Daily US Equity Opening News - TSLA reduces Model Y prices in China; BBWI surge on earnings beat; HOOD upgraded at MS

TODAY'S AGENDA:

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  DAY AHEAD: The US Day sees the release of the Dallas Fed's manufacturing gauge for November. On the speakers' slate, ECB's Chief Economist Lane will also speak at the event. ECB's Makhlouf will give remarks at the annual dinner of Britain's Society of Professional Economists. Notable corporate updates today include ZM and A. In supply, the US will sell USD 69bln of 2yr notes.


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  BROKER MOVES: HOOD upgraded at Morgan Stanley; GOLD downgraded at CIBC. For the full list, please click here.
  


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  WEEK AHEAD: Highlights include US PCE, FOMC Minutes, RBNZ rate decision, EZ HICP, and Australian CPI. It is also worth noting that the US trading calendar will be shortened this week, on account of Thanksgiving, with some data releases and supply issues to be front-loaded in the week.Click here for our week-ahead preview.
  

EQUITY NEWS

POLITICS:

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  US-China - China is looking to Elon Musk as a potential intermediary with the incoming Trump administration, hoping his connections and influence could help mitigate harsh policies towards China. Musk, known for his close ties with both Chinese officials and Trump, is seen as key in navigating the tension between the two superpowers. Separately, TikTok CEO Shou Chew has sought counsel from Elon Musk, owner of a rival social media platform, and a close ally of President-elect Trump, WSJ reports. TikTok, facing potential US ban due to national security concerns, views Musk as a possible link to the incoming administration, the report said.

BROKER

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  UBS - Upgraded the 'Big 6' US technology stocks to Overweight from Neutral; Upgraded US Utilities sector to Overweight from Neutral; Downgraded US Consumer Discretionary sector (excluding AMZN) to Neutral from Overweight.

TECH:

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  Global Semiconductor Industry - The global semiconductor manufacturing industry showed strong growth in Q3 2024, with all key indicators experiencing positive sequential increases for the first time in two years, according to a Semi report cited by DigiTimes. The growth is attributed to higher demand across various sectors, including automotive and consumer electronics.


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  Intel (INTC) - The Biden administration reduced Intel's CHIPS Act grant from USD 8.5bln to under USD 8bln due to investment delays and business struggles, NYT reports. The decision reflects concerns about Intel meeting domestic manufacturing goals and customer demand. Intel, facing declining revenue and job cuts, has also secured a USD 3bln military chip contract, the report adds.


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  Lattice Semiconductor (LSCC), Intel (INTC) - Lattice Semiconductor is considering a bid for Intel's Altera unit, which could challenge Intel’s plans to sell a minority stake in the business, Bloomberg reports. Lattice is seeking private equity backing for the offer. Altera's chips are primarily used in telecom networks.


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  AMD (AMD) - AMD is reportedly looking to enter the mobile phone chip market, with new products expected to be produced using TSMC’s 3nm process, according to China's UDN. This move is anticipated to help keep TSMC’s (TSM) 3nm capacity utilisation at "super full" levels, with orders potentially extending until the second half of 2026. Although companies have declined to comment on these rumours, UDN says industry speculation suggests that AMD’s upcoming APU acceleration processors, which have made inroads into AI server applications, could also be adapted for mobile devices.


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  Apple (AAPL) - Apple CEO Tim Cook is visiting China for a suppliers' conference, marking his third visit this year, Bloomberg notes. The visit coincides with a meeting between Chinese Premier Li Qiang and foreign CEOs, as companies, including Apple, brace for potential trade disruptions due to President-elect Trump's threats of increased tariffs on Chinese goods. Separately, India's antitrust body rejected Apple’s request to delay a report that concluded the company had violated competition laws, Reuters reports; the decision comes after an internal order from the regulator. Elsewhere, Apple may shift orders of A20 Pro chips to Intel (INTC) from TSMC, noting the chips would be for the iPhone 18 series. Lastly, Apple has postponed a larger-than-usual number of iOS 19 features to spring 2026, when iOS 19.4 is set to debut, Bloomberg reports.


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  Nvidia (NVDA) - Positive mention in Barron's; the newspaper said investors should ignore Nvidia's stock fluctuations after strong earnings; despite initial drops, driven by profit-taking, the company's AI growth story remains robust, and long-term prospects are strong, warranting focus on the bigger picture, it said.


