Daily US Equity Opening News - BRK sells more BAC; MS downgraded at Goldman; GME sales unexpectedly fall

TODAY'S AGENDA:

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  BROKER MOVES: CHTR upgraded at Citi; MS downgraded at Goldman on valuation and less market skew. For the full list, please click here.
  


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  DAY AHEAD: On the supply front, the US will sell USD 39bln of 10yr Notes. In energy, API data was said to show headline crude stocks posting a surprise draw of -2.8mln (exp. +1.0mln), Cushing -2.6mln, Cushing -2.6mln, distillates saw a build of +0.2mln (exp. +0.3mln), and gasoline inventories drew down by more than expected at -0.5mln (exp. -0.1mln); the more widely followed DoE energy inventory report will be released at 10:30EDT/15:30BST.


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  RECAP - UK GDP: The UK GDP estimate for July printed 0.0% M/M (exp. 0.2%, prev. 0.0%), and 1.2% Y/Y (exp. 1.4%, prev. 0.7%); the 3M/3M measure eased to 0.5% in July (exp. 0.6%, prev. 0.6%), while the services measure rose to 1.7% Y/Y (exp. 1.8%, prev. 1.2%). Capital Economics said the stagnation in July is unlikely to mark the start of a renewed downturn and is sticking to its view that the BoE will keep interest rates unchanged in September, before cutting rates again in November; that said, CapEco concedes that the GDP data has made an interest rate cut next week a bit more likely.

US EQUITY NEWS:

FINANCIALS

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  Bank of America (BAC), Berkshire Hathaway (BRK) - Berkshire Hathaway sold about 5.8mln Bank of America shares for about USD 228mln between September 6-10th, according to an SEC filing. The sales have slowed, Bloomberg reported, with the average price per share at USD 39.30. Since mid-July, Berkshire has generated USD 7.2bln from sales, retaining over 11% of the bank's stock, valued at USD 33.7bln.


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  Commerzbank AG (CRZBY), UniCredit (UNCRY) - UniCredit acquired a 4.5% stake in Commerzbank from the German government for EUR 702mln (paying around EUR 13.20/shr vs last close 12.60/shr), becoming the third-largest shareholder, reportedly holding 9% after the latest purchase, according to Bloomberg.


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  Goldman Sachs (GS), General Motors (GM), Barclays (BCS) - Goldman Sachs is nearing a deal to transfer its General Motors credit card business, with USD 2bln in outstanding balances, to Barclays. The exit aligns with Goldman's refocus on consumer services, potentially resulting in a USD 400mln pre-tax charge in Q3.


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  Citigroup (C) - Chief Accounting Officer Johnbull Okpara resigned to pursue another opportunity. Robert Walsh will serve as interim Chief Accounting Officer, and Patrick Scally as interim Controller. Okpara will assist with the Q3 earnings process, and regulatory filings to ensure a smooth transition.


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  Fifth Third Bancorp (FITB) - Raises Q3 revenue growth outlook, now sees +2-3% (prev. +1-2%), and sees Q3 non-interest income growth of +3-4% (prev. +1-2%).


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  Northern Trust (NTRS) - Appointed Peter Cherecwich as COO; Teresa Parker will become President of Asset Servicing, Steven Fradkin as Vice Chairman, and Jason Tyler as President of Wealth Management, effective October 1st.


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  Arthur J. Gallagher (AJG) - Said Hurricane Francine could cause insured losses of around USD 1bln; if it strengthens more than anticipated, losses could reach "low or mid-single digit" billion dollars.


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  Morgan Stanley (MS) - Downgraded to Neutral from Buy at Goldman Sachs, with a PT of USD 105 (prev. USD 122). Goldman noted other investment banks are more likely to benefit as they move further into the investment banking cycle, seeing faster growth for banks with a more capital markets skew as a percentage of total revenue than Morgan Stanley. Moreover, the firm added that MS trades at 2x price-to-earnings premium to large bank peers, and at a 90th percentile price to tangible book value over the past decade versus the 70th percentile for peers.

TECH

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  Nvidia (NVDA) - CEO Jensen Huang sold 240K shares between September 6-9th, as part of option exercise, for a total USD 25mln. CEO Huang is set to speak today at 10:20EDT/15:20BST.


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  Microsoft (MSFT) - Xbox announced that beginning September 10th, it will launch Xbox Game Pass Standard, combining features of Game Pass for Console and Game Pass Core, offering more flexibility for gamers with different preferences and budgets.


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  ASML Holding (ASML) - The Dutch government clarified that ASML needs a license to provide spare parts and updates for its chipmaking equipment sold to China, following the addition of two tools to the national control list. This is part of aligning export controls with the US policy.


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  Dell Technologies (DELL) - Expect a continued reduction in overall headcount as part of cost management efforts, alongside employee reorganisations and limited hiring.


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  Western Digital (WDC) - Goldman Sachs, citing a presentation by WDC's EVP and General Manager of Flash Business, said demand for enterprise SSD remains strong driven by AI and, as a market is expected to account for about 10% of Western Digital's total NAND bits in FY25.


