US EARLY MORNING: US equity futures are higher as traders return from the long weekend

US equity futures are trading higher by 0.5-0.8% as traders return from the long weekend. The Nasdaq-100 and Russell 2000 are outperforming, despite yields along the Treasury curve climbing by 6-8bps (most of the underperformance is in the short-end/belly). The Dollar Index is a little better than flat, while crude futures are mixed. Natgas prices are paring in Europe after news on Monday that leaders there are pushing for caps on gas prices too; any commentary will be eyed ahead of officials meeting on Friday to discuss energy. The docket for Tuesday is thin, with the ISM Services report the standout, as well as final S&P Global Services PMIs. Full Day Ahead here.

EQUITY NEWS:

INDEX:

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  S&P 500 - CoStar Group Inc. (CSGP) and Invitation Homes Inc. (INVH) will replace PVH Corp. (PVH) and PENN Entertainment Inc. (PENN) respectively in the S&P 500 on September 19th.


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  DAX - Siemens Energy (ENR GY) will replace HelloFresh (HFG GY) in the DAX Index; changes are effective September 19th.

ENERGY:

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  Nord Stream Pipeline - Russia has kept the Nord Stream 1 pipeline shut; it was expected to reopen on Saturday after "maintenance," but Russia claimed there was an oil leak in a turbine which prevented a restart.


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  Siemens Energy (ENR GY) - Gazprom Deputy CEO said Nord Stream 1 will not be launched until Siemens Energy repairs faulted equipment, according to Reuters. Siemens said it did not understand Gazprom's representations of the situation based on information provided to the US over the weekend, and said Gazprom's reasons did not constitute a technical reason for discontinuing the NS1 operation.


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  Sempra Energy (SRE) - President says the company is in talks with European firms on LNG supply and terminals.


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  ConocoPhillips (COP) - ConocoPhillips will provide natgas and manage a carbon capture and storage facility for a proposed US hydrogen gas project to be jointly developed with Japan's largest utility JERA, Reuters reports. The article said that the agreement to supply gas for hydrogen marked a new avenue for natgas producers, as several companies have lined up long-term supply contracts with LNG developers that supply utilities.

CHINA:

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  China Tariffs - US will keep in place tariffs on Chinese imports while it continues a statutory review, Nikkei reports, and the USTR said that it had received requests from stakeholders to maintain the tariffs imposed in 2018 and 2019.


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  Taiwan - US approves USD 1bln arms sales to Taiwan, WSJ reports; package includes naval missiles, air-to-air missiles and radar support.


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  China Tech - US is mulling moves that would restrict US investment in Chinese technology companies, Bloomberg reports; the investment curbs could come as an executive order in the coming months. BBG added that a separate action against TikTok is a possibility, and the Commerce Department may place further restrictions on chips used for artificial intelligence computing.


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  China Tech - UK is leaning toward restricting or blocking a Chinese company’s takeover of its biggest microchip factory, the Newport Wafer Fab, after agreeing to extend a probe into the purchase, Bloomberg reported. Unwinding the deal, more than a year after it was signed, would underscore an increasing crackdown on Chinese investment, BBG added.

TECH:

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  Semiconductors - The Biden administration has releases its plan for USD 50bln investment in chips, NYT reports; US will begin soliciting applications for the funding from companies no later than February, and it could begin disbursing money by next spring.


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  Apple Inc. (AAPL) - Apple's September 7th event – where it will launch the new iPhone 14, Watch Pro, AirPods – will place an amphasis on its 'Pro' product line, Bloomberg said.


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  Amazon.com, Inc. (AMZN), iRobot Corporation (IRBT) - FTC has begun an antitrust review of Amazon’s USD 1.7bln takeover of iRobot, and the companies are bracing for a lengthy investigation, Politico reports. The probe comes after the companies notified regulators  of the deal two weeks ago.


• 
  Aurora Innovation, Inc. (AUR), Microsoft Corporation (MSFT), Apple Inc. (AAPL) - Aurora CEO has reportedly laid out a range of options for the self-driving company to respond to worsening market conditions, including a possible sale to Apple or Microsoft, Bloomberg reports, adding that he also outlined cost cuts and measures including taking the company private, spinning off or selling assets, or even a small capital raise.


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  SK Hynix (HXSCL) - The chip maker plans to build a new chip plant in South Korea's Cheongju region, and intends for it to be completed by 2025.

COMMUNICATIONS:

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  Amazon.com, Inc. (AMZN) - The first episode of Amazon’s “The Lord of the Rings: The Rings of Power” streaming series attracted over 25mln global viewers in its first day, Amazon biggest ever debut for any show on its Prime Video streaming service, CNBC reports.


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  Comcast Corporation (CMCSA), Walt Disney Company (DIS) - Comcast executives expect Disney to stick to its agreement to acquire the remaining stake in Hulu, CNBC reports. The two have an existing deal in which Disney will acquire Comcast’s 33% stake as early as 2024. CNBC added that Comcast sees value in Hulu, and some execs believe it’s a better fit for NBCUniversal than Disney.


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  Meta Platforms, Inc. (META) - Meta to buy Lofelt, a German haptic-technology start-up, WSJ says. Deal comes as the FTC says the tech giant is trying to dominate the virtual-reality sector. Separately, Irish regulators confirm EUR 405mln fine against Meta's Instagram related to child users between 13-17 years old. Meta said it disagrees with how the fine was calculated, and intends to appeal.


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  Manchester United plc (MANU) – Manchester United owners, the Glazer family, who are under pressure from some fans to sell the club, have set a price tag of around GBP 3.75bln, Daily Mail reports, and that it could tempt interest from Dubai's sovereign wealth fund.