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  Nvidia (NVDA), Samsung (SSNLF) - Nvidia CEO Jensen Huang said it is working swiftly to certify Samsung’s AI memory chips, Bloomberg reports; the effort highlights the increasing demand for high-performance memory solutions in AI technologies. The DigiTimes reports that Samsung's availability of HBM3E memory for Nvidia's upcoming Blackwell chips remains uncertain, although Nvidia's CEO thanked key partners like TSMC (TSM) and SK Hynix (HXSCL) for their role in the Blackwell development, Samsung's HBM3E production is still pending, affecting Nvidia’s supply chain plans.


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  Sony Group (SONY) - Sony is reportedly developing a portable console to play PlayStation 5 games, aiming to compete with Nintendo's (NTDOY) Switch and Microsoft's (MSFT) mobile gaming prototypes, Bloomberg reports. While still in the early stages, the product could be years from release, and Sony may ultimately decide not to proceed with its launch.


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  Toast (TOST) - Director Susan Chapman-Hughes sold 15,285 shares on November 20th at USD 42.114/shr.


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  Corning (GLW) - EU said Corning's concessions in the antitrust probe will remain in force worldwide for nine years; EU offers to drop purchase requirements made to mobile phone manufacturers. Concessions include scrapping all exclusive clauses in its deals with mobile phone makers and raw glass process companies.


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  IBM (IBM) - To accelerate partnership with Amazon Web Services (AMZN) to scale responsible generative AI.


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  Microsoft (MSFT), Verizon (VZ), AT&T (T) - The US government launched an investigation into the Salt Typhoon hack after MSFTR alerted it, and others about anomalies, NYT reports. The report notes, that the hackers who are closely linked to China's Ministry of State Security, lurked undetected inside the networks of the biggest American telecommunications firms for more than a year and got a nearly complete list of phone numbers that the Justice Department monitors in its "lawful intercept" system.


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  Microstrategy (MSTR) - Bought USD 5.4bln in Bitcoin over the past week, according to a filing. Meanwhile, received a positive mention from Barron's.

FINANCIALS:

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  US Financial Stability - According to a Federal Reserve survey, the US government's rising debt load is now considered the biggest financial stability risk, surpassing inflation concerns, Bloomberg reports. Over half of the survey's respondents expressed concerns about fiscal debt sustainability, highlighting potential economic challenges like crowding out private investment and limiting policy responses during downturns. The report noted that while the banking sector remains stable, with strong capital ratios and high liquidity, financial markets show concerns; asset valuations are still high, liquidity is generally low, and hedge funds have near-record levels of leverage. Additionally, life insurers are experiencing declining liquidity in their assets, partly due to increased reliance on alternative investments.


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  Goldman Sachs (GS) - Goldman Sachs is set to write off nearly USD 900mln after Swedish battery maker Northvolt filed for Chapter 11 bankruptcy, FT reports.


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  UniCredit SpA (UNCRY), Banco BPM SpA (BNNCY) - UniCredit has launched a USD 10.57bln all-stock bid to acquire Banco BPM, combining Italy’s second and third-largest banks, Reuters reports. The offer of 0.175 UniCredit shares per BPM share represents a slight premium. CEO Orcel highlighted the need for stronger European banks to boost competitiveness against global economic blocs.


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  Berkshire Hathaway - Chairman Warren Buffett will convert 1.6k A shares into 2.4mln B shares.


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  Ally Financial (ALLY) - Ally Financial is considering selling its credit card division, which it re-entered through acquisition three years ago via a USD 750mln acquisition of Fair Square Financial. The Detroit-based auto lender has engaged a financial adviser to explore potential buyers for the unit, Bloomberg reports. The move reflects a strategic reassessment of its business portfolio.


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  Blackstone (BX) - Strikes USD 3.5bln deal with EQT (EQT), via FT. "The $1.1tn investment manager’s fast-growing credit and insurance arm will finance the $3.5bn transaction, drawing largely on insurance capital, according to people familiar with the matter".