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  Elastic (ESTC) - CEO Ashutosh Kulkarni sold 19,649 shares on September 9th, at USD 70.25/shr.


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  Credo Technology (CRDO) - CEO Willam Brennan sold 144K shares on September 6th, for a total USD 3.7mln.


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  AppLovin (APP) - Chief Technology Officer Vasily Shikin sold 160K shares between September 6-9th, for a total USD 13.5mln.


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  Samsung (SSNLF) - Plans to cut up to 30% of its overseas staff in some divisions, implementing the plan by the end of the year.


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  NXP Semiconductors (NXPI) - To invest over USD 1bln in India, doubling its research and development efforts.

ENERGY

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  Energy Inventories - API Data was said to show headline crude stocks posting a surprise draw of -2.8mln (exp. +1.0mln), Cushing -2.6mln, Cushing -2.6mln, distillates saw a build of +0.2mln (exp. +0.3mln), and gasoline inventories drew down by more than expected at -0.5mln (exp. -0.1mln); the more widely followed DoE energy inventory report will be released at 10:30EDT/15:30BST.


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  APA Corp. (APA) - Selling non-core Permian Basin properties for USD 950mln, with the sale expected to close in Q4 2024. The proceeds will primarily reduce debt, and the sale represents a production of 21,000 BOE/D.


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  Transocean (RIG), BP (BP) - Transocean announced a 365-day contract with BP for the Deepwater Atlas in the US Gulf of Mexico, starting in Q2 2028. The contract includes a 365-day extension option and will add approximately USD 232mln to Transocean’s backlog, excluding mobilisation fees, with no additional services provided.


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  Shell (SHEL) - Plans to run the Norco Louisiana refinery at full capacity during the storm. Due to the downstream impacts of tropical storm Francine, it has shut production at its Perdido, Auger, and Enchilada/salsa assets. For the Whale asset, which is not scheduled to begin operations until later this year, Shell has safely paused drilling operations. It said there are currently no other impacts on the production across the Gulf of Mexico.


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  BP (BP) - Said it is evacuating learning and maintenance facilities in Louisiana, ahead of Storm Francine.


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  Marathon Oil (MRO) - Executive VP of operations Michael Henderson sold 38k shares on September 6th, at USD 27.2079/shr.


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  Dover (DOV) - CFO Brad Cerepak sold 14,818 shares on September 6th, at USD 175/shr.

INDUSTRIALS

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  Deere & Co (DE) - The SEC charged Deere with FCPA violations, resulting in a nearly USD 10mln settlement. Deere's subsidiary, Wirtgen Thailand, bribed Thai officials and private company employees to secure contracts, with the bribes falsely recorded as legitimate expenses.


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  Southwest Airlines (LUV) - Said it was restructuring its Board, removing the Executive Committee, adding a new Finance Committee, and planning to appoint four new independent Directors. Executive Chairman Gary Kelly will retire after the 2025 Annual Meeting, and the Board is confident in CEO Bob Jordan's leadership through ongoing transformation.


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  Canadian National (CNI) - Lowered FY24 adj. EPS growth view to 'low single-digits' range from 'mid to high single digits', due to labour issues, wildfires, and weaker demand; maintained its CAD 3.5bln capital investment plan, and targets 'high single-digit' EPS growth between 2024-2026.


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  Assa Abloy (ASAZY) - Acquired technology solutions firm Level Lock. The acquisition will initially dilute earnings per share, but strengthens Assa Abloy's digital offerings in the Americas.


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  Rentokil Initial PLC (RTO) - Shares tumble premarket after it warned of lower annual profit following reporting weaker-than-expected sales in its largest market North America.

CONSUMER DISCRETIONARY

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  Inditex (IDEXY) - The world's biggest listed fashion retailer reported an 11% sales increase for its autumn-winter collections, offsetting earlier slowdown. H1 2024 (EUR): EBIT 3.54bln (exp. 3.48bln), Net sales 18.07bln (exp. 18bln), Net income 2.8bln (exp. 2.77bln). For FY24, sees a 3% currency impact on sales.


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  Automakers - The NHTSA is proposing new rules to enhance vehicle designs and reduce pedestrian fatalities by requiring new safety standards for passenger vehicles, focusing on minimising injuries in pedestrian crashes. The move aims to address a 57% increase in pedestrian deaths from 2013 to 2022.


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  Amazon (AMZN) - Amazon Web Services will invest GBP 8bln in the UK over the next five years to build and maintain data centres. The investment is expected to boost the UK's GDP by GBP 14bln and support over 14k jobs annually in the data centre supply chain.


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  International Paper (IP) - Board elected Andy Silvernail as Chairman in addition to his role as CEO, effective October 1st.


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  Ross Stores (ROST) - Karen Fleming has been promoted to President and Chief Merchandising Officer at Ross Dress for Less; Karen Sykes, currently EVP of Merchandising at Ross, will replace Fleming as President and Chief Merchandising Officer of dd's DISCOUNTS.


