Daily US Equity Opening News - DPZ gains on EPS beat; DAL sinks as CRWD outage hurts EPS; AMD and TSLA events ahead

TODAY'S AGENDA:

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  DAY AHEAD: On the speakers' slate, remarks are due from the Fed's Cook (voter), who will speak on entrepreneurship; Barkin (voter) will give remarks on the economic outlook; Williams (voter) will also speak on the economic outlook. Equity traders will also be watching AMD's (AMD) AI Event, as well as Tesla's (TSLA) Robotaxi event (primers for both are below). On the supply front, the US will conclude its bond offerings with a sale of USD 22bln of 30yr bonds.


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  BROKER MOVES: NKE upgraded at Truist Secs, believing the Co. is moving in the right direction; PYPL downgraded at Bernstein. For the full list, please click here.
  

US EQUITY NEWS:

TECH

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  Advanced Micro Devices (AMD) - AMD is set to showcase new technologies at its 2024 Advancing AI event on Thursday, including Instinct GPU accelerators and EPYC server processors. Analysts view this as a potential "catch-up catalyst" for AMD in the AI accelerator market, where it currently holds 5-7% share compared to Nvidia's over 80%. AMD aims to increase its share of the market to 10% by 2026, potentially generating an additional USD 5bln in sales. Co. expects to highlight partnerships with firms like Microsoft (MSFT), Oracle (ORCL), and Meta Platforms (META). Some analysts have expressed scepticism about AMD's ability to capture GPU market share; however, BNP Paribas says if AMD shows solid growth prospects for 2025, perceptions could shift, adding that a successful AI event could mirror last year's 10% stock rise, aiding recovery amid ongoing weaknesses in its core segments. Meanwhile, Cantor notes that during last year's event, AMD unveiled its Instinct MI300 series GPU/APU platform, highlighted AI PCs, and projected USD 400bln+ AI total addressable market by 2027; Cantor anticipates similar announcements this year, including the official launch of the Turin CPU, MI325X accelerators, and likely Strix PRO AI PCs, alongside ROCm software advancements. Analysts currently rate AMD as a Buy, with an average price target of USD 187.07, according to Refinitiv's data.


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  Nvidia (NVDA) - Morgan Stanley says "Our meetings with Nvidia's CEO Huang, CFO Kress, and the management team highlighted the magnitude and length of the accelerated computing runaway. Every indication from management suggests that we are still early in a long-term AI investment cycle". The bank added, "Blackwell systems NVL36/72 continue to be the best solution for inference interactions requiring significantly more computation, and the Blackwell ramp is progressing on schedule with the product sold out for the next 12 months, signalling strong demand."


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  Apple (AAPL) - Huawei smartphone sales within China surpassed Apple's in August 2024, for the first time in almost four years, according to data from CINNO Research.


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  OpenAI - OpenAI projects its losses could nearly triple to USD 14bln by 2026, with profitability expected only by 2029, when revenue might reach USD 100bln, according to The Information. The figures, based on internal financial documents, exclude stock compensation costs, which are significant but not cash-based. Investors are facing a challenging path ahead. Separately, the publication reports that Liam Fedus, a key figure in developing OpenAI's new reasoning models, has been promoted to lead post-training, overseeing the preparation of AI models for release. He replaces Barret Zoph, who departed the company two weeks ago alongside CTO Mira Murati.


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  Palo Alto Networks (PANW) - Warned customers to urgently patch vulnerabilities in PAN-OS firewalls, as public exploit code is available, Bleeping Computer reports. The flaws could allow attackers to take control of firewalls and access sensitive data, including administrator credentials, especially during migrations from platforms like Checkpoint (CHKP) and Cisco (CSCO).


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  Broadcom (AVGO) - Chief Legal Officer Mark Brazeal sold 20.3k shares on October 7th for a total USD 3.6mln.


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  Lantronix (LTRX), Qualcomm (QCOM) - Lantronix announced new System-in-Package solutions powered by Qualcomm Technologies, enhancing its position in industrial and enterprise IoT. The solutions aim to provide advanced AI and Machine Learning capabilities at the edge, leveraging Qualcomm’s processors for reliable, industrial-grade systems.

CONSUMER DISCRETIONARY

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  Tesla (TSLA) - Will hold its "Robotaxi Day" today at Warner Brothers Discovery (WBD) studio in Burbank, California. Anticipation is high as Elon Musk teases significant announcements. The event is expected to unveil the next-generation Robotaxi with updated AI hardware and version 13 of FSD, aimed for late 2026, along with a second version of Optimus. Truist's analysts expressed caution regarding the event, stating it is unlikely to serve as a positive catalyst for Tesla shares. Truist noted the focus would be more on AI advancements rather than new near-term vehicle models. Although they recognise the potential for the event to positively impact Tesla's stock if a smaller, more affordable model for 2025 is revealed, they consider this scenario unlikely. Meanwhile, Ming-Chi Kuo said that while some investors are optimistic, mass production may not begin until Q1 2027, suggesting expectations for a stock rally could be overly optimistic. He emphasised the importance of meeting government FSD requirements before launching the service, noting that Tesla has the necessary hardware capabilities but may not achieve Level 4 autonomy until after 2027. He concluded that while the robotaxi trend is promising, patience will be needed for its realisation, with long-term investors potentially overlooking short-term stock impacts from the event. The analyst mode currently has Tesla rated as a Hold, with an average price target of USD 209.14, according to Refinitiv's data.


