Early Look

Monday, August 26, 2024

Despite several headlines in the Middle East raising further geopolitical concerns, U.S. futures are pointing to a slightly higher open, looking to add to last week’s gains as sentiment remains strong in the final trading week of the month. For last week, the S&P 500 gained 1.45%, the Nasdaq climbed 1.4%, and the Dow climbed 1.27% as the rally continued since August lows, with investors fully embracing expectations of aggressive Fed rate interest cuts in September (25-50bps) and up to 100bps by the end of 2024 despite the Presidential election. It has been a strong year across the board for most asset classes, as YTD performance shows: the S&P 500 +18.13%, Nasdaq Comp +19.10%, the Dow +9.25%, SmallCap Russell 2000 +10.36%, Gold prices +21.47%, WTI crude oil +1.90%, the U.S. Dollar index +0.33% and Bitcoin +51.06%. In Asian markets overnight, The Nikkei Index fell -254 points to 38,110, the Shanghai Index was little changed at 2,855, and the Hang Seng Index rose 186 points to 17,798. In Europe, the German DAX is down -48 points to 18,584, while the FTSE 100 is closed. Stocks paused and oil rose after Israel launched a pre-emptive strike involving 100 warplanes on Hezbollah in Lebanon and declared a 48-hour state of emergency. Hezbollah initially fired hundreds of Katyusha rockets and drones towards Israel. The big earnings report is later this week with Nvidia (NVDA) on Wednesday, along with some key economic inflation data points.

• The Dow Jones Industrial Average jumped 462.30 points, or 1.14%, to 41,175.08.
• The Nasdaq Composite gained 258.44 points, or 1.47%, to 17,877.79.
• The Russell 2000 Index surged 68.67 points, or 3.19% to 2,218.70.

• 8:30 AM ET                  Durable Goods Orders M/M Ex Transportation for July…est. (-0.1%)
• 10:30 AM ET                Dallas Fed Manufacturing Index for Aug…prior -17.5

• Earnings After the Close: HEI

• China’s Didi Global is in advanced talks to sell its smart driving and cockpit assets to state-backed digital mapping firm NavInfo’s unit, as the ride-hailer focuses on its core business after a bruising regulatory crackdown – Reuters.

• Boeing (BA): NASA announced Saturday that two astronauts brought to the International Space Station by Boeing’s Starliner spacecraft in early June will instead return on a SpaceX vehicle.

• Everest Group Ltd. (EG) mentioned positively in Barron’s saying the reinsurer has an “impressive” record of growth and profitability in recent years, but notes share of the Bermuda-based company, which has one of the lowest price-to-earnings ratios in the S&P 500 index, don’t reflect the full extent of the company’s success.

• Kymera Therapeutics (KYMR) upgraded to Outperform from Peer Perform at Wolfe Research.
• Regeneron Pharma (REGN) data from landmark phase 3 trials for Dupixent in COPD reinforce exacerbation reduction, improvement in lung function compared to placebo.

• IBM (IBM) will completely shutter its China R&D, with resulting layoffs affecting over 1,000 jobs, Chinese media outlet Yicai reported on Monday, citing a statement from the company.
• PDD Holdings (PDD) Q2 ADS 23.24 yuan vs. est. 20.52 yuan; Q2 revenue 97.06B yuan vs. est. 99.99B yuan; Q2 transaction services revenue 47.94B yuan, vs. 50.02B yuan; Q2 adj net income 34.43B yuan, vs. est. 30.1B yuan.