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  Wingstop (WING) - CEO Michael Skipworth told CNBC that he sees significant brand growth potential, citing record system sales and disciplined pricing. He aims to expand to 6,000 domestic and 10,000 global locations.


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  Casey's General Stores (CASY) - CEO Darren Rebelez sold 13.5K shares on September 6th for a total USD 5.1mln.


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  Tapestry (TPR) - An executive testified on Tuesday as regulators sought to block the USD 8.5bln merger deal with Capri Holdings’ Michael Kors brand, saying Tapestry has room to raise prices and lower discounts on the Michael Kors brand if they merged.

HEALTHCARE

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  Johnson & Johnson (JNJ) - Cos. Phase 2 SKIPPirr study found that 8-mg dexamethasone prophylaxis reduced infusion-related reactions with IV Rybrevant in advanced NSCLC patients by three-fold compared to standard management, achieving an all-grade IRR rate of 22.5%.


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  Eli Lilly (LLY) - Cos. QWINT-2 trial showed that once-weekly insulin efsitora alfa achieved non-inferior A1C reduction compared to daily insulin degludec, with better time in range and no added hypoglycemia risk, suggesting improved adherence and reduced treatment burden for type 2 diabetes patients.


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  Sanofi (SNY), Regeneron (REGN) - Dupixent met the primary and all key secondary endpoints evaluating its investigational use in adults with moderate-to-severe disease. In the trial, five times more Dupixent patients achieved sustained disease remission compared to those on placebo.


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  GSK (GSK) - Provides update on the phase I/II therapeutic herpes simplex virus (HSV) vaccine trial. Results show that GSK3943104 did not meet the study’s primary efficacy objective. This vaccine candidate, therefore, will not progress to phase III studies. No safety concerns.


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  Novo Nordisk (NVO) - Cos. experimental obesity pill has mild-to-moderate side effects, according to Reuters citing an early trial; the drug, Amycretin showed 13.1% weight loss in Phase 1 trial. In addition, the company's Liraglutide weight loss drug is safe and effective in children as young as six, with children ages 6 to 12 using the injectable pens for just over a year seeing a 7.4% reduction in their body-mass index compared with those on a placebo, FT reports.


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  Xencor (XNCR) - Initiated a STOCK offering and pre-funded warrants, with proceeds intended for general corporate purposes, including research and development and capital expenses. The offering amount was not disclosed.


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  BridgeBio Pharma (BBIO) - FDA granted Regenerative Medicine Advanced Therapy (RMAT) designation to BridgeBio's BBP-812, gene therapy for Canavan disease, based on clinical data from the CANaspire Phase 1/2 trial, allowing expedited review and support. Separately, BridgeBio's Phase 1/2 trial of BBP-631 for congenital adrenal hyperplasia showed improved cortisol production but, due to unmet investment criteria, the company will halt development and seek partners for future advancements.


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  Walgreen Boots Alliance (WBA) - Baltimore said on Tuesday that it has settled with over claims the Co. fuelled an opioid addiction in the Maryland city, the latest in a series of settlements totalling USD 402.5mln ahead of a trial scheduled to be next week.

MATERIALS

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  Covestro AG (COVTY) - Abu Dhabi National Oil Company is expected to acquire German chemicals firm Covestro for around EUR 14.4bln, including debt, FT reports. Covestro opened its books to ADNOC following improved bid discussions, focusing on potential agreements regarding growth strategy.


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  Anglo American (NGLOY) - Anglo American launched the first stage of its platinum divestment, with a 5% share sale of Anglo American Platinum, in the run-up to a full demerger of the unit, FT reports.


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  Cemex (CX), Holcim Group (HCMLY) - Cemex has sold its Guatemalan operations to Holcim Group for USD 200mln, focusing on portfolio rebalancing and planned reinvestment in developed markets, especially the US, to support sustainable growth and lower-carbon initiatives.


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  Lithium names (ALB, ALTM, PLL, LAC, SQM) - China’s CATL says it will adjust production in Yichuan, and it has suspended two mines. UBS report adds the suspensions could cut ~8% (5-6k MT) of China’s monthly lithium carbonate production. As such, easing oversupply concerns for the material.

COMMUNICATIONS

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  Meta Platforms (META) - COO Javier Olivan sold 522 shares on September 6th for a total USD 215.6K.


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  GameStop (GME) Q2 2024 (USD): Adj. EPS 0.01 (exp. -0.08), Revenue 798.3mln (exp. 895.67mln); announced a 20mln share offering. Said it anticipates the potential closure of larger number of stores than were closed in the past few years.


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  Dave & Buster's Entertainment (PLAY) Q2 2024 (USD): Adj. EPS 1.12 (exp. 0.84), Revenue 557.1mln (exp. 560.65mln), Comparable sales -6.3%.


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  Trump Media & Technology (DJT) - Shares come under pressure following the presidential debate last night, as multiple polls indicated viewers thought Harris won the debate.

REAL ESTATE

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  Realty Income (O) - Raised its common stock dividend to USD 0.2635/shr (prev. 0.2630).

11 Sep 2024 - 13:56- Data- Source: Newsquawk