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  Stellantis (STLA) - The UAW union warned that a strike at Stellantis could begin within weeks, accusing the company of failing to uphold investment commitments, including reopening the Belvidere Assembly Plant. The union plans to hold a rally in Washington, DC, to push for its demands.


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  Domino's Pizza (DPZ) Q3 2024 (USD): EPS 4.19 (exp. 3.65), Revenue 1.08bln (exp. 1.1bln). Comp sales Domestic 3.0% (exp. +3.6%). 2024 Guidance: Given the challenging macroeconomic environment and its impact on current business trends across the globe, it expects approx. 6% annual global retail sales growth; approx. 8% annual income from operations growth; global net store growth of 800 to 850. 2025 Guidance: Expects annual global retail sales growth and annual income from operations growth to be generally in line with its 2024 expectations. Long-Term Guidance (2026-2028): Continues to expect 7%+ annual global retail sales growth, and 8%+ Annual income from operations growth.


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  Amazon (AMZN) - Traders circulating commentary from Yipit Live noting AWS had had a huge acceleration, now trailing at close to 24% YY/Y, which would mark a sizeable addition to revenue Q/Q. Elsewhere, announced on Wednesday that Apple TV+ (AAPL) will become available on Prime Video later this month in the US for USD 9.99/month.


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  Nike (NKE) - Upgraded to 'Buy' from 'Hold' at Truist Secs with a USD PT of 97 (prev. 83), thinking Nike is "moving in the right direction" and some near-term wins from the fresh team should be enough to "show investors there are better times ahead".

FINANCIALS

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  Toronto-Dominion Bank (TD) - Expected to pay USD 3bln in penalties and face US growth restrictions as part of a settlement over allegations it failed to properly monitor money laundering by drug cartels, WSJ reports. The US Office of the Comptroller of the Currency will likely impose an asset cap, limiting the bank's retail growth in the US.


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  HSBC (HSBC) - Considering a cost-cutting plan that may save up to USD 300mln by reducing top management layers as it contemplates merging its commercial and investment banking units, FT reports. The strategy aims to streamline operations amid rising costs, with a decision expected by the end of October.


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  AllianceBernstein (AB) - Reported prelim. AUM of USD 806bln at the end of September (prev. USD 791bln at the end of August). The increase was driven by market appreciation and net inflows into all three distribution channels.


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  Franklin Resources (BEN) - Reported prelim. AUM of USD 1.68tln at the end of September (unch. M/M).


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  Invesco (IVZ) - Reported prelim. AUM of USD 1.796tln at the end of September (+2.5% M/M).


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  Paypal (PYPL) - Downgraded at Bernstein to 'Market Perform' from 'Outperform' with the stock path appearing to be uncertain from these levels due to the "push/pull dynamics around intense competitive pressures on the cash-cow button on hand, and tailwinds from buybacks/opex cuts and incrementalism on the other hand'. Bernstein wants more visibility into the long-term trajectory of the button and the ability of PayPal’s new initiatives to cumulatively move the needle for gross profit growth.


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  Berkshire Hathaway (BRK.B) - Raised JPY 281.8bln in Yen-denominated bonds, its largest Yen bond sale in five years.


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  UBS Group AG (UBS) - Technology chief is confident that the integration of Credit Suisse, is "bang on target" after a successful run.

INDUSTRIALS

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  Boeing (BA) - Pay talks with striking workers collapsed, with the union leader stating they are prepared for a long strike. Boeing withdrew its offer after minor improvements failed to satisfy demands. The IAM union said it was ready and willing to get back to the bargaining table at any time through direct or mediated talks. The strike, nearing a month, is costing Boeing USD 1bln per month, and the company is considering raising funds to mitigate losses.


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  AZZ (AZZ) Q2 2024 (USD): Adj. EPS 1.37 (exp. 1.32), Revenue 409mln (exp. 411.8mln). Consolidated adj. EBITDA margins rose driven by increased volume of hot-dip galvanised steel and coil-coated materials, alongside improved operational productivity. Metal Coatings benefited from market diversity and better zinc utilisation, while Precoat Metals' margin improved due to sales growth and operational enhancements. Guidance: Raised FY25 adj. EPS to 4.70-5.10 (exp. 4.94, prev. 4.50-5.00), and reiterated revenue of 1.525-1.625bln (exp. 1.61bln).


