Early Look

Thursday, September 12, 2024

U.S. futures are pointing to a higher open ahead of the European Central Bank (ECB) meeting and the August producer price inflation (PPI) data at 8:30 AM, looking to build on the greatest individual turnaround day of the year that saw the Nasdaq Composite surge over 600 points on Wednesday off its lows to close at the highs and the S&P with a 150 point rebound off its lows also to close at the highs, led by a massive push in technology shares. The boost in tech stocks (mostly chip names NVDA, AMD, ARM, AVGO, etc.) came following comments from NVDA CEO at a conference, discussing the rollout of the company’s new Blackwell chip, saying demand was so “great that delivery of our components and our technology and software is really emotional for people.” The commentary boosted the AI tech plays and sent stock prices surging, offsetting investor disappointment at the early CPI inflation report, which crushed hopes the Federal Reserve would cut interest rates by 50 basis points next week. Political developments also drove market sentiment the day after Democrat candidate Kamala Harris put her Republican rival Donald Trump on the defensive in a combative U.S. presidential debate the night prior. Earlier, the Labor Department reported the consumer price index (CPI) rose 0.2% last month, in line with July. Core CPI, excluding volatile food and energy components, rose 0.3% monthly, exceeding economist expectations for a 0.2% rise. Traders changed their bets to an 85% probability for a 25 basis points cut by the Fed from 66% on Tuesday and the probability of a 50-basis point cut fell to 13% from 34% a day ago. In Asian markets, The Nikkei Index surged 1,213 points or 3.41% to 36,833, the Shanghai Index dipped -4 points to 2,717, and the Hang Seng Index rose 131 points to 17,240. In Europe, the German DAX is higher by 225 points to 18,555, while the FTSE 100 is up 65 points to 8,259.

• The Dow Jones Industrial Average rose 124.75 points, or 0.31%, to 40,861.71.
• The Nasdaq Composite surged 369.65 points, or 2.17%, to 17,395.53.
• The Russell 2000 Index climbed 6.41 points, or 0.31% to 2,103.85.

• 8:30 AM ET                  Continuing Claims…est. 1.85M
• 8:30 AM ET                  Producer Price Index (PPI) M/M for August…est. ++0.1% (prior +0.1%)
• 8:30 AM ET                  Producer Price Index (PPI) Y/Y for August…est. +1.8% (prior +2.2%)
• 8:30 AM ET PPI Core – Ex: Food & Energy M/M for August…est. +0.2% (prior 0%)
• 8:30 AM ET PPI Core – Ex: Food & Energy Y/Y for August…est. +2.5% (prior +2.4%)
• 10:30 AM ET                Weekly EIA Natural Gas Inventory Data
• 12:00 PM ET WASDE Agricultural report for September
• 1:00 PM ET US Treasury to sell $25B in 30-year notes
• 2:00 PM ET                   Federal Budget for August

• Earnings After the Close: ADBE FARM IBEX ISPR RLGT

• Goldman Sachs Communacopia & Technology Conference, 9/9-9/12, in San Francisco, CA
• 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
• 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

• Lear Corp. (LEA) said 3Q24 sales tracking to $5.5B -3% vs. consensus according to UBS and they estimate implied ~$230M EBIT, ~10% below consensus. UBS estimates 2024 implied EBIT at ~$1.1B EBIT (in-line with consensus) but think market likely skeptical about strong implied 4Q24.
• Oxford Industries (OXM) shares fall as Q2 adj EPS $2.77 vs est. $3.00 on revs $305Mm vs est. $438.18Mm, adj gr mgn 63.3%; guides Q3 sales $310-325Mm vs est. $352.48Mm and adj EPS $0.00-0.20 vs est. $1.09FY sales $1.51-1.54B vs est. $1.606B and adj EPS $7.00-7.30 vs est. $8.66.

• Viper Energy, Inc. (VNOM) announced it, and its operating subsidiary Viper Energy Partners LLC entered into a definitive purchase and sale agreement to acquire certain mineral and royalty interest- owning subsidiaries of Tumbleweed Royalty IV, LLC in exchange for $461.0M of cash and approximately 10.1M OpCo units, subject to customary adjustments.
• Viper Energy (VNOM) sold 10M shares, up from 8.5 mln shares, at $42.50, 5.8% discount to last sale saying will use expected net proceeds of ~$413.7Mto fund pending acquisition of mineral and royalty-interest owning subsidiaries of Tumbleweed Royalty IV, LLC.

• Invesco Ltd. (IVZ) reported preliminary month-end assets under management (AUM) of $1,751.8B, an increase of 1.1% versus the previous month-end. The firm delivered net long-term inflows of $2.4B in the month. Non-management fee earning net inflows were $0.9B and money market net outflows were $6.4B.
• Lazard (LAZ) reported that its preliminary assets under management as of August 31, 2024 totaled approximately $244.3B. The month’s AUM included net outflows of $7.5B, market appreciation of $2.8B and foreign exchange appreciation of $3B.
• Victory Capital Holdings, Inc. (VCTR) reported Total Assets Under Management (AUM) of $173.8 billion, Other Assets of $4.9 billion, and Total Client Assets of $178.8 billion, as of August 31, 2024. For the month of August, the average Total AUM was $171.1 billion, average other Assets was $4.9 billion, and average Total Client Assets was $176.0 billion.

• Moderna (MRNA) said it would cut its annual spending on R&D by 23%, or $1.1B, between 2024 and 2027; this year they plan to ask for approval of three products, including its next-generation Covid vaccine and a combination Covid/flu vaccine; said is no longer pursuing accelerated approval pathway for regulatory submission of standalone flu vaccine.
• Summit Therapeutics (SMMT) announced that the company accepted offers from multiple leading biotech institutional and individual investors to purchase an aggregate of approximately 10.35M shares of the company’s common stock at $22.70 per share, the closing price on Wednesday,

• Microsoft (MSFT) to cut 650 support jobs In Xbox Games Unit- Bloomberg News