US EARLY MORNING: US equity futures are flat ahead of ADP jobs data, and a second look at GDP in Q2

TODAY’S AGENDA:

• An interactive calendar can be accessed here; a pdf version can be downloaded here.


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  EUROPEAN DAY AHEAD: The morning will see German regions reporting inflation metrics ahead of the aggregated national data later in the afternoon; thus far, the NRW region saw annual inflation tick up, in contrast to expectations for the mainland (data released early afternoon), where the annual figure is expected to cool to 6.0% from 6.3%. Elsewhere, the BoE's monthly credit and money supply stats will be out in the morning, and traders will also be watching the EU sentiment indicators due. On the speakers' front, ECB's Centeno will appear at a markets forum event, while Riksbank's Bremen will appear on a panel discussion on inflation. Germany and Italy will be bringing supply to the market today.


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  US DAY AHEAD: The ADP's jobs data will provide the customary preview for the more widely followed BLS jobs data due Friday; the expectation is for a cooling in the rate of job additions; analysts note that the ADP recently has had little predictive power when it comes to forecasting the NFP data. A second look at US GDP in Q2 will be out before the open, where attention will be on the inflation components, ahead of the PCE report due later in the week. Advanced goods trade balance will be released at the same time. On the earnings slate, CRM is the notable company reporting today.


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  ENERGY: API data reportedly showed US crude stocks drawing down by -11.5mln (exp. -2.9mln), Cushing stocks -2.2mln, gasoline inventories posting a surprise build +1.4mln (exp. -1.4mln), while distillate stocks rose by more than expected at +2.5mln (exp. +0.1mln); the more widely-followed DoE data will be published on Wednesday.

EQUITY NEWS:

TECH:

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  Apple (AAPL) - Citi's analysts maintain a Buy rating on Apple, and a USD 240 PT, stating that it was optimistic about the upcoming September 12th event, where iPhone 15 and a new Apple Watch might be revealed. Expectations include major upgrades in hardware, USB-C transition, improved camera, and higher prices for Pro models.


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  Hewlett Packard Enterprise (HPE) - Shares slipped 1.1% afterhours after it sees Q4 sales below expectations. Q3 adj. EPS 0.49 (exp. 0.47), Q3 revenue USD 7.00bln (exp. 6.99bln), Q3 gross margin 35.9% (exp. 35.6%). Sees Q4 adj. EPS between 0.48-0.52 (exp. 0.50), and Q4 revenue between USD 7.2-7.5bln (exp. 7.44bln). For the FY, raises its adj. EPS outlook to between 2.11-2.15 (prev. 2.06-2.14, exp. 2.11), and sees revenue adj. for currency up +4-6% (exp. +4.9%).


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  HP Inc (HPQ) - Shares dropped by over 10% afterhours following results, where it trimmed its outlook for the FY. Q2 adj. EPS 0.86 (exp. 0.86), Q2 revenue USD 13.20bln (exp. 13.37bln). Sees Q4 adj. EPS between 0.85-0.97 (exp. 0.94). Lowers FY adj. EPS outlook to between 3.23-3.35 (prev. saw 3.30-3.50, exp. 3.34), and sees FY FCF at 3bln (prev. saw 3-3.5bln, exp. 3.43bln).


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  AI Semis - China is exploring ways to make its own AI memory chips despite US sanctions, SCMP reports. China’s top DRAM maker, ChangXin Memory Technologies, is the country’s best hope for specialist chips, but it may take up to four years to deliver products, the newspaper added.


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  Alphabet (GOOG) - Google Cloud's Duet AI is expanding its capabilities to provide AI assistance across various services, aiding developers, operators, data experts, and cybersecurity personnel.


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  Ambarella (AMBA) - Tumbled 16% after publication of its results, where soft guidance offset the strength of the current quarter. Q2 adj. EPS -0.15 (exp. -0.20), Q2 revenue USD 62.1mln (exp. 62mln). Sees Q3 revenue around 50mln +/- 4% (exp. 67.6mln).


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  Box (BOX) - Slid 9% after results, and soft consensus for Q3. Q2 adj. EPS 0.36 (exp. 0.35), Q2 revenue USD 261.4mln (exp. 261.1mln). Boosts stock buyback programme by USD 100mln. Q3 adj. EPS expected between USD 0.37-0.38 (exp. 0.39), and Q3 revenue seen between USD 261-263mln (exp. 265.6mln). For the FY24, BOX narrowed its adjusted EPS outlook to between 1.46-1.50 (exp. 1.49, prev. guifed between 1.44-1.50), and lowered its FY24 revenue outlook to between 1.04-1.044bln (exp. 1.05bln, prev. guided between 1.045B-1.055bln (exp. 1.05bln).


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  Avnet (AVT) - Avnet boosts quarterly dividend +7% to 0.31/shr, follows record EPS performance in FY23 fiscal year and is a reflection of its confidence in its financial position.