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  Crypto - Commerce Secretary nominee and head of Cantor Fitzgerald Howard Lutnick is in talks with Tether Holdings to strengthen financial ties, including a potential USD 2bln Bitcoin (BTC) lending project, Bloomberg reports. Tether, known for its stablecoin, is a major client of Cantor's custody services.


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  Robinhood (HOOD) - Upgraded to 'Overweight' from 'Equal Weight' at Morgan Stanley with a USD 55 PT (prev. 24). The bank notes the Co. is "clearly executing" on plans to broaden its offerings to capture more wallet share and expand its total addressable market, notably in the recently announced acquisition of a registered investment and advisor custody platform. Morgan Stanley sees more "room to run" given the Co.'s discounted valuation, expanding pace of new initiatives, and animal spirits post-election that it thinks will likely continue into 2025. Meanwhile, Chief Legal Officer Dan Gallagher has withdrawn from consideration for the role of SEC chair under the incoming Trump administration. The former SEC commissioner cited concerns over public officials' investment restrictions.


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  Wells Fargo (WFC) - Filed to sell USD-denominated 11yr notes.

CONSUMER DISCRETIONARY

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  Tesla (TSLA) - Tesla introduced a limited-time RMB 10,000 discount for two Model Y variants in China, valid for orders made by December 31st, CnEVPost reports. The 5-year, 0% financing scheme has also been extended. These incentives may precede a Model Y refresh, as spy shots and reports suggest production of updated versions is imminent, the report adds. Separately, a US judge ruled that Tesla must face part of a lawsuit regarding its "phantom braking" issue, where its vehicles' collision monitoring system falsely triggers automatic braking, Reuters reports. The class action claims Tesla concealed this defect from customers, potentially affecting insurance premiums. Some claims were dismissed, but the case will proceed on the safety defect issue. Elsewhere, the door to Tesla's giant casting furnace in its Texas plant, which melts metal to be moulded into Model Y parts, wouldn't shut, spewing toxins into the air and raising temperatures for workers on the floor to as high as 100 degrees, WSJ reports. On another note, Tesla has reached a "conditional" settlement in its 2020 lawsuit accusing Rivian (RIVN) of poaching its employees in order to steal EV trade secrets, Bloomberg reports.


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  Bath & Body Works (BBWI) Q3 2024 (USD): EPS 0.49 (exp. 0.47), revenue 1.61bln (exp. 1.58bln). Sees Q4 EPS at 1.94-2.07 (exp. 1.97). Raised FY24 adj. EPS view to 3.15-3.28 (exp. 3.20, prev. 3.06-3.26).


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  European Auto Names - EU Trade Committee Chair Lange says it is close to an agreement with China to abolish the EV import tariffs, NTV reports. China could commit to offering EVs to the EU at a minimum price, the report adds.


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  Airbnb (ABNB) - Airbnb is launching its long-term rental marketplace in the UK, FT reports. The initiative allows tenants to rent out their homes for short-term stays in partnership with Greystar, addressing criticisms of Airbnb's role in driving up housing costs. Elsewhere, Swiss voters rejected a change in the law giving landlords more powers to restrict subletting by tenants, via prelim results of a referendum on Sunday that scrutinised Airbnb's role in the rental market.


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  Walmart (WMT) - Walmart's Health and Wellness division head, Brian Setzer, is leaving after less than two years to pursue an opportunity in Nashville, Reuters reports. Kyle Kinnard will succeed him. The news follows Walmart's recent closure of its US health clinics, with a renewed focus on expanding pharmacy and vision care operations.


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  Macy (M) Q3 prelim. update: Identified an issue relating to delivery expenses in one of its accrual accounts, delayed earnings release and Q3 call to complete an investigation. November comparable sales are trending ahead of Q3 levels across nameplates. An Individual made erroneous accounting accrual entries to hide USD 132-154mln of delivery expenses from Q4-2021 to November 2nd 2024; Individual is no longer employed by Macy's.


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  Carrefour SA (CRRFY) - Brazilian meatpackers, including Minerva Foods and Masterboi, have suspended sales to Carrefour in response to the retailer's decision to stop selling meat produced in Mercosur nations in its French stores, Bloomberg reports. The move follows Carrefour's policy change and has led to tensions with major suppliers.


