US EARLY MORNING: Index futures slightly higher with sentiment remaining constructive; JOLTs ahead; traders watching month-end, and end-of-week data (inflation/jobs)

US PREMARKETS: US equity futures are trading with slight gains as constructive global sentiment continues, with traders this week citing the boost from China's recent market-supportive measures. Yields are lower along the Treasury curve by between 2-3bps, with the 5s sector outperforming. The Dollar Index is flat. JOLTS data is the highlight today, and although it does not coincide with the reporting period for the more widely followed BLS data due Friday, Fed officials often cite the series as a gauge of labour market tightness. Month-end dynamics are also featuring in traders’ minds (Barclays suggests a 'strong' month-end buying signal of USD vs all majors, while for Treasury's, Barclays model suggests a +0.12yr extension), while traders will also be cognizant of the PCE inflation data and jobs report due at the tail-end of the week.

TODAY’S AGENDA:

• Our full interactive calendar can be accessed here; a pdf version can be found here.


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  EUROPE DAY AHEAD: In Europe, the data slate is thin; EMFX watchers will be watching the Hungarian National Bank’s rate decision, where it is expected to keep the Base Rate unchanged at 13.00%. Supply comes by way of a German 2028 BOBL. On the speakers’ front, Riksbank Deputy Governor Bunge will be making remarks today.


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  US DAY AHEAD: The US Day features JOLTS data for July, which are forecast to pare back to 9.47mln from 9.58mln, in a sign of a continuing easing in the labour market. Elsewhere, monthly house price data from the FHFA and Case-Shiller will be released, as well as the weekly RedBook data. Supply comes by way of a USD 36bln 7yr note sale. Fed’s Barr will be participating at a roundtable event. Today's major corporate earnings include NIO, PDD, CTLT, BBY, SJM, HPE and HPQ; our daily US earnings expectations note can be accessed here.


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  ENERGY: The API will report its gauge of energy inventories after the US close; this week, analysts look for headline crude stocks to draw down 2.9mln, distillates to post a build of 0.1mln, while gasoline stocks are expected to draw 1.4mln.

EQUITY NEWS:

TECH:

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  Micron (MU), Intel (INTC) - US Commerce Secretary Raimondo spoke with Chinese Commerce Minister Wang about worries regarding American companies like Intel and Micron, Reuters said. The two also discussed China's export restrictions on materials, and agreed to share export control information. The meeting aimed to address economic tensions and enhance communication between the two countries.


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  AI Stocks - Top tech CEOs like Tesla (TSLA) CEO Musk, Meta Platforms (META) chief Zuckerberg, Alphabet's (GOOG) Pichai, and Microsoft (MSFT) founder Bill Gates will attend a closed AI insight forum led by Senator Schumer on September 13th, Axios reports. The meeting aims to educate lawmakers on AI's impact and potential regulation, though doubts exist about industry readiness for government oversight.


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  Nvidia (NVDA) - After last week's strong quarterly earnings report, Nvidia's stock is trading at its lowest forward earnings multiple in eight months. Despite the stock's more than tripled value this year, it's trading at around 33 times expected earnings over the next year, down from over 46 a week ago, Reuters notes. Analysts predict strong revenue growth for Nvidia due to demand for its AI chips.

CONSUMER:

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  Amazon (AMZN) - Amazon is testing raising its free shipping minimum order size to USD 35.00 for non-Prime members from USD 25.00, CNBC reports. Prime members are unaffected. CEO Andy Jassy is cutting expenses due to slow sales, and CNBC said that this move could boost Prime sign-ups.


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  Toyota Motor (TM) - Toyota stopped production at 12 out of 14 factories in Japan due to a system glitch, not a cyberattack, preventing order processing for parts, Barron's reports. Later reports suggested that Toyota had extended the production suspension to all 14 plants in Japan, with reports adding that there was no timeline for recovery.