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  nCino (NCNO) - Q2 EPS 0.09 (exp. 0.07), Q2 revenue USD 117.2mln (exp. 115mln). Exec said that with the liquidity crisis in the US banking industry largely behind us, and financial institutions around the world focused on improving their operational efficiency and customer experience, looks for the momentum it saw in Q2 to continue. Sees Q3 EPS between 0.10-0.12 (exp. 0.11), and sees Q3 revenue between USD 120-121mln (exp. 121.4mln). For the FY24, sees EPS between 0.38-0.41 (exp. 0.38), and sees FY revenue between USD 475-478.5mln (exp. 476.8mln).


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  Nano Dimension (NNDM) - Glass Lewis recommends Nano Dimension shareholders vote for the company's nominees, not Murchinson's, at the upcoming Annual General Meeting. Nano Dimension welcomes the support.

CONSUMER:

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  Toyota (TM) - Toyota parent-only July global sales +7.8% Y/Y; US sales +8.1% Y/Y; China sales -15.4% Y/Y. The automaker plans Sep-Nov global output increase of +10% Y/Y to around 2.74mln vehicles, and sees domestic production increasing 26% to 940k vehicles, according to Mid-Japan economic newspaper. Separately, Toyota resumes production at 12 of its 14 plants in Japan, the remaining two are expected to resume by the end of Wednesday, Nikkei reports.


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  Amazon (AMZN) - US FDA has sent Amazon its third warning in a year about selling "unapproved" drugs on its site, FT reports. The drugs, like those for treating skin condition molluscum contagiosum, were marketed incorrectly, especially for children. The FDA wants Amazon to fix this or face legal action.


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  PVH (PVH) - PVH gained 2.2% in afterhours trading following publication of Q2 results which topped guidance, and it lifted its FY outlook. Q2 adj. EPS 1.98 (exp. 1.75), Q2 revenue USD 2.21bln (exp. 2.19bln). Exec noted that it saw another strong quarter across both Calvin Klein and TOMMY HILFIGER driven by the disciplined execution of its long-term growth plan, adding that it was continuing to gain traction. Sees FY adj. EPS between 10.35 (prev. saw 10.00, exp. 10.04); boosts FY planned stock repurchases to up to 400mln.


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  Sysco (SYY) - Sysco appoints Greg D. Bertrand (currently Executive Vice President, US Foodservice Operations) as its Executive Vice President, Global Chief Operating Officer, effective September 1st.


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  Lowe's (LOW) - Executive VP of Stores Joseph Michael McFarland sold 4,500 shares on August 28th at USD 222.53/shr.

COMMUNICATIONS:

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  Sirius XM (SIRI) - CEO Jennifer Witz purchased 250K shares on August 28th for a total USD 1.03mln.


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  Netflix (NFLX) -  Announced new mobile games added in August, including "Samurai Shodown," "LEGO Legacy," "WrestleQuest," and "Cut the Rope Daily." These games, plus 70 others, are free for members with no ads or in-app purchases.

FINANCIALS:

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  Goldman Sachs (GS) - Goldman Sachs used a fund backed by China to purchase US and UK companies, focusing on tech and security firms, and including one with ties to British government cyber security, FT reports. The fund was created in 2017 with China's investment. Despite tensions between the West and China, Goldman continued the fund's activities.


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  Citigroup (C) - Citi is to pay USD 2.9mln to settle SEC charges of flawed accounting processes in its broker's underwriting of securities offerings, Bloomberg reports. The bank lacked proper records and procedures for estimating expenses from 2009-2019. The settlement doesn't admit or deny the allegations.


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  Crypto - Grayscale Investments Tuesday won a legal victory against the SEC to convert its Bitcoin trust into an ETF, however, Bloomberg says that this does not guarantee Grayscale will be the first to launch a US Bitcoin ETF, as the SEC could still appeal, restart the process, or allow multiple issuers to launch simultaneously.

ENERGY:

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  Energy Inventories - API data reportedly showed US crude stocks drawing down by -11.5mln (exp. -2.9mln), Cushing stocks -2.2mln, gasoline inventories posting a surprise build +1.4mln (exp. -1.4mln), while distillate stocks rose by more than expected at +2.5mln (exp. +0.1mln); the more widely-followed DoE data will be published on Wednesday.

INDUSTRIALS:

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  AAR Corp. (AIR), Moog (MOG-B) - AAR signed two multi-year commercial agreements with Moog, the first steps in a new strategic relationship that allows for potential future expansion of the scope of services provided. Under the first agreement, AAR will distribute Moog products applicable to mature aircraft platforms to customers globally. The second agreement will enable AAR and Moog to perform reciprocal component repair services.

HEALTHCARE:

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  Centene (CNC) - US health insurer Centene is selling its UK GP clinics and private hospital group, signaling the end of its British healthcare expansion plans, FT reports. The move comes days after Centene announced a USD 1.2bln sale of its Circle/BMI UK hospital chain. Centene aimed to integrate public GP services with its hospitals but is now divesting from this strategy.

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