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  Unilever (UL) - Unilever CEO Hein Schumacher confirmed the company will slim down its food division but will not spin it off, FT reports. The group aims to prune around GBP 1bln in food sales, focusing on key brands. CEO also confirmed plans to list Unilever’s ice cream unit via an IPO. He emphasised focusing on high-growth markets and premium brands, as well as targeting cost savings of EUR 800mln by next year.


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  Retail Sector - Positive mention in Barron's; the newspaper said that the retail sector is poised for a strong holiday season, as retailers increase their earnings guidance amid optimistic economic forecasts. US consumers are in solid financial shape heading into the peak shopping period, signalling a promising outlook for sales. Barron's suggests potential bargains among certain retail stocks during this period, and specifically mentioned Abercrombie & Fitch (ANF), DICK'S Sporting Goods (DKS), Nordstrom (JWN), Ralph Lauren (RL), Tapestry (TPR).
  

HEALTHCARE

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  BridgeBio Pharma (BBIO) - BridgeBio Pharma's Attruby, an oral stabilizer of transthyretin (TTR), received FDA approval for treating ATTR-CM, reducing cardiovascular death and hospitalisations. The approval, based on Phase 3 ATTRibute-CM trial results, highlights Attruby's near-complete TTR stabilisation. BridgeBio is seeking European approval and partnering with Bayer for European commercialisation.


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  Cassava Sciences (SAVA) - Announced Phase 3 ReThink-ALZ data did not meet co-primary endpoints; failed to meet all primary, secondary and exploratory endpoints, discontinuation of second Phase 3 trial and Open Label Extension study, and no significant reduction in cognitive or functional decline versus placebo.


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  Merck (MRK) - Announced pivotal Phase 3 Zenith trial evaluating Winrevair met the primary endpoint at interim analysis; study to be stopped early and participants will be offered the opportunity to receive Winrevair. Separately, Merck advised shareholders to reject TRC Capital’s unsolicited "mini-tender" offer to buy 1mln shares at USD 96.38/shr — below recent prices. Merck emphasised it is unaffiliated with TRC Capital, whose mini-tender offers lack investor protections required for larger transactions under US securities laws.


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  Novartis (NVS) - Highlights new 96-week results from Phase III Scemblix ASC4FIRST trial at ASH and late-breaking analysis from Phase III Kisqali NATALEE trial at SABCS.


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  Roche (RHBBY) - Received FDA approval for the first companion diagnostic to identify patients with biliary tract cancer eligible for HER2-targeted treatment with Ziihera.


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  Amgen (AMGN), Eli Lilly (LLY), Novo Nordisk (NVO) - Positive mention in Barron's; the newspaper recommends buying stocks of anti-obesity drugmakers Eli Lilly, Novo Nordisk, and Amgen after recent declines driven by concerns over a potential Robert F. Kennedy Jr.-led Department of Health and Human Services. It said that these concerns seem exaggerated, presenting a buying opportunity.


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  Novo Nordisk (NVO), Catalent (CTLT) - Novo Holdings is reportedly to receive EU antitrust approval for the purchase of Catalent, according to Reuters.


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  Intellia Therapeutics (NTLA) - Announced FDA granted RMAT designation, potentially expediting the development/review process; Phase 1 data showed promising results with rapid, deep, and durable TTR reduction.

COMMUNICATIONS

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  Alphabet (GOOG) - Constructive mention in Barron's; the newspaper said that despite US government efforts to break up Google, including selling Chrome, Barron's believes Alphabet stock could still rise by 50%; the rise of generative AI, like Google's Gemini, may boost revenue, with the breakup concerns already priced in, it said. The US DoJ will make its final argument on Monday that Google illegally dominated online advertising technology, seeking a second antitrust win against the Co.


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  Meta Platforms (META) - The US Supreme Court dismissed Facebook's appeal, allowing a securities fraud lawsuit to proceed, Reuters reports. The lawsuit, related to Facebook's failure to disclose the Cambridge Analytica data breach, claims the company misled investors. This decision leaves a lower court's ruling intact, permitting further litigation against the social media giant. Separately, Bluesky is capitalising on the mass departure of users from Elon Musk's X following Donald Trump's election, FT reports. Since election day, app usage of Bluesky in the US and UK increased by almost 300% to 3.5mln daily users, the Times said. Post-election day, Threads is only 1.5 times larger than its rival.


