPOP) initiated with a Neutral at BofA Securities; tgt $63
Econ Data:
06:00 ET: NFIB Small Business Optimism for Sep (Briefing.comConsensus NA; Prior 91.3)
10:00 ET: Wholesale Inventories for Aug (Briefing.comConsensus -0.1%; Prior -0.2%)
Earnings:
Monday (Oct 9)
Morning: None
Afternoon: None
Tuesday (Oct 10)
Morning: NEOG, PEP
Afternoon: AZZ
Wednesday (Oct 11)
Morning: None
Afternoon: None
Thursday (Oct 12)
Morning: DAL, DPZ, FAST, WBA
Afternoon: SGH
Friday (Oct 13)
Morning: BLK, C, UNH, JPM, WFC
Afternoon: None
Asia & Europe detail:
Asia: Nikkei +2.5%, Hang Seng +0.8%, Shanghai Composite -0.7%
Equity indices in the Asia-Pacific region ended Tuesday's session mostly higher, with China and South Korea the underperforming exceptions. China's challenges had links to property developer Country Garden, which didn't make a scheduled debt payment and warned of liquidity pressures, fomenting concerns that it may end up announcing a restructuring of its offshore debt, according to Reuters. That news seemingly trumped a Bloomberg report that said China is considering increasing its budget deficit for 2023 as part of a plan to introduce more stimulus. Japan's Nikkei looked stimulated on the return from a three-day weekend, rising 2.5% to score its largest jump in nine months.
In economic data:
Japan's August Current Account JPY2.280 trln (expected JPY3.091 trln; last JPY2.772 trln); September Economy Watchers Current Index 49.9 (expected 53.2; last 53.6)
Australia's September NAB Business Confidence 1.0 (last 1.0)
---Equity Markets---
Japan's Nikkei: +2.5%
Hong Kong's Hang Seng: +0.8%
China's Shanghai Composite: -0.7%
India's Sensex: +0.9%
South Korea's Kospi: -0.3%
Australia's All Ordinaries: +1.0%
---FX---
USD/JPY: +0.3% to 148.94
USD/CNH: +0.1% to 7.2990
USD/INR: -0.2% to 83.254
Europe: DAX +1.7% FTSE +1.7%, CAC +1.6%
Major European indices are trading with a decidedly positive disposition, taking their cue it seems from the U.S. market, which traded higher on Monday despite the uncertainty surrounding the Israel-Hamas War. Thus far, there has been no indication of a broadening out of that two-party war, so today's rally effort is a bit of a relief trade that worst-case scenarios have not unfolded. That view has tempered the move in oil and natural gas prices, which is a plus for Europe. Separately, Bank of England member Mann in a speech to the NABE maintained a tough line about the need to be more aggressive with monetary policy to prevent a drift in inflation expectations and inflation staying above target.
In economic data:
Italy's August Industrial Production +0.2% m/m (expected 0.0%; last -0.9%) and -4.2% yr/yr (expected -5.0%; last -2.3%)
---Equity Markets---
STOXX Europe 600: +1.6%
Germany's DAX: +1.7%
U.K.'s FTSE 100: +1.7%
France's CAC 40: +1.6%
Italy's FTSE MIB: +1.8%
Spain's IBEX 35: +1.9%
---FX---
EUR/USD: +0.3% to 1.0589
GBP/USD: +0.1% to 1.2249
USD/CHF: -0.1% to 0.
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