Early Look

Wednesday, September 11, 2024

After stocks finished mixed on Tuesday, with the S&P 500 and Nasdaq rising while the Russell 2000 and Dow Jones Industrial slipped, U.S. futures are trading lower ahead of the August consumer price index inflation report, one of the last important data points ahead of next weeks FOMC rate meeting. The August consumer prices (CPI) data is expected at 8:30 AM, with both headline and core CPI M/M expected to rise +0.2% (same as prior month), while core Y/Y CPI is expected to hold steady at +3.2%, but headline CPI Y/y is expected to dip to +2.6% from +2.9% prior. The August producer price index (PPI) data will be released on Thursday, though CPI carries more weighting on markets. The S&P 500 and the Nasdaq gained ground on Tuesday while Brent crude prices hit a 3-1/2-year low amid concerns over softening global demand a day ahead of key inflation data. Mega cap tech and tech-related stocks helped boost the Nasdaq , while the S&P 500 posted a more modest gain and the blue-chip Dow finished in the red. Financial markets are baking in a 71% likelihood that the central bank will cut its Fed funds target rate by 25 basis points at the conclusion of its monetary policy meeting next week, with a 31% chance of a supersized 50 basis point rate cut, according to CME‘s FedWatch tool. In Asian markets, The Nikkei Index tumbled -539 points to 35,619, the Shanghai Index fell -22 points to 2,721, and the Hang Seng Index dropped -125 points to 17,108. In Europe, the German DAX is up 65 points to 18,330, while the FTSE 100 is up a few points to 8,214. Meanwhile, it was a heated debate between Donald Trump and Kamala Harris last night in Pennsylvania that touched upon key topics including, the economy, immigration, abortion, energy/fracking, healthcare plans, the wars between Ukraine/Russia and Israel/Palestine among other topics.

• The Dow Jones Industrial Average fell -92.63 points, or 0.23%, to 40,736.96.
• The Nasdaq Composite jumped 141.28 points, or 0.84%, to 17,025.88.
• The Russell 2000 Index slipped -0.34 points, or 0.02% to 2,097.44.

• 8:30 AM ET                  Consumer Price Index (CPI) M/M for August…est. +0.2% (prior +0.2%)
• 8:30 AM ET                  Consumer Price Index (CPI) Y/Y for August…est. +2.6% (prior +2.9%)
• 8:30 AM ET CPI Core – Ex: Food & Energy M/M for August…est. +0.2% (prior +0.2%)
• 8:30 AM ET CPI Core – Ex: Food & Energy Y/Y for August…est. +3.2% (prior +3.2%)
• 10:30 AM ET                Weekly DOE Inventory Data
• 11:00 AM ET                Cleveland Fed CPI for August…prior +0.3%
• 1:00 PM ET US Treasury to sell $42B in 10-year notes

• Earnings After the Close: KEQU MIND OXM STRM

• Goldman Sachs China+ Conference 2024, 9/11-9/12 in Hon Kong
• JP Morgan Alternative Solutions and Specials Symposium, 9/11-9/12, in South Pointe
• Oppenheimer Southern California MedTech Bus Tour (RXST, EW, TNDM, DXCM), 9/11
• Oracle (ORCL) Cloud World 2024, 9/9-9/12, in Las Vegas, NV
• Roth MKM 11th Annual Solar & Storage Symposium at SPI, 9/9-9/12, in Anaheim, CA

• Japan’s business sentiment in Sept hits 7-month low; Manufacturers sentiment index +4 in Sept vs +10 in Aug; Manufacturers expect their business confidence to drop further to plus 3 over the next three months, The Reuters Tankan service-sector index dropped for a third month to plus 23 in September, from plus 24 in August.

• GameStop (GME) reported Q2 revenue fell -31% y/y to $798.3M vs. consensus of $895.7M; Q2 Hardware and Accessories net sales fell -24% y/y to $451.2M and Software net sales fell -48% y/y to $207.7M.

• Evolution Petroleum Corp. (EPM) Q4 adj EBITDA $8.037B vs est. $8.916B on revs $21.227B vs est. $23.72B; says generated record oil revs for FY and record liquids revs for FY; proved reserves increased by 20% yr/yr.
• FTC Solar (FTCI) announced that it has been selected by Strata Clean Energy to supply approximately 500 megawatts of its Voyager 2P solar tracker technology for multiple project sites in the U.S. and will be the preferred 2P solar tracker supplier over a three-year initial term.
• Transocean Ltd. (RIG) announced a 365-day contract for the Deepwater Atlas with bp in the U.S. Gulf of Mexico that also provides for a 365-day option. The program is expected to commence in Q2’28 and contribute approximately $232M in backlog, excluding a mobilization fee.

• Fifth Third (FITB) raises Q3 revenue growth view to up 2%-3% from 1%-2%, sees Q3 non-interest income up 3%-4% vs. prior forecast of up 1%-2% (presentation slides at Barclays Global Financial Services Conference).
• Morgan Stanley (MS) downgraded to Neutral from Buy at Goldman Sachs.

• Petco (WOOF) Q2 adj EPS ($0.02) vs est. ($0.02) on sales $1.52B vs est. $1.525B; sees Q3 revs about $1.5B vs est. $1.509B, adj EBITDA $76-80Mm vs est. $76.31Mm and adj EPS ($0.04) – ($0.03) vs est. ($0.04).
• Regeneron (REGN) and Sanofi (SNY) said its Dupixent drug achieved significant improvements for the treatment of two skin diseases; said that the drug met the primary and all key secondary endpoints evaluating its investigational use in adults with moderate-to-severe bullous pemphigoid, or BP.
• Relay Therapeutics (RLAY) 28.57M share Secondary priced at $7.00.
• Terns Pharmaceuticals (TERN) 11.91M share Spot Secondary priced at $10.50.
• Viridian Therapeutics (VRDN) announces $150M common stock and preferred stock offering.

• Samsung Electronics (SSNLF) is cutting up to 30% of its overseas staff at some divisions, three sources with direct knowledge of the matter told Reuters. Samsung has instructed subsidiaries worldwide to reduce sales and marketing staff by about 15% and the administrative staff by up to 30%.