US EARLY MORNING: Equity futures are slightly firmer, Treasuries are rallying on dovish Fedspeak and catch-up with global peers after Monday's haven bid

US PRE-MARKET: US equity futures are trading a little higher. The tone has been helped by dovish Fed commentary, where officials are taking note of the recent rise in yields along the long-end of the Treasury curve, arguing that this helps the Fed’s tightening efforts, and these moves will be taken into account when deliberating on future policy moves. Though the Fed’s forecasts still see one more rate hike this year, many analysts – as well as market pricing – suggest that the Fed is already at terminal, and commentary in this vein helps bolster that argument. Treasury yields are solidly lower across the curve, gapping down on the cash reopen as the complex plays catch-up to Monday’s haven-bid after the Israel-Hamas conflict broke out, having been closed for Colombus Day; yields have been drifting off lows, however. The Dollar Index is a little above neutral. Today’s focus will be on another round of Fedspeak, while the NY Fed’s Consumer Inflation Expectations survey will help set the tone going into this week’s CPI and PPI releases.

TODAY’S AGENDA:

• The European data release slate is thin, with only Italian industrial output of note. ECB President Lagarde will deliver remarks on systemic shocks at the IMF/World Bank meetings. The US day sees the release of the NFIB’s business optimism index, RedBook sales data for the week of October 7th, Wholesale sales data for August. Perhaps most attention will be on the NY Fed’s Survey of consumer expectations, which will set the tone ahead of the PPI and CPI releases later this week. On the speakers front, Fed Governor Waller (voter), Fed’s Kashkari (voter) and 2024 voters Bostic and Daly are due to speak. Our interactive calendar can be accessed here; a pdf version can be accessed here.

EQUITY NEWS:

INDICES:

• 
  S&P Midcap 400, Hyatt Hotels (H), National Instruments Corp (NATI) - S&P Dow Jones Indices said Hyatt Hotels (H) will replace National Instruments Corp (NATI) in the S&P Midcap 400 prior to the open on October 12th.

COMMUNICATIONS:

• 
  Disney (DIS) - Activist investor Nelson Peltz plans to challenge Disney's board again, just 10 months after Disney addressed his concerns, Reuters reports. Disney's stock has since dropped by 30%, so Peltz may seek multiple board seats, including one for himself. His Trian Fund Management owns over USD 2.5bln worth of Disney shares, making it one of the company's major investors.


• 
  Activision Blizzard (ATVI), Microsoft (MSFT) - Activision Blizzard won't add "Call of Duty: Modern Warfare III" or "Diablo IV" to Xbox Game Pass this year, but it plans to start doing so after its deal with Microsoft has been approved, likely in the next year.


• 
  Hollywood - The Writers Guild of America said writers have voted overwhelmingly in favour of a new three-year contract with major entertainment studios, ending a five-month labour dispute. Over 8,500 writers participated in the vote, with 99% approving the contract.

TECH:

• 
  PC Shipments - Global PC shipments in Q3 dropped 9% Y/Y, Gartner said, the eighth consecutive decline. But Gartner expects growth to resume in Q4. Education market demand boosted Q3 shipments, but weak enterprise demand offset some growth. Gartner predicts that the PC market will improve by the end of 2023, driven by Windows 11 upgrades and consumer PC refresh cycles, and projects 4.9% growth in 2024.


• 
  Unity (U) - John Riccitiello is retiring as the CEO, Chairman, and board member of Unity. James M. Whitehurst appointed interim CEO, Roelof Botha is the new Chairman. U will begin a search for a permanent CEO. Unity affirms Q3 guidance.


• 
  PagerDuty (PD) - Intends to offer USD 350mln of convertible senior notes due 2028 in a private placement, subject to market conditions and other factors.


• 
  LG Electronics (LGEIY) - Q3 prelim operating profit KRW 996.7bln (exp. 839bln), sales KRW 20.7tln (exp. 20.6tln).

CONSUMER:

• 
  MGM Resorts (MGM), Caesars (CZR) - Thousands of Las Vegas workers plan to picket MGM Resorts and Caesars Entertainment casinos on Thursday. They are demanding a better five-year contract with improved pay and benefits, as casino operators have been making record profits. Strike threats have prompted deals in the past, but these negotiations are progressing slowly.


• 
  Stellantis (STLA) - The automaker has temporarily laid off 520 workers at the Trenton Engine Complex and 50 at the Kokomo Casting plant in Indiana, due to storage issues as a consequence of the UAW strike action at the Toledo Assembly Complex.


• 
  Honda (HMC) - China September vehicle sales +8.5% Y/Y to 109.7k units.

FINANCIALS:

• 
  Truist Financial (TFC) - Truist Financial is discussing selling its insurance brokerage unit to private equity firm Stone Point for approximately USD 10bln, Semafor reports. Stone Point already bought a 20% stake in Truist's insurance unit in February. The deal is not finalised and depends on Stone Point securing enough debt.

MATERIALS:

• 
  Steel Names - The EU is planning to launch anti-subsidy investigations against Chinese steelmakers during a summit with the US, part of joint efforts to counter cheap Chinese steel imports. Washington requested the EU's action to avoid the reintroduction of tariffs on EU steel imposed by former President Trump, FT reports.

INDUSTRIALS:

• 
  Fluor Corporation (FLR) - Fluor's contract with the US Department of Energy's National Nuclear Security Administration has been extended for five years until 2028. The contract involves managing and operating the Naval Nuclear Laboratory to support the Naval Nuclear Propulsion Programme.


• 
  PGT Innovations (PGTI) - PGT Innovations rejected a USD 1.9bln acquisition offer from Miter Brands, a rival backed by Koch Industries. PGT's board found the USD 33/shr offer to be insufficient, Reuters reports.


• 
  A.O. Smith Corporation (AOS) - Board approved +7% increase in its quarterly cash dividend, taking it to USD 0.32/shr.

ENERGY:

• 
  Euronav (EURN), Frontline (FRO) - Euronav major shareholders CMB NV and Frontline plc agreed on a deal to resolve their strategic differences. CMB will buy Frontline's 26.12% stake in Euronav for USD 18.43/shr; Frontline will purchase 24 VLCC tankers from Euronav for USD 2.35bln. The transaction ends their arbitration action. After CMB's acquisition, it will own 49.05% of Euronav's shares and launch a mandatory public takeover offer for the remaining shares at the same price.

HEALTHCARE:

• 
  Kaiser Permanente (not listed) - A labour coalition of 75,000 healthcare workers gave Kaiser Permanente three more weeks to reach a contract deal before a potential second strike in November, Reuters reports. The dispute centres on worker demands for better pay and addressing staffing shortages and high turnover affecting patient care. Negotiations are set to resume after a break, with mediation efforts by the acting US Labor Secretary. Kaiser Permanente hasn't yet responded to the new strike deadline.

UTILITIES:

• 
  PG&E Corporation (PCG) - PG&E faces a USD 45mln fine from the California Public Utility Commission's Safety Division for its involvement in causing the state's second-largest wildfire, according to BBG.

10 Oct 2023 - 09:30- Fixed IncomeData- Source: Newsquawk