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  Lordstown Motors (RIDEQ), Foxconn (HNHPF) - Foxconn lost its attempt to remove Lordstown Motors from bankruptcy, Bloomberg reports. The EV maker can stay in Chapter 11 as it searches for new ownership. Lordstown faced cash shortages and employee issues, and now, it aims to repay creditors by selling the business.


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  Stellantis (STLA) - Chairman John Elkann is to step down, will be replaced by Jeroen Preller.

FINANCIALS:

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  Banks - US FDIC is set to propose heightened rules to ensure regional banks can be safely dissolved in times of stress. The FDIC will vote on five separate proposals at a meeting, all aimed at ensuring banks with over USD 100bln in assets are prepared for their own potential failures, and can be dissolved smoothly and quickly.


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  Goldman Sachs (GS) - Goldman Sachs is selling part of its wealth business to independent wealth manager Creative Planning. This is part of Goldman's strategy to focus on catering to ultra-rich clients and exit some businesses. The deal is expected to close in Q4, with the bank looking to invest in its core businesses using the proceeds.


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  BNY Mellon (BK), Commerzbank (CRZBY) - A US judge dismissed most of Commerzbank's lawsuit against BNY Mellon regarding over USD 1bln losses from toxic mortgages purchased before the 2008 financial crisis. The judge rejected most claims against BNY Mellon and dismissed all negligence claims, except for 13 out of the 100 certificates and notes involved.


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  Gam (GMHLY) - Gam reaches an agreement with NewGAMe and Rock Investment SAS to extend immediate short-term financing, confirms Liontrust (LIO LN) tender offer was unsuccessful.


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  Standard Chartered (SCBFY) - StanChart announces sale of its global aviation finance leasing business to Avilease for an initial cash consideration of USD 0.7bln.

ENERGY:

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  Chevron (CVX) - Workers at two major LNG plants in Australia run by Chevron will strike from September 7th due to pay and conditions disputes, BBC reports. These sites produce over 5% of global LNG, and fears of strikes have already raised gas prices in Europe. Workers at the Chevron's facilities plan work stoppages of as long as ten hours from next week, and will participate in rolling stoppages, bans and limitations, and have said that industrial action will escalate each week until Chevron agrees to bargain claims.


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  European Energy - France and Germany are clashing over whether/how they should be able to subsidise energy costs for their industries, Politico reports.


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  BP (BP) - BP will drill four exploratory NatGas wells in Egypt during Q4.


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  Shell's (SHEL) - Sinopec is reportedly uninterested in acquiring Shell's Singapore refinery and petchem facility.

INDUSTRIALS:

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  3M (MMM) - 3M agrees to pay USD 6.01bln to settle around 260,000 lawsuits from US military members claiming hearing loss due to their earplugs, according to Reuters. The settlement follows a failed attempt to move the lawsuits to bankruptcy court.


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  Norfolk Southern (NSC) - A technology glitch at Norfolk Southern railroad caused delays due to system outages, including positive train control and freight yard operations. The outage affected several systems, including customer portals. The railroad assured that it wasn't a cybersecurity incident and that they were working to resolve the problem.


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  Airbus (EADSY) - NTSB said to investigate the crash of an Airbus helicopter in Florida.

MATERIALS:

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  Rio Tinto (RIO) - RIO and First Quantum complete formation of a JV to unlock the La Granja copper project in Peru.

HEALTHCARE:

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  Catalent (CTLT) - Catalent is close to settling with activist investor Elliott, Reuters reports. The deal may add new directors and explore strategic options, including a potential sale. Elliott's push comes as Catalent's stock value has dropped, and it has faced operational challenges and management changes. CTLT is due to report quarterly earnings before open on Tuesday.


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  AstraZeneca (AZN) - New data from Fasenra and Tezspire trials demonstrate AstraZeneca biologics progress towards achieving remission in severe asthma.


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  Roche (RHHBY) - European Commission approves Roche's Evrysdi for babies under two months old with spinal muscular atrophy.

29 Aug 2023 - 09:30- Research Sheet- Source: Newsquawk