CONSUMER CYCLICALS:

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  Amazon.com, Inc. (AMZN) - Amazon is determined to reduce the size of its sprawling delivery operation amid slowing sales growth, and has abandoned dozens of existing and planned facilities around the US, according to MWPVL International Inc., which tracks Amazon’s real-estate footprint, Bloomberg reports.


• Starbucks Corporation (SBUX) - Mexican franchisee Alsea will invest around USD 225mln in coffee chain Starbucks by 2026 and would open 200 new Starbucks stores, Reuters reports.


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  Bed Bath & Beyond Inc. (BBBY) - Bed Bath & Beyond announced the passing of its CFO Gustavo Arnal. NY Post reported that Arnal was identified as the man who jumped to his death from the a Tribeca skyscraper over the weekend.


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  Caesars Entertainment Corporation (CZR) - Caesars announced the opening of two Caesars Sportsbook Locations, and a brand-new World Series of Poker Room in Louisiana.

CONSUMER STAPLES:

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  Procter & Gamble Company (PG) - P&G is testing the bounds of what consumers are willing to pay for high-end household products, WSJ said, in recent years raising prices for its detergents with little resistance from consumers, growing sales volume and gaining market share in the process. WSJ adds that in recent weeks, sales of premium detergents have been on the decline, industry data show, and consumers are increasingly picking up cheaper brands, the latest sign that shoppers are shifting how they spend money on essential items.


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  Target Corporation (TGT) - Positive mention in Barron's; the newspaper said Target stock was a buy, arguing that the retailer’s problems won’t last forever.


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  Imperial Brands PLC (IMBBY) - Positive mention in Barron's; the newspaper said tobacco was a trusty hedge against inflation, and Imperial Brands was a name to play.


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  Philip Morris International Inc. (PM), Swedish Match AB (SWMAY) - Philip Morris International is committed to getting Swedish Match deal done, Bloomberg reports, and is mulling lowering Swedish Match acceptance threshold; will decide in the coming weeks.


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  Bunzl (BZLFY) - The Times notes of vague takeover talks for the company, and says it is attracting interest, without providing further details.

HEALTH CARE:

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  CVS Health Corporation (CVS), Signify Health, Inc. (SGFY) - CVS is in advanced talks to acquire Signify Health for around USD 8bln, WSJ reports, appearing to have edged out competitors including Amazon and UnitedHealth.


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  Amazon.com, Inc. (AMZN), 1Life Healthcare, Inc. (ONEM) - FTC is investigating Amazon’s USD 3.9bln deal to buy 1Life Healthcare, WSJ reports. Both companies each received a request on Friday for additional information about the deal from the FTC.


• 
  Exelixis, Inc. (EXEL), Teva Pharmaceutical (TEVA) - Exelixis filed a complaint for patent infringement against Teva asserting infringement cabozantinib tablets; Exelixis seeks equitable relief, as well as an order that the effective date of any FDA approval of Teva’s ANDA would be a date no earlier than the expiration of its patent.


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  Pfizer Inc. (PFE), BioNTech SE (BNTX) - Its updated Covid booster has been approved in the UK.


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  Regeneron Pharmaceuticals, Inc. (REGN) - Late-breaking Dupixent data at ERS 2022 show consistent efficacy and safety profile for up to two years in children Aged 6-11 years old with moderate-to-severe asthma.


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  Illumina, Inc. (ILMN) - Reportedly in talks with EU antitrust regulators to divest Grail ahead of EU veto on deal, sources cited by Reuters said; EU’s antitrust chief will hold a press conference at 12:00BST/07:00EDT, and is expected to announce a veto of the deal. 

INDUSTRIALS:

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  Boeing Company (BA) - Israel will ban Boeing 747 and similar aircraft with four engines to reduce noise and air pollution, Reuters reports. Authorities said that it had already told airlines they would not be able to land large airplanes at Ben Gurion Airport near Tel Aviv as of the 2023 summer season.


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  Automakers - The discounts on cars and trucks that US dealerships traditionally offer over holiday weekends have vanished as tight supply has turbocharged pricing enough to help fuel inflation, FT reports, adding that supply problems mean balloons, barbecues and bargains to clear stock are a thing of the past.


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  Volkswagen (VWAGY) - The automaker has announced intentions to IPO the Porsche Brand, possibly in September or October, and subject to market developments. Investors forecast a EUR 60-85bln valuation, according to Reuters. Qatar intends to commit to a 4.99% stake of the floated company.

MATERIALS:

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  Norsk Hydro ASA (NHYDY) - Will keep some of its Norwegian aluminium smelters offline after maintenance; cites lower demand for aluminium.   

FINANCIALS:

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  Citigroup Inc. (C) - Citigroup is joining rivals in trimming the ranks of its mortgage workforce as rising interest rates continue to crimp demand in the housing market, Bloomberg reports. Citi said that it had made a small number of staffing reductions within its mortgage team due to internal streamlining of functions, and the decision to eliminate even a single colleague role is very difficult, especially during these challenging times, and the bank was doing its best to support each individual by helping them to find new employment opportunities within Citi or outside the firm.


• 
  UBS Group AG (UBS) - UBS scrapped its planned USD 1.4bln purchase of Wealthfront, a setback to its plans to grow in the US in online wealth advice, WSJ said.


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  HIVE Blockchain Technologies Ltd. (HIVE) - Hive entered into an at-the-market equity offering programme, under which it may issue and sell common shares with an aggregate offering price of up to USD 100mln.

06 Sep 2022 - 09:22- Research Sheet- Source: Newsquawk