Early Look

Tuesday, September 5, 2023

Futures	Up/Down	%	Last
Dow	-8.00	0.02%	34,874
S&P 500	-5.25	0.12%	4,516
Nasdaq	-37.50	0.24%	15,478

 

 

US equity futures point to a weak opening following losses in Europe and Asia after disappointing data from China renewed concerns over its economic recovery. Meanwhile, the dollar strengthened against rivals. Stocks looking lower after solid gains last week where the S&P rose 2.47%, the Dow added 1.43%, and the Nasdaq gained 3.22%. Goldman Sachs now sees a 15% chance the US will slide into recession, down from 20% previously, as cooling inflation and a still-resilient labor market suggest the Federal Reserve may not need to raise interest rates any further. China Aug Caixin Services PMI recorded at 51.8 below the 53.6 consensus, while business activity increased at the slowest pace in 8 months, weighing on Asian markets. In Japan household spending declined to a more than expected printing -5.0% in July (est. -2.5% prev. -4.2%) for the fifth consecutive contraction. The Nikkei Index gained 97 points to 33,036, the Shanghai Index fell -22 points to 3,154, and the Hang Seng Index slipped -22 points to 3,154. In Europe, the German DAX is down -20 points to 15,804, while the FTSE 100 rises 8 points to 7,461. In Australia, its Central bank kept interest rates steady at 4.1% for a third month. No major earnings or economic data in the U.S. today as traders return from the 3-day Labor Day holiday weekend.

 

Market Closing Prices Yesterday

·     The S&P 500 Index gained 8.11 points, or 0.18%, to 4,515.77.

·     The Dow Jones Industrial Average rose 115.80 points, or 0.33%, to 34,837.71.

·     The Nasdaq Composite slipped -3.25 points, or 0.02%, to 14,031.81.

·     The Russell 2000 Index advanced 21.15 points, or 1.11% to 1,920.83.

 

Economic Calendar for Today

·     10:00 AM ET          Employment Trends for Aug

·     10:00 AM ET          Factory Orders M/M for July

·     4:30 PM ET             API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: BRC CRMT

·     Earnings After the Close: ASAN AVAV GTLB HQY ZS

 

Other Key Events:

·     Deutsche Bank European TMT Conference 2023, 9/5-9/6, in London

·     Deutsche Bank 13th Annual Aircraft Finance & Leasing Conference & Airline One on One Day, 9/5-9/7, in New York

·     Goldman Sachs 13th Annual EMEA Credit and Leveraged Finance Conference, 9/5 in London

·     Goldman Sachs Communacopia + Technology Conference 2023, 9/5-9/8, in San Francisco, CA

 

 

Macro	Up/Down	Last
Nymex	-0.34	85.21
Brent	-0.84	88.16
Gold	-10.50	1,956.60
EUR/USD	-0.0049	1.0744
JPY/USD	0.80	147.26
10-Year Note	+0.051	4.224%

 

 

S&P index changes announced late Friday.

·     Deere & Co. (DE) will replace Walgreens Boots Alliance Inc. (WBA) in the S&P 100. Walgreens Boots Alliance is no longer representative of the mega-cap market space.

·     Airbnb Inc. (ABNB) will replace Newell Brands Inc. (NWL) in the S&P 500 and Newell Brands will replace Universal Insurance Holdings Inc. (UVE) in the S&P SmallCap 600.

·     Blackstone Inc. (BX) will replace Lincoln National Corp. (LNC) in the S&P 500, and Lincoln National will replace UNIQURE N.V. (QURE) in the S&P SmallCap 600.

·     RBC Bearings Inc. (RBC) will replace Hawaiian Electric Industries (HE) in the S&P MidCap 400.

·     Hannon Armstrong (HASI), Blackstone Mortgage Trust Inc. (BXMT), Liberty Energy Inc. (LBRT), Premier Inc. (PINC) and Apple Hospitality REIT Inc. (APLE) will replace FutureFuel Corp. (FF), RE/MAX Holdings Inc. (RMAX), Zynex Inc. (ZYXI), Anika Therapeutics Inc. (ANIK) and Computer Programs and Systems Inc. (CPSI) respectively in the S&P SmallCap 600.