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  Pinterest (PINS) - Positive mention in Barron's; the newspaper suggests Pinterest's stock is a strong buy after a 15% fall; despite disappointing Q3 guidance, the company's history of under-promising and overdelivering, along with innovations, should support growth and competitiveness, it said.


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  ITV Plc (ITVPY) - ITV is attracting takeover interest after a period of share price weakness, with suitors like CVC Capital Partners and France's Groupe TF1 exploring potential offers, Sky News reports. ITV’s production arm, ITV Studios, could be sold separately, with speculated bids exceeding the current company value. ITV is also considering a demerger of its broadcasting and production units. Despite challenges, ITV's strategic shift towards digital and production is seen as positive for its long-term prospects, the report added.


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  Comcast (CMCSA), Paramount Global (PARA) - Weekend box office saw Comcast's "Wicked" dominating with a projected USD 117mln opening, making it the third-biggest debut of 2024. Paramount's "Gladiator II" follows with a strong USD 60mln, marking a personal best for director Ridley Scott, Variety reports.

INDUSTRIALS

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  Lockheed Martin Corp (LMT) - Upcoming co-head of the new Department of Government Efficiency Elon Musk called out the F-35 stealth fighter on Sunday while endorsing drones over jets piloted by humans. On X, Musk captioned on a video of a synchronised drone swarm flying in elaborate formations "Meanwhile, some idiots are still building manned fighter jets like the F-35". Separately, Lockheed Martin secured a USD 869.95mln US Navy contract for F-35 Lot 20 production support. The project is expected to conclude by May 2031.


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  RTX Corp. (RTX) - RTX received a USD 439.1mln contract modification for FY25 Evolved Seasparrow Missile assemblies, with work due by June 2029.


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  Boeing (BA) - Boeing was awarded a USD 129.2mln contract for the F-15 Japan Super Interceptor programme, involving engineering changes for the Japan Air Self-Defense Force. Work is due by January 2030.


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  Rocket Lab (RKLB) - The US Commerce Department said it's finalising nearly USD 60mln in government subsidies for BAE Systems to build chips in jets and satellites, and for Rocket Lab to build compound semiconductors used in satellites and spacecraft. Rocket Lab to receive USD 23.9mln.


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  DHL (DHL GY) - One of the Co's cargo plans, a Boeing (BA) 737-400, crashed near Vilnius airport, Lithuania on Monday.

MATERIALS

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  Rio Tinto (RIO) - Rio Tinto has lifted the force majeure on its alumina exports from the Gladstone refineries in Australia. The company had previously invoked the force majeure in May due to a natural gas supply disruption, but operations have now returned to near normal, according to sources cited by Bloomberg.


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  Anglo American (NGLOY) - Anglo is to sell its coal mines within Australia to Peabody for up to USD 3.8bln. Transaction expected to close by Q3 2025.


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  Summit Materials (SUM) - Quikrete agrees to buy Summit Materials for USD 52.50/shr, a USD 9.2bln deal, via WSJ.


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  Newmont (NEM) - Announced agreement for the sale of Éléonore for USD 795mln in cash; Transaction expected to close in Q1 2025, total gross proceeds expected up to USD 3.6bln.

ENERGY

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  ONEOK (OKE), EnLink Midstream (ENLC) - ONEOK announced an all-stock acquisition of the remaining shares of EnLink Midstream for USD 4.3bln, increasing its footprint in the Permian Basin. This follows a previous USD 3.3bln purchase of a 43% stake in EnLink. The deal values EnLink at around USD 7.6bln, with a 5% premium to its recent share price.


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  Peabody Energy Corp (BTU)- Anglo American has agreed to sell its remaining Australian steelmaking coal mines to Peabody Energy for up to USD 3.78bln in cash.

UTILITIES

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  Chesapeake (CPK) - Chesapeake launched a USD 100mln at-the-market equity offering programme; proceeds will fund general corporate purposes, including capital projects, debt repayment, acquisitions, and working capital.


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  Ameren Corporation (AEE) - CFO Michael Moehn sold 6,500 shares on November 20th at USD 92.15/shr.

25 Nov 2024 - 14:07- EquitiesExclusive- Source: Newsquawk