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  Delta Air Lines (DAL) Q3 2024 (USD): Adj. EPS 1.50 (exp. 1.52), Revenue 15.677bln (exp. 14.67bln). Key Metrics: Passenger revenue 13.11bln (vs 13.12bln Y/Y); Cargo revenue 196M (+27% Y/Y); Passenger load factor 87% (vs. 88% Y/Y); Available seat miles 76.16bln, +4% Y/Y; Revenue passenger miles 66.31bln (exp. 66.53bln); Crowdstrike outage resulted in a 0.45 Q3 EPS hit. Guidance: Q4 adj. EPS 1.60-1.85 (exp. 1.78). Delta Air Lines CEO said they are expecting reimbursement for the cost incurred from the CrowdStrike (CRWD) outage, according to a CNBC interview.


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  Defense names (HII) - China Foreign Ministry imposes sanctions against three US military firms and ten senior execs over US arms sale to Taiwan from Thursday; names include Huntington Ingalls Industries (HII), which came under very modest pressure in the pre-market.


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  GXO Logistics (GXO) - Exploring a potential sale after receiving takeover interest, Bloomberg reports.

HEALTHCARE

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  Pfizer (PFE) - Former Pfizer CEO Ian Read and CFO Frank D’Amelio issued a statement via Guggenheim Securities, declaring their decision to abstain from involvement with Starboard Value concerning Pfizer. They expressed full support for Pfizer's Chairman and CEO Albert Bourla, senior management, and the board, asserting confidence in their ability to deliver shareholder value over time. Meanwhile, Pfizer's Talzenna in combination with Xtandi prolongs overall survival in Phase 3 Talapro-2 trial.


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  Roche (RHHBY) - Obtains CE certification for the first companion diagnostic to identify patients with gastric and gastroesophageal junction cancer eligible for targeted treatment with VYLOY.


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  CVS Health (CVS) - Upgraded to 'Overweight' from 'Equal Weight' at Barclays with a PT of USD 82 (prev. 63), citing a higher conviction in the upper end of the company's 2025 Medicare margin improvement. Barclays also focus on CV'S 2bln in cost savings measures and potential upside from CostVantage.


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  10x Genomics (TXG) - Shares tumble premarket after next quarter revenue guidance fell short of analysts expectations, with CEO Saxonov saying the transition the company experienced due to recent changes to its commercial processes and organisation was "more disruptive than we anticipated, especially in the Americas".

COMMUNICATIONS

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  Deutsche Telekom AG (DTEGY) - Announced plans for a share buyback programme of up to EUR 2bln, scheduled for 2025, alongside an increase in its dividend; it proposes its dividend for FY24 will rise to EUR 0.90/shr from 0.77/shr last year.


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  T-Mobile US (TMUS) - Said it is enhancing its Go5G Next and Go5G Business Next plans from October 17th, allowing new and existing customers to connect devices like smartwatches, tablets, and laptops for only USD 5.00 per month per device. This move simplifies connectivity while ensuring a secure 5G connection with speeds comparable to Wi-Fi.


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  Dave & Buster's (PLAY) - CEO Christopher Morris purchased 14.9k shares as part of option exercise on October 7th for a total USD 502.2k.


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  Baidu (BIDU) - Plans to test and deploy its Apollo Go robotaxis in places including Hong Kong, Singapore and the Middle East, aiming to extend its competitive advantage outside of China.


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  Spotify Technology (SPOT) - Cos. free music and podcasts service option is now available in South Korea, in an effort to widen its audience base.

CONSUMER STAPLES

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  Costco (COST) - Reported September sales results where total comp. sales (ex-gasoline/FX) rose +8.9% (prev. +7.1%); US sales (on the same basis) were +9.3% (prev. +6.7%).


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  Seven & I Holdings (SVNDY), Alimentation Couche-Tard (ANCTF) - Seven & I is exploring the establishment of a holding company for its non-core assets, including its supermarkets, restaurants, and other businesses, to attract external investment, Yomiuri reports. The move, expected to be announced alongside its Q2 earnings, would focus on raising capital before a potential IPO, allowing the company to concentrate more on its core convenience store operations, like 7-Eleven.


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  Celsius Holdings (CELH) - Seeing strength in the premarket after Piper Sandler released its latest survey amongst teens, indicating that Celsius is outperforming in energy drinks, accounting for more than 35% of overall market share in terms of mentions as a favourite.

ENERGY

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  Occidental Petroleum (OXY) - Reported global realised oil prices for Q3 at USD 75.33/bbl, with realised NGL prices at USD 20.47/bbl, and natgas prices at USD 0.76/Mcf.


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  DHT Holdings (DHT) - Estimates Q3 time charter equivalent earnings at USD 42,400/day, with VLCCs in the spot market averaging USD 43,700, and those on time-charter at USD 38,800. For Q4, 32% of available spot days are booked at USD 37,000, and 50% of total revenue days at USD 39,200.

10 Oct 2024 - 13:56- Fixed IncomeData- Source: Newsquawk