·     Permian Resources Corp. (PR), Gaming and Leisure Properties Inc. (GLPI), GoDaddy Inc. (GDDY), Morningstar Inc. (MORN), Ally Financial Inc. (ALLY), Vistra Corp. (VST), Vail Resorts Inc. (MTN), Sensata Technologies Holding plc (ST), Weatherford International plc (WFRD) and Fidelity National Financial Inc. (FNF) will replace Omnicell Inc. (OMCL), Papa John’s International Inc. (PZZA), Sensient Technologies Corp. (SXT), Cathay General Bancorp (CATY), Energizer Holdings Inc. (ENR), Xerox Holdings Corp. (XRX), Highwoods Properties Inc. (HIW), Tripadvisor Inc. (TRIP), JetBlue Airways Corp. (JBLU), and Foot Locker Inc. (FL) respectively in the S&P MidCap 400.

·     The constituents being removed from the S&P MidCap 400 will be added to the S&P SmallCap 600 replacing Trinseo plc (TSE), The Aaron’s Company Inc. (AAN), NETGEAR Inc. (NTGR), Coherus Biosciences Inc. (CHRS), 8X8 Inc. (EGHT), Office Properties Income Trust (OPI), AngioDynamics Inc. (ANGO), Vanda Pharmaceuticals Inc. (VNDA), Orion Office REIT Inc. (ONL), and Enanta Pharmaceuticals (ENTA) respectively.

 

Sector News Breakdown

Consumer

·     Domino’s Pizza (DPZ) upgraded to Outperform from Market Perform at TD Cowen.

·     Lamb Weston (LW) upgraded to Buy from Neutral at Goldman Sachs.

·     Nissan Motor (NSANY) will delay the start of production of its next “Kicks” SUV model in Mexico by about six months after some mold components were stolen at a local supplier, the Nikkei newspaper reported on Tuesday.

 

Energy

·     Chevron (CVX) said some employees at its Wheatstone liquefied natural gas (LNG) facility in Australia have offered to work during industrial action set to begin on Thursday in a bid to avert domestic supply disruptions, a union alliance said.

·     FREYR Battery (FREY) has announced that SAP (SAP) has joined FREYR’s Energy Transition Acceleration Coalition.

·     Transocean (RIG) files to sell 82.6M shares for holders.

·     Qantas Airways said that long-serving CEO Alan Joyce would exit the company two months earlier than previously flagged as a reputational turbulence engulfs Australia’s flagship carrier.

·     Viper Energy (VNOM) said that it will acquire certain mineral and royalty interests in the Permian Basin from affiliates of Warwick Capital Partners and GRP Energy Capital in a roughly $1-billion cash and stock deal.

·     Oil’s sharp rally since late June could be erased in the next six months as weakening demand takes over from supply cuts as the main market driver, according to Gunvor Group Ltd. Still, the global market faces a deficit of 2.3 million barrels a day this quarter – Goldman Sachs.

 

Financials

·     Barclays Plc (BCS) is exploring the sale of a stake in the unit that processes payments for UK merchants, which could be valued at least $2.5B, as the British bank seeks a partner to help grow the business, people familiar with the matter told Reuters. http://tinyurl.com/29st6uj6

·     Intuit (INTU) files automatic mixed securities shelf.

 

Healthcare

·     Cyclacel Pharmaceuticals (CYCC) files $100M mixed securities shelf.

·     ResMed (RMD) downgraded to Neutral from Buy at UBS.

·     Beam Therapeutics (BEAM) announces the first patient dosed in phase 1/2 trial of BEAM-201 in relapsed, refractory T-ALL/T-LL.

 

Technology, Media & Telecom

·     Arm Holdings Ltd.’s initial public offering could give the company a valuation between $50 billion and $55 billion in what may be the biggest offering of the year. http://tinyurl.com/28rcpc3v

·     Manchester United Plc (MANU) shares slid after a report in the Mail on Sunday that said the Glazer family is going to take the club off the market after failing to receive offers that match their asking price. http://tinyurl.com/25kj64tt

·     Charter Communications Inc. (CHTR) and media giant Walt Disney Co. (DIS) were unable to reach a new, multiyear programming contract.

·     Belden (BDC) upgraded to Buy from Neutral at Goldman Sachs and raised tgt to $117 saying its exposure to broadband, fiber and industrial networking can support higher revenue growth.

·     Keysight Technologies (KEYS) upgraded to Buy from Neutral at Goldman Sachs saying it is well positioned to expand margins and benefit from exposure to key demand drivers.

·     Trip.com Group (TCOM) Q2 adj EPS $0.70 vs. est. $0.50; Q2 revs $1.6B vs. est. $1.5B; Adjusted EBITDA for the second quarter was RMB3.7 billion (US$507 million). Adjusted EBITDA margin was 33%, compared to 9% for the same period in 2022 and 31% for the previous quarter.